Four Corners Property Trust, Inc. (NYSE:FCPT) Q4 2024 Earnings Call Transcript

Four Corners Property Trust, Inc. (NYSE:FCPT) Q4 2024 Earnings Call Transcript February 13, 2025

Operator: Ladies and gentlemen, the Four Corners Property Trust, Inc. 2024 Financial Results Conference Call will begin shortly with your host, Patrick Wernig. We appreciate your patience as we prepare your session today. During the call, we encourage participants to raise any questions they may have. You can raise a question by pressing star followed by one on your telephone keypad. And to remove yourself from the line of questioning, press star followed by two. We will begin shortly. Good morning, and thank you for joining us for the Four Corners Property Trust, Inc. fourth quarter 2024 financial results conference call. My name is Carly, and I will be coordinating the call today. If you’d like to register a question during the call, you can do so by pressing star followed by one on your telephone keypad. And to remove yourself from the line of questioning, it will be star followed by two. I will now hand over to your host, Patrick Wernig, CFO. The floor is yours.

Patrick Wernig: Thank you, Carly. During the course of this call, we will make forward-looking statements which are based on our beliefs and assumptions. Actual results will be affected by known and unknown factors that are beyond our control or ability. Assumptions are not a guarantee of future performance, and some will prove to be incorrect. For a more detailed description of some potential risks, please refer to our SEC filings which can be found at fcpt.com. The information presented on this call is current as of today, February 13, 2025. In addition, reconciliations to non-GAAP financial measures presented on this call such as FFO and AFFO, can be found in the company’s supplemental report. With that, I will turn the call over to Bill.

Bill Lenehan: Good morning. Following our typical cadence, we will make introductory remarks, Joshua Zhang will comment further on the investment market, and Patrick Wernig will discuss our financial results and capital position. In totality, 2024 was a strong year for us. The first half of the year was very similar to the second half of 2023. Rising interest rates created a challenging backdrop for net lease companies, and acquisition volume was down for the sector as a whole. Four Corners Property Trust, Inc. largely paused incremental acquisitions and waited for improved investment spreads. We refused to loosen our credit underwriting criteria and remained committed towards our strike zone: small box net lease with strong brands, quality credit, and attractive real estate.

Fortunately, by early Q3, our cost of capital had improved, and we found more seller willingness to transact at appropriate pricing. As we returned to the green zone, we immediately turned the acquisition machine back on. We ended the year with $265 million of acquisitions at a blended 7.1% cap rate. As we look forward to the new year, we have built up significant liquidity to fund new growth. While we do not give guidance, we are continuing to see opportunities that are consistent with our quality thresholds. We expect to add to our pipeline in the same steady and sustainable manner that is the core of our investment approach. As far as cap rate volatility, we have not seen much movement in deals with price recently. While it is early in the year, we expect to be at or near the same cap rate we captured in 2024.

To that end, we will also be continuing to build our investment team in 2025 and look forward to increasing our capabilities with some fantastic new hires that are starting in the coming months. Shifting to our in-place portfolio, we continue to perform very well with high collections and occupancy. Our rent coverage in the fourth quarter was 4.9 times for the majority of our portfolio that reports this figure. This remains amongst the strongest coverage in the net lease industry. As a reminder, Four Corners Property Trust, Inc.’s core tenants are nationally branded casual dining operators and sector leaders that generally outperform the industry. For example, Brinker recently reported Chili’s same-store sales growth grew an astounding 31% for the quarter ended December 2024.

Similarly, Olive Garden and LongHorn reported same-store sales growth of 2% and 7.5% for the three months ended November 2024. Consistent with past performance, Four Corners Property Trust, Inc.’s casual dining tenants have proven to be stronger than high-end fine dining or local mom-and-pop restaurants. Our tenants are well-capitalized, high-performing operators servicing a wide variety of consumers and price points. As for portfolio management, we are not yet experiencing any material tenancy issues in the portfolio or signs that inflation or labor issues will impact our rent payments. We want to remind investors that our portfolio has zero or near-zero exposure to problem net lease subsectors such as theaters, pharmacy, car washes, and big box retail.

