Four Corners Property Trust Q2 2026 Earnings Report

Four Corners Property Trust EPS Results

• Actual EPS: $0.45
• Consensus EPS: $0.29
• Beat/Miss: Beat by +$0.16
• One Year Ago EPS: $0.44

Four Corners Property Trust Revenue Results

• Actual Revenue: $78.42 million
• Expected Revenue: $79.02 million
• Beat/Miss: Missed by -$600.00 thousand
• YoY Revenue Growth: +7.70%

Four Corners Property Trust Announcement Details

• Quarter: Q2 2026
• Date: 7/29/2026
• Time: After Market Closes
• Conference Call Date: Thursday, July 30, 2026
• Conference Call Time: 12:00PM ET

Four Corners Property Trust (NYSE:FCPT) (NYSE:FCPT) is a self-administered and self-managed real estate investment trust that owns and leases properties primarily used by restaurant and other service-oriented businesses. The company generally leases its properties under long-term, net lease arrangements, under which tenants are typically responsible for property taxes, insurance and maintenance expenses.

FCPT’s portfolio is concentrated in restaurant properties and also includes select medical, automotive and other retail or service-related real estate. Its properties are located across the United States and are leased to a range of national, regional and local operators.

Four Corners was formed in 2015 through a spin-off from Darden Restaurants, Inc., the owner of restaurant brands including Olive Garden and LongHorn Steakhouse. The company has since pursued a strategy of acquiring and managing additional properties while maintaining a diversified tenant base. FCPT is led by President and Chief Executive Officer William H. Lenehan.

Four Corners Property Trust Q2 2026 Earnings Call Transcript

Key Takeaways

• FCPT reported Q2 AFFO per share of $0.45, up 1.4% year over year, while cash rental income increased 8.7% to $70 million. Occupancy was 99.5% and Q2 base-rent collections reached 99.7%.
• The company acquired $382 million of properties year to date at a blended 6.6% cash cap rate, surpassing its prior annual investment record. The $268 million Mission Pet Health acquisition added 102 properties, approximately $17.4 million of annualized cash rent, 2% annual escalators, and more than six times unit-level rent coverage.
• FCPT completed $600 million of term-loan financings at approximately 4.5%-4.9% all-in rates, extending its pro forma weighted-average debt tenor to 4.3 years and eliminating nearly all near-term maturities. Management said leverage remains below six times and the revolver is fully undrawn before funding the Mission transaction.
• Portfolio diversification continues, with approximately 41% of pro forma rent coming from outside casual dining, including medical retail, auto service, quick-service restaurants, and veterinary properties. Management is also evaluating grocery and industrial outdoor storage opportunities, while maintaining its focus on low-basis assets and strong operators.
• Management expects a high renewal rate for Darden leases maturing in late 2027 and said the four Bahama Breeze closures represent only about 0.5% of ABR, with Darden rent committed through lease expiration and strong backfill demand. However, executives declined to provide acquisition or earnings guidance and characterized the current equity cost of capital as a “yellow zone,” which could constrain investment activity.

Presentation

[Operator]

Hello, everyone. Thank you for joining us, and welcome to Four Corners Property Trust's Second Quarter 2026 Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Patrick Wernig, CFO. Please go ahead.

[Patrick Wernig, CFO at FCPT]

Thank you, Aidan. 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 to predict. Our 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. All the information presented on this call is current as of today, July 30, 2026. In addition, reconciliation 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, President and CEO at FCPT]

Good morning. Following my initial remarks, Josh will comment on our investment activity, Patrick will discuss financial results and capital position. It has been a remarkable time for FCPT. First, we are only through the first seven months, and we've already exceeded our prior record annual investment volume. Year to date, we've acquired $382 million of properties at a blended 6.6 cash cap rate. This investment activity has pushed us past an important diversification milestone, as FCPT has now acquired over 1,000 properties since inception. Our original spinoff portfolio is now just 29% of the properties we own today. Since April, we have also completed two large financings with very low coupons for a total proceeds of $600 million. Not only do these refinancings push our maturity schedule meaningfully, but also provide us with sufficient dry powder for our investments in 2026.

