Toggle SGML Header (+)


Section 1: 8-K (GTY 8-K 2Q19 INVESTOR PRESENTATION)

gty-8k_20190724.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 24, 2019

 

GETTY REALTY CORP.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

 

 

Maryland

001-13777

11-3412575

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

 

 

 

Two Jericho Plaza, Suite 110,

Jericho, New York

11753-1681

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (516) 478-5400

Not Applicable

Former Name or Former Address, if Changed Since Last Report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock

 

GTY

 

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

 


Item 7.01.

Regulation FD Disclosure.

Getty Realty Corp. (the “Company”) is furnishing a corporate presentation attached as Exhibit 99.1 to this report, which it may use from time to time in conversations with investors and analysts beginning July 24, 2019. A copy of the presentation will be available on the Company’s website.

A copy of the presentation is attached to this report as Exhibit 99.1 and is incorporated by reference herein.

The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), except as expressly set forth in such filing

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits:

 

 

 

 

Exhibit

Number

 

 

Description

 

 

 

 

99.1

 

Getty Realty Corp. Investor Presentation Slides*.

*Exhibit 99.1 hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall such Exhibit be incorporated by reference into any registration statement or other document pursuant to the Securities Act, except as expressly set forth in such filing.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

 

 

GETTY REALTY CORP.

 

 

 

 

Date: July 24, 2019

 

By:

/s/ Danion Fielding

 

 

 

Danion Fielding

 

 

 

Vice President, Chief

 

 

 

Financial Officer and Treasurer

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1 2Q 2019 INVESTOR PRESENTATION)

gty-ex991_44.pptx.htm

Slide 0

Investor Presentation Exhibit 99.1

Slide 1

Safe Harbor Statement 1 Certain statements in this Presentation constitute “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are statements that relate to management’s expectations or beliefs, future plans and strategies, future financial performance and similar expressions concerning matters that are not historical facts. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential.” Such forward-looking statements reflect current views with respect to the matters referred to and are based on certain assumptions and involve known and unknown risks, uncertainties and other important factors, many of which are beyond the Company’s control, that could cause the actual results, performance, or achievements of the Company to differ materially from any future results, performance, or achievement implied by such forward-looking statements. While forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, they are not guarantees of future performance. Except as required under the federal securities laws and the rules and regulations of the SEC, the Company does not undertake any obligation to release publicly any revisions to the forward-looking statements to reflect events or circumstances after the date of this Presentation or to reflect the occurrence of unanticipated events. Examples of forward-looking statements in this Presentation include, but are not limited to, statement(s) relating to (a) the Company’s Portfolio, Net Lease Portfolio, Long-Term Leases and Rent Escalators, Tenant Base, Growth Platform, Market Opportunity, and Redevelopment Projects, (b) Industry Fundamentals, (c) the Company’s Balance Sheet, Dividend Growth and Investment Highlights; and (d) the Company’s expected quarterly dividends and growth. Other unknown or unpredictable factors could also have material adverse effects on our business, financial condition, liquidity, results of operations and prospects. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and the Company’s other filings with the SEC, including, in particular, the section entitled “Risk Factors” contained therein. In light of these risks, uncertainties, assumptions and factors, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Presentation will, in fact, transpire. Moreover, because the Company operates in a very competitive and rapidly changing environment, new risks are likely to emerge from time to time. Given these risks and uncertainties, potential investors are cautioned not to place undue reliance on these forward-looking statements as a prediction of future results. Unless otherwise noted in this Presentation, all reported financial data is presented as of the period ended June 30, 2019, and all portfolio data is as of June 30, 2019. This Presentation presents certain non-GAAP financial measures, including the Company’s Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”). Please refer to the Appendix of this Presentation for complete reconciliations between each of these non-GAAP financial measures to the most directly comparable GAAP financial measure. The Company believes that FFO and AFFO are helpful to investors in measuring its 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 Company’s core operating performance. The Company pays particular attention to AFFO, a supplemental non-GAAP performance measure, as the Company believes it best represents its core operating performance and allows analysts and investors to better assess the Company’s core operating performance. Further, the Company believes that AFFO is useful in comparing the sustainability of the Company’s core operating performance with the sustainability of the core operating performance of other real estate companies. The information contained herein has been prepared from public and non-public sources believed to be reliable. However, the Company has not independently verified certain of the information contained herein, and does not make any representation or warranty as to the accuracy or completeness of the information contained in this Presentation.

