Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 02, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-37538 | |
Entity Registrant Name | Four Corners Property Trust, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 47-4456296 | |
Entity Address, Address Line One | 591 Redwood Highway, | |
Entity Address, Address Line Two | Suite 3215, | |
Entity Address, City or Town | Mill Valley, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94941 | |
City Area Code | 415 | |
Local Phone Number | 965-8030 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | FCPT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 83,887,293 | |
Entity Central Index Key | 0001650132 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Real estate investments: | ||
Land | $ 1,056,228 | $ 966,565 |
Buildings, equipment and improvements | 1,490,729 | 1,437,840 |
Total real estate investments | 2,546,957 | 2,404,405 |
Less: Accumulated depreciation | (700,499) | (682,430) |
Total real estate investments, net | 1,846,458 | 1,721,975 |
Intangible lease assets, net | 106,947 | 104,251 |
Total real estate investments and intangible lease assets, net | 1,953,405 | 1,826,226 |
Cash and cash equivalents | 36,669 | 6,300 |
Straight-line rent adjustment | 59,873 | 55,397 |
Derivative assets | 36,448 | 2,591 |
Deferred tax assets | 920 | 864 |
Other assets | 12,562 | 11,602 |
Total Assets | 2,099,877 | 1,902,980 |
Liabilities: | ||
Long-term debt, net of deferred financing costs | 966,989 | 877,591 |
Dividends payable | 27,487 | 26,655 |
Rent received in advance | 11,870 | 11,311 |
Derivative liabilities | 0 | 7,517 |
Other liabilities | 24,800 | 16,014 |
Total liabilities | 1,031,146 | 939,088 |
Equity: | ||
Preferred stock, par value 0.0001 per share; 25,000,000 authorized, zero shares issued and outstanding | 0 | 0 |
Common stock, par value 0.0001 per share; 500,000,000 shares authorized, 82,822,584 and 80,279,217 shares issued and outstanding, respectively | 8 | 8 |
Additional paid-in capital | 1,027,716 | 958,737 |
Retained earnings | 6,771 | 12,753 |
Accumulated other comprehensive income (loss) | 31,968 | (9,824) |
Noncontrolling interest | 2,268 | 2,218 |
Total equity | 1,068,731 | 963,892 |
Total Liabilities and Equity | $ 2,099,877 | $ 1,902,980 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 82,822,584 | 80,279,217 |
Common stock, shares outstanding (in shares) | 82,822,584 | 80,279,217 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Rental revenue | $ 48,719 | $ 43,673 | $ 143,526 | $ 127,350 |
Total revenues | 56,008 | 50,706 | 165,830 | 146,724 |
Operating expenses: | ||||
General and administrative | 4,917 | 4,262 | 14,884 | 13,490 |
Depreciation and amortization | 10,588 | 8,831 | 30,420 | 25,455 |
Total operating expenses | 24,294 | 21,092 | 71,864 | 60,596 |
Interest expense | (9,177) | (8,311) | (26,583) | (24,328) |
Other income | 164 | 2 | 250 | 10 |
Realized gain on sale | 1,828 | 0 | 7,584 | 431 |
Income tax benefit (expense) | 23 | (97) | (209) | (231) |
Net income | 24,552 | 21,208 | 75,008 | 62,010 |
Net income attributable to noncontrolling interest | (34) | (44) | (105) | (129) |
Net Income Available to Common Shareholders | $ 24,518 | $ 21,164 | $ 74,903 | $ 61,881 |
Basic net income per share (in USD per share) | $ 0.30 | $ 0.28 | $ 0.93 | $ 0.81 |
Diluted net income per share (in USD per share) | $ 0.30 | $ 0.28 | $ 0.92 | $ 0.81 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 81,884,974 | 76,250,614 | 80,797,829 | 76,094,133 |
Diluted (in shares) | 82,119,447 | 76,360,526 | 81,011,737 | 76,222,167 |
Dividends declared per common share (in USD per share) | $ 0.3325 | $ 0.3175 | $ 0.9975 | $ 0.9525 |
Restaurant | ||||
Revenues: | ||||
Restaurant revenue | $ 7,289 | $ 7,033 | $ 22,304 | $ 19,374 |
Operating expenses: | ||||
Expenses | 6,790 | 6,546 | 20,725 | 17,994 |
Property | ||||
Operating expenses: | ||||
Expenses | $ 1,999 | $ 1,453 | $ 5,835 | $ 3,657 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 24,552 | $ 21,208 | $ 75,008 | $ 62,010 |
Other comprehensive income: | ||||
Effective portion of change in fair value of derivative instruments | 17,151 | 1,340 | 39,151 | 6,447 |
Reclassification adjustment of derivative instruments included in net income | (104) | 1,748 | 2,700 | 5,220 |
Other comprehensive income | 17,047 | 3,088 | 41,851 | 11,667 |
Comprehensive income | 41,599 | 24,296 | 116,859 | 73,677 |
Less: comprehensive income attributable to noncontrolling interest | ||||
Net income attributable to noncontrolling interest | 34 | 44 | 105 | 129 |
Other comprehensive income attributable to noncontrolling interest | 24 | 6 | 59 | 24 |
Comprehensive income attributable to noncontrolling interest | 58 | 50 | 164 | 153 |
Comprehensive Income Attributable to Common Shareholders | $ 41,541 | $ 24,246 | $ 116,695 | $ 73,524 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Beginning balance (in shares) at Dec. 31, 2020 | 75,874,966 | |||||
Beginning balance at Dec. 31, 2020 | $ 844,501 | $ 8 | $ 840,455 | $ 26,672 | $ (25,695) | $ 3,061 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 62,010 | 61,881 | 129 | |||
Other comprehensive income (loss) | 11,667 | 11,643 | 24 | |||
Redemption of OP units (in shares) | 44,833 | |||||
Redemption of OP units | 862 | (862) | ||||
ATM proceeds, net of issuance costs (in shares) | 1,161,702 | |||||
ATM proceeds, net of issuance costs | 31,799 | 31,799 | ||||
Dividends and distributions to equity holders | (72,982) | (72,845) | (137) | |||
Stock-based compensation, net (in shares) | 164,225 | |||||
Stock-based compensation, net | 58 | 58 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 77,245,726 | |||||
Ending balance at Sep. 30, 2021 | 877,053 | $ 8 | 873,174 | 15,708 | (14,052) | 2,215 |
Beginning balance (in shares) at Jun. 30, 2021 | 76,202,401 | |||||
Beginning balance at Jun. 30, 2021 | 849,323 | $ 8 | 844,334 | 19,052 | (17,134) | 3,063 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 21,208 | 21,164 | 44 | |||
Other comprehensive income (loss) | 3,088 | 3,082 | 6 | |||
Redemption of OP units (in shares) | 44,833 | |||||
Redemption of OP units | 862 | (862) | ||||
ATM proceeds, net of issuance costs (in shares) | 1,000,193 | |||||
ATM proceeds, net of issuance costs | 27,140 | 27,140 | ||||
Dividends and distributions to equity holders | (24,544) | (24,508) | (36) | |||
Stock-based compensation, net (in shares) | (1,701) | |||||
Stock-based compensation, net | 838 | 838 | ||||
Ending balance (in shares) at Sep. 30, 2021 | 77,245,726 | |||||
Ending balance at Sep. 30, 2021 | $ 877,053 | $ 8 | 873,174 | 15,708 | (14,052) | 2,215 |
Beginning balance (in shares) at Dec. 31, 2021 | 80,279,217 | 80,279,217 | ||||
Beginning balance at Dec. 31, 2021 | $ 963,892 | $ 8 | 958,737 | 12,753 | (9,824) | 2,218 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 75,008 | 74,903 | 105 | |||
Other comprehensive income (loss) | 41,851 | 41,792 | 59 | |||
ATM proceeds, net of issuance costs (in shares) | 2,451,206 | |||||
ATM proceeds, net of issuance costs | 66,257 | 66,257 | ||||
Dividends and distributions to equity holders | (80,999) | (80,885) | (114) | |||
Stock-based compensation, net (in shares) | 92,161 | |||||
Stock-based compensation, net | $ 2,722 | 2,722 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 82,822,584 | 82,822,584 | ||||
Ending balance at Sep. 30, 2022 | $ 1,068,731 | $ 8 | 1,027,716 | 6,771 | 31,968 | 2,268 |
Beginning balance (in shares) at Jun. 30, 2022 | 80,543,986 | |||||
Beginning balance at Jun. 30, 2022 | 991,548 | $ 8 | 964,607 | 9,740 | 14,945 | 2,248 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 24,552 | 24,518 | 34 | |||
Other comprehensive income (loss) | 17,047 | 17,023 | 24 | |||
ATM proceeds, net of issuance costs (in shares) | 2,277,782 | |||||
ATM proceeds, net of issuance costs | 61,903 | 61,903 | ||||
Dividends and distributions to equity holders | (27,525) | (27,487) | (38) | |||
Stock-based compensation, net (in shares) | 816 | |||||
Stock-based compensation, net | $ 1,206 | 1,206 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 82,822,584 | 82,822,584 | ||||
Ending balance at Sep. 30, 2022 | $ 1,068,731 | $ 8 | $ 1,027,716 | $ 6,771 | $ 31,968 | $ 2,268 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Cash flows - operating activities | |||||
Net income | $ 24,552,000 | $ 21,208,000 | $ 75,008,000 | $ 62,010,000 | |
Adjustments to reconcile net income to cash provided by operating activities: | |||||
Depreciation and amortization | 30,420,000 | 25,455,000 | |||
Realized gain on sale | (7,584,000) | (431,000) | |||
Non-cash revenue adjustments | 1,600,000 | 1,590,000 | |||
Amortization of financing costs | 496,000 | 468,000 | 1,460,000 | 1,901,000 | |
Stock-based compensation expense | 3,739,000 | 3,092,000 | |||
Deferred income taxes | (118,000) | (57,000) | 0 | ||
Changes in assets and liabilities: | |||||
Derivative assets and liabilities | 477,000 | 2,283,000 | |||
Straight-line rent adjustment | (4,939,000) | (5,775,000) | |||
Rent received in advance | 559,000 | (1,197,000) | |||
Intangible assets (lease incentive payments) | 0 | (815,000) | $ (1,200,000) | ||
Other assets and liabilities | 8,604,000 | 5,934,000 | |||
Net cash provided by operating activities | 109,287,000 | 94,047,000 | |||
Cash flows - investing activities | |||||
Purchases of real estate investments | (171,835,000) | (195,105,000) | |||
Proceeds from sale of real estate investments | 20,365,000 | 3,343,000 | |||
Advance refunds on acquisition of operating real estate | (459,000) | (148,000) | |||
Net cash used in investing activities | (151,929,000) | (191,910,000) | |||
Cash flows - financing activities | |||||
Net proceeds from ATM equity issuance | 66,257,000 | 31,799,000 | |||
Proceeds from issuance of senior notes | 125,000,000 | 100,000,000 | |||
Payment of deferred financing costs | (1,062,000) | (4,625,000) | |||
Proceeds from revolving credit facility | 28,000,000 | 148,500,000 | |||
Repayment of revolving credit facility | (64,000,000) | (105,500,000) | |||
Payment of dividends to shareholders | (80,053,000) | (72,395,000) | |||
Distributions to non-controlling interests | (114,000) | (137,000) | |||
Employee shares withheld for taxes | (1,017,000) | (3,034,000) | |||
Net cash provided by financing activities | 73,011,000 | 94,608,000 | |||
Net increase (decrease) in cash and cash equivalents, including restricted cash | 30,369,000 | (3,255,000) | |||
Cash and cash equivalents, including restricted cash, at beginning of period | 6,300,000 | 11,064,000 | 11,064,000 | ||
Cash and cash equivalents, including restricted cash, at end of period | 36,669,000 | 7,809,000 | 36,669,000 | 7,809,000 | 6,300,000 |
Supplemental disclosures: | |||||
Interest paid | 17,318,000 | 12,292,000 | |||
Income taxes paid | 358,000 | 291,000 | |||
Operating lease payments received (lessor) | 135,546,000 | 120,462,000 | |||
Operating lease payments remitted (lessee) | 680,000 | 659,000 | |||
Non-cash activities: | |||||
Dividends declared but not paid | $ 27,487,000 | $ 24,508,000 | 27,487,000 | 24,508,000 | $ 26,655,000 |
Change in fair value of derivative instruments | $ 41,374,000 | $ 9,384,000 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Four Corners Property Trust, Inc. (together with its consolidated subsidiaries, “FCPT”) is an independent, publicly traded, self-administered company, primarily engaged in the ownership, acquisition and leasing of restaurant and retail properties. Substantially all of our business is conducted through Four Corners Operating Partnership, LP (“FCPT OP”), a Delaware limited partnership of which we are the initial and substantial limited partner. Our wholly owned subsidiary, Four Corners GP, LLC (“FCPT GP”), is its sole general partner. Any references to “the Company,” “we,” “us,” or “our” refer to FCPT as an independent, publicly traded, self-administered company. FCPT was incorporated as a Maryland corporation on July 2, 2015 as a wholly owned indirect subsidiary of Darden Restaurants, Inc., (together with its consolidated subsidiaries “Darden”), for the purpose of owning, acquiring and leasing properties on a triple-net basis, for use in the restaurant and other retail industries. On November 9, 2015, Darden completed a spin-off of FCPT whereby Darden contributed to us 100% of the equity interest in entities that owned 418 properties in which Darden operates restaurants, representing five of their brands, and six LongHorn Steakhouse restaurants located in the San Antonio, Texas area (the “Kerrow Restaurant Operating Business”) along with the underlying properties or interests therein associated with the Kerrow Restaurant Operating Business. In exchange, we issued to Darden all of our common stock and paid to Darden $315.0 million in cash. Subsequently, Darden distributed all of our outstanding shares of common stock pro rata to holders of Darden common stock whereby each Darden shareholder received one share of our common stock for every three shares of Darden common stock held at the close of business on the record date, which was November 2, 2015, as well as cash in lieu of any fractional shares of our common stock which they would have otherwise received. We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a real estate investment trust (a “REIT”) for federal income tax purposes commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our shareholders, subject to certain adjustments and excluding any net capital gain. As a REIT, we will not be subject to federal corporate income tax on that portion of net income that is distributed to our shareholders. However, FCPT’s taxable REIT subsidiaries (“TRS”) will generally be subject to federal, state, and local income taxes. We made our REIT election upon the filing of our 2016 tax return. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements (the “Consolidated Financial Statements”) include the accounts of Four Corners Property Trust, Inc. and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Consolidated Financial Statements reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results for the interim periods presented. These adjustments are considered to be of a normal, recurring nature. Use of Estimates The preparation of these Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The estimates and assumptions used in the accompanying Consolidated Financial Statements are based on management’s evaluation of the relevant facts and circumstances. Actual results may differ from the estimates and assumptions used in preparing the accompanying Consolidated Financial Statements, and such differences could be material. Real Estate Investments, Net Real estate investments, net are recorded at cost less accumulated depreciation. Building components are depreciated over estimated useful lives ranging from seven using the straight-line method. Leasehold improvements, which are reflected on our Consolidated Balance Sheets as a component of buildings, equipment, and improvements, net are amortized over the lesser of the non-cancelable lease term or the estimated useful lives of the related assets using the straight-line method. Equipment is depreciated over estimated useful lives ranging from two also using the straight-line method. Real estate development and construction costs for newly constructed restaurant and retail locations are capitalized in the period in which they are incurred. Gains and losses on the disposal of land, buildings, and equipment are included in realized gain on sale, net, in our accompanying Consolidated Statements of Income (“Income Statements”). Our accounting policies regarding land, buildings, equipment, and improvements, include our judgments regarding the estimated useful lives of these assets, the residual values to which the assets are depreciated or amortized, the determination of what constitutes a reasonably assured lease term, and the determination as to what constitutes enhancing the value of or increasing the life of existing assets. These judgments and estimates may produce materially different amounts of reported depreciation and amortization expense if different assumptions were used. As discussed further below, these judgments may also impact our need to recognize an impairment charge on the carrying amount of these assets as the cash flows associated with the assets are realized, or as our expectations of estimated future cash flows change. Acquisition of Real Estate The Company evaluates acquisitions to determine whether transactions should be accounted for as asset acquisitions or business combinations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2017-01. The Company has determined the land, building, site improvements, and in-places leases (if any) of assets acquired were each single assets as the building and property improvements are attached to the land and cannot be physically removed and used separately from the land without incurring significant costs or reducing their fair value. Additionally, the Company has not acquired a substantive process used to generate outputs. As substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset and there were no processes acquired, the acquisitions do not qualify as a business and are accounted for as asset acquisitions. Related transaction costs are generally capitalized and amortized over the useful life of the acquired assets. The Company allocates the purchase price (including acquisition and closing costs) of real estate acquisitions to land, building, and improvements based on their relative fair values. The determination of the building fair value is on an ‘as-if-vacant’ basis. Value is allocated to acquired lease intangibles (if any) based on the costs avoided and revenue recognized by acquiring the property subject to lease and avoiding an otherwise ‘dark period’. In making estimates of fair values for this purpose, the Company uses a third-party specialist that obtains various information about each property, as well as the pre-acquisition due diligence of the Company and prior leasing activities at the site. Lease Intangibles Lease intangibles, if any, acquired in conjunction with the purchase of real estate represent the value of in-place leases and above- or below-market leases. For real estate acquired subject to existing lease agreements, acquired lease intangibles are valued based on the Company’s estimates of costs related to tenant acquisition and the asset carrying costs, including lost revenue, that would be incurred during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases at the time of the acquisition. Above-market and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition of the real estate and the Company’s estimate of current market lease rates for the property, measured over a period equal to the remaining initial term of the lease. In-place lease intangibles are amortized on a straight-line basis over the remaining initial term of the related lease and included in depreciation and amortization expense. Above-market lease intangibles are amortized over the remaining initial terms of the respective leases as a decrease in rental revenue. Below-market lease intangibles are generally amortized as an increase to rental revenue over the remaining initial term of the respective leases, but may be amortized over the renewal periods if the Company believes it is likely the tenant will exercise the renewal option. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized as an impairment loss included in depreciation and amortization expense. To date, the Company has not had significant early terminations. Finance ground lease assets are also included in lease intangible assets, net on the Consolidated Balance Sheets. See Leases below for additional information. Impairment of Long-Lived Assets Land, buildings and equipment and certain other assets, including definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such events and changes may include macroeconomic conditions, including those caused by global pandemics, like the recent coronavirus disease pandemic (“COVID-19”) and restrictions intended to prevent its spread, which may result in property operational disruption and indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant and retail level. If these assets are determined to be impaired, the amount of impairment recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined by appraisals or sales prices of comparable assets. The judgments we make related to the expected useful lives of long-lived assets and our ability to realize undiscounted cash flows in excess of the carrying amounts of these assets are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions, changes in usage or operating performance, desirability of the restaurant and retail sites and other factors, such as our ability to sell our assets held for sale. As we assess the ongoing expected cash flows and carrying amounts of our long-lived assets, significant adverse changes in these factors could cause us to realize a material impairment loss. Exit or disposal activities include the cost of disposing of the assets and are generally expensed as incurred. Upon disposal of the assets, any gain or loss is recorded in the same caption within our Income Statements as the original impairment. Provisions for impairment are included in depreciation and amortization expense in the accompanying Income Statements. We did not record impairment expense during the nine months ended September 30, 2022 or 2021. Real Estate Held for Sale Real estate is classified as held for sale when the sale is probable, will be completed within one year, purchase agreements are executed, the buyer has a significant deposit at risk, and no financing contingencies exist which could prevent the transaction from being completed in a timely manner. Restaurant and retail sites and certain other assets to be disposed of are included in assets held for sale when the likelihood of disposing of these assets within one year is probable. Assets whose disposal is not probable within one year remain in land, buildings, equipment and improvements until their disposal within one year is probable. Disposals of assets that have a major effect on our operations and financial results or that represent a strategic shift in our operating businesses meet the requirements to be reported as discontinued operations. Real estate held for sale is reported at the lower of carrying amount or fair value, less estimated costs to sell. No properties were held for sale at September 30, 2022 or December 31, 2021. Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents can consist of cash and money market accounts. Restricted cash consists of 1031 tax deferred real estate exchange proceeds and is included in Other assets in our Consolidated Balance Sheets. The following table provides a reconciliation of cash, cash equivalents, and restricted cash in our Consolidated Balance Sheets to the total amount shown in our Consolidated Statements of Cash Flows: September 30, December 31, (In thousands) 2022 2021 Cash and cash equivalents $ 36,669 $ 6,300 Restricted cash (included in Other assets) — — Total Cash, Cash Equivalents, and Restricted Cash $ 36,669 $ 6,300 Long-term Debt Long-term debt is carried at unpaid principal balance, net of deferred financing costs. All of our long-term debt is currently unsecured and interest is paid monthly on our non-amortizing term loans and revolving credit facility and semi-annually on our senior fixed rate notes. Deferred Financing Costs Financing costs related to long-term debt are deferred and amortized over the remaining life of the debt using the effective interest method. These costs are presented as a direct deduction from their related liabilities in the Consolidated Balance Sheets. See Note 6 - Long-term Debt, Net of Deferred Financing Costs for additional information. Derivative Instruments and Hedging Activities We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as required by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. Our use of derivative instruments is currently limited to interest rate hedges. These instruments are generally structured as hedges of the variability of cash flows related to forecasted transactions (cash flow hedges). We do not enter into derivative instruments for trading or speculative purposes, where changes in the cash flows of the derivative are not expected to offset changes in cash flows of the hedged item. All derivatives are recognized on the balance sheet at fair value. For those derivative instruments for which we intend to elect hedge accounting, at the time the derivative contract is entered into, we document all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking the various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific assets and liabilities on the consolidated balance sheet or to specific forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria in accordance with United States generally accepted accounting principles (“U.S. GAAP”), changes in the derivatives’ fair value are not included in current earnings but are included in accumulated other comprehensive income, net of tax. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. Ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs. See Note 7 - Derivative Financial Instruments for additional information. Other Assets and Liabilities Other assets primarily consist of right of use operating lease assets, pre-acquisition costs, restricted cash, prepaid assets, food and beverage inventories for use by our Kerrow operating subsidiary, escrow deposits, and accounts receivable. Other liabilities primarily consist of accrued compensation, accrued interest expense, accrued operating expenses, intangible lease liabilities, and operating lease liabilities. See Note 8 - Supplemental Detail for Certain Components of Consolidated Balance Sheets for additional information. Leases Effective January 1, 2019, the Company adopted FASB Accounting Standards Codification 842, Leases, including effective amendments (“ASC 842”). All significant lease arrangements are generally recognized at lease commencement. For leases where the Company is the lessee upon adoption of ASC 842, operating or finance lease right-of-use (“ROU”) assets and lease liabilities are recognized at commencement based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset during the reasonably certain lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. As part of certain real estate investment transactions, the Company may enter into long-term ground leases as a lessee. The Company recognizes a ground lease (or right-of-use) asset and related lease liability for each of these ground leases. Ground lease assets and lease liabilities are recognized based on the present value of the lease payments. The Company uses its estimated incremental borrowing rate, which is the estimated rate at which the Company could borrow on a collateralized basis with similar payments over a similar term, in determining the present value of the lease payments. For leases where the Company is the lessor, we determine the classification upon commencement. At September 30, 2022, all such leases are classified as operating leases. These operating leases may contain both lease and non-lease components. The Company accounts for lease and non-lease components as a single component. See Note 5 - Leases for additional information. Revenue Recognition Rental Revenue For those net leases that provide for periodic and determinable increases in base rent, base rental revenue is recognized on a straight-line basis over the applicable lease term when collectability is probable. Recognizing rental revenue on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a deferred rent receivable. In certain circumstances, the Company may offer tenant allowance funds in exchange for increasing rent, extending the term, and including annual sales reporting among other items. These tenant allowance funds are classified as lease incentives upon payment and are amortized as a reduction to revenue over the lease term. Lease incentives are included in intangible lease assets, net, on our Consolidated Balance Sheets. The Company did not pay any lease incentives to tenants during the nine months ended September 30, 2022. During the year ended December 31, 2021, the Company paid lease incentives of $1.2 million to tenants. We assess the collectability of our lease receivables, including deferred rents receivable, on several factors, including payment history, the financial strength of the tenant and any guarantors, historical operations and operating trends of the property, and current economic conditions. If our evaluation of these factors indicates it is not probable that we will be able to recover substantially all of the receivable, we derecognize the deferred rent receivable asset and record that revenue as a reduction in rental revenue. If we determine the lease receivable will not be collected due to a credit concern, we reduce the recorded revenue for the period and related accounts receivable. For those leases that provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met, the increased rental revenue is recognized as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term. Costs paid by the lessor and reimbursed by the lessees are included in variable lease payments and presented on a gross basis within rental revenue. Sales taxes collected from lessees and remitted to governmental authorities are presented on a net basis within rental revenue. Restaurant Revenue Restaurant revenue represents food, beverage, and other products sold and is presented net of the following discounts: coupons, employee meals, complimentary meals and gift cards. Revenue from restaurant sales, whether received in cash or by credit card, is recognized when food and beverage products are sold. At September 30, 2022 and December 31, 2021, credit card receivables, included in other assets, totaled $133 thousand and $116 thousand, respectively. We recognize sales from our gift cards when the gift card is redeemed by the customer. Sales taxes collected from customers and remitted to governmental authorities are presented on a net basis within restaurant revenue on our Consolidated Income Statements. Restaurant Expenses Restaurant expenses include restaurant labor, general and administrative expenses, rent expense, and food and beverage costs. Food and beverage costs include inventory, warehousing, related purchasing and distribution costs. Vendor allowances received in connection with the purchase of a vendor’s products are recognized as a reduction of the related food and beverage costs as earned. Realized Gain on Sale The Company recognizes gain on sale of real estate in accordance with FASB ASU No. 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The Company evaluates each transaction to determine if control of the asset, as well as other specified criteria, has been transferred to the buyer to determine proper timing of revenue recognition, as well as transaction price allocation. During the three months ended September 30, 2022, the Company sold four properties, which resulted in a realized gain of $1.8 million. During the nine months ended September 30, 2022, the Company sold seven properties, which resulted in a realized gain of $7.6 million. During the three months ended September 30, 2021, the Company did not sell any properties. During the nine months ended September 30, 2021, the Company sold two properties, which resulted in a realized gain of $431 thousand. Income Taxes We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. So long as we qualify as a REIT, we generally will not be subject to federal income tax on our net income that we distribute currently to our shareholders. To maintain our qualification as a REIT, we are required under the Code to distribute at least 90% of our REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) to our shareholders and meet certain other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates. Even if we qualify as a REIT, we may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on our undistributed taxable income. The Kerrow Restaurant Operating Business is a TRS and is taxed as a C corporation. See Note 9 - Income Taxes for additional information. Earnings Per Share Basic earnings per share (“EPS”) are computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding for the reporting period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. No effect is shown for any securities that are anti-dilutive. Net income allocated to common shareholders represents net income less income allocated to participating securities and non-controlling interests. None of the Company’s equity awards are participating securities. See Note 10 - Equity for additional information. Noncontrolling Interest Noncontrolling interest represents the aggregate limited partnership interests in FCPT OP held by third parties. In accordance with GAAP, the noncontrolling interest of FCPT OP is shown as a component of equity on our Consolidated Balance Sheets, and the portion of income allocable to third parties is shown as net income attributable to noncontrolling interests in our Income Statements and Consolidated Statements of Comprehensive Income (Loss) (“Comprehensive Income Statement”). The Company follows the guidance issued by the FASB regarding the classification and measurement of redeemable securities. At FCPT OP’s option, it may satisfy this redemption with cash or by exchanging non-registered shares of FCPT common stock on a one-for-one basis. Accordingly, the Company has determined that the common OP units meet the requirements to be classified as permanent equity. A reconciliation of equity attributable to noncontrolling interest is disclosed in our Consolidated Statements of Changes in Equity. See Note 10 - Equity for additional information. Stock-Based Compensation The Company’s stock-based compensation plan provides for the grant of restricted stock awards (“RSAs”), deferred stock units (“DSUs”), performance-based awards, including performance stock units (“PSUs”), dividend equivalents (“DEUs”), restricted stock units (“RSUs”), and other types of awards to eligible participants. DEUs are earned during the vesting period and received upon vesting of award. Upon forfeiture of an award, DEUs earned during the vesting period are also forfeited. We classify stock-based payment awards either as equity awards or liability awards based upon cash settlement options. Equity classified awards are measured based on the fair value on the date of grant. Liability classified awards are remeasured to fair value each reporting period. We recognize costs resulting from the Company’s stock-based compensation awards on a straight-line basis over their vesting periods, which range between one See Note 11 - Stock-Based Compensation for additional information. Fair Value of Financial Instruments We use a fair value approach to value certain assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We use a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The hierarchy consists of three levels: • Level 1 - Quoted market prices in active markets for identical assets or liabilities; • Level 2 - Inputs other than level one inputs that are either directly or indirectly observable; and • Level 3 - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Application of New Accounting Standards We consider the applicability and impact of all ASUs issued by the FASB. Other than as disclosed below, ASUs not yet adopted were assessed and determined to be either not applicable or are expected to have minimal impact to our consolidated result of operations, financial position and cash flows. In the first quarter of 2020 the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04 Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020 the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. On March 5, 2021, the Financial Conduct Authority (“FCA”) announced that U.S. dollar LIBOR will no longer be published after June 30, 2023. This announcement has several implications, including setting the spread that may be used to automatically convert contracts from LIBOR to SOFR. Additionally, banking regulators encouraged banks to discontinue new LIBOR debt issuances by December 31, 2021. The Company anticipates that LIBOR will continue to be available at least until June 30, 2023. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form. At September 30, 2022, the Company had three currently effective interest rate swaps with a total notional amount of $350 million that were indexed to LIBOR. These interest rate swaps mature through 2025, and the Company is monitoring and evaluating the related risks, which include interest on loans or amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to an alternative rate, including any resulting value transfer that may occur, and are likely to vary by contract. The value of loans, securities, or derivative instruments tied to LIBOR, as well as interest rates on our current or future indebtedness, may also be impacted if LIBOR is limited or discontinued. For some instruments the method of transitioning to an alternative reference rate may be challenging, especially if we cannot agree with the respective counterparty about how to make the transition. While we expect LIBOR to be available in substantially its current form until at least the end of June 30, 2023, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified. |
Concentration of Credit Risk
Concentration of Credit Risk | 9 Months Ended |
Sep. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | CONCENTRATION OF CREDIT RISK Our tenant base and the restaurant and retail brands operating our properties are highly concentrated. With respect to our tenant base, Darden leases represent approximately 56.2% of the scheduled base rents from the properties we own. As our revenues predominately consist of rental payments, we are dependent on Darden for a significant portion of our leasing revenues. The audited and unaudited financial statements for Darden are included in its filings with the SEC, which can be found on the SEC’s internet website at www.sec.gov. Reference to Darden’s filings with the SEC is solely for the information of investors. We do not intend this website to be an active link or to otherwise incorporate the information contained on such website (including Darden’s filings with the SEC) into this report or our other filings with the SEC. We also are subject to concentration risk in terms of the restaurant and retail brands that operate our properties. As of September 30, 2022, we ha d 312 O live Garden branded locations in our portfolio, which comprise approximately 31.3% of our leased properties and approximately 42.0% of the revenues received under leases. Longhorn Steakhouse branded restaurants comprise approximately 11.5% of our leased properties and approximately 11.9% of the revenues received under leases as of September 30, 2022. Our properties, including the Kerrow Restaurant Operating Business, are located in 47 states, with concentrations of 10% or greater of total rental revenue in one state: Texas (approximately 10.8%). We are exposed to credit risk with respect to cash held at various financial institutions, access to our credit facility, and amounts due or payable under our derivative contracts. At September 30, 2022, our exposure to risk related to amounts due to us on our derivative instruments totaled $36.4 million, and the counterparty to such instruments are investment grade financial institutions. Our credit risk exposure with regard to our cash and the $250.0 million available capacity under the revolver portion of our credit facility is spread among a diversified group of investment grade financial institutions. |
Real Estate Investments, Net an