[Bill Lenehan, President and CEO at FCPT]

It is also worth noting that the coupon represent approximately a 200 basis point spread to our historical investment yields. We encourage our analysts and investors to revisit their models given the major developments at FCPT, including those that occurred in July, closing after Q2. These major developments aren't yet reflected in our Q2 financials and have not been realized in our reported AFFO. For ease of reference, we have included a number of slides in our latest investor presentation with pro forma figures. Lastly, we also recently announced switching to a monthly dividend, with the first monthly payment scheduled for August. This move aligns timing of rent payments from our tenants with distributions to our shareholders. We believe a monthly dividend is consistent with our longstanding focus on shareholder alignment, transparency, and predictable cash flow generation.

[Bill Lenehan, President and CEO at FCPT]

Moreover, this reflects our confidence in stable rent receipts from our fortress portfolio, and we believe the change will better match the income preferences of many retail investors. Switching over to an update on portfolio performance. Occupancy remains above 99%, and our rent coverage for Q2 was 5.2x for the majority of our portfolio that reports this figure. This is amongst the best coverage within the net lease industry and what we believe is a reflection of our conservative underwriting. The rent coverage figure for our Darden property specifically is 6.0x and has improved over time, remaining above 5x for the past three years. Our three largest restaurant brands, Olive Garden, LongHorn, and Chili's, continue to outperform their peers in gross sales quarter after quarter, most recently 2.4x, 9.5%, and 4%, respectively.

[Bill Lenehan, President and CEO at FCPT]

As such, we note that we have avoided some of the most problematic net lease sectors experienced headwinds in recent years, including pharmacies, experiential retail. By scoring every property and targeting low basis fundable properties with skilled operators, we have built a recession and e-commerce resistant portfolio. As a reminder, to date, we have had no major tenant credit issues, limited vacancy, and very, very low bad debt expense. We continue to significantly diversify. Pro forma for the Mission Pet Health portfolio, approximately 41% of our rent now comes from outside the casual dining tenants, including medical retail at 16%, auto service at 13%, and quick service restaurants at 10%. Darden now represents just 41% of cash rent approximately.

[Bill Lenehan, President and CEO at FCPT]

We note that the first tranche of the original Darden spin properties is due to send us extension notices by no later than October of this year for leases maturing the following year in Q4 2027. We are expecting a very, very high renewal percentage given the strong performance of the stores and 6x coverage overall on our Darden properties. I'll leave you with this before turning it over to Josh. ABR has grown by 11% annually since inception, and we have meaningfully diversified results on a very granular, safe portfolio. FCPT has matured a great deal over the past decade, and as we look forward, we believe we are uniquely positioned within the net lease universe. We are clearly able to execute on large transactions while also maintaining a strong regular way pipeline as a baseline for sustained, attractive, risk-adjusted growth.

[Bill Lenehan, President and CEO at FCPT]

We believe we've built a very strong credit-focused portfolio all the way staying within our stated leverage metrics. The world has a lot of volatility, especially today, but FCPT has been remarkably stable. Over to you, Josh.

[Josh Zhang, Director of Investments at FCPT]

Thanks, Bill. I'll start with a review of Q2 activity, walk through the Mission Pet Health portfolio, and then touch on our investment pipeline. In Q2, we acquired 23 properties with a weighted average lease term of 10 years for $57 million at a blended 6.8% cash cap rate or a 7.5% GAAP cap rate. Our investment activity in the quarter was heavily weighted towards automotive at 64% of volume and anchored by a $26 million acquisition of 14 properties leased to Sun Auto Tire & Service, a leading operator in the automotive service and repair sector. The remainder were restaurant and medical retail investments at 22% and 14% of volume respectively. As a reminder, we do not maintain sector quotas or pipeline targets, but allocate capital purely on the opportunity set, finding the best risk-adjusted returns with what we see as the strongest spread generation.

