Getty Realty (GTY)

Josh Dicker SVP, General Counsel and Corporate Secretary
Christopher Constant CEO
Mark Olear COO
Danion Fielding CFO
Nikita Bely JPMorgan
John Massocca Ladenburg Thalmann
Craig Mailman KeyBanc Capital Markets
Call transcript
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Good morning everyone and welcome to Getty Realty’s Earning Conference Call for the Fourth Quarter and Year End 2019. this call is being recorded. Prior to starting the call Josh Dicker, Executive Vice President, General Counsel and Secretary of the company will read the safe harbor statement and provide information about our non-GAAP financial measures.

Please go ahead Mr. Decker.

Josh Dicker

operator. you, Thank to Getty like call. all joining for I fourth thank quarter for Realty's conference and us would you yearend earnings Yesterday XX, its and afternoon released for the quarter the financial year XXXX. results December ended company The Investor website section the available Relations and Form of earnings X-K gettyrealty.com. are in release at our

beliefs the to of on call may These the events are based are forward-looking statements that actual constitute based on Certain could statements. subject course statements. forward-looking materially results made not current and expectations and uncertainties to and management's in in trends from and this are historical information cause described those statements differ

questions Examples performance, statements of management and acquisition in plans the XXXX company's guidance statements materially. to on and company that our could or remarks made We such judgment regarding caution currently future results operations, reflect and including opportunities. may and that known future you the financial based by our include to also us, best their include events factors response redevelopment forward-looking statements and actual or differ in

any the with to a detailed subsequent on materially company's factors other quarterly actual discussion to XX-Q those the cause filed results report filings XX-K for on you differ for today. statements from the XX, year reports refer I or Form other risks, and and XXXX the forward-looking Form in SEC ended made December annual of implied more that could made expressed

be course call. any forward-looking of not duty update undertakes date that company statements, reflect may hereof. no should which our view You undue the made only of as reliance place forward-looking the on to this in statements The

non-GAAP reconciliation our including release discussion those of financial definition our measures adjusted and net operations or to for our of of earnings use Also from please funds measures, to earnings. refer AFFO our a of

Christopher over Chief turn With Constant, call to let that, me our the Executive Officer.

Christopher Constant

year of ended for we'll today's our and call strategic then and the more Operating Officer. me and XXXX our Officer XXXX. to are to fourth morning call in on results. and Danion fourth and XXXX performance, With today welcome Chief an Danion the our Financial the Good financial our objectives quarter Josh. you our Mark to call Josh providing begin Fielding everyone call Thank on and Olear, touch end pass and our Mark detail will I discuss will portfolio by year overview then our quarter Chief discuss

transactions combination quarter for by Getty and individual had portfolio automotive XX the a convenience sectors. and and of gas of active acquisition very in the in million punctuated fourth both a properties $XX.X other

strength core projects. expect In triple net addition, redevelopment portfolio stability make to from during progress leases the to we on quarter display continue our our the long and lease continue our term net and that

more look and growth XXXX is our through team out realizing close selectively to we than As XXXX, including our initiatives value through from ever on assets, unlocking portfolio developments. ahead enhancing focused on operating executing embedded our and acquisitions accretive growth our of each internal

resistant internet investment over shareholders are for includes metropolitan and long automotive in focusing value and other We to the country strategy continue the term. sectors our our largely across the oriented service that which targeted will confident convenience create on gas markets

conservative while and sheet do we Furthermore, will so a maintaining flexible position. balance

XXXX. the and our prior slightly the activity capital in the revenue, compared quarter expectations to earnings, and same results for raising line net periods year. Turning On per our a basis year our quarter, as FFO AFFO which grew for also increased reflects to year-over-year with and our AFFO successful our we share the during was for

redevelopment incur our to which our profitability during year. we weighed certain made program expenses for our the addition, on matters in and environmental In decision the litigation

benefit financial XXXX in acquisitions of the beginning in be will Finally, the our and of timing such felt was beyond. XXXX much that

mentioned properties. I continue to earlier, new As acquire and underwrite we

convenience high yet our XX disciplined total to and was growing We our underwriting and approach million. locations year. proactive year the portfolio. $XX acquired nearly investment For other gas activity our the automotive This quality demonstrates during

investment have the particularly we fact past I acquired the Over XXX that continue years convenience properties three $XXX for established and approximately of relationships our grow we gas to an of proud million. am operators. with

