Mergers & Acquisitions

Getty Realty Expands Into ‘High-Growth’ Regions

Acquires 77 properties from Pacific Convenience & Fuels, leased to United Oil

JERICHO, N.Y. -- Getty Realty Corp. has acquired fee-simple interests in 77 convenience stores and gas stations acquired from affiliates of Pacific Convenience & Fuels LLC and simultaneously leased to United Oil, for approximately $214 million.

Getty Realty Pacific Convenience & Fuels United Oil (CSP Daily News / Convenience Stores / Gas Stations)

As reported in a 21st Century Smoke/CSP Daily News Flash, the sites are located in several high-growth regions including northern California, southern California, Colorado, Washington, Nevada and Oregon. The acquired properties operate under several well recognized brands including 76, Conoco, Circle K, 7-Eleven and My Goods Market.

Gardena, Calif.-based United Oil, a major regional company, operates approximately 400 convenience stores and gas stations—including this transaction—in the western United States and Colorado and is a portfolio company of Fortress Investment Group LLC, New York.

United Oil is triple-net leasing the 77 properties acquired by Getty Realty for an initial term of 20 years, with three five-year renewal options.

“This acquisition … achieves several important objectives for our company including materially expanding our geographic reach primarily in high-growth regions and adding a new institutional-quality tenant,” said David B. Driscoll, Getty’s president and CEO. We believe the addition of these properties, combined with other activity in our portfolio, has materially improved the overall credit quality of our revenue stream. In addition, we believe we are positioned to provide sustained cash flow growth for shareholders in the coming years.”

Arent Fox LLP corporate partner Michael Blass advised Getty Realty in the transaction.

In conjunction with the acquisition transaction, on June 2, 2015, Getty Realty entered into a new $225 million senior unsecured credit facility with a consortium of banks led by Bank of America and JP Morgan Chase that replaced its existing $175 million senior secured credit facility. On June 2, 2015, the company also entered into a new $75 million unsecured term loan with The Prudential Insurance Co. of America.

The company financed the acquisition transaction by using the $75 million and $50 million term loans and drawing the remainder from the revolving credit facility.

Fortress Investment Group is a leading, diversified global investment management firm with $69.9 billion in assets under management as of March 31, 2015. Its range of investment strategies includes private equity, credit, liquid hedge funds and traditional asset management.

Jericho, N.Y.-based Getty Realty Corp. is a publicly traded real-estate investment trust specializing in ownership, leasing and financing of convenience-store and gas-station properties. The company owns and leases approximately 930 properties nationwide.

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