On the very few occasions where we have bought properties in these sectors, it is because they have passed very strict underwriting criteria to balance out the risk. We also have no exposure to the string of recent high-profile retail bankruptcies, including Zipcar Wash, Big Lots, Joanne’s, Party City, TGI Fridays, Rubio’s, or Conn’s HomePlus. For the avoidance of doubt, we also do not have any properties leased to government agencies. Further, I would note that our business model does not directly rely on new construction. If tariffs were to cause inflation of building materials such as steel, we do not anticipate that would have a direct negative impact. If anything, higher replacement costs should benefit tenant renewal rates. I would also like to continue to highlight our diversification efforts.

Our three largest brands of Olive Garden, LongHorn, and Chili’s now make up 34%, 10%, and 7% of our base rent, respectively. Darden is now 48% of our portfolio on a combined basis across all its brands. Over to you, Joshua Zhang.

Joshua Zhang: Thanks, Bill. During the fourth quarter, Four Corners Property Trust, Inc. acquired 45 properties for $133 million at a 7% cap rate. While we are pleased with 2024’s $265 million acquisition volume, we are especially proud of the momentum we achieved in the second half of the year as our cost of capital improved. In the second half of 2024, our team acquired $203 million across 66 properties, representing over 75% of our annual volume. In Q4, we acquired over 50% of our annual volume, including $87 million invested in the last few weeks of December alone. We are not compromising on the quality of our assets to meet yield and reach volume targets. As you can see in our press releases for each investment, many are with brands and operators we have worked with in the past.

Conversely, we are being patient and organized while seeking to offer sellers superior execution. The investments this quarter were pretty evenly split between restaurant, medical retail, and auto service sectors. For the full year 2024, restaurants made up approximately 42% of our acquisitions, with medical retail at 30% and auto service at 28%. We do not plan our investments to have any specific thresholds or quotas across the three sectors, so the investment volume may vary from quarter to quarter based on opportunities we find attractive. However, we expect new investments will be roughly evenly split between these categories over the long term. As such, we are seeing success compound in our newer automotive and medical retail sectors as we continue to develop relationships.

For example, in Q4, we executed a $25 million sale-leaseback to a top automobile service operator for six newly built sites. We also completed a portfolio acquisition of non-primary and urgent care clinics for $21 million, as well as a $14 million sale-leaseback with a leading investment-grade healthcare system for two of their retail outpatient centers. The acquired properties all scored highly on our underwriting scorecard and were leased to top corporate operators in their respective industries. Further, these investments were all with new tenant relationships for Four Corners Property Trust, Inc., as our team continues to establish our reputation in both sectors as a reliable real estate partner. On the disposition front, we did not sell any properties in 2024.

However, we are still receiving inquiries on our properties on a weekly basis and continue to contemplate strategic dispositions, both as an alternative to issuing new capital and as part of our active portfolio management strategy. For the portfolio as a whole, at year-end, we have 1,220 leases with 68% of our annual base rent coming from casual dining operators and 9% from quick-service restaurants. Outside of restaurants, automotive is our largest sector at 11% of ABR, followed by medical retail at 9% of ABR. We expect to continue our steady approach to diversifying over time. Looking forward, we continue to see an expanding opportunity set for further investments. According to the Boulder Group’s net lease market report, there are 3,929 single-tenant retail properties on the market overall in Q4, representing a 26.6% increase year-over-year.

With transaction volumes still recovering across the industry, we anticipate the pool of opportunities to expand accordingly in 2025. Although Q1 is typically our slowest quarter historically, we are expecting momentum from the fourth quarter to continue and encourage everyone to follow our press releases as we disclose every acquisition the day we close. Patrick, back over to you.

