Getty Realty fell $5.10, or 18%, to $23.75 in New York Stock Exchange composite trading. The decline was the biggest since March 18, 2008.
OAO Lukoil, Russia's second-largest oil producer, [image-nocss] sold its interest in Getty Petroleum Marketing Inc., Jericho, N.Y.- based Getty Realty said yesterday. The tenant's new management said it will delay rental payments due yesterday until on or before March 7, the property company said.
Lukoil, based in Moscow, said after the close of U.S. trading yesterday that its Lukoil Americas unit sold Getty Petroleum to an affiliate of Cambridge Securities LLC. The deal was completed on February 28, Lukoil said in a statement. Terms were notdisclosed.
(Click here for previous CSP Daily News coverage.)
The new owner and delayed rental payments are "not a good sign" and may signal a reworking of the master leases with the tenant, Anthony Paolone, an analyst with JPMorgan Chase & Co. in New York, told the news agency.
"Until the situation is resolved, we think the shares will face a significant headwind and external growth initiatives are likely to be hampered," Paolone wrote in a note to clients yesterday. He cut Getty Realty to "underweight" from "neutral."
A renegotiated lease may reduce Getty's funds from operations by 9% or more, Paolone said.
Getty Realty is the largest publicly traded REIT in the United States specializing in ownership and leasing of convenience store/gas station properties and petroleum distribution terminals. As of December 31, 2010, the company owned 907 properties and leased 145 properties. Its properties are located in the Northeast and the Mid-Atlantic regions in the United States. The company also owns or leases properties in Texas, North Carolina, Hawaii, California, Florida, Arkansas, Illinois, Ohio and North Dakota. All of its properties are leased or sublet to distributors and retailers engaged in the sale of gasoline and other motor fuel products, convenience store products and automotive repair services. As of December 31, 2009, the company leased approximately 78% of its 1,061 owned and leased properties on a long-term, triple-net basis to Getty Petroleum Marketing.
East Meadow, N.Y.-based LUKOIL Americas is a subsidiary of Russia-based OAO LUKOIL, a major international vertically integrated energy company. LUKOIL Americas operates through its subsidiary a network of more than 600 LUKOIL branded outlets in the Mid-Atlantic.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.