Slide 2

Getty Realty at a Glance Net Lease REIT Specializing in Convenience Store & Gasoline Station Properties ⁽¹⁾ 1 Track Record of Partnering with Tenants in a Healthy and Consolidating Retail Sector Multiple Growth Channels Flexible / Low Leverage Balance Sheet Supports Growth $1.7bn Enterprise Value GTY NYSE Ticker Symbol 4.6% Dividend Yield 2 3 4 Established & High Growth Markets 27 Unitary / 105 Individual Leases Alternative Use Opportunities 1.6% Rent Escalations⁽²⁾ Organic 234 Properties / $549 million⁽³⁾ Acquisitions 10 Completed/13 In-Progress⁽⁴⁾ Redevelopments 4.3x Net Debt to EBITDA BBB- / Stable Fitch Rated 3.3x Fixed Charge Coverage Market data as of April 30, 2019. Please see page seven for additional information. Acquisitions completed 2015 to 2019. Please see page 14 for additional information.

Slide 3

National Net Lease Portfolio 933 Properties Across 31 States 9%+ $32mm Mortgage Portfolio $120mm ABR ⁽¹⁾ 99% Occupancy ⁽³⁾ 7% AFFO / Share CAGR ⁽²⁾ 61% ABR in Top 25 MSAs ~10 years Weighted Avg. Lease Term ⁽⁴⁾ 2.2x Unit Level Rent Coverage ⁽⁴⁾ 73% On Corner Locations Based on GAAP annualized base rent (ABR) as of June 30, 2019. Adjusted Fund From Operations Per Share Compound Annual Growth Rate is 2015 to 2018. Occupancy calculation excludes seven properties classified as redevelopment. Please see page seven for additional information.

Slide 4

Convenience Store and Gasoline Station Properties Stable, yet growing sector Institutional quality tenant base Urban Infill Markets Densely populated areas High barriers to entry Limited new development Prime locations and corners Mature transportation grid Convenient ingress and egress High Growth Markets Favorable population demographics 2017 – 2019 year to date acquisition activity accelerated entry into attractive markets High daily traffic counts Alternative Use Opportunities Retail, banking, service, restaurant Assemblage, redevelopment, repositioning Garland, TX Chula Vista, CA New Paltz, NY Well-Positioned Net Lease Portfolio Attractive Portfolio that is Difficult to Replicate

Slide 5

Diversified Tenant Base with High Quality Brands Getty’s Top 15 Tenants (1) Nationally Recognized Fuel Brands (2) Based on GAAP annualized base rent (ABR) as of June 30, 2019. All trademarks, service marks, trade names, brands and logos are the property of their respective owners. Rank Market % of ABR Public Company 1 Global 17% ü 2 United Oil 15% 3 Chestnut Petroleum 9% 4 GPM Investments 9% 5 Empire Petroleum 8% 6 Nouria Energy 7% 7 Applegreen 7% ü 8 Cross America 6% ü Rank Market % of ABR Public Company 9 Capitol Petroleum 4% 10 BP 2% ü 11 Aloha 2% ü 12 Division St. 2% 13 Reid 1% 14 Circle K 1% ü 15 7-Eleven 1% ü Other Tenants 9%

Slide 6

Rank Market % of ABR Top 25 Market (2) 9 Dallas 2% ü 10 Hartford, CT 2% 11 Honolulu 2% 12 Manchester, NH 2% 13 Riverside, CA 2% ü 14 Richmond, VA 2% 15 Seattle 1% ü Other 28% Located in High Density Metropolitan Markets Based on cash annualized base rent (ABR), as of June 30, 2019. Core Based Statistical Areas as defined by United States Office of Management and Budget. Getty’s Top 15 Markets (1) (2) Rank Market % of ABR Top 25 Market (2) 1 New York 26% ü 2 Washington D.C. 9% ü 3 Boston 6% ü 4 Columbia, SC 5% 5 Denver 4% ü 6 Worcester, MA 3% 7 Los Angeles 3% ü 8 Phoenix 3% ü Top 25 Metropolitan Markets Represent 61% of ABR

Slide 7

Stable Long-Term Lease Structure Sustainable cash flows supported by long-term triple-net leases Typical annual rent escalations of 1.0% - 2.0% and rent coverage ratios of 1.5x – 2.0x Unitary lease portfolio weighted average rent escalations of 1.6% and rental coverage of 2.2x ⁽¹⁾ Tenant credit visibility via site and tenant financial statements Majority of triple-net leases have 15-year initial terms Leases are typically 15 or 20 years with extension options Weighted average current lease term of approximately 10 years 49.4% of contractual annualized base rent attributable to leases with initial terms expiring in 2029 or beyond Stable Long-Term Leases with Rent Escalators Unitary lease portfolio rental coverage is calculated one quarter in arrears on a trailing twelve-month basis at quarter end based on site level financial information where provided by tenants. Getty does not independently verify financial information provided by its tenants.