[Josh Zhang, Director of Investments at FCPT]

Subsequent to quarter end, we completed the acquisition of a 102 property portfolio leased to Mission Pet Health for $268 million. The seller was Shore Capital Partners, and the portfolio represented the entirety of Shore Capital's Real Estate Fund I. The portfolio closed very early in Q3, so we will have the benefit of nearly all of the annualized cash rent of $17.4 million in our Q3 results and further gain from its approximately 2% annual rent growth on a go-forward basis. While it was the largest acquisition in our 10-year history, it was also highly consistent with the characteristics that have defined FCPT since inception. Low basis properties, conservative rents, strong unit-level economics, and a leading operator as our tenant. We've historically preferred to build our portfolio granularly, as large portfolios on the market often come with properties that may not fit our selection criteria.

[Josh Zhang, Director of Investments at FCPT]

This was not the case here, and it was clear that Shore constructed this high-quality platform with a buyer like us in mind. First, the portfolio is largely structured across two absolute triple net master leases of high institutional quality. The master leases have approximately 10 years of term remaining, approximately 2% annual rent escalations, and strong financial reporting requirements. Next, the rents were set conservatively and align with our net lease philosophy. Unit-level coverage is over 6x, and an average basis per property at $2.6 million compares well with our Q2 rent coverage of 5.2x an average basis of approximately $3 million. Lastly, and similar to many of our favorite investment sectors, veterinary real estate is mission critical, and their services are often non-discretionary. Additionally, Mission is one of the largest veterinary operators with over 900 locations across the country.

[Josh Zhang, Director of Investments at FCPT]

Their recent investment from Silver Lake valued the company at $8.6 billion. We were already familiar with the credit and team as they are an existing tenant of ours, which makes us even more excited to welcome them as our number three brand across the portfolio. We'd like to thank Shore, Mission, and Eastdil teams, as well as everyone at FCPT involved in executing this transaction. Completing diligence on 102 properties with the same rigor as our usual process while still closing less than 49 days from announcement is a strong testament to the talented and motivated team we've assembled and the strength of our platform. Moving on to our pipeline, we've also continued to source and execute our regular way investments as well, spanning restaurants, automotive service, and other medical retail investments across 10 distinct transactions in Q2.

[Josh Zhang, Director of Investments at FCPT]

I'd like to commend our investment team and the entire platform for their ability to diligently execute both large and small transactions in an extremely organized and efficient manner. Looking forward, we're continuing to explore potential investments in new subsectors such as grocery and industrial outdoor storage, as evidenced by our July investment activity. We remain active in evaluating opportunities across these two sectors, among others, as we actively expand our opportunity set and build domain expertise. Whether it's a grocery store in Florida or a restaurant in Texas, we remain committed to acquiring low basis properties that are leased to best-in-class operators at pricing accretive to our cost of capital. Patrick, back to you.

[Patrick Wernig, CFO at FCPT]

Thanks, Josh. I'll start by talking about our recently closed debt deals and updated balance sheet. I'll provide some commentary on the quarterly results. Since April, we have closed a total of $600 million in new debt capital while adding Citi and RBC to our already strong lending syndicate to provide further borrowing support. This $600 million represents over a third of our total in-place debt, creating meaningful improvement for our balance sheet while avoiding dilutive refinancings. This included closing both the $200 million term loan facility with seven-year tenor at SOFR plus 125 basis points and a $400 million term loan with a five-year tenor at SOFR plus 90 basis points just a few days ago. I'd call out that at current SOFR levels, this debt has all-in rates of approximately 4.5%-4.9%.

