Core Insights - Four Corners Property Trust (FCPT) has acquired two Hawaiian Bros properties for $5.9 million through a sale-leaseback transaction, indicating a strategic move to expand its portfolio in the fast casual dining sector [1][8] - The newly constructed properties are situated in strong retail corridors in Arizona and Texas, and are operated under long-term, triple-net leases, which are favorable for stable income generation [2][8] - FCPT's recent acquisitions reflect its diversification strategy, with a focus on high-quality, net-leased restaurant and retail properties, which enhances portfolio stability [4][5] Acquisition Details - The acquisition of the Hawaiian Bros properties is part of FCPT's ongoing strategy to expand its holdings in the restaurant sector, following a recent purchase of three automotive service properties for the same amount of $5.9 million [3][8] - In the third quarter of 2025, FCPT expanded its portfolio significantly by acquiring 28 properties valued at $82 million, with a cap rate of 6.8%, showcasing its active investment approach [4] Market Context - The company faces increasing competition from private equity funds in the net lease market, which may pressure acquisition yields and impact FCPT's ability to secure attractive deals [5] - Over the past three months, FCPT's shares have declined by 6.3%, contrasting with a 1.4% growth in the broader industry, indicating potential challenges in the current market environment [5]

Financial Data and Key Metrics Changes - Getty Realty reported over 10% year-over-year growth in annualized base rent and a 5.1% increase in quarterly AFFO per share [6][18] - AFFO per share for Q3 2025 was $0.62, reflecting a 5.1% increase compared to Q3 2024 [18] - For the nine months ended September 30, AFFO per share was $1.80, an increase of 3.5% compared to the prior year period [18] Business Line Data and Key Metrics Changes - The company invested more than $235 million year-to-date, exceeding full-year activity in 2024, with a focus on drive-thru QSR segment [8][10] - The portfolio included 1,156 net leased properties with an occupancy rate of 99.8% and a weighted average lease term of 9.9 years [13] - The trailing twelve-month tenant rent coverage ratio was consistent at 2.6 times [15] Market Data and Key Metrics Changes - 61% of annualized base rent came from the top 50 MSAs, and 77% from the top 100 MSAs [13] - The company has diversified its tenant base by transacting with 10 new tenants in 2025 [8] Company Strategy and Development Direction - Getty Realty aims to acquire well-located convenience and automotive retail properties leased to growing regional and national operators [11] - The company is focused on leveraging its underwriting expertise and real estate selection to support investment decisions and mitigate credit risks [11] - The Board approved a 3.2% increase in the recurring quarterly dividend to $0.485 per share, marking the twelfth consecutive year of dividend growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the platform built over the years, highlighting the ability to deliver strong financial results amid market disruptions [11] - The company is increasing its full-year 2025 AFFO per share guidance to a range of $2.42 to $2.43, up from the previous guidance of $2.40 to $2.41 [22] Other Important Information - The company has no debt maturities until 2028, with a weighted average debt maturity of 4.8 years and a weighted average cost of debt at 4.5% [20] - At quarter end, the company had approximately $375 million in total liquidity, including unsettled forward equity and cash on the balance sheet [21] Q&A Session Summary Question: Thoughts on the health of middle to lower-end consumers regarding drive-thru QSRs - Management noted gaining momentum in the quick-service restaurant sector, which aligns with macroeconomic pressures and offers quality food at competitive price points [24][25] Question: Details on 3Q's environmental expense adjustments - Management explained that previous environmental risks have been alleviated, leading to the removal of certain reserves on the balance sheet [26][27] Question: Engagement timeline with Now and Forever acquisition - The transaction took less than six months, but relationship building can vary from months to years depending on the operator [30][31] Question: Funding plan for upcoming transactions - Management indicated that they typically fund investment activity on the line and settle forward equity towards the end of the quarter to manage leverage [32][33] Question: Update on bad debt and guidance - There have been no rent collection issues this year, with typical bad debt levels around 15 basis points [47] Question: Uptick in requests to substitute assets in master leases - Management stated there has not been an uptick in such requests at this time, with expectations for most profitable leases to remain in the portfolio long-term [49] Question: Underwriting differences for travel centers - Management highlighted that travel centers have a different risk profile, with larger land components and a focus on attracting both professional and recreational drivers [54][56]