Slide 8

Quality Assets With Key Differentiation Includes branded QSRs and convenience stores with unbranded fresh food offerings. Includes non-gas automotive-related retailers, free-standing QSRs and regional retailers. Portfolio of well-positioned properties at prominent corner locations Key Attributes Driving Site Traffic 75% of properties have a convenience store 10% of sites have branded QSRs, including several nationally recognized retail brands 73% of properties located at corner locations 13% of properties include car washes Asset Highlights Portfolio Detail (933 Properties) Nationally Branded Quick Service Restaurants

Slide 9

Optimizing Portfolio to Meet Industry Demand Property Attributes of Recently Acquired Assets Reflect Evolving Consumer Preferences Legacy Assets1 (502 properties) Lot Size Acquired Assets1 (431 properties) Total Portfolio (933 properties) Building Size 0.5 – 1.0 acres < 0.5 acres 1.0 – 1.5 acres > 1.5 acres 1,501 – 3,000 sf < 1,500 sf > 3,000 sf Legacy assets are those properties acquired prior to 2009. Acquired assets refers to those properties acquired since 2009; excludes acquisitions of leasehold positions in legacy assets.

Slide 10

Number of convenience stores in service has remained steady over the last 10 years (1) 153,237 properties, 80% selling fuel, represents 34% of all retail outlets Stable Operator Performance (1) Sales and gross profits have grown at 3.7% and 5.3% CAGR since 2004, respectively In-store sales grew for the 16th consecutive year to a record level of $242 billion, led by strong demand for foodservice products Foodservice, with average gross margins of 55%, accounted for 23% of inside sales in 2018 Consumers embracing convenience stores Average store with fuel has around 1,100 customer visits per day (1) ~50% of in-store sales are generated by customers not buying fuel (2) Convenience Stores Dominate Retail Landscape Convenience Store Margins (1) (3) Convenience Store Gross Profit ($bn) (1) Source: National Association of Convenience Stores. Source: Morgan Stanley Research. Source: RBC Fuel Margins Report. Average in-store margin of Couche-Tard, Casey's General Store & CST Brands used to represent broader market trends.

Slide 11

Getty Growth Platform Embedded growth derived from long-term triple-net leases 1% to 2% contractual annual rent increases Leasing activity Leased one property in 2018 and 2019 YTD, respectively Asset recycling Sold 10 properties ($7 million) and six properties ($1 million) in 2018 and 2019 YTD, respectively Unlocking embedded value in existing portfolio Existing portfolio of urban infill properties provides a significant pipeline of high-quality projects Five-year plan to redevelop 5% to 10% of properties Targeting 10%+ unlevered yields Diversifies roster of retail tenants Improves tenant credit quality and coverage ratios Total addressable market size estimated at $75 billion to $100 billion (1) Highly fragmented market with current REIT ownership of chain stores of ~5% Significant pipeline of actionable opportunities Acquiring both single asset and portfolios Sale/leaseback structure attractive for smaller, capital constrained sellers Organic Acquisitions Redevelopment Company estimate based on National Association of Convenience Stores data.

Slide 12

$68 38 $123 49 $17 6 $52 30 Acquisitions Ten-Year Track Record Acquired 410 properties for $849 million Added 12 new states and 15 new tenants 2019 Acquisitions Acquired nine properties for $30 million Average cash return of 7.20% and average initial remaining lease term of 13 years Added one new state (AL) 2018 Acquisitions Acquired 41 properties for $78 million Average cash return of 7.26% and average initial remaining lease term of 14 years Added two new states (IL and OK) 2017 Acquisitions Acquired 103 properties for $214 million Average cash return of 7.31% and average initial remaining lease term of 14 years Added five new states (AZ, GA, LA, NM and SC) Overview Portfolio Transactions 2009 2018 2017 2013 2015 2011 Number of Properties Transaction Value ($mm) $111 59 $87 66 $73 36 $215 77 $49 36

Slide 13

Portfolio Acquisition Case Studies Purchase price – $68 million Closing date – October 3, 2017 Properties – 33 convenience stores and five Burger Kings Lot & building size – 1.7 acres and 2,900 sq. ft. Geography – Columbia, SC Tenant – Largest convenience and gasoline station operator in the Republic of Ireland Purchase price – $52 million Closing date – April 17, 2018 Properties – 30 convenience store and gasoline station properties Lot & building size – 0.8 acres and 2,800 sq. ft. Geography – Arkansas, Louisiana, Oklahoma and Texas Tenant – Largest privately-owned convenience store operator with approximately 1,400 stores in 21 states across the United States Applegreen PLC – 2017 GPM Investments, LLC – 2018 Texarkana, TX Columbia, SC