[Patrick Wernig, CFO at FCPT]

Use of proceeds for the new five-year term loan will be, one, repaying $190 million of term loans coming due in the next six months. Two, remaining amounts will be used to fund the investment pipeline as well as for general corporate purposes. I'd also like to highlight the positive interest savings we were able to achieve in our most recent refinancings. Our lenders agreed to refresh the credit spread pricing on our facility to save 5-10 basis points annually versus prior levels of $450,000 in annual interest expense across the total $800 million in this facility. It is demonstration of FCPT's steady pace in improving our cost of capital through scale and conservative balance sheet management.

[Patrick Wernig, CFO at FCPT]

Importantly, before this debt transaction and closing on the Mission Pet portfolio, we are now fully undrawn on our $350 million revolver, on a run rate leverage remaining below the 6x upper bound of our stated range of 5x-6x. From a maturity schedule perspective, these deals have pushed out our maturity profile. Our pro forma weighted average debt tenor now four point three years. We've removed all near-term maturities aside from a small $50 million private note coming due in December. As noted previously, we expect to handle that private note maturity in due course closer to the maturity date, but believe we have ample options at our disposal. Our staggered maturity schedule ensures we will not face a significant maturity wall in any year thereafter. Turning to some of our earnings highlights for Q2.

[Patrick Wernig, CFO at FCPT]

Q2 AFFO per share was $0.45, representing 1.4% growth versus prior year. Q2 cash rental income was $70 million, representing 8.7% growth versus prior year. Annualized cash-based rent for leases in place as of quarter end was $270.5 million. Our weighted average five-year annual cash rent escalator is 1.5%. Our cash G&A expense was $4.8 million for the quarter, representing 6.8% of cash rental income, compared to 6.9% for the prior year. This improvement in operating leverage illustrates our continued efforts at achieving efficient growth and the benefits of our rising scale. Our fixed charge coverage ratio remains a very healthy 4.6x as of quarter end. Following our Q2 results, we are affirming our guidance range for 2026 cash G&A remains $19.2 million-$19.7 million.

[Patrick Wernig, CFO at FCPT]

As a brief update on Bahama Breeze, we learned earlier this year that Darden would be closing four of our 10 Bahama Breeze properties, with the other six being renovated and converted to other Darden brands. The four Darden properties represent about half a percent of ABR and are supported by leases expiring one to four years from now, and benefit from Darden entities committed to rent units through expiration. While we have that multiyear cushion, we've also had strong backfill demand, so we are deep in LOI and lease negotiations to retenant the properties with strong brands. Based on the rents being negotiated and the small scale of the exposure, we expect to have little to no AFFO disruption.

[Patrick Wernig, CFO at FCPT]

Remarkable results to be sure. Again, just worth noting the risk in quantum here was never significant to begin with. We don't expect to continue detailed updates on this topic going forward. Our portfolio occupancy remains strong at 99.5% today. We collected 99.7% of base rent for Q2. Finally, last quarter did not see any material changes to our collectibility or credit reserves. With that, we'll turn the call back over to Aidan for questions.

[Operator]

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of John Kilichowski with Wells Fargo. John, your line is open. Please go ahead.

[John Kilichowski, Analyst at Wells Fargo]

Hi. Good morning. Thanks for taking my question. Pat, maybe just to circle back on what you were talking about on the balance sheet. Some of the activity you had in the quarter is handling some maturities coming up, but you still have a few maturities that aren't spoken for yet. I guess could you just talk about your plans for those and what you're seeing on pricing?

[Patrick Wernig, CFO at FCPT]

Yeah, sure. Thanks for the question. We have the fully undrawn revolver. That's always kind of a backstop if we wanted to take out any of those maturities with that. I'd also point out that the remarkable support we've had in the lending market, having completed $600 million of term loans in the last couple of months. The support for our name and the credit in our portfolio is just really strong. There's a lot of opportunities to address it. We could have addressed them sooner now, but those rates are really attractive rates, and we want to enjoy them and utilize the tenor that we paid for at the beginning of putting those issuance out there.

