- Reports Record Annual Investment Activity
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- Introduces 2024 Annual Earnings Guidance
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Getty Realty Corp. (NYSE: GTY) (“Getty” or the “Company”) today
provided an update on the Company’s fourth quarter and full year
2023 business activities. The Company also provided its initial
full year 2024 earnings guidance.
2023 Highlights
- Invested approximately $326 million in convenience and
automotive retail assets, a record year of investment activity for
the Company, including approximately $61 million in the fourth
quarter.
- Committed investment pipeline of approximately $75 million, as
of December 31, 2023, for the development and acquisition of 43
convenience stores, express tunnel car washes, and auto service
centers.
- Raised $295 million of new equity and debt capital, including
$25 million of forward equity through the Company’s at-the-market
("ATM") equity program in the fourth quarter, along with a
previously announced $150 million unsecured term loan.
- Committed capital totaling more than $107 million, as of
December 31, 2023, including $32.5 million of outstanding forward
equity and $75 million of proceeds from the delayed draw component
of the previously announced unsecured term loan.
“We had very productive year in 2023, achieving record
investment volumes and successfully accessing the capital markets
to accretively fund our investments,” stated Christopher J.
Constant, Getty’s President and Chief Executive Officer. “We
continued to scale and diversify our portfolio through a variety of
sale leaseback and development funding transactions, which also
provide the foundation for steady earnings and dividend growth. As
we move into 2024, we will remain thoughtful and disciplined as we
execute on our investment strategy and navigate the evolving
transaction and capital markets.”
Portfolio Activities
Acquisitions
In 2023, the Company acquired fee simple interests in 66
convenience and automotive retail properties for approximately $247
million (net of previously advanced development funding amounts),
including 16 properties for approximately $31 million in the fourth
quarter (net of previously advanced development funding
amounts).
Acquisitions included 38 express tunnel car washes, 13 auto
service centers, 12 convenience stores, and 3 drive-thru quick
service restaurants.
Development Funding
In 2023, the Company advanced total funding of approximately $79
million for the development of new-to-industry express tunnel car
washes, convenience stores, and auto service centers, including
approximately $30 million in the fourth quarter.
Investment Pipeline
As of December 31, 2023, the Company had a committed investment
pipeline of approximately $75 million for the acquisition and
development of 43 convenience stores, express tunnel car washes,
and auto service centers. The Company expects to fund this
investment activity over approximately the next 6-9 months. While
the Company has fully executed agreements for each transaction, the
timing and amount of each investment is ultimately dependent on its
counterparties and the schedules under which they are able to
complete development projects and certain business acquisitions for
which the Company is providing sale leaseback financing.
Redevelopments
In 2023, rent commenced on three redevelopment properties,
including one property in the fourth quarter which is located in
Brooklyn, NY and leased to AutoZone under a long term, triple net
lease.
As of December 31, 2023, the Company had three properties under
active redevelopment and others in various stages of feasibility
planning for potential recapture from our net lease portfolio.
Dispositions
In 2023, the Company sold nine properties for gross proceeds of
approximately $12 million, including four properties for gross
proceeds of approximately $7 million in the fourth quarter.
Capital Markets
Activities
Common Equity
In 2023, the Company raised approximately $145 million of gross
equity proceeds through the sale of 4,513,348 common shares subject
to forward sales agreements, including 3,450,000 shares ($112.5
million of gross proceeds) in a follow-on public offering and
1,063,348 shares through its ATM equity program ($32.5 million of
gross proceeds), of which 845,787 shares were sold in the fourth
quarter ($25 million of gross proceeds).
As of December 31, 2023, the Company had a total of 1,063,348
shares subject to outstanding forward equity agreements under its
ATM equity program, which upon settlement are anticipated to raise
gross proceeds of $32.5 million.
Delayed Draw Term Loan
As previously announced, in October 2023, the Company entered
into a new senior unsecured term loan with a group of existing
lenders for an aggregate principal amount of $150 million. An
initial principal amount of $75 million was funded at closing, and
an additional principal amount of $75 million can be funded at the
Company’s option any time on or prior to April 14, 2024.
The Term Loan matures October 17, 2025, with one twelve-month
extension at the Company's option, and the effective interest rate
on the Term Loan was 6.1% as of December 31, 2023.
2024 Guidance
The Company has established its 2024 AFFO guidance at a range of
$2.29 to $2.31 per diluted share. The Company’s outlook includes
completed transaction activity as of December 31, 2023, but does
not include assumptions for any prospective acquisitions,
dispositions, or capital markets activities (including the
settlement of outstanding forward sale agreements or the funding of
delayed draw term loan amounts).
The guidance is based on current assumptions and is subject to
risks and uncertainties more fully described in this press release
and the Company’s periodic reports filed with the Securities and
Exchange Commission.
About Getty Realty Corp.