are the that very a business our maintaining in growth proves been and for accretive as have the We growing to success to such source our keys opportunities. time ongoing convenience these and gas one long of relationships ability and

expense are afforded The consolidates convenience regular sites the and to opportunities. share new and taking as gas sector at evolve. the review Chain operators opportunities individual market store industry are of continues to investment we

store to continue the chain vision with operators to for expect share oriented growth coming partner sector years. to in our the We

addition, businesses. car services In we parts washes progress and automotive operators made year several and as sectors a which in our Getty relationships and was and to investments grew XXXX related include for automotive other such established with expanding and

we both year As first transactions Zips our the Jiffy with of U.S. continue expand Car one during largest the franchisees Go well. as an Lube Wash example and the relationship with completed to our and in

size assets to of profiles. our similar and have existing portfolio types in located highly as areas, similar retail are occupy generally are similar locations complementary These they in economic

and who to real with to and tenants gas goal on estate share long commitment businesses. the acquiring of remains focus quality term, and the to convenience Over evolution growth other our and partner automotive high our

XX commenced redevelopments convenience this These program industry during projects brings redevelopment total new well Turning since retail program. included to four as our to projects commencing This gas XXXX. as other users. and completed on to rent our

an have move As time. pipeline projects opportunities additional this completed basis of stream of steady annual through while which also to we on progress development will expect a over maintaining a matures the platform

placement worked private and debt to September to Utilizing of and finance measured equity XXXX the selective combination were the use financial ATM with of XXX flexibility able year growth including that we've create our hard our XX in we gas million our unsecured program.

a and maintaining flexible structure leveraged to on the well and capital We company. being well to a placed as as laddered grow premium are committed conservatively

of Looking portfolio projects. active to as leased committed our standing ahead, to program managing net well assets, portfolio acquisition, to development selective as we our remain an approach

are components continue these strategic we successfully this through and that be result approach shareholder on our This beyond. should critical to execute is we on focused throughout objectives We move in confident able will as XXXX. driving value, additional year

portfolio will investment discuss I Mark that and With to to turn call Olear the over activities. our

Mark Olear

Thank you Chris.

a acquisition terms acquired in to combined convenience When Staying million. the auto XX during in the resources acquisitions, additional Getty's In gas and we and quarter in total gas had made XX properties other productive as categories. which related focus in in on convenience potential XXXX $XX.X grew from $XX.X for rows added and quality assets. earlier opportunities able to we activities other million investment and year, invest transaction and we our fourth were on of underwriting of we activity with our high automotive

For represented $X.X screening and the billion initial gas represented XX% other process. of met and year, XX% the automotive reviewed we approximately opportunities which Convenience of opportunities our total.

highly as similar in of these and the as As portfolio mentioned convenience we in car we With many remain highly the have said types sector. property calls automotive wash portfolio categories to growing our services gas and share committed to attributes. view that complementary prior our we

fourth during historical return $XX.X our for the To the and and anticipate a a fourth add aggregate forward activities, wash review individual our gas In extended weighted we quarter highlights locations properties efforts. quarter of few of of was Going underwriting resource both with activity having remainder five to our acquired for broader eight pricing, investment we the million and a sites average for our growing platform car areas convenience return support the for X.X%. in and of acquired initial line million. transactions in $XX.X XXXX

for Finally, years. acquired term average in was this the the quarter weighted initial lease properties $XX.X

relationships For in by Go the and diversifying new advanced operators of wash Come-and-Go Circle express Irving the the further Car revenue with and into Wash. we U.S., Oil our and of goal fastest-growing entering with K, our Zips relationships car two our year, expanding

including our Washington and major XX the Los metropolitan now XX% comes markets year MSA. base top XX rent national are centered Angeles Our our we transaction of that expanded activity the and around in net further MSAs. annualized and reach Vegas results represented states quarter from plus geographic The DC and Las the remain in

quarter the car are closed sites we on facilities Zips are these and wash of All million. after $XX.X the to ended Additionally, for XX-year acquisition Wash. Go subject XX leases and with properties Car net triple

strongly sourcing our progress investments team as the and continue Overall, underwriting additional year. will are opportunities as we feel produce to of underwriting volume throughout we busy remains the growth we and potential

Moving to redevelopment platform. our

back rentcommenced progress. quarter, into sites initiative. In bringing and in For approximately million we in our projectsto our one the triple redevelopment XXXX return for the project we of are completed both lease invested which net year four fourth inception total the in portfolio completed projects the and XX since this $X.X

