Four Corners Property Trust, Inc. (NYSE:FCPT) Q1 2024 Earnings Call Transcript

Bill Lenehan: Yeah. It’s a really great question. The crux of it though is, is it $300 million of one tenant? Or is it $300 million of a diversified pool that’s for argument’s sake is analogous to our existing portfolio? What we’ve seen in the market is that the $300 million of one tenant trades at a discount because you’re buying tenant concentration when you buy that, a well-diversified pool less so. So I would look at a well-diversified pool that we’re buying as very efficient. So I wouldn’t demand a premium. $300 million of sale leaseback of one tenant in today’s market would get discounted pricing or a premium cap rate, however you want to say it. And I think the other thing that we’ve noticed in the market — the other thing we’ve noticed in the market just to close the loop is that REITs generally, my feeling is that if acquisitions require capital raises, there’s a higher level of hesitancy because bank debt capital is more dear, capital markets are more fickle and most people are a little bit where we are, where they’d like to see their stock price a little higher.

So a transaction that requires a capital raise, three, four years ago, that was an advantage. You wanted a reason to go to the capital markets today that causes pause.

Jim Kammert: Very good color. And just to close the loop, I know it’s a fluid situation, but on those, let’s just call them, larger portfolios from your perspective, what kind of dollar value that is in your shadow pipeline today, say, versus six or nine months ago? Just ballpark, curious what you’re looking at.

Bill Lenehan: Yeah. These are more quite large transactions that we’re kicking the tires on, but I want to just be very clear, nothing is imminent or even probable. Just things that we’re looking at, we have, we’ve looked — we’ve had large transactions that we’ve been looking at since inception, we’ve done a handful of them with Brinker, with a bank that was selling some net lease a year ago, but nothing is imminent or probable. It’s just an observation that they seem to be more prevalent than in the past.

Jim Kammert: Okay. Understood. Thank you.

Operator: And that was our final question, I will hand back over to Bill for final remarks.

Bill Lenehan: Great. Thank you, everyone, and another efficient conference call. If anyone has any questions, please reach out. Thank you.

Operator: And this concludes today’s call. Thank you for joining. You may now disconnect your lines.