FCPT Announces Disposition of an Olive Garden Restaurant Property for $6.3 million

Rhea-AI Summary

Four Corners Property Trust (NYSE:FCPT) announced the sale of an Olive Garden restaurant property in Florida for $6.3 million, resulting in a gain for the company. The transaction was executed at a 4.5% cap rate on current rent. FCPT plans to reinvest the proceeds through a 1031 like-kind exchange, holding the cash in escrow until suitable properties are identified. However, failure to acquire new properties within the designated timeframe could lead to significant tax liabilities.

Positive

• Sale of Olive Garden property for $6.3 million enhances cash position.
• Transaction completed at a favorable 4.5% cap rate.

Negative

• Risk of tax liabilities if suitable replacement properties are not identified within 45 days.
• Potential need to pay tax at the highest corporate income tax rate on gains from the sale.

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 an Olive Garden restaurant property for $6.3 million. The property is located in Florida and is operated by Darden Restaurants. The transaction was priced at a 4.5% cap rate on current rent, exclusive of transaction costs, and will result in a gain to FCPT. 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 the 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/20220609006000/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 sale price of the Olive Garden property by FCPT?

The Olive Garden property was sold for $6.3 million.

What cap rate was achieved in the FCPT property sale?

The transaction was priced at a 4.5% cap rate.

What are the tax implications of FCPT's property sale?

If FCPT does not acquire new properties within 180 days, it may face significant tax liabilities.

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

FCPT plans to reinvest the proceeds through a 1031 like-kind exchange.