Getty Realty (US:GTY)2025-02-13 21:46Property Portfolio - As of December 31, 2024, Getty Realty Corp. owned 1,085 properties and leased 33 properties, totaling 1,118 properties across 42 states and Washington, D.C.[18] - A significant portion of properties is concentrated in the Northeast and Mid-Atlantic regions, increasing risk of default on rent payments due to adverse regional conditions[85]. - New York and Massachusetts account for 18.5% and 9.2% of the total properties, respectively, with Texas contributing 8.9%[153]. - As of December 31, 2024, the company's portfolio included 1,118 properties, with 1,085 owned and 33 leased from third-party landlords[191]. Investment Activities - During the year ended December 31, 2024, Getty Realty invested $209.0 million in convenience and automotive retail properties, acquiring 31 express tunnel car washes, 17 convenience stores, 19 automotive service centers, and four drive-thru quick service restaurants[22]. - The company is pursuing redevelopment opportunities, which may create additional risks[66]. - The company expects to acquire new properties, which may create risks related to unknown deficiencies affecting value or revenue potential[115]. - The company’s investment strategy includes pursuing sale leaseback transactions and providing forward commitments for new-to-industry construction[198]. Financial Performance - Funds from Operations (FFO) for the year ended December 31, 2024, increased to $123,976,000 from $106,065,000 in 2023, representing a growth of 16.8%[213]. - Adjusted Funds from Operations (AFFO) rose to $130,793,000 in 2024, compared to $115,808,000 in 2023, marking an increase of 12.9%[213]. - Total revenues from rental properties for 2024 were $198,669,000, up from $180,488,000 in 2023, reflecting an increase of 10.1%[215]. - Rental income specifically increased to $186,124,000 in 2024, compared to $162,978,000 in 2023, a rise of 13.5%[216]. - The company reported net earnings of $71,064,000 for 2024, compared to $60,151,000 in 2023, an increase of 18.3%[213]. - The basic earnings per share increased to $1.26 in 2024 from $1.16 in 2023, a growth of 8.6%[213]. Capital Structure - The company raised $164.8 million in gross equity proceeds through the sale of 5.4 million common shares, including $121.2 million from a follow-on public offering and $43.6 million through its ATM Program[25]. - Getty Realty completed the private placement of $125.0 million in new senior unsecured notes, which includes $50.0 million of 5.52% senior notes due September 2029 and $75.0 million of 5.70% senior notes due February 2032[26]. - The principal sources of liquidity include cash flows from operations and proceeds from the offering of new debt or equity securities[109]. - The company relies on external sources of capital to maintain its REIT status and must distribute at least 90% of its net taxable income to stockholders[108]. Environmental and Regulatory Risks - A substantial portion of properties are convenience stores and gasoline stations, which may contain underground storage tanks (USTs) for hazardous substances, increasing environmental risk[75]. - The company is subject to various risks, including environmental regulations and competition in the real estate market[68]. - The company faces various lawsuits related to environmental matters, which could result in material losses affecting financial condition and stock price[82]. - Tenants are contractually responsible for compliance with environmental laws and remediation of contamination, but the company retains some responsibility for known contamination at lease commencement[77]. Operational Efficiency - The weighted average remaining lease term for properties leased under triple-net leases was 10.2 years as of December 31, 2024[29]. - The average remaining lease term for properties leased from third parties is approximately 7.9 years[154]. - Operating expenses for property costs decreased significantly from $23,789,000 in 2023 to $14,859,000 in 2024, a reduction of 37.8%[215]. - The company successfully decreased electric and natural gas consumption year-over-year at its corporate headquarters[51]. Cybersecurity - The company has developed a comprehensive cybersecurity risk management program, including an incident response plan and annual training for employees[137]. - The Audit Committee oversees the cybersecurity risk management program and receives quarterly reports on risks and incidents[144]. Market and Economic Risks - A significant portion of the company's revenues depends on the petroleum marketing industry, which is subject to economic fluctuations[71]. - Inflation could negatively affect financial condition and results of operations, particularly if rent increases do not keep pace with inflation[92]. - The company may not generate sufficient cash flow for dividends or debt service, impacting financial stability[87]. Management and Governance - The loss of key management personnel could have a material adverse effect on the company's business and stock price[102]. - The company has identified several critical accounting policies that require subjective judgments, which could lead to significant adjustments in financial statements[98].