[John Kilichowski, Analyst at Wells Fargo]

Got it. Bill, maybe just on the back of that, could you talk about given where your stock is trading today and as you think about your cost of capital, are you imputing that based off of where you're seeing the pricing of maybe some of these term loans? Or are you still thinking about it in terms of where your longer-term tenor unsecured cost of debt may be and where that blends relative to where your equity trades?

[Bill Lenehan, President and CEO at FCPT]

Sure. I don't see any change in the way we think about calculating WACC. We've always looked at long-term rates. Frankly, we don't use much debt in acquisitions. The difference between a private note and a term loan is not very substantial. It's under 100 basis points. It's much more driven by the cost of equity. We have raised very substantial amount of equity on a forward, which we've used for two years to make acquisitions all with equity. The way I would think about up until this point this year is using attractively priced debt to get our leverage metrics back to where they typically were.

[John Kilichowski, Analyst at Wells Fargo]

Got it. Thank you.

[Bill Lenehan, President and CEO at FCPT]

Yep.

[Operator]

Your next question comes from the line of Eric Borden with BMO Capital Markets. Eric, your line is open. Please go ahead.

[Eric Borden, Analyst at BMO Capital Markets]

Great. Thanks for taking my question. As you begin discussions around the 2027 Darden expirations, what's your latest thinking on overall renewal economics? With a healthy coverage of 6x, does that create an opportunity to push rents higher? Are most of those leases governed by renewal extension options?

[Bill Lenehan, President and CEO at FCPT]

They're entirely governed by renewal extension options for five years at 1.5% growth over the prior year. We would expect, as I said in the prepared remarks, a very high level of renewals. Again, these are for 2027 maturities. We have a favorable 12-month notification period. Those will start coming in towards the end of October.

[Eric Borden, Analyst at BMO Capital Markets]

Okay, great. Just one on the monthly dividend. In a world where

[Eric Borden, Analyst at BMO Capital Markets]

short-term cash yields are relatively attractive, can you talk about the give and takes around moving to a monthly dividend and effectively accelerating the timing of those cash outflows to shareholders versus keeping the cash on a balance sheet and earning interest income for a little bit longer?

[Bill Lenehan, President and CEO at FCPT]

Yeah. It wasn't really a corporate finance decision. That cash flow is our shareholder's cash flow, and we're returning it to them as quickly as we can. It was more getting the logistics right because it increases the number of payments. We wanted to feel comfortable that wasn't a cost burden or an operational burden. I think we're very comfortable that it'll be neither. It just is, again, more aligns with how we receive our shareholders' capital and getting it back to them in the form of dividends quickly.

[Eric Borden, Analyst at BMO Capital Markets]

All right. Well, appreciate it. Thank you, guys.

[Bill Lenehan, President and CEO at FCPT]

Yep, of course.

[Operator]

Your next question comes from the line of Michael Goldsmith with UBS. Michael, your line is open. Please go ahead.

[Anna O'Neill, Analyst at UBS]

Hi, this is Anna O'Neill on for Michael Goldsmith. You talked about grocery and industrial outdoor storage as sub-sectors you're exploring. What are some of the things that are making those sub-sectors more attractive to you?

[Bill Lenehan, President and CEO at FCPT]

It's a great question, Anna. We've been working on both for many years. They match many of the dynamics that we like of restaurant, auto service, and medical retail. Their mission-critical basis is reasonable. There are large tenants, and the pricing is consistent with the other sectors that we look at. I will say on grocery, some grocery price is tighter, so we'll have to pick our spots. I would say with the storage, it's something that I've done a lot of when I was on the board of Gramercy. That was one of the investments we regularly made, so I have a lot of familiarity with it.

[Anna O'Neill, Analyst at UBS]

Great. Thank you.

[Bill Lenehan, President and CEO at FCPT]

Sure

[Anna O'Neill, Analyst at UBS]

Given the elevated acquisition volume might not be fully appreciated by the market, would you explore the idea of providing guidance in some form, or how are you thinking about that?

