Four Corners Property Trust, Inc. · NYSE:FCPT
Four Corners Property Trust — Q4 2024 Earnings Presentation
44 slides from Four Corners Property Trust's earnings presentation, Feb 13, 2025
Slide 1: Investor Presentation February 2025
Four Corners Property Trust NYSE: FCPT INVESTOR PRESENTATION FEBRUARY 2025
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
Slide 3: Contents
CONTENTS 1 COMPANY OVERVIEW PG 3 2 HIGH QUALITY PORTFOLIO PG 12 3 ASSET SELECTION & PRIMARY SECTORS PG 20 4 CONSERVATIVE FINANCIAL POSITION PG 33 5 APPENDIX PG 36 FEBRUARY 2025 3
Slide 4: A Unique Platform Within Net Lease
A UNIQUE PLATFORM WITHIN NET LEASE HIGH-QUALITY PORTFOLIO • Service focused portfolio leased to e-commerce resistant tenants • Strong tenant rent coverage, national brands and low rents provide for high tenant retention and limited vacancies TRANSPARENT, ANALYTICAL, DISCIPLINED INVESTMENT PHILOSOPHY
Slide 5: FCPT's Differentiated Approach Within Net Lease
FCPT’S DIFFERENTIATED APPROACH WITHIN NET LEASE Thoughtful, Tactical, Granular “Shareholders First” 1 Portfolio Building 2 Superior Capital 3 Approach Raising & Allocation o Portfolio is led by Darden, an o Focus on the most efficient means o Hyperfocused approach leads to investment grade restauran
Slide 6: Recent Highlights
RECENT HIGHLIGHTS During Q4, FCPT acquired 45 properties for $133 million at a 7.0% cap rate, one of our busiest investment quarters in Company history The second half of 2024 proved to be a resounding return to action as our cost of capital became more favorable and sellers were more flexible o
Slide 7: FCPT at a Glance
FCPT AT A GLANCE PORTFOLIO1 FINANCIAL 1,220 leases $0.44 AFFO per share (Q4)4 163 brands $1.73 AFFO per share (2024) 99.6% occupied $0.41 FFO per share (Q4) 4.9x tenant EBITDAR coverage2 $0.27 Net Income per share (Q4) 1.4% average annual escalator $265 million / 7.1% cap rate of acquisitions in 202
Slide 8: Consistent Annual Acquisition Growth
CONSISTENT ANNUAL ACQUISITION GROWTH FCPT has consistently delivered growth and diversification through new acquisitions. We focus on credit-worthy tenants, high quality real estate and efficient execution PROPERTY COUNT 1198 1111 1023 919 799 699 610 475 515 418 +57 +40 +95 +89 +100 +120 +104 +88 +
Slide 9: Portfolio by Brand Annualized Base Rent
1,220 Leases / 163 Brands PORTFOLIO BY BRAND Annual Base Rent of $240.2 million1 34% Olive Garden (vs. 74% at inception) FCPT PORTFOLIO ANNUALIZED BASE RENT 23% Non-Restaurant Exposure 48% Darden (vs. 100% at inception) 314 leases 34% 116 leases 10% 10% 82 leases 7% 7% 28 leases 2% 34% 2% 29 leases
Slide 10: Lease Maturity Schedule
LEASE MATURITY SCHEDULE 7.3 years weighted average lease term 99.6% %ANNUALIZED BASE RENT1 Darden Spin occupied2 as of 12/31/2024 Other 4.4% < 3.7% of rental income 6.6% matures prior to 2027 7.4% 7.7% 8.2% 6.9% FCPT has had very high 6.1% 6.1% renewal rates on lease 5.0% 4.3% maturities to date 4.3
Slide 11: Company Momentum Since Inception
COMPANY MOMENTUM SINCE INCEPTION AS OF 12/31/24 Team members 4 37 + 33 $94.4 million $240.2 million + $145.8 million (+154%) Annual base rent1 Properties 418 1,198 + 780 (+187%) 5 163 + 158 Brands 100% 48% - 52% % Darden2 15 years 7.3 years - 7.7 years Weighted avg lease term Equity market cap $848
Slide 12: Contents
CONTENTS 1 COMPANY OVERVIEW PG 3 2 HIGH QUALITY PORTFOLIO PG 12 3 ASSET SELECTION & PRIMARY SECTORS PG 20 4 CONSERVATIVE FINANCIAL POSITION PG 33 5 APPENDIX PG 36 FEBRUARY 2025 12
