Getty Realty Corp. Provides 2023 Business Update

- Reports Record Annual Investment Activity -

- Introduces 2024 Annual Earnings Guidance -

Getty Realty Corp. (NYSE: GTY) (“Getty” or the “Company”) today provided an update on the Company’s fourth quarter and full year 2023 business activities. The Company also provided its initial full year 2024 earnings guidance.

2023 Highlights

• Invested approximately $326 million in convenience and automotive retail assets, a record year of investment activity for the Company, including approximately $61 million in the fourth quarter.
• Committed investment pipeline of approximately $75 million, as of December 31, 2023, for the development and acquisition of 43 convenience stores, express tunnel car washes, and auto service centers.
• Raised $295 million of new equity and debt capital, including $25 million of forward equity through the Company’s at-the-market ("ATM") equity program in the fourth quarter, along with a previously announced $150 million unsecured term loan.
• Committed capital totaling more than $107 million, as of December 31, 2023, including $32.5 million of outstanding forward equity and $75 million of proceeds from the delayed draw component of the previously announced unsecured term loan.

“We had very productive year in 2023, achieving record investment volumes and successfully accessing the capital markets to accretively fund our investments,” stated Christopher J. Constant, Getty’s President and Chief Executive Officer. “We continued to scale and diversify our portfolio through a variety of sale leaseback and development funding transactions, which also provide the foundation for steady earnings and dividend growth. As we move into 2024, we will remain thoughtful and disciplined as we execute on our investment strategy and navigate the evolving transaction and capital markets.”

Portfolio Activities

Acquisitions

In 2023, the Company acquired fee simple interests in 66 convenience and automotive retail properties for approximately $247 million (net of previously advanced development funding amounts), including 16 properties for approximately $31 million in the fourth quarter (net of previously advanced development funding amounts).

Acquisitions included 38 express tunnel car washes, 13 auto service centers, 12 convenience stores, and 3 drive-thru quick service restaurants.

Development Funding

In 2023, the Company advanced total funding of approximately $79 million for the development of new-to-industry express tunnel car washes, convenience stores, and auto service centers, including approximately $30 million in the fourth quarter.

Investment Pipeline

As of December 31, 2023, the Company had a committed investment pipeline of approximately $75 million for the acquisition and development of 43 convenience stores, express tunnel car washes, and auto service centers. The Company expects to fund this investment activity over approximately the next 6-9 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.

Redevelopments

In 2023, rent commenced on three redevelopment properties, including one property in the fourth quarter which is located in Brooklyn, NY and leased to AutoZone under a long term, triple net lease.

As of December 31, 2023, the Company had three properties under active redevelopment and others in various stages of feasibility planning for potential recapture from our net lease portfolio.

Dispositions

In 2023, the Company sold nine properties for gross proceeds of approximately $12 million, including four properties for gross proceeds of approximately $7 million in the fourth quarter.

Capital Markets Activities

Common Equity

In 2023, the Company raised approximately $145 million of gross equity proceeds through the sale of 4,513,348 common shares subject to forward sales agreements, including 3,450,000 shares ($112.5 million of gross proceeds) in a follow-on public offering and 1,063,348 shares through its ATM equity program ($32.5 million of gross proceeds), of which 845,787 shares were sold in the fourth quarter ($25 million of gross proceeds).

As of December 31, 2023, the Company had a total of 1,063,348 shares subject to outstanding forward equity agreements under its ATM equity program, which upon settlement are anticipated to raise gross proceeds of $32.5 million.

Delayed Draw Term Loan

As previously announced, in October 2023, the Company entered into a new senior unsecured term loan with a group of existing lenders for an aggregate principal amount of $150 million. An initial principal amount of $75 million was funded at closing, and an additional principal amount of $75 million can be funded at the Company’s option any time on or prior to April 14, 2024.

The Term Loan matures October 17, 2025, with one twelve-month extension at the Company's option, and the effective interest rate on the Term Loan was 6.1% as of December 31, 2023.

2024 Guidance

The Company has established its 2024 AFFO guidance at a range of $2.29 to $2.31 per diluted share. The Company’s outlook includes completed transaction activity as of December 31, 2023, but does not include assumptions for any prospective acquisitions, dispositions, or capital markets activities (including the settlement of outstanding forward sale agreements or the funding of delayed draw term loan amounts).