Patrick Wernig: Thanks, Joshua Zhang. I will start by talking about capital sourcing and the state of our balance sheet. At Four Corners Property Trust, Inc., we are highly focused on efficient capital raising. In the second half of the year, we were very active on our aftermarket equity program. In total, we raised over $318 million of equity during the year, and $102 million in Q4 alone. That activity was heavily weighted to a few months, which demonstrates our ability to utilize the product at scale. Today, we still have $102 million of unfettered equity forwards. Our fixed charge coverage ratio is a healthy 4.5 times. With respect to overall leverage, our net debt to adjusted EBITDA in Q4 remained 4.9 times inclusive of outstanding net equity forwards as of December 31.

Additionally, as announced two weeks ago, we extended and upsized our credit facility in January. This increased our revolver capacity by $35 million of incremental tonnage, which is fully hedged at a 4.6% all-in interest rate. Importantly, we also added a one-year extension option to our November 2026 term loan, taking care of all debt maturities for nearly two years. This facility recast provides Four Corners Property Trust, Inc. with more liquidity for future acquisitions, all while maintaining conservative pro forma net leverage of 5.1 times including unsettled equity forwards. Following the facility refinancing, we now have approximately $500 million in liquidity between cash, unsettled equity forwards, and undrawn revolver capacity. Assuming no further equity issuance, we have approximately $370 million of available capital before reaching six times net leverage.

While markets remain volatile and treasury rates are elevated, we have continued to diversify our capital sources and be thoughtful around when and how we raise capital. You can expect us to continue that disciplined approach. Now turning to some of our financial highlights for Q4 and the year. We reported Q4 FFO of $0.44 per share, up 2.3% from Q4 last year. Our full-year 2024 FFO per share of $1.73 is up 3.6% from 2023. Q4 cash rental income was $60.8 million, representing growth of 6.6% for the quarter compared to last year. Our full-year 2024 cash rent of $235.4 million increased 8.8% versus 2023. On a run-rate basis, current annual cash-based rent for leases in place as of quarter-end is $240.2 million. Our weighted average five-year annual cash rent escalator remains 1.4%.

Cash G&A expense excluding stock-based compensation is $3.9 million, representing 6.5% of cash rental income for the quarter. The full-year cash G&A was $16.8 million or 7.1% of cash rental income versus 7.6% in 2023 and 8% in 2022. This progress illustrates our continued efforts at efficient growth and the benefits of our improving scale. We are expecting cash G&A will be in the range of $18 to $18.5 million for 2025. As a reminder, we take a conservative approach and do not capitalize any of the compensation costs related to our investment team. As for managing our lease maturity profile, our team successfully renewed or re-tenanted 95% of Four Corners Property Trust, Inc.’s properties that had 2024 lease expirations. We have also made significant progress on 2025 lease renewals with 63% of those tenants already extending their lease or indicating intent to do so.

At the start of 2024, 2025 lease maturities represented 2.2% of our annual base rent. As of year-end 2024, it is down to just 1.1% of ABR. Our portfolio occupancy today is 99.6% and we collected 99.4% of base rent for the fourth quarter. There were no material changes to our collectability or credit reserves nor any balance sheet impairments. With that, we will turn it back over to Carly for questions.

Q&A Session

Operator: Thank you very much. We will now open the lines to Q&A. To remove yourself from the line of questioning, press star followed by two. Our first question comes from Anthony Paolone of JPMorgan. Anthony, your line is now open.

Anthony Paolone: Great. Thank you, and good morning. Appreciate the comments about the coverage and the credit quality in the portfolio, and it sounds like rents are not particularly at risk here. But even if they are not, I am curious if you can talk a bit more about which areas underlying are just seeing better or worse trends at the margin even if rents are not necessarily at risk.

Bill Lenehan: I do not think that there is a notable standout in what we have in our portfolio, Chili’s being the obvious exception, but that is pretty particular to that brand. But, you know, our casual dining brands are growing. Our QSR exposure is predominantly to Burger King, which is doing well. And the other sectors that we are in are pretty defensive. And we have avoided a number of the places where our competitors are having to turn their attention and play defense. So we feel that allows us to be very offense-oriented.