Real Estate Investments, Net and Intangible Assets and Liabilities, Net | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Real Estate Investments, Net and Intangible Assets and Liabilities, Net | REAL ESTATE INVESTMENTS, NET AND INTANGIBLE ASSETS AND LIABILITIES, NET Real Estate Investments, Net Real estate investments, net, which consist of land, buildings and improvements leased to others subject to net operating leases and those utilized in the operations of Kerrow Restaurant Operating Business are summarized as follows: September 30, December 31, (In thousands) 2022 2021 Land $ 1,056,228 $ 966,565 Buildings and improvements 1,355,430 1,302,114 Equipment 135,299 135,726 Total gross real estate investments 2,546,957 2,404,405 Less: Accumulated depreciation (700,499) (682,430) Total real estate investments, net 1,846,458 1,721,975 Intangible lease assets, net 106,947 104,251 Total Real Estate Investments and Intangible Lease Assets, Net $ 1,953,405 $ 1,826,226 During the nine months ended September 30, 2022, the Company invested $171.8 million , including transaction costs, in 70 properties located in twenty-five states, and allocated the investment as follows: $94.5 million to land, $63.0 million to buildings and improvements, $0.2 million to equipment, and $14.1 million to intangible assets. There was no contingent consideration associated with these acquisitions. These properties are 100% occupied under net leases, with a weighted average remaining lease term of 7.5 years as of September 30, 2022. During the nine months ended September 30, 2022, the Company sol d seven properties with a combined net book value o f $12.4 million for a realized gain of $7.6 million. During the nine months ended September 30, 2021, the Company invested $195.1 million, including transaction costs, in 89 properties located in twenty-five states, and allocated the investment as follows: $97.9 million to land, $82.4 million to buildings and improvements, $0.9 million to equipment, and $13.9 million to intangible assets. There was no contingent consideration associated with these acquisitions. These properties were 100% occupied under net leases, with a weighted average remaining lease term of 9.3 years as of September 30, 2021. During the nine months ended September 30, 2021, the Company sold two properties with a combined net book value of $2.8 million for a realized gain on sale of $431 thousand. During the nine months ended September 30, 2021, the Company exercised its option to purchase one of the properties where the Company was the lessee under the ground lease. This lease was previously accounted for as a finance lease. This purchase resulted in an increase in land and a corresponding decrease in finance lease right-of-use assets of $1.2 million. Intangible Lease Assets and Liabilities, Net Acquired in-place lease intangibles are amortized over the remaining lease term as depreciation and amortization expense. Above-market and below-market leases are amortized over the initial term of the respective leases as an adjustment to rental revenue. Lease incentives are amortized over the initial term of the respective leases as an adjustment to rental revenue. Intangible lease liabilities are included in Other liabilities in our Consolidated Balance Sheets. The following tables detail intangible lease assets and liabilities. September 30, December 31, (In thousands) 2022 2021 Acquired in-place lease intangibles $ 97,774 $ 83,892 Above-market leases 13,821 13,821 Finance leases - right of use asset (1) 24,383 24,383 Lease incentives 7,061 7,061 Direct lease costs 153 87 Total 143,192 129,244 Less: Accumulated amortization (36,245) (24,993) Intangible Lease Assets, Net $ 106,947 $ 104,251 (1) See Note 5 - Leases for additional information on finance leases - right of use assets. September 30, December 31, (In thousands) 2022 2021 Below-market leases $ 2,610 $ 2,978 Less: Accumulated amortization (1,090) (1,038) Intangible Lease Liabilities, Net $ 1,520 $ 1,940 The value of acquired in-place leases amortized and included in depreciation and amortization expense was $3.4 million and $2.5 million for the three months ended September 30, 2022 and 2021, respectively, and $9.5 million and $6.9 million for the nine months ended September 30, 2022 and 2021, respectively . The value of above-market and below-market leases amortized as an adjustment to revenue was $402 thousand and $405 thousand for the three months ended September 30, 2022 and 2021, respectively, and $1.2 million and $1.2 million for the nine months ended September 30, 2022 and 2021, respectively . For the three months ended September 30, 2022 and 2021, lease incentive amortization was $136 thousand and $81 thousand , respectively, and $407 thousand and $242 thousand for the nine months ended September 30, 2022 and 2021, respectively . At September 30, 2022 , the total weighted average amortization period remaining for our intangible lease assets and liabilities wa s 8.3 years, a nd the individual weighted average amortization period remaining for acquired in-place lease intangibles, above-market leases, below-market leases and lease incentives w as 8.0 years, 7.2 years, 10.2 years and 13.2 years, respectively. Amortization of Lease Intangibles The following table presents the estimated impact during the next five years and thereafter related to the amortization of in-place lease intangibles, and above-market and below-market lease intangibles for properties held for investment at September 30, 2022. (In thousands) September 30, 2022 (three months) $ 3,989 2023 13,658 2024 11,800 2025 9,952 2026 8,701 Thereafter 26,809 Total Future Amortization $ 74,909 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | LEASES Operating Leases as Lessee As a lessee we record ROU assets and lease liabilities for the two ground leases at our Kerrow Restaurant Operating Business and a corporate office space, both of which qualified as operating leases. In calculating the lease obligations under both the ground leases and office lease, we used discount rates estimated to be equal to what the Company would have to pay to borrow on a collateralized basis over a similar term, for an amount equal to the lease payments, in a similar economic environment. Operating Lease Liability As of September 30, 2022, maturities of operating lease liabilities were as follows: (In thousands) September 30, 2022 (three months) $ 175 2023 705 2024 718 2025 470 2026 310 Thereafter 5,072 Total Payments 7,450 Less: Interest (2,187) Operating Lease Liability $ 5,263 The weighted-average discount rate for operating leases at September 30, 2022 wa s 4.21%. The weighted-average remaining lease term was 16.2 years. Rental expense w as $218 thousand and $218 thousand for the three months ended September 30, 2022 and 2021, respectively. Rental expense was $671 thousand and $667 thousand for the nine months ended September 30, 2022 and 2021, respectively. Operating Leases as Lessor Our leases consist primarily of single-tenant, net leases, in which the tenants are responsible for making payments to third parties for operating expenses such as property taxes, insurance, and other costs associated with the properties leased to them. In leases where costs are paid by the Company and reimbursed by lessees, such payments are considered variable lease payments and recognized in rental revenue. The following table shows the components of rental revenue for the three and nine months ended September 30, 2022 and 2021. Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Lease revenue - operating leases $ 47,188 $ 42,623 138,678 124,599 Variable lease revenue (tenant reimbursements) 1,531 1,050 4,848 2,751 Total Rental Revenue $ 48,719 $ 43,673 $ 143,526 $ 127,350 Future Minimum Lease Payments to be Received The following table presents the scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases. The table presents future minimum lease payments due during the initial lease term only as lease renewal periods are exercisable at the option of the lessee. (In thousands) September 30, 2022 (three months) $ 46,497 2023 187,213 2024 186,998 2025 185,534 2026 184,608 Thereafter 949,846 Total Future Minimum Lease Payments $ 1,740,696 Ground Leases as Lessee As of September 30, 2022 and December 31, 2021, the Company had finance ground lease assets aggregating $24.4 million . These assets are included in intangible lease assets, net in the Consolidated Balance Sheets. The Company did not recognize a lease liability as no payments are due in the future under the leases. The Company’s ground lease assets have remaining lease terms ranging from 61 years to 97 years, with options to extend certain of the lease terms for additional ninety-nine year terms, and the option to purchase the assets. The weighted average remaining non-cancelable lease term for the ground leases wa s 93.8 years |
Leases | LEASES Operating Leases as Lessee As a lessee we record ROU assets and lease liabilities for the two ground leases at our Kerrow Restaurant Operating Business and a corporate office space, both of which qualified as operating leases. In calculating the lease obligations under both the ground leases and office lease, we used discount rates estimated to be equal to what the Company would have to pay to borrow on a collateralized basis over a similar term, for an amount equal to the lease payments, in a similar economic environment. Operating Lease Liability As of September 30, 2022, maturities of operating lease liabilities were as follows: (In thousands) September 30, 2022 (three months) $ 175 2023 705 2024 718 2025 470 2026 310 Thereafter 5,072 Total Payments 7,450 Less: Interest (2,187) Operating Lease Liability $ 5,263 The weighted-average discount rate for operating leases at September 30, 2022 wa s 4.21%. The weighted-average remaining lease term was 16.2 years. Rental expense w as $218 thousand and $218 thousand for the three months ended September 30, 2022 and 2021, respectively. Rental expense was $671 thousand and $667 thousand for the nine months ended September 30, 2022 and 2021, respectively. Operating Leases as Lessor Our leases consist primarily of single-tenant, net leases, in which the tenants are responsible for making payments to third parties for operating expenses such as property taxes, insurance, and other costs associated with the properties leased to them. In leases where costs are paid by the Company and reimbursed by lessees, such payments are considered variable lease payments and recognized in rental revenue. The following table shows the components of rental revenue for the three and nine months ended September 30, 2022 and 2021. Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Lease revenue - operating leases $ 47,188 $ 42,623 138,678 124,599 Variable lease revenue (tenant reimbursements) 1,531 1,050 4,848 2,751 Total Rental Revenue $ 48,719 $ 43,673 $ 143,526 $ 127,350 Future Minimum Lease Payments to be Received The following table presents the scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases. The table presents future minimum lease payments due during the initial lease term only as lease renewal periods are exercisable at the option of the lessee. (In thousands) September 30, 2022 (three months) $ 46,497 2023 187,213 2024 186,998 2025 185,534 2026 184,608 Thereafter 949,846 Total Future Minimum Lease Payments $ 1,740,696 Ground Leases as Lessee As of September 30, 2022 and December 31, 2021, the Company had finance ground lease assets aggregating $24.4 million . These assets are included in intangible lease assets, net in the Consolidated Balance Sheets. The Company did not recognize a lease liability as no payments are due in the future under the leases. The Company’s ground lease assets have remaining lease terms ranging from 61 years to 97 years, with options to extend certain of the lease terms for additional ninety-nine year terms, and the option to purchase the assets. The weighted average remaining non-cancelable lease term for the ground leases wa s 93.8 years |
Long-Term Debt, Net of Deferred
Long-Term Debt, Net of Deferred Financing Costs | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Net of Deferred Financing Costs | LONG-TERM DEBT, NET OF DEFERRED FINANCING COSTS At September 30, 2022, our long-term debt consisted of (1) $400 million of non-amortizing term loans and (2) $575 million of senior, unsecured, fixed rate notes. At December 31, 2021, our long-term debt consisted of (1) $400 million of non-amortizing term loans and (2) $450 million of senior, unsecured, fixed rate notes. At September 30, 2022 and December 31, 2021, the outstanding borrowings under the revolving credit facility were $0 million and $36 million, respectively, and there were no outstanding letters of credit. At September 30, 2022, we had $250 million of borrowing capacity under the revolving credit facility. The revolving credit facility portion will mature on November 9, 2025 with a six month extension option. The weighted average interest rate on the term loans before consideration of the interest rate hedge described in Note 7 - Derivative Financial Instruments was 3.70% and 1.38% at September 30, 2022 and December 31, 2021, respectively. The weighted average interest rate on the revolving credit facility was 1.40% at December 31, 2021. The following table presents the Term Loan balances as of September 30, 2022 and December 31, 2021. Outstanding Balance Maturity Interest September 30, December 31, (Dollars in thousands) Date Rate 2022 2021 Term Loans: Term loan due 2023 Nov 2023 3.70% (a) 50,000 50,000 Term loan due 2024 Mar 2024 3.70% (a) 100,000 100,000 Term loan due 2025 Nov 2025 3.70% (a) 150,000 150,000 Term loan due 2026 Nov 2026 3.70% (a) 100,000 100,000 Total Term Loans $ 400,000 $ 400,000 (a) Loan is a variable‑rate loan which resets monthly at one-month LIBOR + the applicable credit spread of 1.00% at September 30, 2022. Note Purchase Agreement On December 17, 2021, the Company entered into agreements to issue $125 million of senior unsecured notes. The notes consist of $75 million of notes with a ten-year term, which were issued on March 17, 2022 and mature on March 17, 2032, and priced at a fixed interest rate of 3.11%, and $50 million of notes with a nine-year term, which were issued on March 17, 2022, and mature on March 17, 2031, and priced at a fixed interest rate of 3.09%. These notes were issued at par value. The following table presents the senior unsecured fixed rate notes balance as of September 30, 2022 and December 31, 2021. Outstanding Balance Maturity Interest September 30, December 31, (Dollars in thousands) Date Rate 2022 2021 Notes Payable: Senior unsecured fixed rate note, issued June 2017 Jun 2024 4.68 % $ 50,000 $ 50,000 Senior unsecured fixed rate note, issued June 2017 Jun 2027 4.93 % 75,000 75,000 Senior unsecured fixed rate note, issued December 2018 Dec 2026 4.63 % 50,000 50,000 Senior unsecured fixed rate note, issued December 2018 Dec 2028 4.76 % 50,000 50,000 Senior unsecured fixed rate note, issued March 2020 Jun 2029 3.15 % 50,000 50,000 Senior unsecured fixed rate note, issued March 2020 Apr 2030 3.20 % 75,000 75,000 Senior unsecured fixed rate note, issued April 2021 Apr 2029 2.74 % 50,000 50,000 Senior unsecured fixed rate note, issued April 2021 Apr 2031 2.99 % 50,000 50,000 Senior unsecured fixed rate note, issued March 2022 Mar 2031 3.09 % 50,000 — Senior unsecured fixed rate note, issued March 2022 Mar 2032 3.11 % 75,000 — Total Notes $ 575,000 $ 450,000 Deferred Financing Costs At September 30, 2022 and December 31, 2021, net unamortized deferred financing costs were approximately $8.0 million and $8.4 million, respectively. During the three months ended September 30, 2022 and 2021, amortization of deferred financing costs was $496 thousand and $468 thousand, respectively. During the nine months ended September 30, 2022 and 2021, amortization of deferred financing costs was $1.5 million and $1.9 million, respectively. The amortization of deferred financing costs for the nine months ended September 30, 2021 includes a one-time charge of $364 thousand for deferred financing costs expensed as a result of the execution of an amendment to the term loan agreement on June 4, 2021. The Company was in compliance with all debt covenants at September 30, 2022 and December 31, 2021. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS Risk Management Objective of Using Derivatives We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in our receipt or payment of future cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash payments principally related to our borrowings. Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The change in the fair value of derivatives designated and that qualify as cash flow hedges is recorded on our consolidated balance sheet in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2022 and 2021, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. As of September 30, 2022 and December 31, 2021, $350 million of our variable-rate debt is hedged by swaps with notional values totaling $350 million. During the nine months ended September 30, 2022, we entered into two interest rate swaps to hedge the interest rate variability associated with the term loan portion of our credit facility. The Company enters into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of long-term debt. The Company has hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending August 17, 2023. As of September 30, 2022, these interest rate swaps were valued as an asset of approximately $7.1 million within derivative assets. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. We estimate that over the next twelve months an additional $7.7 million will be reclassified to earnings as a reduction to interest expense. Non-designated Hedges We do not use derivatives for trading or speculative purposes. During the nine months ended September 30, 2022 and 2021, we did not have any derivatives that were not designated as cash flow hedges for accounting purposes. Tabular Disclosure of Fair Values of Derivative Instruments on the Consolidated Balance Sheets The table below presents the fair value of our derivative financial instruments as well as their classification on the consolidated balance sheet as of September 30, 2022 and December 31, 2021. Derivative Assets Derivative Liabilities Balance Sheet Location Fair Value at Balance Sheet Location Fair Value at (Dollars in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Derivatives designated as hedging instruments: Interest rate swaps Derivative assets $ 36,448 $ 2,591 Derivative liabilities $ — $ 7,517 Total $ 36,448 $ 2,591 $ — $ 7,517 Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statements of Comprehensive Income (Loss) The table below presents the effect of our interest rate swaps on comprehensive income for the three and nine months ended September 30, 2022 and 2021. (Dollars in thousands) Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Total Amount of Interest Expense Presented in the Consolidated Statements of Income Three months ended September 30, 2022 $ 17,151 Interest expense $ (104) $ (9,177) Three months ended September 30, 2021 1,340 Interest expense 1,748 (8,311) Nine months ended September 30, 2022 39,151 Interest expense 2,700 (26,583) Nine months ended September 30, 2021 6,447 Interest expense 5,220 (24,328) Tabular Disclosure Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of our derivatives at September 30, 2022 and December 31, 2021. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the consolidated balance sheets. Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Financial Instruments Cash Collateral Received Net Amount September 30, 2022 $ 36,448 $ — $ 36,448 $ — $ — $ 36,448 December 31, 2021 2,591 — 2,591 (1,268) — 1,323 Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Financial Instruments Cash Collateral Posted Net Amount September 30, 2022 $ — $ — $ — $ — $ — $ — December 31, 2021 7,517 — 7,517 (1,268) — 6,249 Credit-risk-related Contingent Features The agreement with our derivative counterparty provides that if we default on any of our indebtedness, including default for which repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations. |
Supplemental Detail for Certain