Financial Data and Key Metrics Changes - Getty Realty reported an annualized base rent (ABR) of approximately $199 million, reflecting an 11.2% increase from $179 million in the prior year [7][18] - The company generated adjusted funds from operations (AFFO) per share of $0.59, a 3.5% increase compared to the same quarter last year [17][18] - General and administrative expenses (G&A) as a percentage of total revenue improved by 40 basis points to 13.2% [18] Business Line Data and Key Metrics Changes - The convenience and automotive retail sectors showed resilience, with strong performance from tenants despite macroeconomic challenges [7][8] - Rent coverage for convenience store assets remained consistent, while car wash sector rent coverage increased [8] - The company invested $10.9 million across six properties with an initial cash yield of 7.8% during the quarter [13] Market Data and Key Metrics Changes - The portfolio included 1,115 net leased properties with an occupancy rate of 99.7% and a weighted average lease term of ten years [12] - Approximately 61% of ABR came from the top 50 metropolitan statistical areas (MSAs) [12] Company Strategy and Development Direction - Getty Realty aims to maintain a disciplined acquisition strategy focused on high-density metro areas with creditworthy operators under long-term leases [11] - The company is committed to sourcing opportunities that align with its investment thesis, despite current market volatility [10] - The investment pipeline was increased to over $110 million, with a focus on development funding transactions [9][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their tenant base, which provides essential goods and services [7] - The company reaffirmed its AFFO per share guidance for 2025 in the range of $2.38 to $2.41, factoring in the anticipated resolution of the ZiPS situation [23] - Management noted that the economic and political uncertainty has created headwinds for closing deals but remains optimistic about sourcing new opportunities [10][23] Other Important Information - The company has no debt maturities until June 2028, with a weighted average debt maturity of 5.4 years and a cost of debt at 4.5% [21][22] - The company received all rent due through April 2025 from ZiPS, except for the period surrounding its bankruptcy filing [22] Q&A Session Summary Question: Can you describe the cadence of capital deployment in the next nine to twelve months for the $110 million investment pipeline? - Management indicated that about two-thirds of the pipeline consists of development funding, typically taking nine to twelve months for completion, while sale leaseback activity is expected within the next quarter [25][26] Question: Given the macro uncertainty, what is the current development demand? - Management noted ongoing discussions with operators looking to accelerate new store growth programs in 2025, but clarity on the situation is still developing [27] Question: How should we think about the timing of ZiPS rent income hitting the income statement? - Management expects the resolution of the ZiPS situation by the end of the second quarter, with continuity of rent for sites remaining with ZiPS [36][37] Question: Have you seen any impact from tariffs on your existing tenant base? - Management stated that the impact of tariffs is still uncertain, but their assets are not heavily reliant on manufacturing, which may mitigate direct effects [42] Question: What is your appetite for QSR investments going forward? - Management indicated that while QSRs currently represent a small portion of the portfolio, they are pleased with the progress made in developing relationships in this sector [75]

