Getty Realty Corp. Q4 FY2025 earnings call

• Christopher Constant led off by highlighting 2025 financial performance and investment activity, noting stable rental income and strong yields from acquisitions, with AFFO per share growth. Mentioned growth initiatives like the $100,000,000 sale-leaseback, $82.5 million development funding for collision repair, acquisition of travel centers and drive-thru QSRs. Over 75% of 2025 investment activity in top 100 markets, and a healthy investment pipeline of ~$100,000,000 under contract.
• Mark O’Lear discussed the lease portfolio with 1,169 net leased properties, 99.7% occupancy excluding redevelopments, and 61% of ABR from top 50 MSAs. Underwrote a record $6,800,000,000 of potential investments in 2025, with 54% focused on non-convenience store properties. Fourth quarter investment of $135,400,000 across 26 properties at 7.9% initial cash yield.
• RJ Ryan talked about 2025 investment activity including acquisition of 73 properties for $278,300,000 and incremental development funding of $13,600,000. Pipeline of ~$100,000,000 of investments under contract with majority expected to fund in 2026 at high 7% initial cash yields. Portfolio is the most diversified in tenants, sectors, and geographies in company history with 49 new tenants added since current investment strategy began.
• Brian Dickman provided financial results: AFFO per share $0.63 for Q4 2025, $2.43 for full year 2025. G&A ratio 9.5% for full year 2025, expecting <2% growth in 2026 and ratio to fall below 9%. Balance sheet: net debt to EBITDA 5.1x, fixed charge coverage 3.8x. Closed $250,000,000 new unsecured notes in Q4, used proceeds to repay revolver borrowings. Pro forma, $1,000,000,000 of senior unsecured notes outstanding with 4.5% weighted average rate and 6.2 year weighted average maturity. No debt maturities until 2028. Equity capital markets: settled ~2,100,000 shares for ~$59,100,000 and entered new forward sale agreement.

In 2025, Getty's annualized base rent grew by nearly 12%. AFFO per share was up 5% for the fourth quarter and 3.8% for the full year. The in-place portfolio had essentially full occupancy and rent collections. 61% of annualized base rent came from top 50 MSAs and 77% from top 100 MSAs. For the year, $270,000,000 was invested at an initial cash yield of 7.9%. Highlights included a $100,000,000 sale-leaseback in Houston, a $82.5 million development funding for collision repair centers, acquisition of four travel centers for $47,100,000, and $40,000,000 invested in drive-thru quick-service restaurants across 28 properties. More than 75% of 2025 investment activity was in top 100 markets. The portfolio had 1,169 net leased properties and two active redevelopment sites, with occupancy excluding redevelopments at 99.7% and weighted average lease term of 9.9 years. 2025 investment was $268,800,000 with weighted average initial yield of 7.9% and weighted average lease term of 15.8 years. Subsequent to year-end, $8,700,000 was invested in drive-thru QSRs and auto service centers. Currently, nearly 30% of annual base rent is from non-convenience and gas properties.

• Reaffirming AFFO per share range of $2.48 to $2.50 for 2026. Guidance reflects current run rate from in-place portfolio with certain expense and credit loss variability, and does not include prospective investment or capital activities. Historically, averaged more than $200,000,000 of annual investments and added ~250 basis points of AFFO per share growth beyond midpoint of initial guidance range.
• $8,700,000 of additional acquisitions subsequent to quarter-end are included in the point-in-time run rate of the guidance. The $100,000,000 pipeline is not included in the initial guidance number.

Q: Could you provide a little more detail on the $100,000,000 investment pipeline you mentioned in the release? Any types of assets or any timing there on funding that you can provide?

A: Yeah. Hey, Upal. It is Brian. Happy to do so. About 80% of that, if you are looking at property types, about 80% of that is auto service, both collision centers and oil change locations, followed by C-store, drive-thrus, and car wash in that order, making up the remaining 20%. And then from a transaction type perspective, about 80% of that is development funding. That is sort of the long end of that deployment range that we put out, and the balance is regular acquisitions that are more in the, you know, call it 60-day, you know, 60–90 day type time frame from a closing perspective.

Q: Given the improved share price and cost of capital relative to last year, do you think you can do more investment volume this year relative to last year?

A: Well, I will just say that I think we are off to a great start. Right? Obviously, it is a couple of weeks into the year to have $100,000,000 under contract. Christopher Constant: We are really enthused by the pipeline we have. Behind that, that is in various stages of negotiation and underwriting. I think we are already north of 25% of our last year's underwriting volume sitting here today in early February. Certainly, the improved cost of capital is helpful. We are looking at investments and looking at our available opportunities in the capital markets. So I think I would say we are off to a great start. We are optimistic. Brian Dickman: And I think the team has done a great job all around in bringing great opportunities in for us to evaluate, and we look forward to adding a lot of that to our company as we move through the year.

Q: The cadence of that $100,000,000, the way to think about it, it is mostly going to hit a little bit each quarter. Is that the way to think about it?

A: Mitch, it is Brian. That is what I was just alluding to. Again, think you have, call it, 20% of that that is regular acquisitions that are, call it, average 60 days, so kind of 30–90 days. That is the front end of that deployment range, kind of the three-month area. Development funding gets deployed over time. We expect the majority of that to be deployed over the next twelve months. The cadence is really dictated more by the tenants, their development schedules, when they submit for reimbursement. But assume that that gets deployed throughout the year, which should give you a little bit more visibility. But candidly, we do not always have that until the reimbursement requests start coming in. And then I would just add, maybe to reiterate or reemphasize what Chris said, that is simply what we have under contract today. That is the timing that we are looking at with respect to deployment for the $100,000,000, but there is quite a bit of deal activity behind that, certainly some of which we would expect to hit this year as well.

