Four Corners Property Trust, Inc. · NYSE:FCPT
Four Corners Property Trust — Investor Presentation (September 2018)
30 slides from Four Corners Property Trust's investor presentation, Sep 24, 2018
Slide 1: Four Corners Property Trust Investor Presentation September 2018
FOUR CORNERS PROPERTY TRUST NYSE: FCPT INVESTOR PRESENTATION | SEPTEMBER 2018 www.fcpt.com 1 | FCPT | SEPTEMBER 2018
Slide 2: Forward Looking Statements and Disclaimers
FORWARD LOOKING STATEMENTS AND DISCLAIMERS Cautionary Note Regarding Forward-Looking Statements: This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and t
Slide 3: Agenda
AGENDA Company Overview and Business Update Page 3 Key Investment Highlights Page 11 Acquisition & Diversification Strategy Page 18 Appendix Page 27 3 | FCPT | SEPTEMBER 2018
Slide 4: Senior Management Team
SENIOR MANAGEMENT TEAM Former Board member and Chair of the Finance and Real Estate Committee at Darden Restaurants, Inc. Member of the Board of Directors of Macy’s, Inc. Former Board member and Chairman of the Investment Committee at Gramercy Property Trust, Inc. William Lenehan President and
Slide 5: Overview of FCPT
OVERVIEW OF FCPT Four Corners Property Trust (“FCPT”) is an investment grade rated REIT FCPT Portfolio Brands Property primarily engaged in the ownership, acquisition, and leasing of restaurant Brand Count % of ABR Olive Garden 299 59.4% properties Longhorn Steakhouse 105 16.1% Chili's 50 8.4% F
Slide 6: Momentum Since Spin-Off
COMPANY UPDATE & MOMENTUM SINCE SPIN-OFF FCPT Team and Portfolio Highlights Market Access & Capital Raising Highlights • Continue to build out acquisition, legal and accounting / finance • FCPT continues to trade with an attractive cost of capital teams • Recycled Capital Accretively • Added two add
Slide 7: Select Transaction Overview: Washington Prime Mall Outparcel Portfolio
SELECT TRANSACTION OVERVIEW: WASHINGTON PRIME MALL OUTPARCEL PORTFOLIO • On September 20, 2017, FCPT announced the acquisition of 41 restaurant properties from Washington Prime Group (“WPG”) for a purchase price of approximately $67 million (6.7% initial cash yield) with a weighted average remaining
Slide 8: Select Transaction Overview: Brinker Sale-Leaseback
SELECT TRANSACTION OVERVIEW: BRINKER SALE-LEASEBACK On August 8, 2018, FCPT acquired 46 Chili’s properties for $149.8 million from Brinker International (NYSE: EAT) through a sale-leaseback transaction. Two additional properties are expected to close by the end of Q3 2018 for $5.9 million, bringing
Slide 9: Tenant Evolution Since Spin-Off: Significant Progress on Diversifying Tenant Base
TENANT EVOLUTION SINCE SPIN- OFF: SIGNIFICANT PROGRESS ON DIVERSIFYING TENANT BASE Brand Breakdown by Annual Base Rent +27.7% growth in annual base rent since spin1 16% 105 units 20% 104 units 8% 6% 50 units 14 units 59% 74% 299 units 300 units 13% 122 units Initial Portfolio at Spin: FCPT Portfolio
Slide 10: High Quality Portfolio
HIGH QUALITY PORTFOLIO FCPT Portfolio Summary • 589 Properties Properties: • 79% Investment grade tenancy • 31 brands – 13 Casual, Family & Fine Dining / 18 Quick Service & Fast Casual Casual, • 45 states Geography: Family • Only Texas (12.4%) and Florida (11.6%) are above 10% of NOI & Fine Dining •
Slide 11: Agenda
