FCPT Announces Disposition of a Red Lobster Property for $4.7 Million

Rhea-AI Summary

Four Corners Property Trust (NYSE:FCPT) has announced the sale of a Red Lobster property in North Dakota for $4.7 million. The transaction was conducted under a triple net lease, with a cap rate comparable to previous sales. Proceeds will be utilized for new investments through a 1031-Exchange, allowing the company to defer taxes. However, FCPT must identify suitable replacement properties within 45 days and complete acquisitions within 180 days to avoid incurring tax liabilities on the sale's gains.

Headquartered in Mill Valley, CA, FCPT specializes in the ownership and leasing of restaurant and retail properties.

Positive

• Sale of Red Lobster property for $4.7 million enhances liquidity.
• Intention to reinvest proceeds through a 1031-Exchange allows for tax deferral.

Negative

• Failure to identify suitable replacement properties may lead to tax liability.
• Time constraints of 45 days and 180 days create pressure for reinvestment.

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 disposition of a Red Lobster property for $4.7 million. The property is located in North Dakota and is corporate-operated under a triple net lease. The transaction was priced at cap rate in range with previous FCPT dispositions. The Company plans to repurpose the proceeds into new investment opportunities consistent with FCPT thresholds.

FCPT anticipates redeploying the proceeds from this transaction through an Internal Revenue Code Section 1031 like-kind exchange (“1031-Exchange”). As a result, net cash proceeds from the sale will be held in an escrow account until one or more properties are purchased through the 1031-Exchange. However, there can be no assurance that an acquisition of a new property or properties will occur. If the Company fails to identify one or more like-kind replacement properties of comparable value within 45 days of the date of sale and/or fails to acquire such property or properties within 180 days of the date of sale, the Company will be required to pay a tax at the highest corporate income tax rate on any gain recognized on the sale of this property.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230113005425/en/

Four Corners Property Trust:

Bill Lenehan, 415-965-8031

CEO

Gerry Morgan, 415-965-8032

CFO

Source: Four Corners Property Trust

FAQ

What is the recent sale made by FCPT?

FCPT sold a Red Lobster property in North Dakota for $4.7 million.

What are the financial implications of the 1031-Exchange for FCPT?

The 1031-Exchange allows FCPT to defer taxes on gains from the property sale, provided suitable replacements are identified.

What are the risks involved with FCPT's recent property sale?

FCPT risks incurring a tax liability if it fails to acquire replacement properties within set deadlines.

When must FCPT identify replacement properties after the sale?

FCPT must identify replacement properties within 45 days and complete the acquisition within 180 days.

What type of properties does FCPT primarily invest in?

FCPT primarily invests in high-quality, net-leased restaurant and retail properties.