- Reports Fourth Quarter Portfolio and Capital Markets Activity -

- Introduces 2023 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 2022 business activities. The Company also provided its initial full year 2023 earnings guidance.

2022 Highlights

• Invested approximately $157 million across 52 properties, including approximately $83 million across 36 properties in the fourth quarter.
• As of December 31, 2022, had a committed investment pipeline of more than $100 million for the development and acquisition of 28 convenience stores and car wash properties.
• Entered into forward sale agreements to sell an aggregate of 3.7 million common shares for anticipated gross proceeds of $117.6 million through the Company’s 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.
• As of December 31, 2022, had committed permanent capital totaling more than $180 million, including cash on hand, 1031 sale proceeds, forward sale agreements under the Company’s ATM equity program, and net proceeds from the delayed draw component of the Company’s previously announced unsecured notes issuance.

“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,” stated Christopher J. Constant, Getty’s President & Chief Executive Officer. “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.”

Portfolio Activities

Acquisitions

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.

Development Funding

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 December 31, 2022, 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.

Investment Pipeline

As of December 31, 2022, 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 approximately 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.

Redevelopments

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 December 31, 2022, 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 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.

Capital Markets Activities

Common Equity

In 2022, the Company 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 ATM equity program, including agreements to sell 3.0 million common shares for anticipated gross proceeds of $96.1 million in the fourth quarter.

As of December 31, 2022, no shares subject to forward sale agreements had been settled by the Company.

Credit Facility Amendment

In December 2022, 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 December 31, 2022, the Company had $230 million available under its revolving credit facility.

2023 Guidance

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 the date of this release, 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 $0.4 million 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.

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, 2022, the Company’s portfolio included 1,039 freestanding properties located in 38 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. As previously disclosed, beginning with its results for the quarter and year ended December 31, 2021, the Company updated its definition of AFFO to include adjustments for stock-based compensation and amortization of debt issuance costs. The Company believes that conforming to this market practice for calculating AFFO improves the comparability of this measure of performance to other net lease REITs.

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 2023 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 IN 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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