[Bill Lenehan, President and CEO at FCPT]

Yeah. I would say that we've added a bunch of new disclosure that should help people get there. I would agree that it seems like analysts have been slow to update their numbers, and in my prepared remarks, I think I alluded to that. For now, I think we're going to be consistent with how we've done over the last decade since inception and not provide acquisition or earnings guidance.

[Anna O'Neill, Analyst at UBS]

Got it. Thanks so much.

[Operator]

Your next question comes from the line of Alec Feygin with Baird. Alec, your line is open. Please go ahead.

[Alec Feygin, Analyst at Baird]

Hey, thanks for taking my question. First one for me would be, the recent reduction in the debt spreads, have they benefited from that incremental diversification and the big portfolios that you closed, or is that a future opportunity where you can see further benefit?

[Bill Lenehan, President and CEO at FCPT]

Yeah, I think it's just consistent with, as Pat mentioned, a consistent grinding down our cost of capital as we get larger, and the portfolio matures and as we mentioned, the original spin portfolio is 30% of where we are today. We've gotten a lot bigger. It's a lot more diverse. It's a much more seasoned company. Our acquisition team at inception was just a handful of folks. Now it's 10 and growing. I think we just have a lot more capability, and that's reflected in the stability of our balance sheet and improved pricing.

[Alec Feygin, Analyst at Baird]

Got it. Second one for me, kind of on the theme of new sectors. Could you provide any additional details about the Drilling Tools International property you acquired?

[Bill Lenehan, President and CEO at FCPT]

Sure.

[Alec Feygin, Analyst at Baird]

Should we expect that industrial type properties maybe become part of the sandbox going forward?

[Bill Lenehan, President and CEO at FCPT]

Yeah, sure.

[Alec Feygin, Analyst at Baird]

Yeah.

[Bill Lenehan, President and CEO at FCPT]

It's just one property out of a number, but just off the top of my head, DTI manufactures drilling equipment. It's got over a 50% North American rig penetration. This is like a 10-acre parcel. It's one of only a handful of properties where they manufacture. I think it's actually on their cover of their annual report. Josh, anything you want to add to that?

[Josh Zhang, Director of Investments at FCPT]

Just that, Bill, exactly what you stated, it's just an extension of our IOS, industrial outdoor storage, strategy that Bill mentioned. We view it very similar to the United Rentals property we acquired in Q4 of 2025, we're just constantly evaluating new opportunities in the space, we're just dipping our toes in.

[Alec Feygin, Analyst at Baird]

Got it. Thanks. That's it for me.

[Operator]

Your next question comes from the line of Rich Hightower with Barclays. Rich, your line is open. Please go ahead.

[Rich Hightower, Analyst at Barclays]

Hey, good morning out there, guys. I want to talk about Mission Pet Health. I know we talked about the deal when it was first announced a little bit, just to go a little deeper. Tell me about how the business is performing and what the underwriting assumptions were in the context of really very high, 6x rent coverage, and how's the business growing? What's the capital structure with the private equity firm? Where the sale leaseback financing here fits into that. I've got one follow-up.

[Bill Lenehan, President and CEO at FCPT]

Yeah. These properties were already under a sale leaseback. Two large master leases make up 100 of the 102 properties, and then there's two individual properties. Shore had capitalized a real estate fund, Shore Real Estate Fund I, that when Shore, the private equity firm, was buying vet businesses, if real estate was available for sale, the real estate fund would buy that real estate. We bought the entirety of that fund. As Josh mentioned, 6x covered, a very strong entity providing a guarantee. Silver Lake recently co-invested into the business along with Shore. It is a company that I would guess might go public in the next couple of years. Just a very large, stable, high-scoring portfolio. Out of the 102 properties, the vast majority we would have been interested in on a one-off basis.

[Bill Lenehan, President and CEO at FCPT]

To get them together in a master lease with 2% rent growth is very favorable. We leaned in a little bit on pricing. I think it also was strategic in getting our under-levered balance sheets back in line and should provide growth that we think folks are missing in the second half of the year and into 2027.

