Four Corners Property Trust (NYSE:FCPT) announce dthe disposition of a Bahama Breeze restaurant property leased to Darden Restaurants, Inc. (NYSE: DRI) for $16.2 million. The property is located in Orlando, Florida, and is occupied under a triple-net lease with approximately 11 years of term remaining. The sale is the result of an unsolicited offer at a cash cap rate of slightly over 5.0%, exclusive of transaction costs.
Bill Lenehan commented, “This transaction evidences the strong demand, at an attractive valuation, of our properties in the private market. Proceeds from this sale will be deployed accretively into new, diversifying acquisitions.”
FCPT anticipates redeploying the proceeds from this transaction through an Internal Revenue Code Section 1031 like-kind exchange (“1031-Exchange”). As a result, net cash proceeds from the sale will be held in an escrow account until one or more properties are purchased through the 1031-Exchange. However, there can be no assurance that an acquisition of a new property or properties will occur. If the Company fails to identify one or more like-kind replacement properties of comparable value within 45 days of the date of sale and/or fails to acquire such property or properties within 180 days of the date of sale, the Company will be required to pay a tax at the highest corporate income tax rate on the “built-in gain” (i.e. the gain that existed at the time FCPT acquired the properties from Darden) recognized on the sale of the properties.
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