Slide 14

Market Asset Type Anticipated Total Investment (1) Investment As Of 6/30/19 Expected Completion (2) Active Projects Bronx, NY Retail 372 265 2019 Manchester, CT Convenience & Gas 150 74 2019 Bronx, NY Quick Service Restaurant 1,540 849 2019 Brooklyn, NY Retail 229 193 2019 Philadelphia, PA Retail 315 134 2020 Brooklyn, NY Retail 242 176 2020 Freehold, NJ Fast Casual Restaurant 1,444 596 2021 Active Projects Total 4,291 2,286 Pipeline Six sites Various 4,285 444 2020 - 2021 Total $8,576 $2,730 Redevelopment Projects Invested $10 million in 10 completed redevelopments with aggregate yield of 14% In-Progress Redevelopment Activity ($ thousands) Anticipated total investment is original budget and includes development costs, termination/recapture fees and leasing commissions. No assurance can be given that any of these redevelopment projects will be completed in the time expected, or at all. At completion redevelopment projects are reclassified as operating real estate on Getty’s balance sheet. Completed Redevelopments

Slide 15

Redevelopment Case Studies Property type – Convenience and Gas Development type – Ground lease Lot & building size – 3.0 acres and 6,520 sq. ft. Total investment – $0.3 million Incremental yield – 67% Rent commencement – January 26, 2019 Tenant – Sheetz is one of America's fastest-growing convenience store chains with over 580 store locations Property type – Urgent Care Development type – Build to suit Lot & building size – 0.7 acres and 5,099 sq. ft. Total investment – $2.1 million Incremental yield – 10% Rent commencement – November 6, 2018 Tenant – ConvenientMD operates a network of 15 urgent care facilities across New England Sheetz, Inc. ConvenientMD Falmouth, MA Lancaster, PA

Slide 16

Income Growth, Scalable G&A G&A ($ thousands) AFFO ($ thousands) (1) Total Revenue ($ thousands) FFO ($ thousands) (1) FFO and AFFO are non-GAAP measures. For a description of how Getty calculates FFO and AFFO, see the earnings release issued by the Company on July 24, 2019. For a reconciliation of Net Earnings to FFO and AFFO please see Appendix.

Slide 17

Strong Balance Sheet Credit Agreement Revolving Credit Facility $250 million Matures 2022 with 1-year option, subject to certain conditions LIBOR +150 to 230 bps Bank Term Loan $50 million Matures 2023 LIBOR +145 to 225 bps Senior Unsecured Notes Series A: 6.0% $100 million matures 2021 Series B: 5.35% $75 million matures 2023 Series C: 4.75% $50 million matures 2025 Series D&E: 5.47% $100 million matures 2028 $125 million ATM Equity Issuance Program Refreshed program in March 2018 Total equity issuance since 2016 $176 million of equity issuance under ATM programs and 2017 follow-on offering Credit Statistics Maturity Schedule ($ millions) Debt to Total Capitalization 27% Debt to Total Asset Value (1) 36% Net Debt to EBITDA (1) 4.3x Fixed Charge Coverage (1) 3.3x Weighted Average Interest Rate 5.1% Weighted Average Maturity 4.6 yrs Variable Rate vs. Fixed Rate 26% / 74% As defined in the Company’s loan agreements.

Slide 18

Quarterly Dividends Declared per Share (1) Consistent Dividend Growth Excludes special dividend of $0.22 per share in 4Q15.

Slide 19

Key Takeaways 1 National Net Lease Portfolio of Convenience Stores and Gasoline Stations 2 Well Located Retail Real Estate in both Established and High Growth Markets 3 Convenience and Gas Sector Continues to Grow and Remains One of the Healthiest Segments of the Retail Landscape 4 Cash Flow and Dividends Supported by Long-Term Triple-Net Leases 5 Proven Growth Track Record of Completing Acquisitions and Redevelopment Projects 6 Strong Balance Sheet to Support Future Growth

Slide 20

Appendices

Slide 21

Reconciliation of Net Earnings to FFO and AFFO FFO and AFFO are non-GAAP measures. For a description of how Getty calculates FFO and AFFO, see the earnings release issued by the Company on July 24, 2019.

(Back To Top)