FCPT Announces Acquisition of a MercyOne Outpatient Clinic Property for $2.8 Million

Rhea-AI Summary

Four Corners Property Trust (NYSE:FCPT) has announced the acquisition of a MercyOne outpatient clinic property in Iowa for $2.8 million. The property is situated in a strong retail corridor and operates under a triple net lease with approximately five years remaining on the term. The transaction was completed at a 7.8% cap rate on rent as of the closing date, excluding transaction costs.

Positive

• Strategic acquisition in strong retail corridor
• 7.8% cap rate indicates favorable return potential
• Triple net lease structure minimizes operational costs
• Diversification into healthcare real estate sector

Negative

• Relatively short remaining lease term of 5 years
• Small transaction size may have impact on overall portfolio

Insights

Real Estate Investment Analyst

This acquisition aligns with FCPT's strategic diversification beyond restaurant properties into healthcare real estate. The $2.8 million MercyOne outpatient clinic purchase, secured at a 7.8% cap rate, represents an attractive yield in the current market environment. The triple net lease structure transfers operational costs to the tenant, while the property's location in a strong retail corridor suggests solid underlying real estate fundamentals.

The relatively short remaining lease term of 5 years presents both opportunities and risks. While it allows for potential rent adjustments in the medium term, it also introduces tenant retention risk. The cap rate pricing indicates a balance between the stable healthcare tenant and the shorter lease duration. Healthcare properties typically command cap rates between 6% to 8%, making this acquisition competitively priced.

For FCPT's $2.6 billion market cap portfolio, this small acquisition demonstrates continued execution of their property acquisition strategy while maintaining conservative leverage. The healthcare sector addition enhances tenant diversification and provides exposure to a defensive sector with stable cash flows.

MILL VALLEY, Calif.--(BUSINESS WIRE)-- Four Corners Property Trust (NYSE:FCPT), a real estate investment trust primarily engaged in the ownership and acquisition of high-quality, net-leased restaurant and retail properties (“FCPT” or the “Company”), is pleased to announce the acquisition of a MercyOne outpatient clinic property for $2.8 million. The property is located in a strong retail corridor in Iowa and is under a triple net lease with approximately five years of term remaining. The transaction was priced at a 7.8% cap rate on rent as of the closing date and exclusive of transaction costs.

About FCPT

FCPT, headquartered in Mill Valley, CA, is a real estate investment trust primarily engaged in the ownership, acquisition and leasing of restaurant and retail properties. The Company seeks to grow its portfolio by acquiring additional real estate to lease, on a net basis, for use in the restaurant and retail industries. Additional information about FCPT can be found on the website at www.fcpt.com.

Category: Acquisition

View source version on businesswire.com: https://www.businesswire.com/news/home/20241219738632/en/

Four Corners Property Trust:

Bill Lenehan, 415-965-8031

CEO

Patrick Wernig, 415-965-8038

CFO

Source: Four Corners Property Trust

FAQ

What is the value of FCPT's recent MercyOne clinic acquisition?

FCPT acquired the MercyOne outpatient clinic property for $2.8 million.

What is the cap rate for FCPT's MercyOne property acquisition?

The transaction was priced at a 7.8% cap rate on rent as of the closing date, exclusive of transaction costs.

How many years remain on the MercyOne clinic lease acquired by FCPT?

The property has approximately five years remaining on its triple net lease term.

Where is FCPT's newly acquired MercyOne clinic located?

The MercyOne outpatient clinic property is located in a strong retail corridor in Iowa.

What type of lease agreement does FCPT have for the MercyOne property?

The property is under a triple net lease agreement, meaning the tenant is responsible for most operating expenses.