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.

About Getty Realty Corp.

Getty Realty Corp. is a publicly traded, net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. As of December 31, 2023, the Company’s portfolio included 1,093 freestanding properties located in 40 states across the United States and Washington, D.C.

Non-GAAP Financial Measures

In addition to measurements defined by accounting principles generally accepted in the United States of America (“GAAP”), the Company also focuses on Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”) to measure its performance.

FFO and AFFO are generally considered by analysts and investors to be appropriate supplemental non-GAAP measures of the performance of REITs. FFO and AFFO are not in accordance with, or a substitute for, measures prepared in accordance with GAAP. In addition, FFO and AFFO are not based on any comprehensive set of accounting rules or principles. Neither FFO nor AFFO represent cash generated from operating activities calculated in accordance with GAAP and therefore these measures should not be considered an alternative for GAAP net earnings or as a measure of liquidity. These measures should only be used to evaluate the Company’s performance in conjunction with corresponding GAAP measures.

FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as GAAP net earnings before (i) depreciation and amortization of real estate assets, (ii) gains or losses on dispositions of real estate assets, (iii) impairment charges, and (iv) the cumulative effect of accounting changes.

The Company defines AFFO as FFO excluding (i) certain revenue recognition adjustments (defined below), (ii) certain environmental adjustments (defined below), (iii) stock-based compensation, (iv) amortization of debt issuance costs and (v) other non-cash and/or unusual items that are not reflective of the Company’s core operating performance.

Other REITs may use definitions of FFO and/or AFFO that are different than the Company’s and, accordingly, may not be comparable.

The Company believes that FFO and AFFO are helpful to analysts and investors in measuring the Company’s performance because both FFO and AFFO exclude various items included in GAAP net earnings that do not relate to, or are not indicative of, the core operating performance of the Company’s portfolio. Specifically, FFO excludes items such as depreciation and amortization of real estate assets, gains or losses on dispositions of real estate assets, and impairment charges. With respect to AFFO, the Company further excludes the impact of (i) deferred rental revenue (straight-line rent), the net amortization of above-market and below-market leases, adjustments recorded for the recognition of rental income from direct financing leases, and the amortization of deferred lease incentives (collectively, “Revenue Recognition Adjustments”), (ii) environmental accretion expenses, environmental litigation accruals, insurance reimbursements, legal settlements and judgments, and changes in environmental remediation estimates (collectively, “Environmental Adjustments”), (iii) stock-based compensation expense, (iv) amortization of debt issuance costs and (v) other items, which may include allowances for credit losses on notes and mortgages receivable and direct financing leases, losses on extinguishment of debt, retirement and severance costs, and other items that do not impact the Company’s recurring cash flow and which are not indicative of its core operating performance.

The Company pays particular attention to AFFO which it believes provides the most useful depiction of the core operating performance of its portfolio. By providing AFFO, the Company believes it is presenting information that assists analysts and investors in their assessment of the Company’s core operating performance, as well as the sustainability of its core operating performance with the sustainability of the core operating performance of other real estate companies.

Forward-Looking Statements

Certain statements contained herein may constitute “forward-looking statements” within the meaning of the private securities litigation reform act of 1995. When the words “believes,” “expects,” “plans,” “projects,” “estimates,” “anticipates,” “predicts,” “outlook” and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on management’s current beliefs and assumptions and information currently available to management and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Examples of forward-looking statements include, but are not limited to, those regarding the company’s 2024 AFFO per share guidance, those made by Mr. Constant, statements regarding the recapture and transfer of certain net lease retail properties, statements regarding the ability to obtain appropriate permits and approvals, and statements regarding AFFO as a measure best representing core operating performance and its utility in comparing the sustainability of the company’s core operating performance with the sustainability of the core operating performance of other REITs.

Information concerning factors that could cause the company’s actual results to differ materially from these forward-looking statements can be found elsewhere from this press release, including, without limitation, those statements in the company’s periodic reports filed with the securities and exchange commission. The company undertakes no obligation to publicly release revisions to these forward-looking statements to reflect future events or circumstances or reflect the occurrence of unanticipated events.

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