Anthony Paolone: Okay. But then I just had one other one other one other from, for example, the COVID period where quick service with drive-throughs was dramatically outperforming restaurants that you had to go inside and sit down. All those trends have normalized. So it is very consistent across all our different exposures.

Anthony Paolone: Okay. Thank you. And then just the only other item I had was you did obviously work on the balance sheet with the facility and so forth. So you are in good shape there. But just how should we think about how far off you might be from being, like, a public bond issue at this point?

Bill Lenehan: Well, something we are going to spend a lot of time working on. This is two. Upsizing of our revolver was anticipation of having that as an option. So we have borrowed in the private note market historically. That has been very supportive of us. But at the moment, public bonds have more attractive pricing. But as Patrick evidenced, we also have capacity to raise term loans at very attractive pricing as well. So we feel like we have a buffet of options on the debt side. But it is something that we will be spending a lot of time on in 2025 in anticipation of being ready.

Anthony Paolone: Okay. Thank you.

Bill Lenehan: Thank you very much.

Operator: Our next question comes from Karl Kaczmarek of Janney Montgomery. Karl, your line is now open.

Karl Kaczmarek: Hey. Good morning, guys. Exposure to non-restaurant retail segment grew roughly four to five percent a year over the last few years as a percent of the overall portfolio. And I think you mentioned around sixty percent of acquisitions last year were split between medical retail and auto service roughly. Do we expect a similar cadence going forward? It is more a function of current cap rates. Thanks.

Bill Lenehan: Alright. You know, as Joshua Zhang says, we do not plan it out that way. But I would not be surprised if the trends that we have established continue. QSR is very competitive, and the price points are a lot of are a bit smaller. Casual dining, we have exposures with the brands, the exact brands that you would want to have exposure to. And then medical retail, the buildings tend to be a little bit bigger, so it is a little bit easier to get capital deployed into that sector. So I do not think we are trying to fill up buckets per se or hit thresholds that we preordained, but I could imagine it being similar to in the past. And, obviously, we are always looking for new sectors that we find interesting. So we are constantly doing a lot of research on that.

Karl Kaczmarek: Okay. Thank you. And then from a lease roll perspective, 2025 and 2026 are pretty light. But starting in 2027, you have significant rollover from the initial Darden transaction. Today, where is the escalated pricing on those leases versus the market? Do you expect to get any locations back and any other changes to this lease structure anticipated?

Bill Lenehan: Yeah. The tenant has multiple extension options to their benefit. Typically four or five five-year extension options with one and a half percent rent growth. So I would anticipate, and this is an anticipation, not a given, but I would anticipate the vast majority of those will renew because the tenant has coverage that is approaching six times.

Karl Kaczmarek: Okay. Thanks, guys. Appreciate it.

Bill Lenehan: Of course. Thank you.

Patrick Wernig: Thank you very much.

Operator: As a reminder, if you would like to raise a question, please press star followed by one on your telephone keypad. Our next question comes from Michael Goldsmith of UBS. Michael, your line is now open.

Michael Goldsmith: Morning. Thanks a lot for taking my question. You know, you talked about returning to the green zone in the third quarter of last year and the acquisition that followed. Given the movement in interest rates, do you still feel good about being in the green zone and feeling good about the acquisition outlook for 2025?

Bill Lenehan: Yeah. I think we are in the green zone now. Perhaps even more importantly, we have substantial capital that we raised when we were well in the green zone to use for acquisitions. So call it $250 million of capital to be at the low end of our range and $350 million to be at the high end of our leverage range. So, you know, given what we have done in the last couple of years, we are in really good shape for having funded 2025 acquisitions. And I think that frankly puts us in a pretty rare category compared to our peers.