Slide 13: Unique and Highly Secure Net Lease
UNIQUE AND HIGHLY Ground Leased 79% structurally SECURE NET LEASE $147k average rent superior to regular way net lease 11% • Our portfolio is primarily outparcel properties in high High density retail corridors Quality • ~79% of rent featuring unique benefits structurally Ground & superior to regula
Slide 14: FCPT's Strong Portfolio Performance
FCPT’S STRONG PORTFOLIO PERFORMANCE FCPT has one of the highest-quality and consistent portfolios in the net lease sector. We have established a strong track record over time (even through the COVID-19 pandemic) RENT COLLECTIONS 99.5% 98.8% 99.6% 99.6% 99.7% 99.8% 99.8% 99.8% 99.7% 99.9% 99.8% 99.7%
Slide 15: Geographically Diverse Portfolio
WA GEOGRAPHICALLY MT ND ME DIVERSE PORTFOLIO OR ID MN VT NH SD WI NY MA WY MI RI • Lower income taxes and growing IA PA CT economies has accelerated a population NV NE IN OH NJ UT IL DE shift toward low-cost of living states in CA CO WV MD the southeast KS MO KY VA NC TN • FCPT’s portfolio is primar
Slide 16: Diversification with National Brands
DIVERSIFICATION WITH Sq Ft Sq Ft / Unit NATIONAL BRANDS Rank Brand Name 1 Olive Garden # 314 (000s) 2,674 (000s) 8.5 % of ABR1 34.2% 2 Longhorn Steakhouse 116 650 5.6 9.7% 3 Chili's 82 450 5.5 7.2% TOP 25 FCPT 4 Outback Steakhouse 28 182 6.5 2.5% PORTFOLIO BRANDS 1 5 Buffalo Wild Wings 29 177 6.1 2.
Slide 17: Balanced Credit Among Top National Brands
BALANCED CREDIT AMONG TOP NATIONAL BRANDS FCPT's Top 25 Brands Total Unit 2024 Total Publicly 1 2 # Brand Count Sales ($mm) Traded? Over the nine years since FCPT’s 1 Olive Garden 925 $5,089 Yes (DRI) inception, we have targeted brands 2 Longhorn Steakhouse 580 $2,917 Yes (DRI) 3 Chili's 1,209 $4,
Slide 18: FCPT Casual Dining: Size & Scale vs. Top Franchisees
FCPT CASUAL DINING ANCHORS vs. FRANCHISE TIMES TOP 200 FCPT CASUAL DINING: STORE COUNT (2023) SIZE & SCALE vs. TOP FRANCHISEES 1,914 1,605 1,189 • Publicly traded casual dining operators maintain a significant size and scale 398 304 advantage over hundreds of franchisee 165 131 103 tenants in the ov
Slide 19: The Benefits of FCPT's Darden Leases
THE BENEFITS OF FCPT’S DARDEN LEASES • After 9 years of diversifying through new acquisitions, Darden is now ~48% of FCPT’s rent roll by ABR1 • Darden is a strong anchor tenant for our portfolio and one of the preeminent casual dining operators globally o BBB / Baa2 credit, $11 billion in revenue, $
Slide 20: Contents
CONTENTS 1 COMPANY OVERVIEW PG 3 2 HIGH QUALITY PORTFOLIO PG 12 3 ASSET SELECTION & PRIMARY SECTORS PG 20 4 CONSERVATIVE FINANCIAL POSITION PG 33 5 APPENDIX PG 36 FEBRUARY 2025 20
Slide 21: FCPT's Primary Sectors
FCPT’S PRIMARY SECTORS • Our portfolio is principally leased to restaurants, auto service and medical retail tenants Low Rent & Fungible Real Investment Estate • The intentional focus on (small / medium these subsectors reflect a Basis building size in multi-tiered filter that favors attractive fung
Slide 22: Acquisition and Underwriting Framework
ACQUISITION AND UNDERWRITING FRAMEWORK CREDIT CRITERIA REAL ESTATE CRITERIA ~50% ~50% • Guarantor credit and health • Location • Brand durability • Retail corridor strength & demographics • Store performance • Access / visibility • Lease term and structure • Absolute and relative rent • Pad site and
Slide 23: Selective Approach to Net Lease
