FCPT

• Investment Activity

  • Year-to-date through July 2026, FCPT has already exceeded its prior record annual investment volume, acquiring $382 million of properties at a blended 6.6% cash cap rate, and now owns over 1,000 properties total, with the original spinoff portfolio accounting for only 29% of current holdings.
  • In Q2 2026, FCPT acquired 23 properties for $57 million, at a blended 6.8% cash cap rate and 7.5% going-in cap rate, with a 10-year weighted average lease term; 64% of Q2 investment volume went to automotive service, 22% to restaurants, and 14% to medical retail.
  • Shortly after quarter-end in early Q3 2026, FCPT closed its largest ever acquisition: a 102-property portfolio leased to Mission Pet Health for $268 million, with 10 years of remaining term on two triple-net master leases, 2% annual rent growth, 6x unit-level rent coverage, and an average property basis of $2.6 million.
  • FCPT is actively expanding its opportunity set by evaluating potential new investments in under-explored subsectors including grocery and industrial outdoor storage, and has already closed a July 2026 investment in industrial property aligned with this expansion strategy.

• Capital Structure & Financing

  • Since April 2026, FCPT completed two large low-coupon financing transactions raising $600 million in total new debt capital, adding Citi and RBC to its lending syndicate.
  • The two facilities include a $200 million seven-year tenor facility at Silver plus 125 basis points, and a $400 million five-year tenor facility at Silver plus 90 basis points, with all-in interest rates of 4.5% to 4.9% at current Silver rates.
  • Pro forma for the new debt and Mission Pet acquisition, FCPT has a fully undrawn $350 million revolving credit facility, maintains run-rate leverage below the 6x upper bound of its 5-6x target range, and has a pro forma weighted average debt tenor of 4.3 years, with no material near-term maturities other than a small $50 million private note due in December 2026.

• Portfolio Strategy & Quality

  • FCPT intentionally avoids high-headwind net lease sectors including pharmacies and experiential retail, focusing on low-basis, fungible properties with strong, skilled operators to build a portfolio resistant to recession and e-commerce disruption.
  • The portfolio is significantly diversified, with no major tenant credit issues, very limited vacancy, and minimal bad debt expense to date. Occupancy remains above 99%, with strong same-store sales growth for top restaurant brands.
  • FCPT has switched to a monthly dividend, with the first payment scheduled for August 2026, to align dividend distributions with monthly tenant rent receipts, match retail investor income preferences, and reflect management confidence in stable cash flow from the portfolio.

• Operational Updates

  • Darden will close 4 of FCPT's 10 Bahama Breeze properties, with the remaining 6 to be renovated and converted to other Darden brands; the 4 closed properties represent just 0.5% of FCPT's ABR, with Darden obligated to pay rent through lease expiration (1-4 years), and FCPT is already in advanced re-leasing negotiations with new tenants, expecting minimal to no AFFO disruption.

• FCPT maintains its prior 2026 guidance range for annual cash G&A expense of $19.2 million to $19.7 million, with no upward or downward revision.
• FCPT will continue its long-standing policy of not providing acquisition volume or adjusted funds from operations (AFFO) earnings guidance, consistent with its practice since inception. The company has added new pro forma disclosure in investor presentations to help analysts update their own models to reflect recent large transactions that are not yet included in Q2 2026 reported results.

FCPT reports overall portfolio performance rather than separate product segments. Key segment-level metrics: Pro forma for the Mission Pet Health acquisition, 59% of cash rent comes from casual dining (Darden alone represents 41% of total cash rent), 16% from medical retail, 13% from auto service, 10% from other service restaurants, and 14% from other diversified sectors. Q2 2026 overall cash rental income was $70 million, an 8.7% increase year-over-year. Annualized in-place cash rent as of quarter-end was $270.5 million. Q2 2026 AFFO per share was $0.45, a 1.4% increase year-over-year. Q2 2026 cash G&A expense was $4.8 million, equal to 6.8% of cash rental income, down from 6.9% in the prior year. Occupancy across the full portfolio is 99.5%, with 99.7% of base rent collected in Q2. Portfolio-wide average rent coverage is 5.2x, and Darden properties specifically have 6.0x rent coverage.

• Forward-looking statements made on the call are based on management assumptions that may prove incorrect, and actual future results will be impacted by known and unknown risk factors outside of management's control; investors are referred to FCPT's SEC filings for a full description of potential risks.
• 0.5% of FCPT's ABR is exposed to the upcoming expiration of 4 closed Bahama Breeze properties, though management notes the small scale of this exposure, Darden's obligation to continue rent payments for 1-4 years, and strong existing backfill demand that will limit any disruption to AFFO.
• Acquisitions in new subsectors like grocery and industrial outdoor storage require FCPT to build new domain expertise, and management notes that grocery pricing is often tighter, requiring selective investment to meet FCPT's underwriting criteria.
• FCPT's current equity cost of capital is not at the level management prefers, which could impact the pace of future acquisition activity if equity valuations do not improve to reflect the company's recent growth.

Q: How does FCPT plan to address upcoming unhedged debt maturities, and what is management seeing in current debt pricing? / A: FCPT has a fully undrawn $350 million revolving credit facility that acts as a backstop for any upcoming maturities. Management notes that it recently received strong lender support to close $600 million in new term loans, so there are ample market opportunities to address remaining maturities on attractive terms. Management chose not to refinance maturities earlier to continue benefiting from the favorable tenor and rates of its existing debt issuances.

Q: What are the renewal economics for Darden leases maturing in Q4 2027, given their strong 6x rent coverage? / A: All of the maturing leases have pre-negotiated 5-year renewal extension options set at 1.5% annual rent growth over the prior rent rate. Management expects a very high renewal rate, consistent with the strong performance of these properties, and will start receiving extension notices from Darden in October 2026 per the 12-month notification requirement.

Q: What makes grocery and industrial outdoor storage attractive new subsectors for FCPT? / A: Both sectors match FCPT's core investment criteria: they are mission-critical, offer reasonable property basis, have large creditworthy tenants, and deliver risk-adjusted returns aligned with FCPT's existing sectors. Management notes that grocery pricing is often tighter, so FCPT will have to be selective, and the CEO has deep prior experience investing in industrial outdoor storage from past board roles.

Q: Would FCPT pursue additional veterinary real estate acquisitions after the Mission Pet Health deal, or is it now full-up on the sector? / A: Management would still pursue additional high-quality veterinary assets that meet FCPT's underwriting scoring criteria. The Mission Pet portfolio took over five years to develop and was specifically constructed with FCPT as a likely buyer, resulting in a rare high-quality large-scale opportunity. FCPT will add any high-scoring asset regardless of sector as it continues to grow.