Mill Valley-Based FCPT Announces $150MM Strategic Retail Venture with Lubert-Adler

San Francisco, Proposition H, Prop H, retail, formula retail, Starboard Commercial Real Estate

MILL VALLEY, Calif.–Four Corners Property Trust (NYSE:FCPT), a real estate investment trust primarily engaged in the ownership of high-quality, net-leased restaurant properties (“FCPT” or the “Company”), is pleased to announce a strategic venture to invest up to $150 million (the “Venture”) with Lubert-Adler Real Estate Funds, a leading real estate private equity investor (“Lubert-Adler”). The Venture will focus on acquiring vacant retail real estate that will be principally re-tenanted with credit-worthy brand operators expanding their store count. Both FCPT and Lubert-Adler bring significant attributes to the Venture. FCPT has meaningful restaurant investing experience, access to restaurant real estate deal flow, long-standing tenant relationships, and acquisition execution capabilities. Lubert-Adler brings decades of retail real estate acquisition and repositioning experience to the Venture, having re-tenanted 170 million square feet of retail properties, in addition to having relevant financial capabilities. FCPT will invest up to $20 million into the Venture, with Lubert-Adler contributing the remainder of the capital. In addition, FCPT will have the right, but not the obligation, to purchase properties from the Venture for FCPT’s long-term ownership portfolio once the properties are stabilized.

FCPT’s exposure to vacant properties will be separately managed from its core operations. FCPT does not anticipate any impact from the Venture to its core business focus on acquiring high quality real estate leased to best-in-class restaurant and retail operators. Further, FCPT does not anticipate any impact to its leverage or credit profile from participating in the Venture. The Venture will have a multi-year investment period and will be fully compliant with FCPT’s REIT status. While the Venture will look to invest in vacant properties in the near term, the long-term nature of the leasing and asset stabilization process means it may be several years before FCPT purchases assets from the Venture, and may never purchase assets from the Venture.

Bill Lenehan, CEO of FCPT, commented: “Organizing appropriate capital to purchase well located but vacant restaurant properties has been on our mind for some time. This venture allows us to apply our core sector expertise to high-return opportunities prudently and efficiently relative to our shareholders’ capital and low risk tolerance. This venture has the potential to lead to a future pipeline for our core business at attractive economics. Most importantly, however, by keeping retail areas occupied and vibrant, we will be aiding the surrounding communities in their recovery from the economic impact of COVID-19. Lubert-Adler has significant access to acquisition opportunities and deep tenant relationships. We are excited to be partnered with them in the venture and are looking forward to working with their long-standing operating and co-investment partners who possess significant experience in this field.”

Dean Adler, CEO and Co-Founder of Lubert-Adler, added: “Regrettably, the business interruption caused by COVID-19 to the retail and restaurant sector will cause many operators to close their doors permanently. Our goal is to bring in new tenants that will replace vacant buildings with jobs for those communities. While our focus will remain on stabilizing retail corridors, we also believe this to be a generational distressed investment opportunity akin to acquiring housing after the Great Financial Crisis. Over the last 20 years we have successfully purchased over 3,000 retail properties and repositioned them. We are very familiar with the process of value-add retail investing and believe that FCPT, as the industry sharp-shooter, is an ideal partner to execute this strategy with us.”

About FCPT

FCPT, headquartered in Mill Valley, CA, is a real estate investment trust primarily engaged in the acquisition and leasing of restaurant properties. The Company seeks to grow its portfolio by acquiring additional real estate to lease for use in the restaurant and retail industries.

About Lubert-Adler

Since being formed in 1997, Lubert-Adler has raised and deployed over $8 billion of equity capital in $20 billion of real estate assets. Lubert-Adler focuses on creating value from “asset-rich” retailers, adapting real estate use of historic buildings into vibrant multifamily properties, and financial restructurings including upgrading and repositioning distressed real estate; investments have included re-tenanting vacant stores of Albertsons, Levitz, Mervyns, ShopKo and Toys “R” Us. Lubert-Adler is also a significant investor in Albertsons.

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