Financial Data and Key Metrics Changes - In Q4 of fiscal 2024, comparable store sales decreased by 9.4% year-over-year on a like-for-like basis [32] - Revenue for the quarter was $535 million, with a net income of $9 million, or $0.25 per diluted share, and adjusted net income of $27 million, or $0.69 per diluted share [32] - Adjusted EBITDA was $127 million, resulting in an adjusted EBITDA margin of 23.8% [32] - Operating cash flow for the quarter was $108.9 million, ending with $6.9 million in cash and $503.5 million available under a $650 million revolving credit facility [33] Business Line Data and Key Metrics Changes - The company is focusing on a "back to basics" strategy, unwinding previous leadership's changes in marketing, operations, and menu offerings [11][15] - The reintroduction of TV advertising and the classic eat and play combo promotion has shown positive results in increasing check sizes [17][18] - The company completed 44 remodels under its program, with a more measured approach planned for the first half of 2025 [21][22] Market Data and Key Metrics Changes - The company opened five new stores in Q4, totaling 14 new stores for fiscal 2024, including its first international franchise location in India [28][29] - The company has entered into 35 franchise partnership agreements, anticipating at least six additional franchise units to open in the next 12 months [29] Company Strategy and Development Direction - The current leadership is focused on improving revenue, adjusted EBITDA, and free cash flow through strategic changes and operational improvements [12][13] - The company plans to open 10 to 12 new stores in fiscal 2025, with a renewed focus on high ROI initiatives and a more disciplined remodel program [39][40] - The leadership acknowledges the need to enhance competitive differentiation while correcting past mistakes [82] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving trends in March and April, indicating a recovery from the fourth quarter's performance [12][44] - The leadership is aware of macroeconomic challenges but believes that strengthening the business will mitigate these effects [78][114] - The company is committed to converting operating cash flow into free cash flow while maintaining a strong balance sheet [114] Other Important Information - The company repurchased nearly 3 million shares for approximately $85 million in Q4, totaling 5 million shares for fiscal 2024 [34] - The company completed sale-leaseback transactions generating $111 million in proceeds, totaling approximately $185 million for fiscal 2024 [35] Q&A Session Summary Question: Improvements seen in March and April - Management noted that March and April showed marked improvements in traffic and ticket sales, indicating a positive trend [44] Question: CapEx and leaseback cash against CapEx - Management confirmed that the $220 million CapEx guidance assumes typical tenant improvements and sale-leasebacks [50][53] Question: Back-to-basics strategy and cost structure implications - The strategy involves smarter spending on marketing and a focus on core offerings without significantly increasing costs [57][59] Question: Value proposition for the brand - Management is re-evaluating the gaming value proposition and testing ways to enhance guest experience while maintaining value [67] Question: Recent traffic and sales pressures breakdown - Management indicated that recent pressures were a mix of macroeconomic factors and self-inflicted issues, with a focus on correcting past mistakes [76] Question: Competitive environment and top-line struggles - Management believes that execution issues were the primary cause of struggles, rather than competitive pressures [98] Question: Lower-income consumer trends - Management noted that while trends were unfavorable for lower-income consumers, recent marketing efforts may help drive visitation from this demographic [88] Question: CapEx outlook and breakdown - Management provided flexibility in capital spending and indicated that they would tighten up the breakdown of CapEx categories in the coming weeks [92] Question: Remodel hurdle rates and TV advertising mix - The remodel hurdle rate is expected to be lowered to mid to high single digits, with a return to a 50% mix of TV advertising [110][108]

Core Insights - Four Corners Property Trust (FCPT) has acquired a Burger King property for $2.1 million through a sale-leaseback from Ampler Restaurant Group, marking the tenth property purchase from this group and totaling $22 million in March [1][4] - The property is situated in strong retail corridors in Kentucky, with a cap rate of 6.8% on rent and a long-term, triple-net lease with 20 years remaining, which will secure long-term cash flows for the company [2][5] - FCPT's strategy focuses on acquiring high-quality, net-leased restaurant and retail properties to ensure stable revenues over the long term [3][5] Acquisition History - In March 2025, FCPT acquired nine additional Burger King properties from Ampler Restaurant Group for $19.9 million, also through a sale-leaseback, located in strong retail corridors in Tennessee with similar lease terms [4] - In 2024, FCPT acquired a total of 87 properties for approximately $265 million, reinforcing its strategy of building a diversified portfolio [5] Market Performance - Over the past three months, FCPT's shares have increased by 3.5%, while the industry has seen a decline of 0.6%, indicating a positive market sentiment towards the stock [6] - Analysts have revised the Zacks Consensus Estimate for FCPT's 2025 funds from operations (FFO) per share upward to $1.77 over the past two months, reflecting bullish sentiment [6]

Core Viewpoint - Four Corners Property Trust (FCPT) is actively diversifying its portfolio through strategic acquisitions, including the recent purchase of nine Burger King properties for $19.9 million, which reflects its commitment to enhancing portfolio quality [1][2]. Acquisition Details - The nine Burger King properties are situated in strong retail corridors in Tennessee and were acquired at a 6.8% cap rate on rent, exclusive of transaction costs. These properties are under long-term, triple-net leases with 20 years remaining, which will help secure long-term cash flows for FCPT [2]. - In March 2025, FCPT also acquired six Whataburger properties for $16.8 million, similarly structured under long-term, triple-net leases with 20 years remaining, located in strong retail corridors in Alabama [4]. Historical Performance - In 2024, FCPT acquired a total of 87 properties, representing an investment of approximately $265 million, indicating a strategy focused on building a diverse portfolio to ensure stable revenues [5]. - Over the past three months, FCPT's shares have increased by 7.1%, outperforming the industry growth of 4.6%. Analysts have revised the Zacks Consensus Estimate for its 2025 funds from operations (FFO) per share upward by 1.1% to $1.77 [6]. Market Position - FCPT operates as a real estate investment trust (REIT) primarily focused on high-quality, net-leased restaurant and retail properties, showcasing a strong track record of acquisitions [3]. - Other REITs in the sector, such as Welltower and Cousins Properties, are also performing well, with their 2025 FFO per share estimates being revised upward, indicating a positive outlook for the broader REIT market [7].