Specifically, more in In leased on XX%. we developer invested to generate expect December site retail project project, commenced where we return million than use. a investment rent to this $X.X a and a for regional we on ground of

In the the on projects projects include signed letters letters X recaptured of which advance All tenants which are redevelopment been vacant leases with these and on sign ended intent terms but current signed net active have X to to intent triple of quarter two properties of redevelopment subject the process. are and leases yet through not projects currently from which we properties. XX or continuing leases

redevelopment one we we $X.X at the We years. XX projects to In expect these over our three expect pipeline during projects be have the XXXX. completed and substantial approximately have next rent sites million in commencement all will to several in invested of total

will returns that company $XX.X the million we the estimate of in of capital will these by we and where spending excess generate could side, total invest require funds these incremental Getty the market projects today. investment acquisition in XX to On

be the on XX information redevelopment investor website. more which For our to refer please presentation our on can of pipeline found detailed page

X% continue current program committed with five of redevelopment remain between portfolio We greater redevelopment years and next XX%. optimize opportunities over possibly targeted involving our to XX% than of anticipate unlevered our portfolio yields and the

properties dispositions nine proceeds sold lease $X.X us of during XXXX to or for sold the terms properties their approximately returned agreements. realizing vacant we by Turning million. The were of to tenants

these minimal. net be will a impact financial expect of dispositions We

landlords. the during which exited five previously third-party we we addition leased In properties from year

we have where property selectively the potential. As properties as have and does to no of made we dispose look we is that determination location a the CNG longer ahead redevelopment competitive continue not

net of ended XXX the redevelopment all activity vacant X of properties. active we year result a As with leased properties, X our and sites

Our years overall approximately and occupancy at lease active redevelopments is XX%. remains XX our consistent weighted term average excluding

over With the I call that to turn Danion.

Danion Fielding

Mark. you Thank

mortgage increase receivables our tenant prior year's which total the were our over X.X% reimbursement X.X% and fourth-quarter the the excludes $XX.X grew For on quarter and interest revenues income of million, $XX.X to those an million. rental

Our XXXX that should leases completed to be growth and rent to projects. by income and the be driven our our acquisitions weighted QX continues timing due growth acquisitions the and XXXX. of noted acquisition we from escalators rental the incremental beginning in poor to It of our plus realize year being contributions end quarterly redevelopment in revenue activity to expect these towards of

quarter a to and project During to projected are the our incurred related decision redevelopment fees fourth related proactively of we costs certain settlement. environmental one-time litigation, legal we higher of our where than XXXX, to terminate nearing a

specific refer to more movements yesterday's For please information release. earnings on expense

$XX.X million for per per to year’s or as quarter for share prior the $X.XX was $X.XX compared FFO the share million quarter. $XX.X Our or

share was $XX share as $X.XX quarter million prior or the for compared year's per quarter. to the or per $XX.X $X.XX AFFO for million Our

redevelopment. million XXXX receivables the to mortgage and year X.X% from $XXX.X rental in revenues growth escalators our million in and grew Again, and by tenant which and our income on interest successful acquisitions With of this and both X.X% ended reimbursement net $XXX.X leases our to notes execution stems the total respectively. excludes

increased. For which variable. was expenses highly The expense driver and continues other increases the property fees increases be line in costs the and year ended for XXXX primary to item our included professional in redevelopment cost operating environmental our

the or $X.XX FFO was $XX.X Our as to share share for $XX.X compared prior $X.XX per year year. million or the million per for

or as share $XX.X per Our was the or $X.XX AFFO $XX.X to for share million the million year. per prior $X.XX for year compared

activities. million and credit We long-term with Turning which to the XXX our XXX market XXXX balance million of XX under our sheet capital includes ended fixed-rate of agreement million debt. borrowings and

is remains The is maturity XX% our of earliest weighted cost X.X our XXXX. average borrowing debt debt years X.X%. Our and is maturity our and average rate weighted of fixed debt

X.X to is Our debt conservative capitalization our stands at total times. is Our to EBITDA to XX% value commonly net XX%, debt total debt and asset

during programs quarter the In addition, issued our market for and $XX.XX we share. $X.X average capital per at of an utilized at equity million price

of ATM we per program For million $XX.X average price our through share. $XX.XX at an the raised year

the for ended ended spending environmental XXXX quarter at company's the and $X.X $XX.X million, Our mediation and year year year environmental million respectively. liability $X.X but quarter the million down net million was XX, approximately and the December $X.X