Getty Realty Corp. is a publicly traded, net lease REIT
specializing in the acquisition, financing and development of
convenience, automotive and other single tenant retail real estate.
As of December 31, 2023, the Company’s portfolio included 1,093
freestanding properties located in 40 states across the United
States and Washington, D.C.
Non-GAAP Financial
Measures
In addition to measurements defined by accounting principles
generally accepted in the United States of America (“GAAP”), the
Company also focuses on Funds From Operations (“FFO”) and Adjusted
Funds From Operations (“AFFO”) to measure its performance.
FFO and AFFO are generally considered by analysts and investors
to be appropriate supplemental non-GAAP measures of the performance
of REITs. FFO and AFFO are not in accordance with, or a substitute
for, measures prepared in accordance with GAAP. In addition, FFO
and AFFO are not based on any comprehensive set of accounting rules
or principles. Neither FFO nor AFFO represent cash generated from
operating activities calculated in accordance with GAAP and
therefore these measures should not be considered an alternative
for GAAP net earnings or as a measure of liquidity. These measures
should only be used to evaluate the Company’s performance in
conjunction with corresponding GAAP measures.
FFO is defined by the National Association of Real Estate
Investment Trusts (“NAREIT”) as GAAP net earnings before (i)
depreciation and amortization of real estate assets, (ii) gains or
losses on dispositions of real estate assets, (iii) impairment
charges, and (iv) the cumulative effect of accounting changes.
The Company defines AFFO as FFO excluding (i) certain revenue
recognition adjustments (defined below), (ii) certain environmental
adjustments (defined below), (iii) stock-based compensation, (iv)
amortization of debt issuance costs and (v) other non-cash and/or
unusual items that are not reflective of the Company’s core
operating performance.
Other REITs may use definitions of FFO and/or AFFO that are
different than the Company’s and, accordingly, may not be
comparable.
The Company believes that FFO and AFFO are helpful to analysts
and investors in measuring the Company’s performance because both
FFO and AFFO exclude various items included in GAAP net earnings
that do not relate to, or are not indicative of, the core operating
performance of the Company’s portfolio. Specifically, FFO excludes
items such as depreciation and amortization of real estate assets,
gains or losses on dispositions of real estate assets, and
impairment charges. With respect to AFFO, the Company further
excludes the impact of (i) deferred rental revenue (straight-line
rent), the net amortization of above-market and below-market
leases, adjustments recorded for the recognition of rental income
from direct financing leases, and the amortization of deferred
lease incentives (collectively, “Revenue Recognition Adjustments”),
(ii) environmental accretion expenses, environmental litigation
accruals, insurance reimbursements, legal settlements and
judgments, and changes in environmental remediation estimates
(collectively, “Environmental Adjustments”), (iii) stock-based
compensation expense, (iv) amortization of debt issuance costs and
(v) other items, which may include allowances for credit losses on
notes and mortgages receivable and direct financing leases, losses
on extinguishment of debt, retirement and severance costs, and
other items that do not impact the Company’s recurring cash flow
and which are not indicative of its core operating performance.
The Company pays particular attention to AFFO which it believes
provides the most useful depiction of the core operating
performance of its portfolio. By providing AFFO, the Company
believes it is presenting information that assists analysts and
investors in their assessment of the Company’s core operating
performance, as well as the sustainability of its core operating
performance with the sustainability of the core operating
performance of other real estate companies.
Forward-Looking
Statements
Certain statements contained herein may constitute
“forward-looking statements” within the meaning of the private
securities litigation reform act of 1995. When the words
“believes,” “expects,” “plans,” “projects,” “estimates,”
“anticipates,” “predicts,” “outlook” and similar expressions are
used, they identify forward-looking statements. These
forward-looking statements are based on management’s current
beliefs and assumptions and information currently available to
management and involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of the company to be materially different from any
future results, performance or achievements expressed or implied by
these forward-looking statements. Examples of forward-looking
statements include, but are not limited to, those regarding the
company’s 2024 AFFO per share guidance, those made by Mr. Constant,
statements regarding the recapture and transfer of certain net
lease retail properties, statements regarding the ability to obtain
appropriate permits and approvals, and statements regarding AFFO as
a measure best representing core operating performance and its
utility in comparing the sustainability of the company’s core
operating performance with the sustainability of the core operating
performance of other REITs.
Information concerning factors that could cause the company’s
actual results to differ materially from these forward-looking
statements can be found elsewhere from this press release,
including, without limitation, those statements in the company’s
periodic reports filed with the securities and exchange commission.
The company undertakes no obligation to publicly release revisions
to these forward-looking statements to reflect future events or
circumstances or reflect the occurrence of unanticipated
events.
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version on businesswire.com: https://www.businesswire.com/news/home/20240110601173/en/
Brian Dickman Chief Financial Officer (646) 349-6000
Investor Relations (646) 349-0598 ir@gettyrealty.com
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