Supplemental Detail for Certain Components of Consolidated Balance Sheets | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Detail for Certain Components of Consolidated Balance Sheets | SUPPLEMENTAL DETAIL FOR CERTAIN COMPONENTS OF CONSOLIDATED BALANCE SHEETS Other Assets The components of other assets were as follows: September 30, December 31, (In thousands) 2022 2021 Operating lease right-of-use asset $ 4,552 $ 4,919 Prepaid acquisition costs and deposits 3,615 3,049 Accounts receivable 1,749 1,312 Prepaid assets 1,184 1,375 Food and beverage inventories 256 252 Other 1,206 695 Total Other Assets $ 12,562 $ 11,602 Other Liabilities The components of other liabilities were as follows: September 30, December 31, (In thousands) 2022 2021 Accrued interest expense $ 6,774 $ 2,066 Operating lease liability 5,263 5,617 Tenant deposits 4,893 961 Accrued compensation 2,083 2,547 Intangible lease liabilities, net 1,520 1,940 Accrued operating expenses 322 286 Accounts payable 310 550 Other 3,635 2,047 Total Other Liabilities $ 24,800 $ 16,014 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. So long as we qualify as a REIT, we generally will not be subject to federal income tax on our net income that we distribute currently to our stockholders. Accordingly, no provision for federal income taxes has been included in the accompanying consolidated financial statements for the nine months ended September 30, 2022 related to the REIT. Income tax expense consists of federal, state, and local income taxes incurred by FCPT’s TRS, and state and local income taxes incurred by FCPT on its lease portfolio. During the three months ended September 30, 2022, we recorded income tax benefit of $23 thousand. During the three months ended September 30, 2021, we recorded income tax expense of $97 thousand. During the nine months ended September 30, 2022 and 2021, we recorded income tax expense of $209 thousand and $231 thousand, respectively. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes, as well as operating loss and tax credit carryforwards. The Company evaluates the realizability of its deferred tax assets and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized. When evaluating the realizability of its deferred tax assets, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook. This realizability analysis |
Equity
Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Equity | EQUITY Preferred Stock At September 30, 2022 and December 31, 2021, the Company was authorized to issue 25,000,000 shares, $0.0001 par value per share of preferred stock. There were no shares issued and outstanding at September 30, 2022 and December 31, 2021. Common Stock At September 30, 2022 and December 31, 2021, the Company was authorized to issue 500,000,000 shares, $0.0001 par value per share of common stock. At September 30, 2022, there were 82,822,584 shares of the Company's common stock issued and outstanding. On March 8, 2022, we declared a dividend of $0.3325 per share, which was paid in April 2022 to common stockholders of record as of March 31, 2022. On June 16, 2022, we declared a dividend of $0.3325 per share, which was paid in July 2022 to common stockholders of record as of June 30, 2022. On September 16, 2022, we declared a dividend of $0.3325 per share, which was paid in October 2022 to common stockholders of record as of September 30, 2022. Common Stock Issuance Under the At-The-Market Program In December 2016, the Company established an “At-the-Market” (“ATM”) equity issuance program (the “prior ATM program”) under which the Company may, at its discretion, issue and sell its common stock through ATM offerings on the New York Stock Exchange through broker-dealers. On March 22, 2019, the Company amended the prior ATM program to, among other things, increase the maximum sales under ATM offerings to $210 million and provide that such sales could be made through the sales agents, as the Company’s agents or, if applicable, as forward sellers for forward purchasers. On February 24, 2021, the Company terminated the prior ATM program and entered into a new ATM program (the “current ATM program” and together with the prior ATM program, the “ATM programs”), which provides for the offer and sale of the shares of the Company’s common stock having an aggregate gross sales price of up to $350 million. In connection with the Company’s ATM program, the Company may enter into forward sale agreements with certain financial institutions acting as forward purchasers whereby, at the Company's discretion, the forward purchasers may borrow and sell shares of common stock. The use of forward sale agreements allows the Company to lock in a share price on the sale of shares of common stock at the time the respective forward sale agreements are executed but defer settling the forward sale agreements and receiving the proceeds from the sale of shares until a later date. During the three and nine months ended September 30, 2022, the Company executed forward sale agreements with financial institutions acting as forward purchasers under the current ATM program to sell 1,723,426 and 3,959,433 shares of common stock, respectively, at a weighted average sales price of $28.56 and $27.84 per share, respectively, before sales commissions and offering expenses. During the three months ended September 30, 2022, the Company physically settled a portion of these forward sale agreements and issued 1,190,532 shares at a weighted average share price of $26.52 for net proceeds of $31.6 million. During the nine months ended September 30, 2022, the Company physically settled a portion of these forward sale agreements and issued 1,363,956 shares at a weighted average share price of $26.42 for net proceeds of $36.0 million. The Company currently expects to fully physically settle the remaining forward sale agreements with the forward purchasers on one or more dates specified by the Company on or prior to March 31, 2023, in which case the Company expects to receive aggregate net cash proceeds at settlement equal to the number of shares of common stock multiplied by the relevant forward price per share at such time. The forward price per share that the Company will receive upon physical settlement of the forward sale agreements, will be subject to adjustment for (i) a floating interest rate factor equal to a specified daily rate less a spread, (ii) the forward purchaser's stock borrowing costs and (iii) scheduled dividends during the term of the forward sale agreements. During the three months ended September 30, 2022, 2,277,782 shares were issued under the current ATM program, including physically settled forward sale agreements, at a weighted average share price of $27.23 for net proceeds of $62.0 million. During the nine months ended September 30, 2022, the Company issued 2,451,206 shares under the current ATM program, including physically settled forward sale agreements, at a weighted average share price of $27.12 for net proceeds of $66.5 million. During the three months ended September 30, 2021, 1,000,193 shares were issued under the current ATM program at a weighted average share price of $27.67 for net proceeds of $27.1 million. During the nine months ended September 30, 2021, the Company issued 1,161,702 shares under the ATM programs at a weighted average share price of $27.93 for net proceeds of $31.8 million. At September 30, 2022, there was $93.3 million available for issuance under the current ATM program. Noncontrolling Interest At September 30, 2022, there were 114,559 FCPT Operating Partnership Units (“OP units”) outstanding held by third parties. During the three and nine months ended September 30, 2022, FCPT OP did not issue any OP units for consideration in real estate transactions. Generally, OP units participate in net income allocations and distributions and entitle their holder the right, subject to the terms set forth in the partnership agreement, to require FCPT OP to redeem all or a portion of the OP units held by such limited partner. At FCPT OP’s option, it may satisfy this redemption with cash or by exchanging non-registered shares of FCPT common stock on a one-for-one basis. Prior to the redemption of OP units, the limited partners participate in net income allocations and distributions in a manner equivalent to the common stockholders. The redemption value of outstanding non-controlling interest OP units was $2.8 million and $3.4 million as of September 30, 2022 and December 31, 2021, respectively. At September 30, 2022, FCPT was the owner of approximately 99.86% of FCPT’s OP units. The remaining 0.14%, or 114,559 of FCPT’s OP units were held by unaffiliated limited partners. During the three and nine months ended September 30, 2022, FCPT OP distributed $38 thousand and $114 thousand, respectively, to its unaffiliated limited partners. Earnings Per Share The following table presents the computation of basic and diluted net earnings per common share for the three and nine months ended September 30, 2022 and 2021. (In thousands except for shares and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Average common shares outstanding – basic 81,884,974 76,250,614 80,797,829 76,094,133 Net effect of dilutive equity awards 234,473 109,912 213,908 128,034 Average common shares outstanding – diluted 82,119,447 76,360,526 81,011,737 76,222,167 Net income available to common shareholders $ 24,518 $ 21,164 $ 74,903 $ 61,881 Basic net earnings per share $ 0.30 $ 0.28 $ 0.93 $ 0.81 Diluted net earnings per share $ 0.30 $ 0.28 $ 0.92 $ 0.81 For the three months ended September 30, 2022 and 2021, the number of outstanding equity awards that were anti-dilutive totaled 264,186 and 192,151, respectively. For the nine months ended September 30, 2022 and 2021, the number of outstanding equity awards that were anti-dilutive totaled 284,751 and 174,029, respectively. Exchangeable OP units have been omitted from the denominator for the purpose of computing diluted earnings per share since FCPT OP, at its option, may satisfy a redemption with cash or by exchanging non-registered shares of FCPT common stock. The weighted average exchangeable OP units outstanding for the three months ended September 30, 2022 and 2021 was |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION On October 20, 2015, the Board of Directors of FCPT adopted, and FCPT’s sole stockholder at such time, Rare Hospitality International, Inc., approved, the Four Corners Property Trust, Inc. 2015 Omnibus Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of awards of nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, performance shares and other performance-based awards, other equity-based awards, and cash bonus awards to eligible participants. On June 10, 2022, the Board of Directors of FCPT adopted, and FCPT’s stockholders approved, the Amended and Restated Four Corners Property Trust, Inc. 2015 Omnibus Incentive Plan (the “Amended Plan”) to, among other things, increase the maximum number of shares of our common stock reserved for issuance under the 2015 Plan by 1,500,000 shares to 3,600,000 shares. At September 30, 2022, 2,009,516 shares of common stock were available for award under the Plan. The unamortized compensation cost of awards issued under the Plan totaled approximately $6.6 million at September 30, 2022 as shown in the following table. (In thousands) Restricted Stock Units Restricted Stock Awards Performance Stock Awards Total Unrecognized compensation cost at January 1, 2022 $ 1,820 $ 1,728 $ 662 $ 4,210 Equity grants 2,080 3,225 1,236 6,541 Equity grant forfeitures (200) (112) (56) (368) Equity compensation expense (1,097) (1,890) (752) (3,739) Unrecognized Compensation Cost at September 30, 2022 $ 2,603 $ 2,951 $ 1,090 $ 6,644 At September 30, 2022, the weighted average amortization period remaining for all of our equity awards was 2.2 years. Restricted Stock Units RSUs have been granted at a value equal to the five-day average or day of closing market price of our common stock on the date of grant, and will be settled in stock at the end of their vesting periods, which range between one At September 30, 2022 and December 31, 2021, there were 218,060 and 159,524 RSUs outstanding, respectively. During the three months ended September 30, 2022, there were 816 shares of restricted stock granted, 816 RSUs vested, and no RSUs were forfeited. During the nine months ended September 30, 2022, there were 77,424 shares of restricted stock granted, 11,361 RSUs vested, and 7,527 RSUs were forfeited. Restrictions on these RSUs lapse through 2027. Restricted Stock Awards RSAs have been granted at a value equal to the five-day average closing market price of our common stock on the date of grant and will be settled in stock at the end of their vesting periods, which range between one At September 30, 2022 and December 31, 2021, there were 157,023 and 113,695 RSAs outstanding, respectively. During the three months ended September 30, 2022, no shares of restricted stock were granted or forfeited, and no restrictions on RSAs lapsed. During the nine months ended September 30, 2022, there were 119,471 shares of restricted stock granted, 4,035 shares forfeited, and restrictions on 72,105 RSAs lapsed and were distributed, of which 38,082 RSAs were designated for tax withholdings. Restrictions on these RSAs lapse through 2025. The Company expects all RSAs to vest. Performance-Based Restricted Stock Awards At September 30, 2022 and December 31, 2021, the target number of PSUs that were unvested was 202,560 and 208,481, respectively. During the three months ended September 30, 2022, no PSU shares were granted or vested and no shares were forfeited. During the nine months ended September 30, 2022, PSUs with a target number of 66,369 shares were granted and PSUs with a target number of 68,523 shares vested and 3,767 shares forfeited. The total shareholder return calculated for these PSUs resulted in a distribution of 0% of target shares, resulting in the distribution of no shares. The performance period of the unvested grants run from January 1, 2022 through December 31, 2024, from January 1, 2021 through December 31, 2023, and from January 1, 2020 through December 31, 2022. Pursuant to the PSU award agreement, each participant is eligible to vest in and receive shares of the Company's common stock based on the initial target number of shares granted multiplied by a percentage range between 0% and 200%. The percentage range is based on the attainment of a combination of relative shareholder return and total shareholder return of the Company compared to certain specified peer groups of companies during the performance period. The grant date fair values of PSUs were determined through Monte-Carlo simulations using the following assumptions: our common stock closing price at the grant date, the average closing price of our common stock price for the 20 trading days prior to the grant date and a range of performance-based vesting based on estimated total stockholder return over a three year Based on the grant date fair value, the Company expects to recognize $1.1 million in compensation expense on a straight-line basis over the remaining requisite service period associated with the unvested PSU awards. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The carrying amounts of certain of the Company’s financial instruments including cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value due either to length of maturity or interest rates that approximate prevailing market rates. The carrying value of derivative financial instruments equal fair value in accordance with U.S. GAAP. Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate hierarchy disclosures each reporting period. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the assets and liabilities recorded that are reported at fair value on our Consolidated Balance Sheets on a recurring basis. September 30, 2022 (In thousands) Level 1 Level 2 Level 3 Total Assets Derivative assets $— $36,448 $— $36,448 Liabilities Derivative liabilities $— $— $— $— December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total Assets Derivative assets $— $2,591 $— $2,591 Liabilities Derivative liabilities $— $7,517 $— $7,517 Derivative Financial Instruments Currently, we use interest rate swaps to manage our interest rate risk associated with our notes payable. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The fair values of interest rate options are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties. We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of our derivatives held at September 30, 2022, and December 31, 2021 were classified as Level 2 of the fair value hierarchy. Fair Value of Certain Financial Liabilities The following table presents the carrying value and fair value of certain financial liabilities that are recorded on our Consolidated Balance Sheets. The fair value of the long-term debt (Level 2) is determined using the present value of the contractual cash flows, discounted at the current market cost of debt. September 30, 2022 (In thousands) Carrying Value (1) Fair Value Term loan due 2023 $ 50,000 $ 49,875 Term loan due 2024 100,000 99,750 Term loan due 2025 150,000 149,734 Term loan due 2026 100,000 99,606 Senior fixed note due June 2024 50,000 49,994 Senior fixed note due June 2026 50,000 48,819 Senior fixed note due June 2027 75,000 73,955 Senior fixed note due June 2028 50,000 48,504 Senior fixed note due April 2029 50,000 43,133 Senior fixed note due June 2029 50,000 43,950 Senior fixed note due April 2030 75,000 65,163 Senior fixed note due March 2031 50,000 41,688 Senior fixed note due April 2031 50,000 42,267 Senior fixed note due March 2032 75,000 62,385 Revolving credit facility — — December 31, 2021 (In thousands) Carrying Value (1) Fair Value Term loan due 2023 $ 50,000 $ 50,237 Term loan due 2024 100,000 100,474 Term loan due 2025 150,000 151,702 Term loan due 2026 100,000 101,262 Senior fixed note due June 2024 50,000 53,482 Senior fixed note due June 2026 50,000 55,468 Senior fixed note due June 2027 75,000 84,593 Senior fixed note due June 2028 50,000 56,952 Senior fixed note due April 2029 50,000 50,965 Senior fixed note due June 2029 50,000 52,045 Senior fixed note due April 2030 75,000 78,246 Senior fixed note due April 2031 50,000 51,584 Revolving credit facility 36,000 36,220 (1) Carrying values exclude deferred financing costs |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Litigation We are subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of our business from time to time. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employee wage and hour claims and others related to operational issues common to the restaurant industry. We record our best estimate of a loss when the loss is considered probable. When a liability is probable and there is a range of estimated loss with no best estimate in the range, we record the minimum estimated liability related to the lawsuits, proceedings or claims. While the resolution of a lawsuit, proceeding or claim may have an impact on our financial results for the period in which it is resolved, we believe that the maximum liability related to probable lawsuits, proceedings and claims in which we are currently involved, individually and in the aggregate, will not have a material adverse effect on our financial position, results of operations or liquidity. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segments | SEGMENTS During the three and nine months ended September 30, 2022 and 2021, we operated in two segments: real estate operations and restaurant operations. Our segments are based on our organizational and management structure, which aligns with how our results are monitored and performance is assessed. Expenses incurred at our corporate office are allocated to real estate operations. The accounting policies of the reportable segments are the same as those described in Note 2 - Summary of Significant Accounting Policies . The following tables present financial information by segment for the three and nine months ended September 30, 2022 and 2021. Three Months Ended September 30, 2022 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 48,719 $ — $ — $ 48,719 Intercompany rental revenue 211 — (211) — Restaurant revenue — 7,289 — 7,289 Total revenues 48,930 7,289 (211) 56,008 Operating expenses: General and administrative 4,917 — — 4,917 Depreciation and amortization 10,408 180 — 10,588 Property expenses 1,999 — — 1,999 Restaurant expenses — 7,001 (211) 6,790 Total operating expenses 17,324 7,181 (211) 24,294 Interest expense (9,177) — — (9,177) Other income 164 — — 164 Realized gain on sale 1,828 — — 1,828 Income tax benefit (expense) (54) 77 — 23 Net Income $ 24,367 $ 185 $ — $ 24,552 Three Months Ended September 30, 2021 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 43,673 $ — $ — $ 43,673 Intercompany rental revenue 209 — (209) — Restaurant revenue — 7,033 — 7,033 Total revenues 43,882 7,033 (209) 50,706 Operating expenses: General and administrative 4,262 — — 4,262 Depreciation and amortization 8,447 384 — 8,831 Property expenses 1,453 — — 1,453 Restaurant expenses — 6,755 (209) 6,546 Total operating expenses 14,162 7,139 (209) 21,092 Interest expense (8,311) — — (8,311) Other income 2 — — 2 Realized gain on sale — — — — Income tax expense (46) (51) — (97) Net Income (Loss) $ 21,365 $ (157) $ — $ 21,208 Nine Months Ended September 30, 2022 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 143,526 $ — $ — $ 143,526 Intercompany rental revenue 633 — (633) — Restaurant revenue — 22,304 — 22,304 Total revenues 144,159 22,304 (633) 165,830 Operating expenses: General and administrative 14,884 — — 14,884 Depreciation and amortization 29,878 542 — 30,420 Property expenses 5,835 — — 5,835 Restaurant expenses — 21,358 (633) 20,725 Total operating expenses 50,597 21,900 (633) 71,864 Interest expense (26,583) — — (26,583) Other income 250 — — 250 Realized gain on sale 7,584 — — 7,584 Income tax expense (146) (63) — (209) Net Income $ 74,667 $ 341 $ — $ 75,008 Nine Months Ended September 30, 2021 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 127,350 $ — $ — $ 127,350 Intercompany rental revenue 533 — (533) — Restaurant revenue — 19,374 — 19,374 Total revenues 127,883 19,374 (533) 146,724 Operating expenses: General and administrative 13,490 — — 13,490 Depreciation and amortization 25,071 384 — 25,455 Property expenses 3,657 — — 3,657 Restaurant expenses — 18,527 (533) 17,994 Total operating expenses 42,218 18,911 (533) 60,596 Interest expense (24,328) — — (24,328) Other income 10 — — 10 Realized gain on sale 431 — — 431 Income tax expense (128) (103) — (231) Net Income $ 61,650 $ 360 $ — $ 62,010 The following tables present supplemental information by segment at September 30, 2022 and December 31, 2021. Supplemental Segment Information at September 30, 2022 (In thousands) Real Estate Operations Restaurant Operations Total Total real estate investments $ 2,524,709 $ 22,248 $ 2,546,957 Accumulated depreciation (693,861) (6,638) (700,499) Total real estate investments, net 1,830,848 15,610 1,846,458 Cash and cash equivalents 35,368 1,301 36,669 Total assets 2,077,650 22,227 2,099,877 Long-term debt, net of deferred financing costs 966,989 — 966,989 Supplemental Segment Information at December 31, 2021 (In thousands) Real Estate Operations Restaurant Operations Total Total real estate investments $ 2,382,169 $ 22,236 $ 2,404,405 Accumulated depreciation (676,183) (6,247) (682,430) Total real estate investments, net 1,705,986 15,989 1,721,975 Cash and cash equivalents 4,830 1,470 6,300 Total assets 1,880,192 22,788 1,902,980 Long-term debt, net of deferred financing costs 877,591 — 877,591 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Company reviewed its subsequent events and transactions that have occurred after September 30, 2022, the date of the Consolidated Balance Sheet, through November 2, 2022, and noted the following: Acquisitions Through November 2, 2022, the Company invested $16.0 million in the acquisition of eight net lease properties with an investment yield of approximately 6.9%, and approximately 7.2 years of lease term remaining. The Company funded the acquisitions with cash on hand and ATM forward settlements. The Company anticipates accounting for these transactions as asset acquisitions in accordance with U.S. GAAP. There were no contingent liabilities associated with these transactions at September 30, 2022. Capital Resources Through November 2, 2022, the Company physically settled a portion of the forward sale agreements that were outstanding on the current ATM program and issued 1,052,051 shares for net proceeds of $28.0 million. On October 25, 2022, the Company entered into a Third Amended and Restated Revolving Credit and Term Loan Agreement (the “Loan Agreement”). The Loan Agreement provides for a revolving credit facility in an aggregate principal amount of $250.0 million (the “Revolving Credit Facility”) and a term loan facility in an aggregate principal amount of $430.0 million, comprised of (i) a $150.0 million term credit facility with a maturity date of November 9, 2025, (ii) a $100.0 million term credit facility with a maturity date of November 9, 2026, (iii) a $90.0 million term credit facility with a maturity date of January 9, 2027 and (iv) a $90.0 million term credit facility with a maturity date of January 9, 2028. The Loan Agreement has an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional aggregate amount not to exceed $350.0 million, subject to certain conditions, including one or more new or existing lenders agreeing to provide commitments for such increased amount. The amendment converts the credit facility from LIBOR to SOFR-based borrowings, and the Company and counterparties converted the related interest rate swaps concurrently. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements (the “Consolidated Financial Statements”) include the accounts of Four Corners Property Trust, Inc. and its consolidated subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Consolidated Financial Statements reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results for the interim periods presented. These adjustments are considered to be of a normal, recurring nature. |
Use of Estimates | Use of Estimates The preparation of these Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The estimates and assumptions used in the accompanying Consolidated Financial Statements are based on management’s evaluation of the relevant facts and circumstances. Actual results may differ from the estimates and assumptions used in preparing the accompanying Consolidated Financial Statements, and such differences could be material. |
Real Estate Investments, Net | Real Estate Investments, Net Real estate investments, net are recorded at cost less accumulated depreciation. Building components are depreciated over estimated useful lives ranging from seven using the straight-line method. Leasehold improvements, which are reflected on our Consolidated Balance Sheets as a component of buildings, equipment, and improvements, net are amortized over the lesser of the non-cancelable lease term or the estimated useful lives of the related assets using the straight-line method. Equipment is depreciated over estimated useful lives ranging from two also using the straight-line method. Real estate development and construction costs for newly constructed restaurant and retail locations are capitalized in the period in which they are incurred. Gains and losses on the disposal of land, buildings, and equipment are included in realized gain on sale, net, in our accompanying Consolidated Statements of Income (“Income Statements”). Our accounting policies regarding land, buildings, equipment, and improvements, include our judgments regarding the estimated useful lives of these assets, the residual values to which the assets are depreciated or amortized, the determination of what constitutes a reasonably assured lease term, and the determination as to what constitutes enhancing the value of or increasing the life of existing assets. These judgments and estimates may produce materially different amounts of reported depreciation and amortization expense if different assumptions were used. As discussed further below, these judgments may also impact our need to recognize an impairment charge on the carrying amount of these assets as the cash flows associated with the assets are realized, or as our expectations of estimated future cash flows change. Acquisition of Real Estate The Company evaluates acquisitions to determine whether transactions should be accounted for as asset acquisitions or business combinations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2017-01. The Company has determined the land, building, site improvements, and in-places leases (if any) of assets acquired were each single assets as the building and property improvements are attached to the land and cannot be physically removed and used separately from the land without incurring significant costs or reducing their fair value. Additionally, the Company has not acquired a substantive process used to generate outputs. As substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset and there were no processes acquired, the acquisitions do not qualify as a business and are accounted for as asset acquisitions. Related transaction costs are generally capitalized and amortized over the useful life of the acquired assets. The Company allocates the purchase price (including acquisition and closing costs) of real estate acquisitions to land, building, and improvements based on their relative fair values. The determination of the building fair value is on an ‘as-if-vacant’ basis. Value is allocated to acquired lease intangibles (if any) based on the costs avoided and revenue recognized by acquiring the property subject to lease and avoiding an otherwise ‘dark period’. In making estimates of fair values for this purpose, the Company uses a third-party specialist that obtains various information about each property, as well as the pre-acquisition due diligence of the Company and prior leasing activities at the site. Lease Intangibles Lease intangibles, if any, acquired in conjunction with the purchase of real estate represent the value of in-place leases and above- or below-market leases. For real estate acquired subject to existing lease agreements, acquired lease intangibles are valued based on the Company’s estimates of costs related to tenant acquisition and the asset carrying costs, including lost revenue, that would be incurred during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases at the time of the acquisition. Above-market and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition of the real estate and the Company’s estimate of current market lease rates for the property, measured over a period equal to the remaining initial term of the lease. In-place lease intangibles are amortized on a straight-line basis over the remaining initial term of the related lease and included in depreciation and amortization expense. Above-market lease intangibles are amortized over the remaining initial terms of the respective leases as a decrease in rental revenue. Below-market lease intangibles are generally amortized as an increase to rental revenue over the remaining initial term of the respective leases, but may be amortized over the renewal periods if the Company believes it is likely the tenant will exercise the renewal option. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized as an impairment loss included in depreciation and amortization expense. To date, the Company has not had significant early terminations. Finance ground lease assets are also included in lease intangible assets, net on the Consolidated Balance Sheets. See Leases below for additional information. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Land, buildings and equipment and certain other assets, including definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such events and changes may include macroeconomic conditions, including those caused by global pandemics, like the recent coronavirus disease pandemic (“COVID-19”) and restrictions intended to prevent its spread, which may result in property operational disruption and indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant and retail level. If these assets are determined to be impaired, the amount of impairment recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Fair value is generally determined by appraisals or sales prices of comparable assets. The judgments we make related to the expected useful lives of long-lived assets and our ability to realize undiscounted cash flows in excess of the carrying amounts of these assets are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions, changes in usage or operating performance, desirability of the restaurant and retail sites and other factors, such as our ability to sell our assets held for sale. As we assess the ongoing expected cash flows and carrying amounts of our long-lived assets, significant adverse changes in these factors could cause us to realize a material impairment loss. |
Real Estate Held for Sale | Real Estate Held for SaleReal estate is classified as held for sale when the sale is probable, will be completed within one year, purchase agreements are executed, the buyer has a significant deposit at risk, and no financing contingencies exist which could prevent the transaction from being completed in a timely manner. Restaurant and retail sites and certain other assets to be disposed of are included in assets held for sale when the likelihood of disposing of these assets within one year is probable. Assets whose disposal is not probable within one year remain in land, buildings, equipment and improvements until their disposal within one year is probable. Disposals of assets that have a major effect on our operations and financial results or that represent a strategic shift in our operating businesses meet the requirements to be reported as discontinued operations. Real estate held for sale is reported at the lower of carrying amount or fair value, less estimated costs to sell. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents can consist of cash and money market accounts. Restricted cash consists of 1031 tax deferred real estate exchange proceeds and is included in Other assets in our Consolidated Balance Sheets. |
Long-term Debt | Long-term Debt Long-term debt is carried at unpaid principal balance, net of deferred financing costs. All of our long-term debt is currently unsecured and interest is paid monthly on our non-amortizing term loans and revolving credit facility and semi-annually on our senior fixed rate notes. Deferred Financing Costs Financing costs related to long-term debt are deferred and amortized over the remaining life of the debt using the effective interest method. These costs are presented as a direct deduction from their related liabilities in the Consolidated Balance Sheets. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as required by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. Our use of derivative instruments is currently limited to interest rate hedges. These instruments are generally structured as hedges of the variability of cash flows related to forecasted transactions (cash flow hedges). We do not enter into derivative instruments for trading or speculative purposes, where changes in the cash flows of the derivative are not expected to offset changes in cash flows of the hedged item. All derivatives are recognized on the balance sheet at fair value. For those derivative instruments for which we intend to elect hedge accounting, at the time the derivative contract is entered into, we document all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking the various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific assets and liabilities on the consolidated balance sheet or to specific forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria in accordance with United States generally accepted accounting principles (“U.S. GAAP”), changes in the derivatives’ fair value are not included in current earnings but are included in accumulated other comprehensive income, net of tax. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. Ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs. |
Other Assets and Liabilities | Other Assets and Liabilities Other assets primarily consist of right of use operating lease assets, pre-acquisition costs, restricted cash, prepaid assets, food and beverage inventories for use by our Kerrow operating subsidiary, escrow deposits, and accounts receivable. Other liabilities primarily consist of accrued compensation, accrued interest expense, accrued operating expenses, intangible lease liabilities, and operating lease liabilities. |
Leases, Lessee | Leases Effective January 1, 2019, the Company adopted FASB Accounting Standards Codification 842, Leases, including effective amendments (“ASC 842”). All significant lease arrangements are generally recognized at lease commencement. For leases where the Company is the lessee upon adoption of ASC 842, operating or finance lease right-of-use (“ROU”) assets and lease liabilities are recognized at commencement based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset during the reasonably certain lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. As part of certain real estate investment transactions, the Company may enter into long-term ground leases as a lessee. The Company recognizes a ground lease (or right-of-use) asset and related lease liability for each of these ground leases. Ground lease assets and lease liabilities are recognized based on the present value of the lease payments. The Company uses its estimated incremental borrowing rate, which is the estimated rate at which the Company could borrow on a collateralized basis with similar payments over a similar term, in determining the present value of the lease payments. |
Leases, Lessor | For leases where the Company is the lessor, we determine the classification upon commencement. At September 30, 2022, all such leases are classified as operating leases. These operating leases may contain both lease and non-lease components. The Company accounts for lease and non-lease components as a single component. |
Revenue Recognition | Revenue Recognition Rental Revenue For those net leases that provide for periodic and determinable increases in base rent, base rental revenue is recognized on a straight-line basis over the applicable lease term when collectability is probable. Recognizing rental revenue on a straight-line basis generally results in recognized revenues during the first half of a lease term exceeding the cash amounts contractually due from our tenants, creating a deferred rent receivable. In certain circumstances, the Company may offer tenant allowance funds in exchange for increasing rent, extending the term, and including annual sales reporting among other items. These tenant allowance funds are classified as lease incentives upon payment and are amortized as a reduction to revenue over the lease term. Lease incentives are included in intangible lease assets, net, on our Consolidated Balance Sheets. The Company did not pay any lease incentives to tenants during the nine months ended September 30, 2022. During the year ended December 31, 2021, the Company paid lease incentives of $1.2 million to tenants. We assess the collectability of our lease receivables, including deferred rents receivable, on several factors, including payment history, the financial strength of the tenant and any guarantors, historical operations and operating trends of the property, and current economic conditions. If our evaluation of these factors indicates it is not probable that we will be able to recover substantially all of the receivable, we derecognize the deferred rent receivable asset and record that revenue as a reduction in rental revenue. If we determine the lease receivable will not be collected due to a credit concern, we reduce the recorded revenue for the period and related accounts receivable. For those leases that provide for periodic increases in base rent only if certain revenue parameters or other substantive contingencies are met, the increased rental revenue is recognized as the related parameters or contingencies are met, rather than on a straight-line basis over the applicable lease term. Costs paid by the lessor and reimbursed by the lessees are included in variable lease payments and presented on a gross basis within rental revenue. Sales taxes collected from lessees and remitted to governmental authorities are presented on a net basis within rental revenue. Restaurant Revenue |
Restaurant Expenses | Restaurant ExpensesRestaurant expenses include restaurant labor, general and administrative expenses, rent expense, and food and beverage costs. Food and beverage costs include inventory, warehousing, related purchasing and distribution costs. Vendor allowances received in connection with the purchase of a vendor’s products are recognized as a reduction of the related food and beverage costs as earned. |
Realized Gain on Sale | Realized Gain on SaleThe Company recognizes gain on sale of real estate in accordance with FASB ASU No. 2017-05, “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The Company evaluates each transaction to determine if control of the asset, as well as other specified criteria, has been transferred to the buyer to determine proper timing of revenue recognition, as well as transaction price allocation. |