[Rich Hightower, Analyst at Barclays]

Okay. That's helpful. I guess just to follow up on maybe that last point, Bill, or even for Patrick. Granting you're towards the low end of the comfort range leverage-wise, I presume you wouldn't want to sort of bump up against the high end if you didn't need to. What do you think your comfortable investment capacity is from here without really thinking you would need to raise new equity?

[Bill Lenehan, President and CEO at FCPT]

Yeah. I'm not going to answer that because it gets really close to providing acquisition guidance, which for us is basically the same as AFFO guidance. We put a bunch of pro forma numbers in the book. You can see where we stand. We are committed to that 5x-6x leverage ratio. We haven't been offsides of that, other than below it, since inception. I think you'll see these acquisitions that we've announced in the last couple of weeks and the remainder of our pipeline really pencil to favorable growth for the second half of the year. I just encourage folks to update their numbers.

[Rich Hightower, Analyst at Barclays]

Okay. Thanks.

[Operator]

Your next question comes from the line of Mitch Germain with Citizens Bank. Mitch, your line is open. Please go ahead.

[Mitch Germain, Analyst at Citizens Bank]

Thank you. Bill, as some of this leasing gets done over the next couple of, or I guess the validation of maybe some of this leasing, has there been any consideration to maybe consider continuing to pare down your Darden exposure with some asset sales?

[Bill Lenehan, President and CEO at FCPT]

Yeah. The leasing that's been done, just to make sure everyone's clear, there will be no interruption of payments from the Bahama Breeze leases. Those 10 buildings, six of them will become other brands within the Darden portfolio. The others we will release, quite likely before any of those leases come to maturity. That will be uninterrupted. Justin has done a terrific job addressing the small number of properties that have become vacant at maturity, and we've picked up rent. As far as selling Darden assets, we've done it occasionally. These are very high quality, very in-demand properties. We get unsolicited interest all the time. We feel very confident that they're going to renew. There's not a ton of motivation to sell them. Every once in a while, we get an offer that's too good to refuse, but we typically want to hold those assets.

[Mitch Germain, Analyst at Citizens Bank]

Great. God, I hate asking this question because I know that you don't give guidance, but is it safe to think that we'll at least see a little bit of a deceleration in acquisition activity for the next couple of months, or is this still all systems go?

[Bill Lenehan, President and CEO at FCPT]

I think it really depends on our equity cost of capital. Our debt cost of capital is very attractive. We have some leverage capacity to grow into. I think it really comes to our equity cost of capital, which isn't where we want it to be. We think that the market's missing our growth, so we're really trying to double underline that on this call. You've seen that I've bought a bunch of stock. I think that speaks volumes to where I think we're trading versus the value of the company.

[Mitch Germain, Analyst at Citizens Bank]

Thanks. Congrats to you and the team.

[Bill Lenehan, President and CEO at FCPT]

Thanks, Mitch.

[Operator]

Your next question comes from the line of James Kammert with Evercore. Jim, your line is open. Please go ahead.

[James Kammert, Analyst at Evercore]

Thank you. Good morning for you. Following a couple themes in the call, are you in the kind of a red, green, or yellow zone on the equity, Bill? I guess that last topic you were just touching on.

[Bill Lenehan, President and CEO at FCPT]

Yeah, I think we're in the yellow zone.

[James Kammert, Analyst at Evercore]

Yeah.

[Bill Lenehan, President and CEO at FCPT]

We've been very disciplined about that since inception. I think it's one of the things that makes us stand out is how disciplined we are on capital allocation. My background is I spent the formative part of my career as an equity investor and I fundamentally believe that companies that are disciplined about capital allocation are worth more. We feel like it's not being reflected in our stock right now, but we're putting up the results that should change that.

