Four Corners Property Trust (NYSE:FCPT) used its fourth-quarter 2025 earnings call to highlight a decade of growth as a public company, while outlining an acquisition strategy built around granular deal sourcing, a heavily equity-funded balance sheet, and continued diversification beyond casual dining.
Ten-year milestone and portfolio positioning
CEO Bill Lenehan said November marked FCPT’s 10-year anniversary as a public company. Over that period, the company grew from four employees and 418 properties leased to a single tenant into a platform with 44 team members and 1,325 leases. Lenehan said FCPT has acquired $2.3 billion of properties and paid more than $1 billion of dividends to shareholders.
Acquisition activity and new sectors
In the fourth quarter, FCPT acquired $95 million of net lease properties at a 7% blended cap rate, which management said was a 20-basis-point expansion from the prior quarter and the company’s highest blended cap rate in 2025. For the full year, FCPT acquired 105 properties for $318 million at a 6.8% blended cap rate.
Chief Investment Officer Josh Rogers said the company’s 2025 activity relied primarily on mid-sized transactions rather than large portfolio deals. He said FCPT completed 53 unique transactions during the year, with an average basis of roughly $3 million per property, and argued that smaller, “low basis” acquisitions help protect against downside.
FCPT also discussed early steps into new categories outside its “main three” acquisition areas (restaurants, automotive service, and medical retail). In Q4, the company acquired a Sprouts grocery store and its first equipment-rental asset, a United Rentals property. Rogers said FCPT is evaluating grocery and equipment rental as adjacent, “recession-resistant” sectors, and described the purchases as an initial effort to build expertise before launching any broader strategy.
- Rogers said Sprouts is publicly traded, has more than 410 U.S. locations, and “no debt,” and that FCPT’s $8.6 million basis in its acquired store was below the $10 million–$15 million it typically sees for the brand.
- Rogers said United Rentals is publicly traded with more than 1,600 U.S. locations and is rated BB+ by S&P.
In response to an analyst question on industrial outdoor storage and equipment rental, Lenehan said the sector can be attractive due to residual land value, tenant credit quality, and entitlement barriers for new sites, adding that the addressable market is “enormous” relative to FCPT’s size. He said FCPT will continue to pursue opportunities where cap rates “make sense.”
Tenant updates: Casual dining strength and Bahama Breeze discussions
Lenehan highlighted operating results from major tenants, noting that Olive Garden, LongHorn, and Chili’s represent more than 51% of portfolio rent combined. He cited reported same-store sales growth of 9% for Chili’s for the quarter ended December 2025, and said Olive Garden and LongHorn reported same-store sales growth near 5% and 6%, respectively, for the quarter ended November 2025.
The call also addressed Darden’s announcement that it plans to shut down the Bahama Breeze brand and convert many locations to other concepts. Lenehan said FCPT’s Bahama Breeze exposure is 1.3% of base rent across 10 properties, with average rent of $341,000 per property. He said the company is in discussions with Darden and expects several stores to be converted to other Darden concepts. He also noted the leases have a minimum of 1.7 years of remaining term, during which Darden is expected to continue paying rent and other property costs.
Management said that if any locations become permanent closures, FCPT has already received “significant inbound inquiries” to backfill the sites and believes they could be re-tenanted at similar rents. In Q&A, Lenehan said he did not believe the company was “baking in losses” related to Bahama Breeze, and suggested any conversions would likely occur at the existing lease rental rate. CFO Patrick Wernig added that some conversion plans may be affected by property-specific restrictions such as covenants and shopping center constraints, but said demand from prospective replacement tenants over the prior week had been “tremendous.”
On Red Lobster, Lenehan said the brand is doing “much, much better” than under prior ownership and that FCPT’s locations are predominantly in a master lease that was affirmed during restructuring “at the same rent.”
Balance sheet, liquidity, and Q4 financial results
Wernig said FCPT ended the fourth quarter with full capacity on its $350 million revolving credit facility. Net debt to adjusted EBITDA was 4.9x including outstanding net equity forwards, and 5.1x excluding forward equity, marking the sixth consecutive quarter below 5.5x and near the low end of its stated 5x–6x leverage range. He said the company has more than $220 million of liquidity before reaching 5x leverage, with “substantially more” capacity before approaching 6x.
Management also discussed improving debt market conditions. Lenehan said FCPT avoided issuing debt when it would have required a 7%+ coupon, and now sees potential coupons in the 4.5%–5.5% range depending on structure and term. Wernig said 98% of FCPT’s debt stack is fixed, with 95% of floating-rate debt fixed through November 2027 at 3% versus spot rates around 4%, resulting in a blended cash interest rate of 4%. He also cited a fixed charge coverage ratio of 4.8x and noted the company has no debt maturities until December 2026, when $50 million of private notes come due.
On results, Wernig reported fourth-quarter AFFO per share of $0.45 and full-year 2025 AFFO per share of $1.78, representing 2.9% growth over 2024. Fourth-quarter cash rental income was $67.5 million, up 11.1% year over year. Annualized cash-based rent at quarter end was $264.2 million, and FCPT’s weighted average five-year annual cash rent escalator was 1.5%.
Cash G&A expense was $18 million for the year, at the bottom of the company’s guidance range, representing 6.9% of cash rental income versus 7.1% in the prior year. Wernig said 2026 cash G&A guidance is $19.2 million to $19.7 million.
Operationally, FCPT reported occupancy of 99.6%, and said it collected 99.5% of base rent in Q4 and 99.8% for the year, with no material changes to collectibility or credit reserves. Management also said 95% of the 41 leases that expired in 2025 remain occupied, and that progress on 2026 maturities reduced 2026 expirations to 1.5% of ABR from 2.6% at the start of 2025.
In Q&A, management disclosed a “rare impairment” tied to an older asset—a Hardee’s property in Glencoe, Alabama—citing difficulty re-leasing a small, long-vacant site.
Outlook commentary and capital allocation approach
While FCPT did not provide acquisition guidance, executives reiterated a disciplined capital allocation approach and said the company believes it has significant runway to fund accretive investments, aided by what it views as improved debt pricing. Lenehan said that given current cap rates and FCPT’s cost of debt capital, the company does not anticipate slowing down in 2026 and expects “healthy investment spreads and growth for the year.”
About Four Corners Property Trust (NYSE:FCPT)
Four Corners Property Trust is a publicly traded real estate investment trust focused on acquiring and managing single-tenant commercial properties subject to long-term, triple-net leases. The company targets industrial, manufacturing, distribution, office and retail facilities leased to creditworthy tenants. By concentrating on net-lease structures, Four Corners seeks to generate stable, predictable income streams and mitigate operating cost variability.
The firm’s core activities include sourcing off-market and broker-sourced acquisition opportunities, conducting rigorous credit and property due diligence, and structuring lease agreements that shift property taxes, insurance and maintenance expenses to tenants.