Income Taxes | Income Taxes We believe that we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT commencing with our taxable year ended December 31, 2016, and we intend to continue to operate in a manner that will enable us to maintain our qualification as a REIT. So long as we qualify as a REIT, we generally will not be subject to federal income tax on our net income that we distribute currently to our shareholders. To maintain our qualification as a REIT, we are required under the Code to distribute at least 90% of our REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) to our shareholders and meet certain other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates. Even if we qualify as a REIT, we may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on our undistributed taxable income. The Kerrow Restaurant Operating Business is a TRS and is taxed as a C corporation. |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) are computed by dividing net income allocated to common shareholders by the weighted-average number of common shares outstanding for the reporting period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. No effect is shown for any securities that are anti-dilutive. Net income allocated to common shareholders represents net income less income allocated to participating securities and non-controlling interests. None of the Company’s equity awards are participating securities. |
Noncontrolling Interest | Noncontrolling InterestNoncontrolling interest represents the aggregate limited partnership interests in FCPT OP held by third parties. In accordance with GAAP, the noncontrolling interest of FCPT OP is shown as a component of equity on our Consolidated Balance Sheets, and the portion of income allocable to third parties is shown as net income attributable to noncontrolling interests in our Income Statements and Consolidated Statements of Comprehensive Income (Loss) (“Comprehensive Income Statement”). The Company follows the guidance issued by the FASB regarding the classification and measurement of redeemable securities. At FCPT OP’s option, it may satisfy this redemption with cash or by exchanging non-registered shares of FCPT common stock on a one-for-one basis. Accordingly, the Company has determined that the common OP units meet the requirements to be classified as permanent equity. A reconciliation of equity attributable to noncontrolling interest is disclosed in our Consolidated Statements of Changes in Equity. |
Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation plan provides for the grant of restricted stock awards (“RSAs”), deferred stock units (“DSUs”), performance-based awards, including performance stock units (“PSUs”), dividend equivalents (“DEUs”), restricted stock units (“RSUs”), and other types of awards to eligible participants. DEUs are earned during the vesting period and received upon vesting of award. Upon forfeiture of an award, DEUs earned during the vesting period are also forfeited. We classify stock-based payment awards either as equity awards or liability awards based upon cash settlement options. Equity classified awards are measured based on the fair value on the date of grant. Liability classified awards are remeasured to fair value each reporting period. We recognize costs resulting from the Company’s stock-based compensation awards on a straight-line basis over their vesting periods, which range between one |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We use a fair value approach to value certain assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We use a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity's own assumptions (unobservable inputs). The hierarchy consists of three levels: • Level 1 - Quoted market prices in active markets for identical assets or liabilities; • Level 2 - Inputs other than level one inputs that are either directly or indirectly observable; and • Level 3 - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. |
Application of New Accounting Standards | Application of New Accounting Standards We consider the applicability and impact of all ASUs issued by the FASB. Other than as disclosed below, ASUs not yet adopted were assessed and determined to be either not applicable or are expected to have minimal impact to our consolidated result of operations, financial position and cash flows. In the first quarter of 2020 the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04 Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020 the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. On March 5, 2021, the Financial Conduct Authority (“FCA”) announced that U.S. dollar LIBOR will no longer be published after June 30, 2023. This announcement has several implications, including setting the spread that may be used to automatically convert contracts from LIBOR to SOFR. Additionally, banking regulators encouraged banks to discontinue new LIBOR debt issuances by December 31, 2021. The Company anticipates that LIBOR will continue to be available at least until June 30, 2023. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form. At September 30, 2022, the Company had three currently effective interest rate swaps with a total notional amount of $350 million that were indexed to LIBOR. These interest rate swaps mature through 2025, and the Company is monitoring and evaluating the related risks, which include interest on loans or amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to an alternative rate, including any resulting value transfer that may occur, and are likely to vary by contract. The value of loans, securities, or derivative instruments tied to LIBOR, as well as interest rates on our current or future indebtedness, may also be impacted if LIBOR is limited or discontinued. For some instruments the method of transitioning to an alternative reference rate may be challenging, especially if we cannot agree with the respective counterparty about how to make the transition. While we expect LIBOR to be available in substantially its current form until at least the end of June 30, 2023, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified. |
Fair Value Measurements | The carrying amounts of certain of the Company’s financial instruments including cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value due either to length of maturity or interest rates that approximate prevailing market rates. The carrying value of derivative financial instruments equal fair value in accordance with U.S. GAAP. Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate hierarchy disclosures each reporting period. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash in our Consolidated Balance Sheets to the total amount shown in our Consolidated Statements of Cash Flows: September 30, December 31, (In thousands) 2022 2021 Cash and cash equivalents $ 36,669 $ 6,300 Restricted cash (included in Other assets) — — Total Cash, Cash Equivalents, and Restricted Cash $ 36,669 $ 6,300 |
Real Estate Investments, Net _2
Real Estate Investments, Net and Intangible Assets and Liabilities, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments, Net | Real estate investments, net, which consist of land, buildings and improvements leased to others subject to net operating leases and those utilized in the operations of Kerrow Restaurant Operating Business are summarized as follows: September 30, December 31, (In thousands) 2022 2021 Land $ 1,056,228 $ 966,565 Buildings and improvements 1,355,430 1,302,114 Equipment 135,299 135,726 Total gross real estate investments 2,546,957 2,404,405 Less: Accumulated depreciation (700,499) (682,430) Total real estate investments, net 1,846,458 1,721,975 Intangible lease assets, net 106,947 104,251 Total Real Estate Investments and Intangible Lease Assets, Net $ 1,953,405 $ 1,826,226 |
Schedule of Intangible Assets | The following tables detail intangible lease assets and liabilities. September 30, December 31, (In thousands) 2022 2021 Acquired in-place lease intangibles $ 97,774 $ 83,892 Above-market leases 13,821 13,821 Finance leases - right of use asset (1) 24,383 24,383 Lease incentives 7,061 7,061 Direct lease costs 153 87 Total 143,192 129,244 Less: Accumulated amortization (36,245) (24,993) Intangible Lease Assets, Net $ 106,947 $ 104,251 (1) See Note 5 - Leases for additional information on finance leases - right of use assets. |
Schedule of Intangible Liabilities | September 30, December 31, (In thousands) 2022 2021 Below-market leases $ 2,610 $ 2,978 Less: Accumulated amortization (1,090) (1,038) Intangible Lease Liabilities, Net $ 1,520 $ 1,940 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table presents the estimated impact during the next five years and thereafter related to the amortization of in-place lease intangibles, and above-market and below-market lease intangibles for properties held for investment at September 30, 2022. (In thousands) September 30, 2022 (three months) $ 3,989 2023 13,658 2024 11,800 2025 9,952 2026 8,701 Thereafter 26,809 Total Future Amortization $ 74,909 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of of Operating Lease Liability Maturities | As of September 30, 2022, maturities of operating lease liabilities were as follows: (In thousands) September 30, 2022 (three months) $ 175 2023 705 2024 718 2025 470 2026 310 Thereafter 5,072 Total Payments 7,450 Less: Interest (2,187) Operating Lease Liability $ 5,263 |
Schedule of Components of Rental Revenue | The following table shows the components of rental revenue for the three and nine months ended September 30, 2022 and 2021. Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Lease revenue - operating leases $ 47,188 $ 42,623 138,678 124,599 Variable lease revenue (tenant reimbursements) 1,531 1,050 4,848 2,751 Total Rental Revenue $ 48,719 $ 43,673 $ 143,526 $ 127,350 |
Schedule of Future Minimum Lease Payments to be Received | The table presents future minimum lease payments due during the initial lease term only as lease renewal periods are exercisable at the option of the lessee. (In thousands) September 30, 2022 (three months) $ 46,497 2023 187,213 2024 186,998 2025 185,534 2026 184,608 Thereafter 949,846 Total Future Minimum Lease Payments $ 1,740,696 |
Long-Term Debt, Net of Deferr_2
Long-Term Debt, Net of Deferred Financing Costs (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of of Term Loans and Notes Payable | The following table presents the Term Loan balances as of September 30, 2022 and December 31, 2021. Outstanding Balance Maturity Interest September 30, December 31, (Dollars in thousands) Date Rate 2022 2021 Term Loans: Term loan due 2023 Nov 2023 3.70% (a) 50,000 50,000 Term loan due 2024 Mar 2024 3.70% (a) 100,000 100,000 Term loan due 2025 Nov 2025 3.70% (a) 150,000 150,000 Term loan due 2026 Nov 2026 3.70% (a) 100,000 100,000 Total Term Loans $ 400,000 $ 400,000 (a) Loan is a variable‑rate loan which resets monthly at one-month LIBOR + the applicable credit spread of 1.00% at September 30, 2022. The following table presents the senior unsecured fixed rate notes balance as of September 30, 2022 and December 31, 2021. Outstanding Balance Maturity Interest September 30, December 31, (Dollars in thousands) Date Rate 2022 2021 Notes Payable: Senior unsecured fixed rate note, issued June 2017 Jun 2024 4.68 % $ 50,000 $ 50,000 Senior unsecured fixed rate note, issued June 2017 Jun 2027 4.93 % 75,000 75,000 Senior unsecured fixed rate note, issued December 2018 Dec 2026 4.63 % 50,000 50,000 Senior unsecured fixed rate note, issued December 2018 Dec 2028 4.76 % 50,000 50,000 Senior unsecured fixed rate note, issued March 2020 Jun 2029 3.15 % 50,000 50,000 Senior unsecured fixed rate note, issued March 2020 Apr 2030 3.20 % 75,000 75,000 Senior unsecured fixed rate note, issued April 2021 Apr 2029 2.74 % 50,000 50,000 Senior unsecured fixed rate note, issued April 2021 Apr 2031 2.99 % 50,000 50,000 Senior unsecured fixed rate note, issued March 2022 Mar 2031 3.09 % 50,000 — Senior unsecured fixed rate note, issued March 2022 Mar 2032 3.11 % 75,000 — Total Notes $ 575,000 $ 450,000 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of our derivative financial instruments as well as their classification on the consolidated balance sheet as of September 30, 2022 and December 31, 2021. Derivative Assets Derivative Liabilities Balance Sheet Location Fair Value at Balance Sheet Location Fair Value at (Dollars in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Derivatives designated as hedging instruments: Interest rate swaps Derivative assets $ 36,448 $ 2,591 Derivative liabilities $ — $ 7,517 Total $ 36,448 $ 2,591 $ — $ 7,517 Offsetting of Derivative Assets Gross Amounts of Recognized Assets Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Assets Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Financial Instruments Cash Collateral Received Net Amount September 30, 2022 $ 36,448 $ — $ 36,448 $ — $ — $ 36,448 December 31, 2021 2,591 — 2,591 (1,268) — 1,323 Offsetting of Derivative Liabilities Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities Presented in the Consolidated Balance Sheet Gross Amounts Not Offset in the Consolidated Balance Sheet (In thousands) Financial Instruments Cash Collateral Posted Net Amount September 30, 2022 $ — $ — $ — $ — $ — $ — December 31, 2021 7,517 — 7,517 (1,268) — 6,249 |
Schedule of Derivative Instruments, Gain (Loss) | The table below presents the effect of our interest rate swaps on comprehensive income for the three and nine months ended September 30, 2022 and 2021. (Dollars in thousands) Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Total Amount of Interest Expense Presented in the Consolidated Statements of Income Three months ended September 30, 2022 $ 17,151 Interest expense $ (104) $ (9,177) Three months ended September 30, 2021 1,340 Interest expense 1,748 (8,311) Nine months ended September 30, 2022 39,151 Interest expense 2,700 (26,583) Nine months ended September 30, 2021 6,447 Interest expense 5,220 (24,328) |
Supplemental Detail for Certa_2
Supplemental Detail for Certain Components of Consolidated Balance Sheets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Components of Other Assets | The components of other assets were as follows: September 30, December 31, (In thousands) 2022 2021 Operating lease right-of-use asset $ 4,552 $ 4,919 Prepaid acquisition costs and deposits 3,615 3,049 Accounts receivable 1,749 1,312 Prepaid assets 1,184 1,375 Food and beverage inventories 256 252 Other 1,206 695 Total Other Assets $ 12,562 $ 11,602 |
Schedule of Components of Other Liabilities | The components of other liabilities were as follows: September 30, December 31, (In thousands) 2022 2021 Accrued interest expense $ 6,774 $ 2,066 Operating lease liability 5,263 5,617 Tenant deposits 4,893 961 Accrued compensation 2,083 2,547 Intangible lease liabilities, net 1,520 1,940 Accrued operating expenses 322 286 Accounts payable 310 550 Other 3,635 2,047 Total Other Liabilities $ 24,800 $ 16,014 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the computation of basic and diluted net earnings per common share for the three and nine months ended September 30, 2022 and 2021. (In thousands except for shares and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Average common shares outstanding – basic 81,884,974 76,250,614 80,797,829 76,094,133 Net effect of dilutive equity awards 234,473 109,912 213,908 128,034 Average common shares outstanding – diluted 82,119,447 76,360,526 81,011,737 76,222,167 Net income available to common shareholders $ 24,518 $ 21,164 $ 74,903 $ 61,881 Basic net earnings per share $ 0.30 $ 0.28 $ 0.93 $ 0.81 Diluted net earnings per share $ 0.30 $ 0.28 $ 0.92 $ 0.81 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The unamortized compensation cost of awards issued under the Plan totaled approximately $6.6 million at September 30, 2022 as shown in the following table. (In thousands) Restricted Stock Units Restricted Stock Awards Performance Stock Awards Total Unrecognized compensation cost at January 1, 2022 $ 1,820 $ 1,728 $ 662 $ 4,210 Equity grants 2,080 3,225 1,236 6,541 Equity grant forfeitures (200) (112) (56) (368) Equity compensation expense (1,097) (1,890) (752) (3,739) Unrecognized Compensation Cost at September 30, 2022 $ 2,603 $ 2,951 $ 1,090 $ 6,644 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets Measured on Recurring Basis | The following table presents the assets and liabilities recorded that are reported at fair value on our Consolidated Balance Sheets on a recurring basis. September 30, 2022 (In thousands) Level 1 Level 2 Level 3 Total Assets Derivative assets $— $36,448 $— $36,448 Liabilities Derivative liabilities $— $— $— $— December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total Assets Derivative assets $— $2,591 $— $2,591 Liabilities Derivative liabilities $— $7,517 $— $7,517 |
Schedule of Fair Value Measurements, Nonrecurring | The following table presents the carrying value and fair value of certain financial liabilities that are recorded on our Consolidated Balance Sheets. The fair value of the long-term debt (Level 2) is determined using the present value of the contractual cash flows, discounted at the current market cost of debt. September 30, 2022 (In thousands) Carrying Value (1) Fair Value Term loan due 2023 $ 50,000 $ 49,875 Term loan due 2024 100,000 99,750 Term loan due 2025 150,000 149,734 Term loan due 2026 100,000 99,606 Senior fixed note due June 2024 50,000 49,994 Senior fixed note due June 2026 50,000 48,819 Senior fixed note due June 2027 75,000 73,955 Senior fixed note due June 2028 50,000 48,504 Senior fixed note due April 2029 50,000 43,133 Senior fixed note due June 2029 50,000 43,950 Senior fixed note due April 2030 75,000 65,163 Senior fixed note due March 2031 50,000 41,688 Senior fixed note due April 2031 50,000 42,267 Senior fixed note due March 2032 75,000 62,385 Revolving credit facility — — December 31, 2021 (In thousands) Carrying Value (1) Fair Value Term loan due 2023 $ 50,000 $ 50,237 Term loan due 2024 100,000 100,474 Term loan due 2025 150,000 151,702 Term loan due 2026 100,000 101,262 Senior fixed note due June 2024 50,000 53,482 Senior fixed note due June 2026 50,000 55,468 Senior fixed note due June 2027 75,000 84,593 Senior fixed note due June 2028 50,000 56,952 Senior fixed note due April 2029 50,000 50,965 Senior fixed note due June 2029 50,000 52,045 Senior fixed note due April 2030 75,000 78,246 Senior fixed note due April 2031 50,000 51,584 Revolving credit facility 36,000 36,220 (1) Carrying values exclude deferred financing costs |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables present financial information by segment for the three and nine months ended September 30, 2022 and 2021. Three Months Ended September 30, 2022 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 48,719 $ — $ — $ 48,719 Intercompany rental revenue 211 — (211) — Restaurant revenue — 7,289 — 7,289 Total revenues 48,930 7,289 (211) 56,008 Operating expenses: General and administrative 4,917 — — 4,917 Depreciation and amortization 10,408 180 — 10,588 Property expenses 1,999 — — 1,999 Restaurant expenses — 7,001 (211) 6,790 Total operating expenses 17,324 7,181 (211) 24,294 Interest expense (9,177) — — (9,177) Other income 164 — — 164 Realized gain on sale 1,828 — — 1,828 Income tax benefit (expense) (54) 77 — 23 Net Income $ 24,367 $ 185 $ — $ 24,552 Three Months Ended September 30, 2021 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 43,673 $ — $ — $ 43,673 Intercompany rental revenue 209 — (209) — Restaurant revenue — 7,033 — 7,033 Total revenues 43,882 7,033 (209) 50,706 Operating expenses: General and administrative 4,262 — — 4,262 Depreciation and amortization 8,447 384 — 8,831 Property expenses 1,453 — — 1,453 Restaurant expenses — 6,755 (209) 6,546 Total operating expenses 14,162 7,139 (209) 21,092 Interest expense (8,311) — — (8,311) Other income 2 — — 2 Realized gain on sale — — — — Income tax expense (46) (51) — (97) Net Income (Loss) $ 21,365 $ (157) $ — $ 21,208 Nine Months Ended September 30, 2022 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 143,526 $ — $ — $ 143,526 Intercompany rental revenue 633 — (633) — Restaurant revenue — 22,304 — 22,304 Total revenues 144,159 22,304 (633) 165,830 Operating expenses: General and administrative 14,884 — — 14,884 Depreciation and amortization 29,878 542 — 30,420 Property expenses 5,835 — — 5,835 Restaurant expenses — 21,358 (633) 20,725 Total operating expenses 50,597 21,900 (633) 71,864 Interest expense (26,583) — — (26,583) Other income 250 — — 250 Realized gain on sale 7,584 — — 7,584 Income tax expense (146) (63) — (209) Net Income $ 74,667 $ 341 $ — $ 75,008 Nine Months Ended September 30, 2021 (In thousands) Real Estate Operations Restaurant Operations Intercompany Total Revenues: Rental revenue $ 127,350 $ — $ — $ 127,350 Intercompany rental revenue 533 — (533) — Restaurant revenue — 19,374 — 19,374 Total revenues 127,883 19,374 (533) 146,724 Operating expenses: General and administrative 13,490 — — 13,490 Depreciation and amortization 25,071 384 — 25,455 Property expenses 3,657 — — 3,657 Restaurant expenses — 18,527 (533) 17,994 Total operating expenses 42,218 18,911 (533) 60,596 Interest expense (24,328) — — (24,328) Other income 10 — — 10 Realized gain on sale 431 — — 431 Income tax expense (128) (103) — (231) Net Income $ 61,650 $ 360 $ — $ 62,010 The following tables present supplemental information by segment at September 30, 2022 and December 31, 2021. Supplemental Segment Information at September 30, 2022 (In thousands) Real Estate Operations Restaurant Operations Total Total real estate investments $ 2,524,709 $ 22,248 $ 2,546,957 Accumulated depreciation (693,861) (6,638) (700,499) Total real estate investments, net 1,830,848 15,610 1,846,458 Cash and cash equivalents 35,368 1,301 36,669 Total assets 2,077,650 22,227 2,099,877 Long-term debt, net of deferred financing costs 966,989 — 966,989 Supplemental Segment Information at December 31, 2021 (In thousands) Real Estate Operations Restaurant Operations Total Total real estate investments $ 2,382,169 $ 22,236 $ 2,404,405 Accumulated depreciation (676,183) (6,247) (682,430) Total real estate investments, net 1,705,986 15,989 1,721,975 Cash and cash equivalents 4,830 1,470 6,300 Total assets 1,880,192 22,788 1,902,980 Long-term debt, net of deferred financing costs 877,591 — 877,591 |
