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Mergers & Acquisitions

Getty Realty Picking Up 42 Applegreen Sites Via Leaseback

Acquiring metropolitan Columbia, S.C., locations that Irish retailer bought from Brandi Group

JERICHO, N.Y. -- Getty Realty Corp. has entered into an acquisition-leaseback transaction with a U.S. subsidiary of Applegreen PLC. Getty Realty will acquire interests in 38 fee-simple and four leasehold properties for $70.1 million and enter into a unitary lease with Applegreen covering all of the properties.

Last week, Dublin-based Applegreen acquired 42 Pitt Stop convenience stores and other properties from The Brandi Group, Columbia, S.C., adding to its 14 other U.S. locations.

The properties consist of 34 c-store and gas stations, many of which contain quick-service restaurants (QSRs) such as Burger King, Subway and Blimpie, and eight stand-alone Burger King restaurants located within the metropolitan market of Columbia, S.C.

"The properties we are acquiring are high-quality convenience stores and gasoline stations, many of which have significant co-branded fast-food offerings," said Christopher Constant, Getty Realty’s president and CEO. "The acquisition of stand-alone Burger King restaurants, which are a part of this portfolio, represents an added opportunity for us to expand our retail portfolio.”

The unitary lease to be effective at closing provides for an initial term of 15 years, with four five-year renewal options. Rent is scheduled to increase annually during the initial and renewal terms of the lease. Under the terms of transaction, Getty Realty will receive initial annual rent of $5 million from the fee-simple properties and a positive rent spread of $200,000 on the leasehold interests being acquired.

“This acquisition extends our reach into South Carolina, in the desirable and growing Columbia market, and further builds our presence in the Southeast,” Constant said. "We are excited to enter into a long-term relationship with Applegreen, the largest convenience-store and gasoline-station operator in the Republic of Ireland. This is a significant commitment by Applegreen to its U.S. expansion, and we are happy to be their partner in South Carolina."

Getty Realty said it expects the transaction to close before the end of fourth-quarter 2017.

The transaction is subject to closing conditions, including the consummation of the purchase agreement between Applegreen and Brandi. The company can offer no assurances that the transaction will close on the terms described, or at all.

Public Offering

In other company news, Getty Realty also has launched an underwritten registered public offering of 4.1 million shares of its common stock. In connection with the offering, it also intends to grant the underwriters a 30-day option to purchase up to an additional 615,000 shares of common stock.

Bank of America Merrill Lynch, JPMorgan, KeyBanc Capital Markets and RBC Capital Markets are acting as book-running managers for the offering, which is subject to market conditions, and Getty Realty said there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

Jericho, N.Y.-based Getty Realty is a publicly traded real-estate investment trust (REIT) specializing in the ownership, leasing and financing of convenience-store and gas-station properties. It owns 736 properties and leases 87 properties from-third party landlords in 24 states and Washington, D.C.

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