Michael Goldsmith: Appreciate that. And then just in the presentation, it looked like rent collected declined sequentially or decelerated sequentially by forty basis points. Can you talk a little bit about what is driving that?

Bill Lenehan: I do not think there is anything material. Some of that is just timing. We have acquired a lot of assets in December in the last couple of weeks. And so sometimes it takes a month to get rents shifted over to a new address, but there is no big read-through there.

Michael Goldsmith: Thank you very much. Good luck in 2025.

Bill Lenehan: Thank you.

Operator: Thank you very much. Our next question comes from John Kilichowski of Wells Fargo. John, your line is now open.

John Kilichowski: Thank you. Good morning. Maybe just a follow-up on that last question on the acquisition pipeline and just the market in general. I want to make sure I am getting the right read-through from your comments, but it sounds, you know, very positive. Like, you are seeing high deal flow, you are expanding your team, underwriting is great. I am just kind of curious here. Coverage is picking up. You know, we are hearing anecdotally that competition is really coming back to the market on the private side. What is allowing you to source so many deals and maybe keep this acquisition cadence elevated from last quarter given the influx of capital that is coming in and competing on deals? Or maybe are you competing in a different environment you are not really seeing as much?

Bill Lenehan: Yeah. There certainly has been a lot of talk about a handful of very large transactions where there was a lot of attention. You know, deals that were north of a few hundred million dollars. So it is a very sizable. We certainly look at all of those, but we are heads down on one, you know, individual property, small portfolios. I think people understand that we have capital that was raised where we can buy things that are accretive. And we do not use leverage when we buy things. So the movements in the ten-year make levered buyers less reliable, and we are not using leverage when we acquire things. We borrow at the corporate level. And I would say Joshua Zhang has done a fantastic job of being super organized and as this market has sort of whipsawed around, being in constant contact even when we have a disagreement with the seller on price.

And hanging around the hoop has really paid off. The acquisitions we closed in Q4, some of them we have been working on for two years. And we just could not get there on price. And, you know, the conditions were such that we could lean in a little bit and ask for them to give up fifteen, twenty basis points on cap rate, and we got a lot of deals done. So I think it is, you know, we are accessing a more broad environment for acquisition transactions than simply waiting for very, very large sale-leasebacks to happen, and that has proven very valuable.

John Kilichowski: Mhmm. Thanks. And then, you know, maybe just jumping to a different area here. And I am sure a bit early for this. But have you seen or heard anything from your tenants that, you know, they have been impacted at all on the labor side by any of the policies by the new administration?

Bill Lenehan: Yeah. We have not. But, you know, it is an interesting question. We operate seven steakhouses in San Antonio. And, you know, we have been in constant contact with the woman who runs that business. She is an exceptional business leader. We have not yet seen impact there. And more broadly, we are monitoring all sorts of things that could be impacting the economy or our businesses because of the changes in political strategy in the country, and we have not really found anything that would be a particularly standout to mention in the call.

John Kilichowski: Got it. Thank you.

Operator: Thank you very much. A further reminder, if you would like to raise a question, please press star followed by one on your telephone keypad. And to remove yourself from the line of questioning, it will be star followed by two. Our next question comes from Rich Hightower of Barclays. Rich, your line is now open.

Rich Hightower: Hey. Good morning, guys. You are making me sweat a little bit thinking I did not hit star one, but I think we are good. I think, you know, Bill, just to flesh out maybe the last question there, you know, you did mention also that you are constantly exploring new industry verticals for investment. And I guess, just to be clear, as far as that goes, would you say that any policy changes that have been announced in the last few months or prospectively, kind of in the future, how is that affecting underwriting? How is that affecting risk assessment? Or would you sort of reiterate that, you know, at least in the way you think about it currently, not much has changed?

Bill Lenehan: Yeah. We have not seen a ton change yet. But, you know, the pace of change in Washington is obviously far greater than most people have been used to, so we are monitoring it closely. But I do not see any particular, I think we have seen particularly in the last few months, changed our acquisition scorecard, what we are trying to source, etcetera. I can give you many examples of real estate subsectors that might be significantly impacted. But they are not part of our historical strategy. So I do not see them impacting Four Corners Property Trust, Inc., but we are keeping our ears to the ground for sure.