Organization (Details)
Organization (Details) - Darden $ in Millions | Nov. 09, 2015 USD ($) brand property |
Separation And Spin-Off [Line Items] | |
Equity interest contributed, percentage | 1 |
Number of real estate properties | property | 418 |
Number of brands | 5 |
Stockholder's equity, conversion ratio | 0.3333 |
Revolving Credit and Term Loan | Secured Debt | |
Separation And Spin-Off [Line Items] | |
Payment from issuance of long-term debt | $ | $ 315 |
Longhorn San Antonio Business | |
Separation And Spin-Off [Line Items] | |
Number of brands | 6 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Real Estate and Impairment (Details) | 9 Months Ended | ||
Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) | Dec. 31, 2021 property | |
Property, Plant and Equipment [Line Items] | |||
Impairment expense | $ | $ 0 | $ 0 | |
Assets held for sale disposal period (in years) | 1 year | ||
Number of properties held for sale | property | 0 | 0 | |
Building and Building Improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 7 years | ||
Building and Building Improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 55 years | ||
Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 15 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 36,669 | $ 6,300 | ||
Restricted cash (included in Other assets) | 0 | 0 | ||
Total Cash, Cash Equivalents, and Restricted Cash | $ 36,669 | $ 6,300 | $ 7,809 | $ 11,064 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Lease incentive payment | $ 0 | $ 815,000 | $ 1,200,000 |
Credit card receivables | $ 133,000 | $ 116,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Realized Gain on Sale (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) property | Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) property | |
Accounting Policies [Abstract] | ||||
Number of real estate properties sold | property | 4 | 0 | 7 | 2 |
Realized gain (losses) from operations | $ | $ 1,800 | $ 0 | $ 7,584 | $ 431 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Noncontrolling Interest and Stock-Based Compensation (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Redeemable noncontrolling interest, convertible shares, conversion ratio | 1 |
Restricted Stock Units | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSU vesting period (in years) | 1 year |
Restricted Stock Units | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSU vesting period (in years) | 5 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Adoption of New Accounting Standards (Details) $ in Millions | Sep. 30, 2022 USD ($) derivativeInstrument | Dec. 31, 2021 USD ($) |
Derivative [Line Items] | ||
Number of interest rate derivatives held | derivativeInstrument | 3 | |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Notional amount | $ | $ 350 | $ 350 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 USD ($) restaurant state property | Sep. 30, 2021 property | |
Concentration Risk [Line Items] | ||
Number of restaurants | property | 70 | 89 |
Number of states in which entity operates | state | 47 | |
Derivative exposure to risk | $ 36.4 | |
Secured Debt | Revolving Credit Facility | ||
Concentration Risk [Line Items] | ||
Line of credit facility, current borrowing capacity | $ 250 | |
Revenue Benchmark | Geographic Concentration Risk | Texas | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.80% | |
Darden | Revenue Benchmark | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 56.20% | |
Olive Garden | ||
Concentration Risk [Line Items] | ||
Number of restaurants | restaurant | 312 | |
Olive Garden | Revenue Benchmark | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 42% | |
Olive Garden | Leased Properties | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 31.30% | |
Long Horn Steakhouse | Revenue Benchmark | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.90% | |
Long Horn Steakhouse | Leased Properties | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.50% |
Real Estate Investments, Net _3
Real Estate Investments, Net and Intangible Assets and Liabilities, Net - Schedule of Real Estate Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Real Estate [Abstract] | ||
Land | $ 1,056,228 | $ 966,565 |
Buildings and improvements | 1,355,430 | 1,302,114 |
Equipment | 135,299 | 135,726 |
Total real estate investments | 2,546,957 | 2,404,405 |
Less: Accumulated depreciation | (700,499) | (682,430) |
Total real estate investments, net | 1,846,458 | 1,721,975 |
Intangible lease assets, net | 106,947 | 104,251 |
Total real estate investments and intangible lease assets, net | $ 1,953,405 | $ 1,826,226 |
Real Estate Investments, Net _4
Real Estate Investments, Net and Intangible Assets and Liabilities, Net - Real Estate Investments, Net - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) property state | Sep. 30, 2021 USD ($) property state | Sep. 30, 2022 USD ($) property state | Sep. 30, 2021 USD ($) property state | Dec. 31, 2021 USD ($) | |
Real Estate [Line Items] | |||||
Payments to acquire business | $ 171,800,000 | $ 195,100,000 | |||
Number of restaurants | property | 70 | 89 | 70 | 89 | |
Number of states properties are located | state | 25 | 25 | 25 | 25 | |
Payments to acquire land | $ 94,500,000 | $ 97,900,000 | |||
Payments to acquire buildings and improvements | 63,000,000 | 82,400,000 | |||
Payments to acquire equipment | 200,000 | 900,000 | |||
Payments to acquire intangible assets | 14,100,000 | 13,900,000 | |||
Contingent consideration | $ 0 | $ 0 | |||
Operating leases, term of contract | 7 years 6 months | 9 years 3 months 18 days | 7 years 6 months | 9 years 3 months 18 days | |
Number of real estate properties sold | property | 4 | 0 | 7 | 2 | |
Realized gain (losses) from operation | $ 1,800,000 | $ 0 | $ 7,584,000 | $ 431,000 | |
Increase in land | 1,056,228,000 | 1,056,228,000 | $ 966,565,000 | ||
Decrease in finance leases - right of use asset | (24,383,000) | (24,383,000) | $ (24,383,000) | ||
Ground Lease Asset Acquisition | |||||
Real Estate [Line Items] | |||||
Number of net lease property acquired | property | 1 | ||||
Ground Lease Asset Acquisition | Adjustment | |||||
Real Estate [Line Items] | |||||
Increase in land | 1,200,000 | $ 1,200,000 | |||
Decrease in finance leases - right of use asset | 1,200,000 | 1,200,000 | |||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Real Estate [Line Items] | |||||
Real estate held for sale | $ 12,400,000 | $ 2,800,000 | $ 12,400,000 | $ 2,800,000 |
Real Estate Investments, Net _5
Real Estate Investments, Net and Intangible Assets and Liabilities, Net - Intangible Lease Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Finance leases - right of use asset | $ 24,383 | $ 24,383 |
Total | 143,192 | 129,244 |
Less: Accumulated amortization | (36,245) | (24,993) |
Intangible Lease Assets, Net | $ 106,947 | $ 104,251 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Intangible lease assets, net | Intangible lease assets, net |
Acquired in-place lease intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible lease assets, gross | $ 97,774 | $ 83,892 |
Above-market leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible lease assets, gross | 13,821 | 13,821 |
Lease incentives | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible lease assets, gross | 7,061 | 7,061 |
Direct lease costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible lease assets, gross | $ 153 | $ 87 |
Real Estate Investments, Net _6
Real Estate Investments, Net and Intangible Assets and Liabilities, Net - Intangible Lease Liabilities, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Real Estate [Abstract] | ||
Below-market leases | $ 2,610 | $ 2,978 |
Less: Accumulated amortization | (1,090) | (1,038) |
Intangible Lease Liabilities, Net | $ 1,520 | $ 1,940 |
Real Estate Investments, Net _7
Real Estate Investments, Net and Intangible Assets and Liabilities, Net - Intangible Lease Assets and Liabilities, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible lease assets and liabilities, weighted average amortization period (in years) | 8 years 3 months 18 days | |||
Acquired in-place lease intangibles | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 3,400 | $ 2,500 | $ 9,500 | $ 6,900 |
Intangible lease assets and liabilities, weighted average amortization period (in years) | 8 years | |||
Above-market and below-market leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | 402 | 405 | $ 1,200 | 1,200 |
Above-market leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible lease assets and liabilities, weighted average amortization period (in years) | 7 years 2 months 12 days | |||
Below-market Leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible lease assets and liabilities, weighted average amortization period (in years) | 10 years 2 months 12 days | |||
Lease incentives | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 136 | $ 81 | $ 407 | $ 242 |
Intangible lease assets and liabilities, weighted average amortization period (in years) | 13 years 2 months 12 days |
Real Estate Investments, Net _8
Real Estate Investments, Net and Intangible Assets and Liabilities, Net - Amortization Expense (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Real Estate [Abstract] | |
2022 (three months) | $ 3,989 |
2023 | 13,658 |
2024 | 11,800 |
2025 | 9,952 |
2026 | 8,701 |
Thereafter | 26,809 |
Total Future Amortization | $ 74,909 |
Leases - Operating Lease Liabil
Leases - Operating Lease Liability (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) groundLease | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Leases [Abstract] | |||||
Number of ground leases | groundLease | 2 | ||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||||
2022 (three months) | $ 175 | $ 175 | |||
2023 | 705 | 705 | |||
2024 | 718 | 718 | |||
2025 | 470 | 470 | |||
2026 | 310 | 310 | |||
Thereafter | 5,072 | 5,072 | |||
Total Payments | 7,450 | 7,450 | |||
Less: Interest | (2,187) | (2,187) | |||
Operating Lease Liability | $ 5,263 | $ 5,263 | $ 5,617 | ||
Weighted average discount rate | 4.21% | 4.21% | |||
Weighted average remaining lease term (in years) | 16 years 2 months 12 days | 16 years 2 months 12 days | |||
Rental expense | $ 218 | $ 218 | $ 671 | $ 667 |
Leases - Operating Leases as Le
Leases - Operating Leases as Lessor (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Lease revenue - operating leases | $ 47,188 | $ 42,623 | $ 138,678 | $ 124,599 |
Variable lease revenue (tenant reimbursements) | 1,531 | 1,050 | 4,848 | 2,751 |
Total Rental Revenue | 48,719 | $ 43,673 | 143,526 | $ 127,350 |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | ||||
2022 (three months) | 46,497 | 46,497 | ||
2023 | 187,213 | 187,213 | ||
2024 | 186,998 | 186,998 | ||
2025 | 185,534 | 185,534 | ||
2026 | 184,608 | 184,608 | ||
Thereafter | 949,846 | 949,846 | ||
Total Future Minimum Lease Payments | $ 1,740,696 | $ 1,740,696 |
Leases - Ground Leases as Lesse
Leases - Ground Leases as Lessee (Details) - Ground Lease - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
Finance ground lease assets | $ 24.4 | $ 24.4 |
Ground lease renewal term (in years) | 99 years | |
Weighted average remaining non-cancelable lease term (in years) | 93 years 9 months 18 days | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Ground lease remaining term (in years) | 61 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Ground lease remaining term (in years) | 97 years |
Long-Term Debt, Net of Deferr_3
Long-Term Debt, Net of Deferred Financing Costs - Narrative (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 400,000,000 | $ 400,000,000 |
Weighted average interest rate | 3.70% | 1.38% |
Unsecured Debt | The Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 575,000,000 | $ 450,000,000 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.40% | |
Revolving Credit Facility | Secured Debt | ||
Debt Instrument [Line Items] | ||
Fair value of amount outstanding | 0 | $ 36,000,000 |
Line of credit facility, current borrowing capacity | 250,000,000 | |
Letter of Credit | Secured Debt | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding, amount | $ 0 | $ 0 |
Long-Term Debt, Net of Deferr_4
Long-Term Debt, Net of Deferred Financing Costs - Summary of Term Loans (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Term loan due 2023 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.70% | |
Outstanding Balance | $ 50,000 | $ 50,000 |
Term loan due 2024 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.70% | |
Outstanding Balance | $ 100,000 | 100,000 |
Term loan due 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.70% | |
Outstanding Balance | $ 150,000 | 150,000 |
Term loan due 2026 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.70% | |
Outstanding Balance | $ 100,000 | 100,000 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 400,000 | $ 400,000 |
Term Loan | Minimum | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Variable rate | 1% |
Long-Term Debt, Net of Deferr_5
Long-Term Debt, Net of Deferred Financing Costs - Note Purchase Agreement (Details) - Unsecured Debt $ in Millions | Dec. 17, 2021 USD ($) |
Note Purchase Agreement | |
Debt Instrument [Line Items] | |
Long-term debt | $ 125 |
Note Purchase Agreement Maturing 2032 | |
Debt Instrument [Line Items] | |
Long-term debt | $ 75 |
Debt term | 10 years |
Interest rate | 3.11% |
Note Purchase Agreement Maturing 2031 | |
Debt Instrument [Line Items] | |
Long-term debt | $ 50 |
Debt term | 9 years |
Interest rate | 3.09% |
Long-Term Debt, Net of Deferr_6
Long-Term Debt, Net of Deferred Financing Costs - Summary of Notes Payable (Details) - Unsecured Debt - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Senior fixed note due June 2024 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.68% | |
Outstanding Balance | $ 50,000 | $ 50,000 |
Senior fixed note due June 2027 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.93% | |
Outstanding Balance | $ 75,000 | 75,000 |
Senior fixed notes due December 2026 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.63% | |
Outstanding Balance | $ 50,000 | 50,000 |
Senior fixed notes due December 2028 | ||
Debt Instrument [Line Items] | ||
Interest rate | 4.76% | |
Outstanding Balance | $ 50,000 | 50,000 |
Senior fixed notes due June 2029 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.15% | |
Outstanding Balance | $ 50,000 | 50,000 |
Senior fixed notes due April 2030 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.20% | |
Outstanding Balance | $ 75,000 | 75,000 |
Senior fixed note due April 2029 | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.74% | |
Outstanding Balance | $ 50,000 | 50,000 |
Senior fixed note due April 2031 | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.99% | |
Outstanding Balance | $ 50,000 | 50,000 |
Senior fixed note due March 2031 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.09% | |
Outstanding Balance | $ 50,000 | 0 |
Senior fixed note due March 2032 | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.11% | |
Outstanding Balance | $ 75,000 | 0 |
The Notes | ||
Debt Instrument [Line Items] | ||
Outstanding Balance | $ 575,000 | $ 450,000 |
Long-Term Debt, Net of Deferr_7
Long-Term Debt, Net of Deferred Financing Costs - Deferred Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||
Unamortized deferred financing costs | $ 8,000 | $ 8,000 | $ 8,400 | ||
Amortization of financing costs | $ 496 | $ 468 | $ 1,460 | $ 1,901 | |
Revolving Credit and Term Loan Agreement | |||||
Debt Instrument [Line Items] | |||||
Amortization related to debt issuance costs | $ 364 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) swap | Dec. 31, 2021 USD ($) | |
Derivative [Line Items] | ||
Derivative assets | $ 36,448 | $ 2,591 |
Estimated reclassification to earnings from AOCI | 7,700 | |
Derivative fair value, net asset (liability) position | 36,400 | (4,900) |
Derivative instrument obligation | 36,400 | |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative assets | 7,100 | |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Notes payable, net of deferred financing costs | 350,000 | 350,000 |
Notional amount | $ 350,000 | $ 350,000 |
Number of instruments | swap | 2 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Derivatives Balance Sheet (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 36,448 | $ 2,591 |
Derivative assets | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 36,448 | 2,591 |
Derivative liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 0 | 7,517 |
Derivative liabilities | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 0 | $ 7,517 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Derivatives Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | $ 17,151 | $ 1,340 | $ 39,151 | $ 6,447 |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (104) | 1,748 | 2,700 | 5,220 |
Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | 17,151 | 1,340 | 39,151 | 6,447 |
Interest rate swaps | Interest expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | (104) | 1,748 | 2,700 | 5,220 |
Total Amount of Interest Expense Presented in the Consolidated Statements of Income | $ (9,177) | $ (8,311) | $ (26,583) | $ (24,328) |
Derivative Financial Instrume_6
Derivative Financial Instruments - Derivatives Offsetting (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Offsetting of Derivative Assets | ||
Net Amounts of Assets Presented in the Consolidated Balance Sheet | $ 36,448 | $ 2,591 |
Offsetting of Derivative Liabilities | ||
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 0 | 7,517 |
Swap | ||
Offsetting of Derivative Assets | ||
Gross Amounts of Recognized Assets | 36,448 | 2,591 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Assets Presented in the Consolidated Balance Sheet | 36,448 | 2,591 |
Gross Amounts Not Offset in the Consolidated Balance Sheet, Financial Instruments | 0 | (1,268) |
Gross Amounts Not Offset in the Consolidated Balance Sheet, Cash Collateral Received | 0 | 0 |
Net Amount | 36,448 | 1,323 |
Offsetting of Derivative Liabilities | ||
Gross Amounts of Recognized Liabilities | 0 | 7,517 |
