Convenience-store property owner Getty Realty Corp. expects to add 28 new properties this year, following the addition of 52 store locations in 2022.
In its full year 2023 earnings guidance released Jan. 10, the public company reported that it has a committed investment pipeline of more than $100 million for the development and acquisition of 28 convenience stores and car-wash properties. This comes after a year when it invested approximately $157 million across 52 properties, including approximately $83 million across 36 properties in the fourth quarter.
“I am proud of Getty’s accomplishments in 2022. Despite challenging macroeconomic conditions, and evolving transaction and capital markets, we continued to execute on our core growth and diversification strategies,” said Christopher Constant, Getty’s president and CEO. “I am especially pleased with our activity in the fourth quarter, which saw us close on a variety of investments and raise record amounts of equity capital at attractive prices.
"Looking ahead, we are excited about the strength of our investment pipeline, and are pleased that our team continues to source new opportunities to acquire convenience and automotive retail real estate located in major metropolitan markets and leased to growing, institutional quality operators.”
In 2022, the company acquired fee-simple interests in 40 properties for approximately $137 million, including 24 properties for approximately $74 million in the fourth quarter.
Acquisitions included 16 car-wash properties for $67 million, nine convenience stores for $44 million, 14 auto service centers for $23 million and one drive-thru quick service restaurant for $3 million.
In 2022, the company advanced construction loans in the amount of $20 million, including accrued interest, for the development of 12 new-to-industry convenience stores and car-wash properties, including $9 million advanced in the fourth quarter.
As of Dec. 31, the company had advanced aggregate construction loans in the amount of approximately $26 million, including accrued interest, for the development of these 12 properties, which the company expects to acquire via sale-leaseback transactions at the end of their respective construction periods.
As of year-end, the company had a committed investment pipeline of more than $100 million for the acquisition and development of 28 convenience stores and car-wash properties. The company expects to fund this investment activity over the next nine 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, Getty said.
In 2022, rent commenced on two redevelopment properties, including one property in the fourth quarter which was leased to Murphy USA under a long term, triple net lease.
As of Dec. 31, the company had three properties under active redevelopment and others in various stages of feasibility planning for potential redevelopment from the company's net lease portfolio.
In 2022, the company sold 24 properties for gross proceeds of approximately $26 million, including five properties for gross proceeds of approximately $13 million in the fourth quarter.
In 2022, Getty Realty entered into forward sale agreements to sell an aggregate of 3.7 million common shares for anticipated gross proceeds of $117.6 million through its at-the-market (ATM) equity program, including agreements to sell 3.0 million common shares for anticipated gross proceeds of $96.1 million in the fourth quarter.
Credit Facility Amendment
In December, the company amended the terms of its $300 million unsecured revolving credit facility to transition the applicable interest rates from LIBOR-based rates to SOFR-based rates. As of Dec. 31, the company had $230 million available under its revolving credit facility.
The company has established its 2023 AFFO guidance at a range of $2.19 to $2.21 per diluted share. The company’s outlook includes completed transaction activity as of Jan. 10, as well as the previously announced issuance of $125 million of new 3.65% unsecured notes in January 2023 and simultaneous prepayment of $75 million of 5.35% unsecured notes due June 2023, but does not include any other assumptions for prospective acquisitions, dispositions, or capital markets activities (including the settlement of outstanding forward sale agreements). The company’s outlook also assumes approximately $400,000 of demolition costs for anticipated redevelopment projects with rent commencements anticipated in 2023 and 2024.
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.
Getty Realty Corp., Jericho, New York, is a publicly traded, net lease real estate investment trust (REIT) specializing in the acquisition, financing and development of convenience, automotive and other single-tenant retail real estate. As of Dec. 31, the company’s portfolio included 1,039 freestanding properties located in 38 states across the United States.
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