FCPT Announces Disposition of a Red Lobster Property for $4.9 Million

Rhea-AI Summary

Four Corners Property Trust (FCPT) announced the sale of a Red Lobster property in Ohio for $4.9 million. This transaction aligns with previous dispositions in terms of cap rate. FCPT plans to reinvest the proceeds through a 1031-Exchange, holding net cash in escrow until new acquisitions are made. However, the company may incur a substantial tax penalty if it fails to identify comparable properties within the specified time frame. The strategic disposition reflects FCPT's commitment to expanding its real estate portfolio.

Positive

• Sale of Red Lobster property for $4.9 million indicates strategic asset management.
• Plans for reinvestment through a 1031-Exchange could enhance portfolio value.

Negative

• Risk of incurring high corporate tax if comparable properties are not identified.
• Dependence on successful acquisition of new properties within a tight timeline.

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 $4.9 million. The property is located in Ohio 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/20221215006004/en/

Four Corners Property Trust:

Bill Lenehan, 415-965-8031

CEO

Gerry Morgan, 415-965-8032

CFO

Source: Four Corners Property Trust

FAQ

What did FCPT announce in their recent press release?

FCPT announced the sale of a Red Lobster property in Ohio for $4.9 million.

What is the significance of the $4.9 million sale for FCPT?

The sale reflects FCPT's strategic asset management and provides capital for future investments.

How does FCPT plan to use the proceeds from the property sale?

FCPT plans to reinvest the proceeds through a 1031-Exchange, holding funds in escrow until new properties are acquired.

What are the risks associated with FCPT's 1031-Exchange plan?

If FCPT fails to acquire comparable properties within 45 days, it may incur a high corporate tax on the sale profit.

What does the cap rate indicate about FCPT's recent property sale?

The cap rate for the Red Lobster property sale is in line with previous FCPT dispositions, indicating consistent valuation practices.