MILL VALLEY, Calif.--(BUSINESS WIRE)--
Four Corners Property Trust (NYSE:FCPT), a real estate investment
trust engaged in the ownership of high-quality, net-leased restaurant
properties (“FCPT” or the “Company”), is pleased to announce the signing
of a definitive agreement to acquire 41 restaurant properties from
Washington Prime Group Inc. (“WPG”) for a purchase price of
approximately $67.2 million cash.
The transaction is priced at a cap rate consistent with our investment
thresholds and past transactions and is expected to close in two
tranches. The first tranche is expected to close in the fourth quarter
of 2017, and the second tranche is expected to be completed in the first
half of 2018, in each case, subject to due diligence and customary
closing conditions. There is a separate individual lease for each
property, and the leases have a current weighted average remaining term
of approximately 8 years. In addition, well over half of the leases
cover only the ground (i.e., the tenant built its own building
with ownership reverting to the landlord upon lease expiry), so the
current rents are lower than if the rent had been set to cover both the
land and the cost of the building.
The restaurant properties consist entirely of outparcels to WPG
properties and are well located within highly trafficked retail
corridors in Colorado, Connecticut, Florida, Illinois, Indiana, Iowa,
Maryland, New Jersey, Ohio, Pennsylvania, Texas and Virginia.
Approximately 83% of the net operating income is from properties on
out-lots to either open air or WPG’s “Tier One Enclosed” properties.
None of the 41 restaurant properties or the adjacent WPG properties are
currently encumbered by property-level debt.
In addition, the portfolio includes 22 different restaurant brands, 15
of which would be new to FCPT’s current portfolio. The 22 brands in the
transaction include: McDonald’s (5 restaurants), Buffalo Wild Wings (4),
Olive Garden (4), Taco Bell (4), BJ’s Restaurant (3), Red Lobster (3),
Chick-Fil-A (2), Starbucks (2), and one each of Arby’s, Burger King,
Cheddar’s, Chili’s, Checkers, IHOP, Outback Steakhouse, Panda Express,
Panera Bread, Rally’s Hamburgers, Steak N’ Shake, Texas Roadhouse,
Wendy’s and White Castle. Of the 41 leases, 32 are with corporate
operators and 9 are with franchisees.
Bill Lenehan, CEO and Director of FCPT stated: “This transaction
constitutes a unique opportunity for FCPT, offering diversity in
geography, brand, lease maturity, operators and credit. The portfolio
benefits from modest rents, a large majority of corporate operators and
strong demographics and traffic counts. While many of the leases have a
shorter lease term than those in our existing portfolio, we expect that
the low rent-to-sales figures will increase the likelihood of renewal
upon lease expiration.” Mr. Lenehan added, “FCPT has significant cash on
hand and an undrawn corporate revolver to finance this acquisition, and
FCPT would still be well under its stated financial leverage limits pro
forma for this acquisition.”
About FCPT
FCPT, headquartered in Mill Valley, CA, is a real estate investment
trust primarily engaged in the acquisition and leasing of restaurant
properties. The Company seeks to grow its portfolio by acquiring
additional real estate to lease for use in the restaurant and related
food services industry. Additional information about FCPT can be found
on the website at www.fcpt.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995 which
represent the current expectations and beliefs of management of Four
Corners Property Trust, Inc. (“FCPT”) concerning the proposed
transactions, the anticipated consequences and benefits of the
transactions and the targeted close date for the transactions, and other
future events and their potential effects on FCPT, including, but not
limited to, statements relating to anticipated financial and operating
results, the company’s plans, objectives, expectations and intentions,
cost savings and other statements, including words such as “anticipate,”
“believe,” “confident,” “plan,” “estimate,” “expect,” “intend,” “will,”
“should,” “may,” and other similar expressions. Such statements are
based upon the current beliefs and expectations of FCPT’s management,
and involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance, or achievements of FCPT
to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements.
Such factors include, without limitation: changes in asset quality and
credit risk; ability to sustain revenue and earnings growth; changes in
political, economic or market conditions generally and the real estate
and capital markets specifically; the impact of increased competition;
the availability of capital and financing; tenant or seller(s)
bankruptcies; risks associated with the acquisition, development,
expansion, leasing and management of properties; changes in market
rental rates; trends in the retail or restaurant industry; relationships
with tenants; competitive market forces; the level and volatility of
interest rates; the rate of revenue increases as compared to expense
increases; the financial stability of tenants within the retail or
restaurant industry; the restrictions in current financing arrangements
or the failure to comply with such arrangements; the liquidity of real
estate investments; the impact of changes to tax legislation and FCPT’s
tax positions; failure to qualify as a real estate investment trust; the
failure to refinance debt at favorable terms and conditions; loss of key
personnel; material changes in the dividend rates on securities or the
ability to pay dividends on common shares or other securities; possible
restrictions on the ability to operate or dispose of owned properties;
the failure to achieve earnings/funds from operations targets or
estimates; the failure to achieve projected returns or yields on
development and investment properties (including joint ventures);
expected gains on debt extinguishment; changes in generally accepted
accounting principles or interpretations thereof; terrorist activities
and international hostilities; the unfavorable resolution of legal
proceedings; the impact of future acquisitions and divestitures; assets
that may be subject to impairment charges; significant costs related to
environmental issues; and other risks and uncertainties, including those
detailed from time to time in FCPT’s statements and periodic reports
filed with the Securities and Exchange Commission, including those
described under “Risk Factors”. The forward-looking statements in this
communication are qualified by these risk factors. Each statement speaks
only as of the date of this press release and FCPT undertakes no
obligation to update or revise any forward-looking statements to reflect
subsequent events or circumstances. Actual results may differ materially
from current projections, expectations, and plans, if any. Investors,
potential investors and others should give careful consideration to
these risks and uncertainties.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170920006286/en/
Four Corners Property Trust:
Bill Lenehan, 415-965-8031
CEO
Gerry
Morgan, 415-965-8032
CFO
Source: Four Corners Property Trust