XXXX introducing our a range of $X.XX Finally, we per AFFO per guidance are share $X.XX share. to at

assume redevelopment guidance of capital all as leasing acquisitions will includes XXXX, not but does of future does any for continue activities Our or transaction markets disposition activity. execute to this activity and the that date our expectations reflect on our we potential although it remainder

specific we we rent guidance will forego that our properties our The expectation impact this factors which include redevelopment. for year when recapture

and dilution activities borrowings associated our in in for pursuing which deals increase that cost not expenses company’s completed. ultimately our The of acquisitions we additional active of capital remain could and result that will will expectation XXXX year in XXXX. raising expectation with the full Our redevelopments impact

With turn to that the I call back will Chris.

Christopher Constant

concludes remarks. That you. our prepared Thank

So open to the ask questions. let the me operator for call


Thank you. Thank Instructions] you. [Operator

Our first with Nikita JPMorgan. your proceed Please from with question question. Bely comes

Nikita Bely

guidance costs Getty? Good environmental in morning for your in guys. embedded What's XXXX

Christopher Constant

that Our could materially of sort $X.XX say year-over-year to any overall simply provide we XXXX. AFFO additional than from I breakdown to don't guidance anything $X.XX other change don't we expect is would

Nikita Bely

doing it you little you split at flow? percentage was so deal terms right split maybe Do And on bit plan are of be a looking of just will of like split XXXX c-stores that more pipelines between and you auto maintain guys XX/XX. the mentioned total the your you in the kind order or of to sounds now,

Christopher Constant


I other think gas for planning feel we're we're our the continuing acting convenience on to automotive and where view is the as that. and underwrite right as on we opportunities opportunities that's us well opportunity

are what think not growing number investing underwriting and of either are have any really our have we shift split we aspects both there's year we we targeting specific or areas target class. we but comfortable So given really have and two comfortable we is specific at asset any for what that but portfolio in no that

Nikita Bely


the has is give acquisition came understanding at XQ is you us the because quarters of why of factorial pricing? the through curious and volume, that little past deals year-to-date. you is up it recent timing the picked and it of type Just obviously a and Can that or it all? since looking bit just Is of were

Mark Olear

Olear. It's timing effective Mark the transactions more progressed Yes. through of the is they This just as XXXX.

Nikita Bely

deal So to future your basically XQ the what they're saying is, we from shouldn't flow we were make assumption? extrapolate XQ if into an and

Mark Olear

mean Yes, I our historically been has transaction lumpier. activity

are consistent be year think and it's recurring any to make I quarter. time every significant given level hope on amount we a going more comment but any not We over to underwriting on we're

Nikita Bely

question last list, watch and comments on tenant right All on credit that? any

Mark Olear

have of really our worthy We our property do and a to here call. coverages the process we've note assets. that the a nothing also the watch health list about in review bring which to spoken at past of people maintain not on We there's tenants I've to the that's to monitor individual up our only but specific

Nikita Bely

very you Thank Okay. much.


Thank you.

from comes Please John question questions. next Massocca with Ladenburg proceed with Our your Thalmann.

John Massocca

Good morning.

Christopher Constant

Hi John.

John Massocca

transactions? end wondering the So and transactions provide quarter during I kind little on maybe and subsequent the wash you a c-store how of car quarter deals the was the source both color could you

Christopher Constant

off different. each a first little Well, Sure. every is transaction

and at afford much time our So and let deals. some faster opportunity to specifically, of the that history answer moves maybe more sector more because the and velocity we Mark I’ll CNG the look within have but along because a some of routinely more relationships takes

we see sectors active presence other experience more same get have We [indiscernible]. more sourcing but accelerate and I the to in in that starting market think a automotive and we're of are as in very trend that

Mark Olear

what regarding the we've sourcing, just past. doing it's Just a to commitment continued in been

doing tenant sponsored new sectors. in few deals, brokered We with and that. It's to the It's last are growing we've the outreach sourcing development. growing trade some existing various that staying on with for just been opportunities the just we or existing relationships resources top that business standard of to our are dedicated that base our research marketed widely up shows, growing internal following tenants years deals direct commitment to

John Massocca

Okay. acquisition kind transactions implied that I many how just XQ, was of mean, which activity? and in XQ