Q: What do you think is driving that increased emphasis to potentially sell here?

A: Yeah. Hey. It is Mark. Mitch Germain: Hi, Mark. Brian Dickman: A lot of things right now. The team continues to do a great job sourcing opportunities both with new Mitch Germain: Potential tenants and managing Brian Dickman: With our existing tenant base. We continue to talk about diversity across all the asset classes that we trade in. So we introduced a bigger buy box Christopher Constant: A few years ago, and we are seeing the momentum and the results of that. Mitch Germain: You know, the ability for us to both transact at the different ranges of Christopher Constant: The cap rates that are out there in the market Mitch Germain: You know, allow us to source opportunities. Christopher Constant: You know, we are sensing, Chris used the word, an optimistic tone around the market. The buyer pool seems more active coming out of the year. Brian Dickman: I am sorry. The seller pool seems more active coming out of the year. So it is a combination of a lot of things. So it is just more Christopher Constant: More of the same around the efforts to develop business across all our asset classes and across the geographies and with routine tenants. You know, routine business with our existing tenants, I would say.

Q: Arco priced an IPO last night. Should we think about this as a potential credit-enhancing event?

A: Yeah. You know, so Brian Dickman: In conversations with them, and I think one of their primary motivations was allowing investors to see both pieces of their business independently, the retail assets and the wholesale business. Christopher Constant: Yep. The use of proceeds, as stated, was to pay down debt. So as a landlord, we certainly appreciate that. I do think that is a credit enhancement. Brian Dickman: Gives folks more visibility into the various pieces of their business. What I have said before, I will just say again. Arco has been a tenant of ours for almost twenty years at this point. Christopher Constant: Fantastic operator. Brian Dickman: He has got a defined strategy that he is working through. We have got five leases with him that we can see site-level Christopher Constant: Information on, and we are comfortable with Brian Dickman: How all those leases are performing. So Christopher Constant: I am thrilled for Ari that he got his deal done, and certainly, I think from an investment standpoint, or if you are focused on maybe the fuel side or on the retail side, it does give you the ability to see those businesses and how each one operates independently.

Q: Just following up on your comments on the exclusion of prospective investment activity in the initial guide, I wanted to clarify if the current guide includes the $8,700,000 of additional acquisitions subsequent to quarter-end. And then how much of that $100,000,000 pipeline is in the current initial guidance?

A: Yes. Go ahead, Michael. The $8,700,000 is in there. So it is a point-in-time run rate, usually at the day of the release or the day before. So that is in there. And then by definition or by approach as it currently stands, none of the $100,000,000 would be in that guidance number.

Q: As you kind of balance the portfolio with maintaining your niche and expertise, what do you think now with 30% of ABR from non-convenience and gas is the right balance, or are you looking to increase from there?

A: Well, what I would say is, Mark mentioned that now 30% of our rent comes from Christopher Constant: Non-convenience and gas asset classes, and that is basically over the last six years at this point, or five and a half years. During that time period, we have made significant investments in the C-store sector, including Now and Forever, and there were some larger deals that we did in 2024 in the sector. So we still like all the— I think what you are seeing, though, is on balance, the underwriting has gone from maybe $4,000,000,000 to almost $7,000,000,000 as we develop relationships in these other verticals, which do take some time, given how we like to transact with portfolio sale-leasebacks. Brian Dickman: You are starting to see the strategy really take off. Christopher Constant: You know, whether it is the QSR work we did this year, we have done a lot in the car wash business. So we do not have defined limits or category limits within those asset classes, but I think you can expect to see the business become more diverse just naturally as we develop relationships, have more resources focused on Brian Dickman: Not only C-store, but some of the other verticals. Michael Gorman: So I think we are really happy with how the business has Christopher Constant: Expanded and become more diversified and gotten larger, but there are no hard targets in any asset class to answer your question specifically.

Q: We have seen other net lease REITs increase exposure to C-stores. Do you expect your cap rates of 7.9% to hold firm and then secondly, Getty sold seven properties in 4Q. Can you provide some color as to why these were candidates to be disposed of?

A: Yeah. I will take the first one, which is the competitive landscape. And we have been in the sector for a long time in the C-store. Brian Dickman: The other REITs that you are referring to that are investing in C-stores have either been buying them for a long time, and we have been competing against them, Michael Goldsmith: And continuing to Brian Dickman: Add attractive properties to our balance sheet, or they are newer Christopher Constant: Entrants, and the sector itself has grown. So I feel very comfortable about the way Getty Realty Corp. transacts and our ability to source and close investments at accretive spreads for us. Brian Dickman: The competition is not a new dynamic in this asset class. Christopher Constant: Whether it is just the way people are referring to C-stores or just talking about it on their phone calls. I do not want to comment too much on that. Do you want to take the disposals? Michael Goldsmith: The disposals? Brian Dickman: Yeah. Well, Brad, do you want to take the disposals? Michael Goldsmith: I would just say quickly on the disposals, as Brian said, it was seven properties. You know, we are always evaluating the portfolio for different opportunities. Three or four of those actually went back to existing tenants. That happens periodically where we will sell assets to a tenant. Sometimes, it is a CapEx dynamic in terms of who wants to ultimately invest in those properties. In this case, it is a very small portfolio, but it was a very low, like, low-single-digit cap rate. Just the way that operator valued the portfolio, it was opportunistic for us. And then the others were just, you know, an asset here and there that for, you know, tactical reasons or otherwise, we just thought it made sense to dispose of. So no, I would not say there are any universal trends or anything that drove it. Just an opportunistic deal and a couple of tactical dispositions.