[James Kammert, Analyst at Evercore]

Fair enough. Thank you. Second question, obviously it's brand new with the Mission Pet and a very large new exposure. It sounds very constructive. Would you do other veterinary activity at this point, or do you think that this was more of a, such a standout sort of portfolio construction, all that you're kind of full up on that particular line of exposure?

[Bill Lenehan, President and CEO at FCPT]

I think we would still seek out very high-scoring assets. Keep in mind Jim, we've been working on this Mission Pet Health portfolio probably for 5+ years. We're very close with the seller on a personal basis and their advisors are folks that we've worked with a lot. This was, in some ways, put together with a strong sense that we might be the likely buyer. We're happy that after all the time that we put into it, that the portfolio was at such a high quality and was available at a price that was accretive. We would certainly, as we grow, if we find things that we think score highly, we would add to it irregardless of what sector it's in.

[James Kammert, Analyst at Evercore]

Fair enough. Thank you.

[Operator]

A reminder, if you would like to ask a question, please press star one on your telephone keypad. Your next question comes from the line of Anthony Paolone with JPMorgan. Anthony, your line is open. Please go ahead.

[Anthony Paolone, Analyst at JPMorgan]

Thanks. I just have one left here. You expressed your confidence in just the renewals or just leases getting extended over the next few years. Bill, maybe if we were to think about anything that doesn't get renewed, even if you feel good about just getting these things back filled because you own good assets, what's typical downtime for us to think about if you have to switch tenants?

[Bill Lenehan, President and CEO at FCPT]

Sure. We would have 12 months with Darden operating and paying rent in any event. Historically for assets like this, it's been less than 12 months. We have a long runway that's supported by Darden rents. Again, these properties have long operating histories, very high coverage, and they're in great locations. I think there'd be a pretty good line waiting to get access to them, to be honest. That's been our experience.

[Anthony Paolone, Analyst at JPMorgan]

Okay

[Bill Lenehan, President and CEO at FCPT]

With Bahama Breeze as a recent test case.

[Anthony Paolone, Analyst at JPMorgan]

Got it. We're looking at the 2027, 2028 expirations, or lease maturities. They have to let you know 12 months in advance of the maturity whether they're staying or going, that gives you the time to market it and find a backup tenant.

[Bill Lenehan, President and CEO at FCPT]

Correct. Yep.

[Anthony Paolone, Analyst at JPMorgan]

Okay.

[Bill Lenehan, President and CEO at FCPT]

Exactly.

[Anthony Paolone, Analyst at JPMorgan]

Thank you.

[Operator]

We have reached the end of the Q&A session. I will now turn the call back to Bill Lenehan for closing remarks.

[Bill Lenehan, President and CEO at FCPT]

Thank you. Ultimately, the first seven months of 2026 have been a defining period for FCPT. We have already exceeded our prior record annual investment volume, completed the largest acquisition in our history with the Mission Pet Health portfolio, and continue to demonstrate the consistency and durability of the portfolio we have built over the past decade. Our occupancy, rent collections, and tenant coverage outcomes remain amongst the strongest in our sector. On the back of some of our largest and most accretive capital raising. We believe that we are well positioned to execute with the same underwriting discipline that has defined FCPT since inception. Our team will be at the Wells Fargo and Bank of America conferences in September, and we would welcome the opportunity to meet in person. Please reach out to Patrick or me to coordinate schedules. With that, thank you.

[Operator]

This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Analysts

• Patrick Wernig, CFO at FCPT
• Bill Lenehan, President and CEO at FCPT
• Josh Zhang, Director of Investments at FCPT
• John Kilichowski, Analyst at Wells Fargo
• Eric Borden, Analyst at BMO Capital Markets
• Anna O'Neill, Analyst at UBS
• Alec Feygin, Analyst at Baird
• Rich Hightower, Analyst at Barclays
• Mitch Germain, Analyst at Citizens Bank
• James Kammert, Analyst at Evercore
• Anthony Paolone, Analyst at JPMorgan