SELECTIVE APPROACH TO NET LEASE • FCPT’s initial portfolio was established in 2015, fully constructed after the advent of online shopping • FCPT utilizes a consistent underwriting process that examines credit and real estate quality prior to investment • Our disciplined underwriting approach has ult
Slide 24: Restaurants
RESTAURANTS • FCPT seeks to acquire nationally recognized branded restaurants from premier lease guarantors located within the strongest retail corridors • FCPT has increased its restaurant diversification since inception by targeting a variety of meal price-points, cuisine types, and geographies •
Slide 25: Restaurant Industry Targets
RESTAURANT INDUSTRY TARGETS FCPT prioritizes tenant credit, fungible real estate, and concept durability in its restaurant investments • FCPT pursues mature, national brands FCPT’S CURRENT FOCUS FCPT GENERALLY AVOIDS1 with significant scale in terms of units, Casual Dining In-Line Real Estate revenu
Slide 26: Real Estate Characteristics: Casual Dining & Quick Service
FCPT REAL ESTATE CHARACTERISTICS: CASUAL DINING & QUICK SERVICE Olive Garden HOUSTON, TX • Adjacent to Willowbrook Mall and several other shopping centers, with ample parking • Excellent visibility and prominent Farm to Market 1960 Road – 34,500 Vehicles per Day retail position along frontage of Far
Slide 27: Auto Industry
AUTO INDUSTRY • Principally targeting auto service centers, including collision repair and tire service leased to credit worthy operators. We have made select investments in gas stations with large format convenience stores, car wash and auto part retailers at attractive, low bases • Focus is on pro
Slide 28: Auto Service Industry Targets
AUTO SERVICE INDUSTRY TARGETS FCPT targets categories for the long-term with high renewal probabilities • FCPT targets categories in the Auto FCPT’S CURRENT FOCUS FCPT GENERALLY AVOIDS1 Industry that are not tied to Collision Service Centers High Basis / Franchisee traditional, gas-powered vehicles
Slide 29: Real Estate Characteristics: Automotive Service
FCPT REAL ESTATE CHARACTERISTICS: AUTOMOTIVE SERVICE Discount Tire Coralville, IA • Outparcel to Coral Ridge Mall, a Brookfield Properties center Coral Ridge Ave – 28,000 Vehicles per Day • Hard corner and mall ring road provide plenty of vehicle traffic, access, and parking • Grouped with several o
Slide 30: Medical Retail
MEDICAL RETAIL • FCPT’s largest medical retail exposures are focused on outpatient services: urgent care, dental, primary care, veterinary care, and outpatient / ambulatory surgery centers • Medical retail is e-commerce and recession resistant given its service-based nature, large customer base and
Slide 31: Healthcare Industry Targets
HEALTHCARE INDUSTRY TARGETS Healthcare delivery occurs across a spectrum of real estate and operator cost structures • FCPT target operators provide services FCPT’S CURRENT FOCUS FCPT GENERALLY AVOIDS1 that require in-person interaction, while (Pharmacy & High Accuity) having lighter asset needs and
Slide 32: Real Estate Characteristics: Medical Retail
FCPT REAL ESTATE CHARACTERISTICS: MEDICAL RETAIL To Walmart, Meijer WellNow Chicago, IL • Adjacent to Walmart, Meijer, Whole Foods, Macy’s, and other S Western Ave – 31,000 Vehicles per Day major anchors • Signalized hard corner provides plenty of access and exposure to vehicle traffic W 95th Street
Slide 33: Contents
CONTENTS 1 COMPANY OVERVIEW PG 3 2 HIGH QUALITY PORTFOLIO PG 12 3 ASSET SELECTION & PRIMARY SECTORS PG 20 4 CONSERVATIVE FINANCIAL POSITION PG 33 5 APPENDIX PG 36 FEBRUARY 2025 33