Rich Hightower: Got it. Okay. And then, you know, forgive me if you guys have spelled this out on prior calls. You know, as far as the decision maybe not to give forward guidance, I mean, would you say that is more contingent on the sourcing of capital side or the uses of capital side or what maybe informs that philosophy at this point in the company’s history?

Bill Lenehan: Sure. I would say I think it is, you know, our company is very, very simple and purpose-built to be simple. So modeling out the earnings of the company is not an onerous task, and we are certainly not a black box. And the street has done a very good job of being relatively accurate. And because we announce our acquisitions and dispositions when they close, it gives the street the ability and our investors the ability to forecast our cash flows. But I think the bigger reason is perhaps core to our strategy and what I think differentiates Four Corners Property Trust, Inc. from most of our peers, which is our intention is to modulate our acquisition volume with our cost of capital. And because our business is not necessarily issuing equity, turning it into cash for a short period of time, and then buying buildings, it is quite important whether our stock is twenty-two or twenty-eight when we do that.

And so because I cannot forecast what my stock price is going to be throughout a year, and, you know, individual stocks tend to trade at wide bands, it is very, very difficult for me to both stick to that policy of modulating our acquisition volume and provide meaningful guidance.

Rich Hightower: Understood. Thanks, Bill.

Bill Lenehan: Yep.

Operator: Thank you very much. Our next question comes from Alex Fajan of Baird. Alex, your line is now open.

Alex Fajan: Hi. Good morning, and thank you for taking our questions. So the first one for me would be on G&A. Should we expect the platform to continue to scale in 2025 as you ramp up new employees and maybe any other puts and takes on the G&A side?

Bill Lenehan: Sure. I think one thing that we probably do not get as much attention as we should is just the absolute low dollar amount of G&A that this company has. And it has been the case for ten years. But given the size of our company, the dollar amount of our G&A is very low. And we continue to increase capacity. We started with six people. We are now at forty. We have the largest incoming acquisition class that we have ever had. And they are incredibly impressive young people. But because we grow by hiring and developing young people and not typically doing much lateral hiring, and because we are very lean at the C-suite level, our overall cash overhead is quite moderate. But, yes, our intention is if we have the cost of capital to grow accretively, that we will continue to grow the business as we have in the last several years.

Alex Fajan: Alright. And speaking on the pipeline, you mentioned that, you know, some negotiations have gone your way with sellers. And just can you maybe speak about how large of a pipeline of deals that you have been hanging around the loop with and those sellers have not capitulated yet on price?

Bill Lenehan: Yeah. We do not typically give guidance on pipeline. You know, Q1 is typically a slower quarter. Q4 is typically the busiest quarter. I think Q1 is shaping up to be a good one this year, but, again, usually, Q1 is a little shorter. And I do not know. You know, there is a vast amount of acquisitions that we could do if we were simply to drop our price fifty or a hundred basis points, you know, an enormous amount. But that delta is what changes acquisitions from being accretive to the owners of the business to simply growing to grow without any per-share accretion. So it is not something that we focus on because we are not going to do it.

Alex Fajan: Alright. Thank you.

Operator: Thank you very much. As a reminder, if you would like to raise a question, please press star followed by one on your telephone keypad. Our next question comes from Mitch Germain of JMP. Mitch, your line is now open.

Mitch Germain: Thanks for taking my question. Bill, you have talked about or Joshua Zhang mentioned it in his comments, the underwriting scorecard. And I am curious about the inputs and how often you look at them, you audit them, and you modify or change the different variables that you are considering over time.