Gross Amounts Offset in the Consolidated Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Consolidated Balance Sheet | 0 | 7,517 |
Gross Amounts Not Offset in the Consolidated Balance Sheet, Financial Instruments | 0 | (1,268) |
Gross Amounts Not Offset in the Consolidated Balance Sheet, Cash Collateral Posted | 0 | 0 |
Net Amount | $ 0 | $ 6,249 |
Supplemental Detail for Certa_3
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Operating lease right-of-use asset | $ 4,552 | $ 4,919 |
Prepaid acquisition costs and deposits | 3,615 | 3,049 |
Accounts receivable | 1,749 | 1,312 |
Prepaid assets | 1,184 | 1,375 |
Food and beverage inventories | 256 | 252 |
Other | 1,206 | 695 |
Total Other Assets | $ 12,562 | $ 11,602 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Total Other Assets | Total Other Assets |
Supplemental Detail for Certa_4
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued interest expense | $ 6,774 | $ 2,066 |
Operating lease liability | 5,263 | 5,617 |
Tenant deposits | 4,893 | 961 |
Accrued compensation | 2,083 | 2,547 |
Intangible lease liabilities, net | 1,520 | 1,940 |
Accrued operating expenses | 322 | 286 |
Accounts payable | 310 | 550 |
Other | 3,635 | 2,047 |
Total Other Liabilities | $ 24,800 | $ 16,014 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expenses | $ (23) | $ 97 | $ 209 | $ 231 |
Deferred income taxes | $ 118 | $ 57 | $ 0 |
Equity - Preferred Stock and Co
Equity - Preferred Stock and Common Stock (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||||||
Sep. 16, 2022 | Jun. 16, 2022 | Mar. 08, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Equity [Abstract] | ||||||||
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 | 25,000,000 | |||||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | |||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares issued (in shares) | 82,822,584 | 82,822,584 | 80,279,217 | |||||
Common stock, shares outstanding (in shares) | 82,822,584 | 82,822,584 | 80,279,217 | |||||
Dividends declared per common share (in USD per share) | $ 0.3325 | $ 0.3325 | $ 0.3325 | $ 0.3325 | $ 0.3175 | $ 0.9975 | $ 0.9525 |
Equity - Common Stock Issuance
Equity - Common Stock Issuance Under the At-The-Market Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Feb. 24, 2021 | Mar. 22, 2019 | |
Subsidiary, Sale of Stock [Line Items] | ||||||
Net proceeds from ATM equity issuance | $ 66,257 | $ 31,799 | ||||
At-The-Market Offering | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Stock issuance, sales agreement, value available for issuance | $ 93,300 | $ 93,300 | $ 350,000 | $ 210,000 | ||
Weighted average share price (in USD per share) | $ 27.23 | $ 27.67 | $ 27.12 | $ 27.93 | ||
ATM proceeds, net of issuance costs (in shares) | 2,277,782 | 1,000,193 | 2,451,206 | 1,161,702 | ||
Net proceeds from ATM equity issuance | $ 62,000 | $ 27,100 | $ 66,500 | $ 31,800 | ||
At-The-Market Offering, Forward Sale Agreement | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued in transaction (in shares) | 1,723,426 | 3,959,433 | ||||
Weighted average share price (in USD per share) | $ 28.56 | $ 27.84 | ||||
At-The-Market Offering, Settled Forward Sale Agreement | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Weighted average share price (in USD per share) | $ 26.52 | $ 26.42 | ||||
ATM proceeds, net of issuance costs (in shares) | 1,190,532 | 1,363,956 | ||||
Net proceeds from ATM equity issuance | $ 31,600 | $ 36,000 |
Equity - Noncontrolling Interes
Equity - Noncontrolling Interest (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 USD ($) shares | Sep. 30, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | |
Class of Stock [Line Items] | |||
Outstanding number of units (in shares) | shares | 114,559 | 114,559 | |
Redeemable noncontrolling interest, convertible shares, conversion ratio | 1 | 1 | |
Redemption value | $ 2,800 | $ 2,800 | $ 3,400 |
Distribution to limited partners | $ 38 | $ 114 | |
Four Corners Property Trust | |||
Class of Stock [Line Items] | |||
Noncontrolling interest, ownership percentage by parent | 99.86% | 99.86% | |
Noncontrolling interest, ownership percentage by noncontrolling owners | 0.14% | 0.14% |
Equity - Earnings Per Share (De
Equity - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Abstract] | ||||
Average common shares outstanding – basic (in shares) | 81,884,974 | 76,250,614 | 80,797,829 | 76,094,133 |
Net effect of dilutive equity awards (in shares) | 234,473 | 109,912 | 213,908 | 128,034 |
Average common shares outstanding - diluted (in shares) | 82,119,447 | 76,360,526 | 81,011,737 | 76,222,167 |
Net income available to common shareholders | $ 24,518 | $ 21,164 | $ 74,903 | $ 61,881 |
Basic net earnings per share (in USD per share) | $ 0.30 | $ 0.28 | $ 0.93 | $ 0.81 |
Diluted net earnings per share (in USD per share) | $ 0.30 | $ 0.28 | $ 0.92 | $ 0.81 |
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 264,186 | 192,151 | 284,751 | 174,029 |
Weighted average units of partnership interest, amount (in shares) | 114,559 | 158,905 | 114,559 | 159,228 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jun. 10, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Increase in number of shares reserved for future issuance (in shares) | 1,500,000 | ||
Maximum number of shares reserved for future issuance (in shares) | 3,600,000 | ||
Shares available for grant (in shares) | 2,009,516 | ||
Unrecognized compensation cost | $ 6,644 | $ 4,210 | |
Period for recognition (in years) | 2 years 2 months 12 days |
Stock-Based Compensation - Disc
Stock-Based Compensation - Disclosure of Share-based Compensation Arrangements by Share-based Payment Award (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized [Roll Forward] | |
Unrecognized compensation cost at January 1, 2022 | $ 4,210 |
Equity grants | 6,541 |
Equity grant forfeitures | (368) |
Equity compensation expense | (3,739) |
Unrecognized Compensation Cost at September 30, 2022 | 6,644 |
Restricted Stock Units | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized [Roll Forward] | |
Unrecognized compensation cost at January 1, 2022 | 1,820 |
Equity grants | 2,080 |
Equity grant forfeitures | (200) |
Equity compensation expense | (1,097) |
Unrecognized Compensation Cost at September 30, 2022 | 2,603 |
Restricted Stock Awards | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized [Roll Forward] | |
Unrecognized compensation cost at January 1, 2022 | 1,728 |
Equity grants | 3,225 |
Equity grant forfeitures | (112) |
Equity compensation expense | (1,890) |
Unrecognized Compensation Cost at September 30, 2022 | 2,951 |
Performance Stock Awards | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized [Roll Forward] | |
Unrecognized compensation cost at January 1, 2022 | 662 |
Equity grants | 1,236 |
Equity grant forfeitures | (56) |
Equity compensation expense | (752) |
Unrecognized Compensation Cost at September 30, 2022 | $ 1,090 |
Stock-Based Compensation - RSUs
Stock-Based Compensation - RSUs and Restricted Stock Awards (Details) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Average closing market price, common stock, period (in days) | 5 days | ||
Outstanding (in shares) | 218,060 | 218,060 | 159,524 |
Granted (in shares) | 816 | 77,424 | |
Vested (in shares) | 816 | 11,361 | |
Forfeited (in shares) | 0 | 7,527 | |
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Average closing market price, common stock, period (in days) | 5 days | ||
Outstanding (in shares) | 157,023 | 157,023 | 113,695 |
Granted (in shares) | 0 | 119,471 | |
Forfeited (in shares) | 4,035 | ||
Restrictions on awards (in shares) | 0 | 72,105 | |
Awards forfeited and returned (in shares) | 38,082 | ||
Minimum | Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 1 year | ||
Minimum | Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 1 year | ||
Maximum | Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 5 years | ||
Maximum | Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance- Based Restricted Stock Awards (Details) - Performance Stock Awards $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 shares | Sep. 30, 2022 USD ($) day shares | Dec. 31, 2021 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested PSUs (in shares) | 202,560 | 202,560 | 208,481 |
Granted (in shares) | 0 | 66,369 | |
Shares vested in period (in shares) | 68,523 | ||
Forfeited (in shares) | 0 | 3,767 | |
Percentage of target shares distributed | 0% | ||
Total distribution of shares (in shares) | 0 | ||
Threshold trading days | day | 20 | ||
Performance period | 3 years | ||
Expected volatility rate | 49.50% | ||
Dividend yield | 0% | ||
Grant date fair value | $ | $ 1.2 | ||
Compensation expense | $ | $ 1.1 | ||
Three-Year Treasury Rate | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest rate | 2.50% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage multiplier | 0 | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage multiplier | 2 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Derivative assets | $ 36,448 | $ 2,591 |
Liabilities | ||
Derivative liabilities | 0 | 7,517 |
Fair Value, Recurring | ||
Assets | ||
Derivative assets | 36,448 | 2,591 |
Liabilities | ||
Derivative liabilities | 0 | 7,517 |
Fair Value, Recurring | Level 1 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Assets | ||
Derivative assets | 36,448 | 2,591 |
Liabilities | ||
Derivative liabilities | 0 | 7,517 |
Fair Value, Recurring | Level 3 | ||
Assets | ||
Derivative assets | 0 | 0 |
Liabilities | ||
Derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Value | Revolving Credit Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | $ 0 | $ 36,000 |
Carrying Value | Term Loan | Term loan due 2023 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 50,000 | 50,000 |
Carrying Value | Term Loan | Term loan due 2024 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 100,000 | 100,000 |
Carrying Value | Term Loan | Term loan due 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 150,000 | 150,000 |
Carrying Value | Term Loan | Term loan due 2026 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 100,000 | 100,000 |
Carrying Value | Senior Notes | Senior fixed note due June 2024 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 50,000 | 50,000 |
Carrying Value | Senior Notes | Senior fixed note due June 2026 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 50,000 | 50,000 |
Carrying Value | Senior Notes | Senior fixed note due June 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 75,000 | 75,000 |
Carrying Value | Senior Notes | Senior fixed note due June 2028 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 50,000 | 50,000 |
Carrying Value | Senior Notes | Senior fixed note due April 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 50,000 | 50,000 |
Carrying Value | Senior Notes | Senior fixed note due June 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 50,000 | 50,000 |
Carrying Value | Senior Notes | Senior fixed note due April 2030 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 75,000 | 75,000 |
Carrying Value | Senior Notes | Senior fixed note due March 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 50,000 | |
Carrying Value | Senior Notes | Senior fixed note due April 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 50,000 | 50,000 |
Carrying Value | Senior Notes | Senior fixed note due March 2032 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 75,000 | |
Fair Value | Revolving Credit Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 0 | 36,220 |
Fair Value | Term Loan | Term loan due 2023 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 49,875 | 50,237 |
Fair Value | Term Loan | Term loan due 2024 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 99,750 | 100,474 |
Fair Value | Term Loan | Term loan due 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 149,734 | 151,702 |
Fair Value | Term Loan | Term loan due 2026 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 99,606 | 101,262 |
Fair Value | Senior Notes | Senior fixed note due June 2024 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 49,994 | 53,482 |
Fair Value | Senior Notes | Senior fixed note due June 2026 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 48,819 | 55,468 |
Fair Value | Senior Notes | Senior fixed note due June 2027 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 73,955 | 84,593 |
Fair Value | Senior Notes | Senior fixed note due June 2028 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 48,504 | 56,952 |
Fair Value | Senior Notes | Senior fixed note due April 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 43,133 | 50,965 |
Fair Value | Senior Notes | Senior fixed note due June 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 43,950 | 52,045 |
Fair Value | Senior Notes | Senior fixed note due April 2030 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 65,163 | 78,246 |
Fair Value | Senior Notes | Senior fixed note due March 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 41,688 | |
Fair Value | Senior Notes | Senior fixed note due April 2031 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | 42,267 | $ 51,584 |
Fair Value | Senior Notes | Senior fixed note due March 2032 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Revolving credit facility | $ 62,385 |
Segments - Narrative (Details)
Segments - Narrative (Details) - segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting [Abstract] | ||||
Number of operating segments | 2 | 2 | 2 | 2 |
Segments - Income by Segment (D
Segments - Income by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Rental revenue | $ 48,719 | $ 43,673 | $ 143,526 | $ 127,350 |
Total revenues | 56,008 | 50,706 | 165,830 | 146,724 |
Operating expenses: | ||||
General and administrative | 4,917 | 4,262 | 14,884 | 13,490 |
Depreciation and amortization | 10,588 | 8,831 | 30,420 | 25,455 |
Total operating expenses | 24,294 | 21,092 | 71,864 | 60,596 |
Interest expense | (9,177) | (8,311) | (26,583) | (24,328) |
Other income | 164 | 2 | 250 | 10 |
Realized gain on sale | 1,828 | 0 | 7,584 | 431 |
Realized gain (losses) from operations | 1,800 | 0 | 7,584 | 431 |
Income tax benefit (expense) | 23 | (97) | (209) | (231) |
Net Income (Loss) | 24,552 | 21,208 | 75,008 | 62,010 |
Real Estate Operations | ||||
Revenues: | ||||
Rental revenue | 48,719 | 43,673 | 143,526 | 127,350 |
Restaurant Operations | ||||
Revenues: | ||||
Rental revenue | 0 | 0 | 0 | 0 |
Operating Segments | Real Estate Operations | ||||
Revenues: | ||||
Total revenues | 48,930 | 43,882 | 144,159 | 127,883 |
Operating expenses: | ||||
General and administrative | 4,917 | 4,262 | 14,884 | 13,490 |
Depreciation and amortization | 10,408 | 8,447 | 29,878 | 25,071 |
Total operating expenses | 17,324 | 14,162 | 50,597 | 42,218 |
Interest expense | (9,177) | (8,311) | (26,583) | (24,328) |
Other income | 164 | 2 | 250 | 10 |
Realized gain on sale | 1,828 | |||
Realized gain (losses) from operations | 0 | 7,584 | 431 | |
Income tax benefit (expense) | (54) | (46) | (146) | (128) |
Net Income (Loss) | 24,367 | 21,365 | 74,667 | 61,650 |
Operating Segments | Restaurant Operations | ||||
Revenues: | ||||
Total revenues | 7,289 | 7,033 | 22,304 | 19,374 |
Operating expenses: | ||||
General and administrative | 0 | 0 | 0 | 0 |
Depreciation and amortization | 180 | 384 | 542 | 384 |
Total operating expenses | 7,181 | 7,139 | 21,900 | 18,911 |
Interest expense | 0 | 0 | 0 | 0 |
Other income | 0 | 0 | 0 | 0 |
Realized gain on sale | 0 | |||
Realized gain (losses) from operations | 0 | 0 | 0 | |
Income tax benefit (expense) | 77 | (51) | (63) | (103) |
Net Income (Loss) | 185 | (157) | 341 | 360 |
Intersegment Eliminations | ||||
Revenues: | ||||
Rental revenue | 211 | 209 | 633 | 533 |
Total revenues | (211) | (209) | (633) | (533) |
Operating expenses: | ||||
General and administrative | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Total operating expenses | (211) | (209) | (633) | (533) |
Interest expense | 0 | 0 | 0 | 0 |
Other income | 0 | 0 | 0 | 0 |
Realized gain on sale | 0 | |||
Realized gain (losses) from operations | 0 | 0 | 0 | |
Income tax benefit (expense) | 0 | 0 | 0 | 0 |
Net Income (Loss) | 0 | 0 | 0 | 0 |
Restaurant | ||||
Revenues: | ||||
Restaurant revenue | 7,289 | 7,033 | 22,304 | 19,374 |
Operating expenses: | ||||
Expenses | 6,790 | 6,546 | 20,725 | 17,994 |
Restaurant | Operating Segments | Real Estate Operations | ||||
Revenues: | ||||
Restaurant revenue | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Expenses | 0 | 0 | 0 | 0 |
Restaurant | Operating Segments | Restaurant Operations | ||||
Revenues: | ||||
Restaurant revenue | 7,289 | 7,033 | 22,304 | 19,374 |
Operating expenses: | ||||
Expenses | 7,001 | 6,755 | 21,358 | 18,527 |
Restaurant | Intersegment Eliminations | ||||
Operating expenses: | ||||
Expenses | (211) | (209) | (633) | (533) |
Property | ||||
Operating expenses: | ||||
Expenses | 1,999 | 1,453 | 5,835 | 3,657 |
Property | Operating Segments | Real Estate Operations | ||||
Operating expenses: | ||||
Expenses | 1,999 | 1,453 | 5,835 | 3,657 |
Property | Operating Segments | Restaurant Operations | ||||
Operating expenses: | ||||
Expenses | 0 | 0 | 0 | 0 |
Property | Intersegment Eliminations | ||||
Operating expenses: | ||||
Expenses | $ 0 | $ 0 | $ 0 | $ 0 |
Segments - Supplemental Segment
Segments - Supplemental Segment Information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Total real estate investments | $ 2,546,957 | $ 2,404,405 |
Accumulated depreciation | (700,499) | (682,430) |
Total real estate investments, net | 1,846,458 | 1,721,975 |
Cash and cash equivalents | 36,669 | 6,300 |
Total assets | 2,099,877 | 1,902,980 |
Long-term debt, net of deferred financing costs | 966,989 | 877,591 |
Real Estate Operations | ||
Segment Reporting Information [Line Items] | ||
Total real estate investments | 2,524,709 | 2,382,169 |
Accumulated depreciation | (693,861) | (676,183) |
Total real estate investments, net | 1,830,848 | 1,705,986 |
Cash and cash equivalents | 35,368 | 4,830 |
Total assets | 2,077,650 | 1,880,192 |
Long-term debt, net of deferred financing costs | 966,989 | 877,591 |
Restaurant Operations | ||
Segment Reporting Information [Line Items] | ||
Total real estate investments | 22,248 | 22,236 |
Accumulated depreciation | (6,638) | (6,247) |
Total real estate investments, net | 15,610 | 15,989 |
Cash and cash equivalents | 1,301 | 1,470 |
Total assets | 22,227 | 22,788 |
Long-term debt, net of deferred financing costs | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 9 Months Ended | ||
Nov. 02, 2022 USD ($) property shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Oct. 25, 2022 USD ($) | |
Subsequent Event [Line Items] | ||||
Payments to acquire business | $ 171,800,000 | $ 195,100,000 | ||
Net proceeds from ATM equity issuance | $ 66,257,000 | $ 31,799,000 | ||
Subsequent Event | Maximum | ||||
Subsequent Event [Line Items] | ||||
Line of credit, accordion feature, increase in borrowing capacity | $ 350,000,000 | |||
Subsequent Event | Revolving Credit Facility | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 250,000,000 | |||
Subsequent Event | Term Loan Facility | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 430,000,000 | |||
Subsequent Event | Term Loan Facility | Term loan due 2025 | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 150,000,000 | |||
Subsequent Event | Term Loan Facility | Term loan due 2026 | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 100,000,000 | |||
Subsequent Event | Term Loan Facility | Term Loan Due 2027 | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 90,000,000 | |||
Subsequent Event | Term Loan Facility | Term Loan 2028 | ||||
Subsequent Event [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 90,000,000 | |||
Subsequent Event | At-The-Market Offering, Forward Sale Agreement | ||||
Subsequent Event [Line Items] | ||||
ATM proceeds, net of issuance costs (in shares) | shares | 1,052,051 | |||
Net proceeds from ATM equity issuance | $ 28,000,000 | |||
Subsequent Event | 2022 Acquisitions | ||||
Subsequent Event [Line Items] | ||||
Payments to acquire business | $ 16,000,000 | |||
Number of net lease property acquired | property | 8 | |||
Real estate investments yield | 6.90% | |||
Real estate investments, remaining lease term | 7 years 2 months 12 days |