Slide 34: Conservative Financial Policies
CONSERVATIVE FCPT maintains a well-laddered debt maturity and 100% FINANCIAL POLICIES unencumbered assets to provide financial flexibility • Weighted average debt maturity ~4.4 years • No near-term debt maturities DEBT MATURITY SCHEDULE AS OF 2/1/25 $ MILLIONS Conservative leverage (OPTIONS SHOWN AS
Slide 35: FCPT's Consistent Leverage Range
FCPT’S CONSISTENT LEVERAGE RANGE FCPT has a stated leverage target of 5.5x-6.0x, but has been below or in the lower range of its target since inception Discipline around our leverage is embedded into company culture and our approach to funding growth FCPT HISTORICAL LEVERAGE1 5.8x 5.7x 5.7x 5.7x 5.7
Slide 36: Contents
CONTENTS 1 COMPANY OVERVIEW PG 3 2 HIGH QUALITY PORTFOLIO PG 12 3 ASSET SELECTION & PRIMARY SECTORS PG 20 4 CONSERVATIVE FINANCIAL POSITION PG 33 5 APPENDIX PG 36 FEBRUARY 2025 36
Slide 37: Underwriting Geared Toward Higher Sales Volume & Brands
UNDERWRITING GEARED TOWARD HIGHER SALES VOLUME & BRANDS Brand Average Sales Volume ($000s)1 Casual $7,000 Dining Quick Service $6,000 FCPT focuses on national brands with strong sales volumes and market appropriate rents Fast Casual $5,000 $4,000 $3,000 $2,000 $1,000 $0 FCPT pursues properties withi
Slide 38: Historically Tight Leasing Market Is Keeping Vacancy Low
HISTORICALLY TIGHT LEASING MARKET IS KEEPING VACANCY LOW U.S. gross construction vs. Despite an increasing number of retailer bankruptcies, the demolition of retail space, U.S. retail vacancy rate square feet decade-plus long slowdown in retail space deliveries due to the Global Financial Crisis a
Slide 39: Sustainability Framework
SUSTAINABILITY FRAMEWORK Our commitment to sustainability and Environmental, Social and Governance (ESG) principles creates value our shareholders. We continuously review our internal policies to advance in the areas of environmental sustainability, social responsibility, employee well-being, and go
Slide 40: Glossary and Non-GAAP Definitions
GLOSSARY AND NON-GAAP DEFINITIONS NON-GAAP DEFINITIONS AND CAUTIONARY NOTE REGARDING Tenant EBITDAR is calculated as EBITDA plus rental expense. EBITDAR is Adjusted Funds From Operations “AFFO” is a non-GAAP FORWARD-LOOKING STATEMENTS: derived from the most recent data provided by tenants that discl
Slide 41: Reconciliation Schedules
RECONCILIATION SCHEDULES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDARE (In thousands) Three Months Ended December 31, Twelve Months Ended December 31, Unaudited 2024 2023 2024 2023 Net Income $ 26,207 $ 24,459 $ 100,595 $ 95,462 Adjustments: Interest expense 12,302 12,361 49,231 44,606 Income ta
Slide 42: FFO & AFFO Reconciliation
FFO & AFFO RECONCILIATION ($000s, except shares and per share data) Three Months Ended December 31, Twelve Months Ended December 31, Unaudited 2024 2023 2024 2023 Net income $ 26,207 $ 24,459 $ 100,595 $ 95,462 Depreciation and amortization 14,060 13,284 54,372 50,592 Realized gain on sales of real
Slide 43: Footnotes
FOOTNOTES PAGE 7 FCPT AT A GLANCE Figures as of 12/31/2024 PAGE 17 BALANCED CREDIT AMONG TOP NATIONAL BRANDS 1. Weighted averages based on contractual Annual Cash Base Rent as defined in glossary, except for 1. Source: Nation’s Restaurant Top 500 Restaurants or public filings occupancy which is base
Slide 44: Thank You
Four Corners Property Trust NYSE: FCPT THANK YOU INVESTOR PRESENTATION FEBRUARY 2025
Four Corners Property Trust — Q4 2024 Earnings Presentation on 6ix