Christopher Constant

one Well, and in leaseback the of fourth non-individual beginning and quarter, it sale transaction. transactions portfolio one was portfolio individual in and the sale year it's leaseback this one

John Massocca

kind in Okay, that? development then pipeline. from your more one that that prepared the color deal sense. you removed makes Can a guys maybe was mentioned you on And provide of little remarks

Christopher Constant


time through program, into to There of efforts development permits the are a precedes pipeline. the development achieve the to program will required and portfolio make the the we those of not that and development strategic the terminate or the on development and of process. rest focus decision deals entitlements As entire put the

So there to are the decisions deals we on. make that at just risk terminate activity

John Massocca

progress terminated or original kind for when kind kind find And need do being of it to go of that back asset is alternative property? you mean did C-store an that the of solution to an

Christopher Constant

each strategic a for net to vacant on the if property and on it's it different it's best work a portfolio plan in a there. will lease likely we property level. property If It's highest stay continue

in is, buckets on it it So of and from currently where comes where portfolio. the really depends various our

answer one-size-fits-all So It's right it's kind not there. decision the for a of property. each

John Massocca

it's the to placement the on of kind maybe then where I but are still sheet, far going given rates interest $XXX that’s decently today? to XXXX note, there is million potential And prepay private particularly know in out balance Okay. any mature

Danion Fielding

it's provisions those there. all notes On in here. they whole Danion in John make

year related we us later from to our of that the hear costs this so analysis you'll mind is probably obviously something, and at on progress the to do are where So year top that that as we look to is during have issuance

John Massocca

Okay. from Thank That's you, me. very it much.


you. Thank

Our Markets. comes KeyBanc Mailman proceed question. next question with Please from your Capital Craig with

Craig Mailman

last something we guys of the know in in car bit but you a XQ I bit tougher. Could so more XQ washes guys guys. made has to far? a or pricing you here about deals get Hey, year little you more just what talk interested competitive a kind was and talked were little bit

Christopher Constant

Well, I driven. that's be competitive. to I think some the relationship think of market And continues

dynamic. in I sure really real-estate competing I'm mentioned multiple think both of in terms and think some anything MSAs. we overall the the that competitive have we're where of But changed across be I future. I targeting of parties don’t relationships think is various has will all companies And in the institutional

Craig Mailman

What yield got that the the was on acquisitions? guys you XXXX

Christopher Constant

Yes, that the been we've yields' Craig. similar very about, talking where to

the where at So, to we've is we're of market always kind is high really sixes said looking mid-sevens.

three seven half. a deviated six think to and So, is that and nothing quarters overall. from really And

Craig Mailman

targets? deals, forma how And then, deploy kind pro XQ leveraged within your can capital much and the think you you of remain do

Christopher Constant

that pace I certainly an the that, ability at to some Well, maybe at kind same choose think our if issue like average years, could product capacity to but ATM. grow ample depends use of to last that of activity on we've you have we line. And of the take look on continue capacity of rate. our over couple we to ample remaining got under that If feel the we

to that. the is to ATM obviously, add And would price ability only under be where and given wherever the issue stock might the

Craig Mailman

you. Thank great. Okay,

Christopher Constant

from from our to no, there's maintain where be Be there has historical mean just years. no to leverage materially clear. plan leverage real We deviate that. to over there's I a the and deviate been last just no -- for plan profile a is us several rough

Craig Mailman

if you before how to you Right. just deploy a or need million it comfortable about equity out the is XXX would get guys like figure substantial trying -- door before No, do to what a would portfolio XXX need putting came at you I was million much equity? raises, feel a you could the

Christopher Constant


the north deal equity our somewhat program the a need do of I large mitigate do available which would portfolio. ATM under And we got larger obviously to were think well a we've if revolver. go have million there XXX

of equity look deals. capital -- again So, at of done to we grow at We but of all we've look business. kind lager the look our as we sources

think there tool right I that's a in -- there. So of our transaction each is minds, out for type

Craig Mailman

thanks. Great,


we further time no this At you. questions. have Thank

to closure So, back return remarks. Constant like I'd for or further Mr. any to

Christopher Constant

the for end on everybody get at XXXX quarter Well, of call first off, of end back the everybody forward Getty first look with in thanks the phone appreciate at your the the today. We being interest you April. on Again Realty. to


concludes now our conference Thank you. call. This

You time. this at may disconnect