AGENDA Company Overview and Business Update Page 3 Key Investment Highlights Page 11 Acquisition & Diversification Strategy Page 18 Appendix Page 27 11 | FCPT | SEPTEMBER 2018
Slide 12: National Footprint with Increasing Brand Diversification
NATIONAL FOOTPRINT WITH INCREASING BRAND DIVERSIFICATION ND WA MT MN 589 Properties ME SD WI ID MI VT NH OR WY NY IA MA NE CT RI PA OH NV IL IN NJ 45 States UT CO MD DE KS MO WV KY VA Annualized CA TN OK NC Base Rent (%) AR ≥10.0% 31 Brands AZ NM SC MS AL 5.0%–10.0% GA LA TX 3.0%–5.0% 2.0%–3.0% 1.0
Slide 13: National Footprint with Increasing Brand Diversification (Continued)
NATIONAL FOOTPRINT WITH INCREASING BRAND DIVERSIFICATION (CONTINUED) 1 589 Properties 31 Brands ___________________ 1. Data as of 9/21/2018 2. Other includes two Seasons 52 properties, as well as one property for each of the following brands: BJ’s Restaurant, Cheddar’s, Chick-Fil-A, Del Taco/Mod Piz
Slide 14: Lease Maturity Schedule
LEASE MATURITY SCHEDULE Lease Maturity Schedule (% Annualized Cash Base Rent1) 16.2% 2 99.9% occupied 14.3% 13.9% 12.4% 12.1% 11.8% Weighted average lease term of 12.4 years 8.7% Only 2.1% of rental income matures prior to 2027 3.3% 3.4% 0.7% 0.9% 0.4% 0.2% 0.3% 0.5% 0.3% 0.0% 0.0% 0.1% 0.2% 0.1% 0.
Slide 15: Summary Capitalization and Financials
SUMMARY CAPITALIZATION AND FINANCIALS 1 Capitalization FCPT Current Trading Metrics FCPT Current 3 ($ million, except per share) Current1 Cash NOI ($ million) $120.6 Share price (9/21/2018) $25.69 Implied Cap Rate 5.3% Shares and OP units outstanding (millions) 67.4 Quarterly Dividend per share $0.2
Slide 16: FCPT Debt Maturity Schedule
FCPT DEBT MATURITY SCHEDULE Current Debt Maturity Schedule1 Weighted average Drawn Revolver maturity of 5.5 years1 Undrawn Revolver Capacity $400 Unsecured Term Loan Unsecured Notes New Unsecured Notes $250 $75 $50 $50 $50 $0 $0 $0 $0 $0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 _______
Slide 17: FCPT Capitalization and Portfolio Create a Strong Platform for Growth
FCPT CAPITALIZATION AND PORTFOLIO CREATE A STRONG PLATFORM FOR GROWTH High quality portfolio diversified geographically and by concept across 45 states and 31 tenant brands Stable rental stream, 100% anchored with service retail tenants and 79% investment grade tenancy with long-term lease-life
Slide 18: Agenda
AGENDA Company Overview and Business Update Page 3 Key Investment Highlights Page 11 Acquisition & Diversification Strategy Page 18 Appendix Page 27 18 | FCPT | SEPTEMBER 2018
Slide 19: FCPT Acquisition Philosophy and Underwriting Criteria
FCPT ACQUISITION PHILOSOPHY AND UNDERWRITING CRITERIA Acquisition Philosophy • Acquire nationally recognized branded restaurants that are well located with creditworthy lease guarantors • Purchase assets only when accretive to cost of capital • Increase diversification by targeting different brands,
Slide 20: FCPT Acquisition Target Criteria
FCPT ACQUISITION TARGET CRITERIA Summary Criteria • Single-tenant restaurant properties net leased to credit-worthy tenants operating well-known brands; select multi-tenant properties considered Properties: • Existing leases or new sale-leasebacks • Minimum deal size of $1 million • All 50 states an
Slide 21: Investment Opportunity Sourcing
INVESTMENT OPPORTUNITY SOURCING FCPT is principally building its acquisition pipeline through five channels: 1) Consolidating Franchisees: The franchisee industry is highly fragmented, but is undergoing consolidation and growth by top players. FCPT partners with large franchisees on real estate tran