Bill Lenehan: So we have changed the scorecard minimally. The scorecard is relatively balanced. So you could change individual components slightly. I am not sure you would get different answers. The language that surrounds the scorecard is culturally ingrained in the company. So we know as a team what it means when we say this Burger King is a seventy-eight or this tire store is a sixty-three. And having some consistency around that really helps. So there is not a ton of change. Obviously, the scorecard is not the end-all-be-all of our acquisition effort. It is a way to get aligned and communicate efficiently on what we are spending our time on. And we found that it is pretty darn accurate as far as, yeah, we have had very, very, very little credit issues in this portfolio.

But when we go back and look at deals that scored poorly and we did not buy them, there tends to be a negative result as we survey things that we passed on. That does not mean that every once in a blue moon something does not come out that the scorecard would not capture. But, you know, that is one property with a reason of x and another property of a weird reason of y. And you cannot have a scorecard that captures every possible outcome, but it is a grounding exercise that keeps us organized, and it helps us avoid a lot of, you know, sort of sloppy decision-making. And I think it modestly helps in making sure that we are pricing things appropriately because you have a standard of quality that you can put against the standard of value.

Mitch Germain: Great. That is super helpful. Good luck in 2025.

Bill Lenehan: Thank you.

Operator: Thank you very much. Our next question comes from Jim Kammert of Evercore. Jim, your line is now open.

Jim Kammert: Good morning. Thank you. Realize that the vast preponderance of your leasing or renewals is coming from the extension options, but if you think about 2024, can you share what maybe were the representative sort of recovery rates where you did actually have a replacement tenant?

Bill Lenehan: Yeah. It has been really positive, Jim, and we basically have covered the rents when we had to replace the tenant. I think that is largely due to tight replacement costs and the fact that we focused on low rents. But I would not get over your skis on that. You know, the historical dynamic in net lease is if you lose a tenant, you would struggle to replace the rents. And so I think we have done a great job of replacing the rents. We have brought more resources into the company to get ahead of these things. But I would not lull yourself to sleep to think that you lose a net lease tenant, it is no big deal. You just find another one at the same rent. We have been fortunate that that has been the case, but the sample size is really small. We are in a very favorable market environment for leasing.

Jim Kammert: Perfect. And then thinking about visibility of the transaction or investment pipeline, if you think about 2024, what proportion of the deals that you closed would you say were, you know, widely marketed, let us say, six or ten competitors in there bidding with Four Corners Property Trust, Inc. versus, you know, maybe more relationship or your one or two or three folks inside the tent?

Bill Lenehan: Yeah. It is interesting. There is not a dynamic that we see very often on the size of deals that we are working on, like you might see with a multiple hundred million dollar deal, where there is a dynamic where on the tenth of the month, there is a call for offers. On the twelfth of the month, there is best and final. On the fourteenth of the month, there is best and final again. And fifteen bidders become five, become three, become one. Very often for us, it is here is a property. There may or may not be a broker involved, but there may not even be marketing materials. They know the kind of things we like to buy, or the seller directly may know what we like to buy. And sort of a look, we will take this out to market and fully flog it.

But if you can get to this price, which is, you know, slightly more attractive than what a marketed price would be, we will just cut to the chase and deal with you. That is the typical flavor. That does not mean that every once in a while, we will have a larger portfolio where there is a more formal process, but a lot of them are price agreed and transact before formal marketing materials have been put together.

Jim Kammert: That is interesting. I appreciate the color. Thank you.

Operator: Thank you very much. We currently have no further questions. So I would like to hand back to Bill Lenehan for any closing remarks.

Bill Lenehan: Well, thank you, everyone. I will note that this thirteen minutes of prepared remarks was overwhelmed by a substantive Q&A session. Thank you for the interest. Just bottom line, we are in a great position to start off 2025, very strong Q4. Below target leverage. We have substantial capital that was raised at very attractive pricing and a pipeline that will keep us very busy. And the team that is growing with exceptional young talent. So we are really excited about 2025, and please reach out if you have any questions.

Operator: This concludes today’s call. We would like to thank everyone for joining. You may now disconnect your lines.