"Getty's board has charged management with the task of significantly growing the company in the coming years. During the past 14 months, we have added assets, increased our equity float and reduced our borrowing levels," said David Driscoll, Getty's recently [image-nocss] appointed president and CEO. "Our intent is to continue our growth trajectory, and by expanding our origination staff, we are redoubling our efforts to acquire portfolios by providing competitively priced and innovatively structured capital to the industry."
He added, "We currently own properties throughout the U.S. (including Hawaii) operating under a variety of brands including Getty, BP, Exxon, Mobil, Shell, Chevron, Valero, Fina and Aloha. We are seeking to expand both our brand and geographic coverage throughout the U.S. and into Canada, as well. Mike, with his broad industry knowledge and national reputation, will be an important element to achieving this growth and we are proud he has chosen to join our team."
Ross has more than 15 years of origination experience at firms including Trustreet Properties, Merrill Lynch and FMAC. He will be based in Dallas and will work closely with Getty Realty executive vice president Kevin Shea to pursue Getty's strategy of aggressively growing the company's convenience store and gasoline marketing assets.
"Mike's location, experience and in depth knowledge of our industry and its players are an exciting addition to the Getty team. His addition enhances our focus on pursuing growth through providing capital to the convenience store and gasoline marketing industry," Shea said.
Jericho, N.Y.-based Getty Realty has provided strong double-digit average returns of 11% annually over the past decade and a half (almost double the 6% for the S&P 500, according to iStockAnalyst.com.
It owns about 1,060 properties, mainly in the northeastern and mid-Atlantic state and operates nine petroleum distribution terminals.
Getty was started in 1955, went public in 1971 and spun off Getty Petroleum Marketing in 1997. That company was bought by Lukoil, Russia's largest integrated oil company. Lukoil's stations currently lease 78% of Getty's properties. The other 22% are leased by individual operators.
Getty's fortunes remain closely tied to those of Getty Petroleum Marketing, which provides about 80% of its revenues. This division ensures steady rental income to Getty under long-term leases through 2015, which also provide for annual 2% rent increases.
Revenues have grown a steady 5% a year over the past five years, iStockAnalyst said, mainly driven by acquisitions. In 2009, they totaled $84.5 million, and are projected to grow to nearly $89 million in 2010.
At the end of 2009, Getty Realty had $62.5 million in debt, primarily in the form of a revolving line of credit, and $316 million in equity, said the investment website. That gave it a very manageable debt to equity ratio of 0.2 times.
For the full year 2010, analysts project an increase in funds from operations per unit to $2.15 from $2.12 chalked up in 2009. Estimates for 2011 call for a nominal increase in FFO per unit to $2.16, said the report.
Getty Realty "has so far been minimally affected by the issue of dependence on one major customer for the majority of its revenues and this situation appears to be improving rather than worsening," said iStockAnalyst. "The company has also raised its distribution for six consecutive years, making the REIT suitable for dividend reinvestment. For investors seeking an investment with superior yield, rising dividends and double-digit returns over the past 15 years, [Getty Realty] is a strong prospect."
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