Slide 22: Food & Beverage Among Most E-Commerce Resilient Retail Categories
FOOD & BEVERAGE AMONG MOST E-COMMERCE RESILIENT RETAIL CATEGORIES US eCommerce Penetration by Retail Category (2016) 50% 46.7% 45% 40% 35% 31.8% 30% 25% 20% 16.4% 14.8% 15% 11.1% 11.0% 10.5% 10% 7.3% 5% 2.8% 0.9% 0% Consumer Books & Toys & Hobbies Apparel & Health & Jewelry & Sports & Fitness Furnit
Slide 23: Vast Addressable Market Within Restaurant Industry Subsectors
VAST ADDRESSABLE MARKET WITHIN RESTAURANT INDUSTRY SUBSECTORS US GDP – $18.6 Trillion Consumption Investment Government $12.8T $3.0T $3.3T Net Exports Retail Sales -$0.5T $4.85T Restaurants (~11% of Retail Sales, $523bn) Family Fine Quick Service & Fast Casual Casual Dining / Buffet Dining $268bn $1
Slide 24: Rapid Franchisee Consolidation Creates Real Estate Opportunities in Restaurant Industry
RAPID FRANCHISEE CONSOLIDATION CREATES REAL ESTATE OPPORTUNITIES IN RESTAURANT INDUSTRY Units Owned by the Top 200 Franchisees Average units per Top 200 Franchisees 141 28,109 135 26,993 126 25,176 116 23,177 109 21,831 102 20,331 18,408 92 17,887 89 85 16,915 16,715 82 84 16,030 16,489 80 2006 2007
Slide 25: Industry Benchmarking: Concentrating on Stable Brands
INDUSTRY BENCHMARKING: CONCENTRATING ON STABLE BRANDS FCPT is focused on acquiring restaurants operated by top brands within each cuisine type % of % of Typically Top 5 Top 5 Brands by Market Share (% of cuisine type)1 Revenue Dining Restaurant Free-Standing % of ($bn) Sector Industry Buildings #1 #
Slide 26: Further Brand Selection Considerations Surround Long-Term Cash Flow Protection
FURTHER BRAND SELECTION CONSIDERATIONS SURROUND LONG-TERM CASH FLOW PROTECTION Brand Average Sales Volume ($000s) Casual $6,000 $10,495 Dining $5,000 Brands with mid-range sales have more Fast options for re-tenanting in case of vacancy Casual $4,000 Quick Service $3,000 $2,000 $1,000 $0 FCPT pursue
Slide 27: Agenda
AGENDA Company Overview and Business Update Page 3 Key Investment Highlights Page 11 Acquisition & Diversification Strategy Page 18 Appendix Page 27 27 | FCPT | SEPTEMBER 2018
Slide 28: FCPT Closed Acquisitions (2018 Year to Date)
FCPT CLOSED ACQUISITIONS (2018 YEAR TO DATE) # of Purchase Initial Cash Term Tenant Location Properties Operator / Guarantor Information Price ($mm) Yield (yrs) Announced Buffalo Wild Wings IL 2 World Wide Wings (40+ unit franchisee) $6.6 6.6% 14 1/10/2018 WPG Portfolio: 1st Closing FL, IL, IA, OH 1
Slide 29: FCPT Closed Acquisitions (2016 & 2017)
FCPT CLOSED ACQUISITIONS (2016 & 2017) # of Purchase Initial Cash Term Tenant Location Properties Operator / Guarantor Information Price ($mm) Yield (yrs) Announced Pizza Hut IL, IN 6 40-unit sub. of 150-unit operator $5.7 7.2% 20 7/18/2016 Wendy's TX 1 2-unit operator $2.1 6.5% 10 8/2/2016 Arby's N
Slide 30: FCPT Closed Dispositions
FCPT CLOSED DISPOSITIONS # of Sale Initial Cash Term Tenant Location Properties Operator / Guarantor Information Price ($mm) Yield (yrs) Announced Bahama Breeze Tampa, FL 1 Bahama Breeze Holdings, LLC $18.5 4.8% 12 10/24/2016 Olive Garden Pembroke Pines, FL 1 Darden Restaurants, Inc. $6.3 4.8% 16 10
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