Getty Realty Corp. Q3 FY2025 earnings call

• Christopher Constant highlighted quarterly financial results, tenant performance, and recent investment activity. - Mark Olear discussed portfolio investments, noting $56.3 million invested in the quarter with an initial cash yield of 8%, and subsequent additional investments. - Brian Dickman provided details on earnings, balance sheet, and increased 2025 AFFO per share guidance. - Getty's growth initiatives include successful investment activity in sale leasebacks, diversified tenant base, and backfilled investment pipeline. - Board approved a 3.2% increase in the recurring quarterly dividend to $0.485 per share.

Getty had more than 10% year-over-year growth in annualized base rent and a 5.1% increase in quarterly AFFO per share. The in-place portfolio of convenience and automotive retail properties is essentially fully occupied. For the trailing 12 months, rent coverage for tenants reporting site level financials was 2.6x. Year-to-date, Getty invested more than $235 million, including acquiring over 25 drive-thru QSR properties, 5 convenience stores, and 2 express tunnel car washes. The leased portfolio at quarter end had 1,156 net lease properties, 99.8% occupancy excluding active redevelopments, and a weighted average lease term of 9.9 years. 61% of annualized base rent came from top 50 MSAs and 77% from top 100 MSAs.

• Increased full year 2025 AFFO per share guidance to a range of $2.42 to $2.43 from $2.40 to $2.41. - Primary factors impacting guidance include variability in operating expenses, transaction-related costs, and timing of demolition costs for redevelopment projects. - Year-to-date investment activity contributed to the guidance increase.

• Statements made during the call are forward-looking and subject to trends, events, and uncertainties that could cause actual results to differ. - Risks include market disruption, uncertainty, and volatility in transaction and capital markets. - Environmental potential unknown liabilities were discussed, with reserves adjusted as risks were alleviated on legacy sites.

Q: Wesley Golladay asked about tenant health and request to substitute assets.

A: Christopher Constant said no uptick in substitution requests at this time, and most profitable leases are expected to remain in the portfolio long term.

Q: Brad Heffern asked about underwriting differences for travel centers.

A: Mark Olear said travel centers have different land components, store sizes, and attract different types of drivers, with a total value underwriting approach being developed.

Q: Michael Goldsmith asked about cap rates and transacting volume versus acquisition cap rates, and car wash industry.

A: Christopher Constant said no big move in cap rates yet, Getty is not a volume shop, and car washes are ramping up ahead of schedule with improved rent coverage.