Getty Realty (US:GTY)2025-10-23 20:30Property Portfolio and Investment - As of September 30, 2025, the company owned a portfolio of 1,160 properties, including 1,130 owned and 30 leased from third-party landlords[155]. - The company has a weighted average remaining lease term of 9.9 years, with 1,156 properties leased under triple-net leases[157]. - During the nine months ended September 30, 2025, the company invested $135.7 million across 61 properties, including 27 drive-thru quick service restaurants and nine auto service centers[163]. - The company completed 34 redevelopment projects since 2015, enhancing property values through redevelopment[165]. - The investment strategy includes pursuing sale leaseback transactions and financing opportunities to diversify the portfolio[162]. - The company has two properties under active redevelopment and others in feasibility planning stages[166]. Financial Performance - Net earnings for Q3 2025 were $23,348,000, an increase of 52.1% compared to $15,335,000 in Q3 2024[173]. - Funds from operations (FFO) for Q3 2025 were $38,697,000, up 23.2% from $31,441,000 in Q3 2024[173]. - Adjusted funds from operations (AFFO) for Q3 2025 were $36,102,000, representing a 8.8% increase from $33,161,000 in Q3 2024[173]. - Revenues from rental properties for Q3 2025 totaled $55,159,000, a rise of 9.2% from $50,494,000 in Q3 2024[175]. - Revenues from rental properties for the nine months ended September 30, 2025, were $159,589,000, an increase of 9% from $146,430,000 in the same period of 2024[187]. Costs and Expenses - Total property costs decreased to $2,406,000 in Q3 2025, down 38.7% from $3,927,000 in Q3 2024[179]. - Interest expense increased to $11,450,000 in Q3 2025, reflecting a rise of 13.9% from $10,052,000 in Q3 2024[174]. - Impairments for the nine months ended September 30, 2025, were $2,271,000, a slight decrease from $2,467,000 in the same period of 2024[187]. - The company experienced a decrease in tenant reimbursement income by $1,231,000 due to changes in tenant payment structures for real estate taxes[177]. - Rental income for the nine months ended September 30, 2025, was $152.3 million, a decrease of $15.2 million (9.9%) compared to $137.1 million in 2024[188]. - Total revenues from rental properties decreased by $13.2 million (8.3%) to $146.4 million in 2025 from $159.6 million in 2024[188]. - Tenant reimbursement income fell by $4.5 million (107.8%) to $8.7 million in 2025 from $4.2 million in 2024, primarily due to a decrease in reimbursable real estate taxes[190]. - Property operating expenses decreased by $4.8 million (43.0%) to $6.4 million in 2025 from $11.2 million in 2024[192]. Cash Flow and Financing - Net cash flow provided by operating activities was $93.9 million in 2025, a slight decrease of $0.4 million (0.4%) from $94.3 million in 2024[203]. - Net cash flow used in investing activities decreased by $5.3 million (4.2%) to $120.7 million in 2025 from $126.0 million in 2024[205]. - The company had $260.0 million available under its Credit Facility as of September 30, 2025[202]. - The company anticipates generating approximately $113.1 million in gross proceeds from 3.7 million shares of common stock subject to forward sales agreements[202]. - Interest expense increased due to higher average borrowings and interest rates during the nine months ended September 30, 2025[199]. - The company issued $20.0 million of 3.45% Series M Guaranteed Senior Notes due February 22, 2032 and $20.0 million of 3.65% Series O Guaranteed Senior Notes due January 20, 2033 to MassMutual[217]. - As of September 30, 2025, total debt outstanding is $940.0 million, with a net total debt of $934.594 million after unamortized debt issuance costs[220]. - Regular quarterly dividends paid to stockholders for the nine months ended September 30, 2025 were $80.8 million, or $1.41 per share[232]. - The company completed a follow-on public offering of 4.0 million shares of common stock, realizing net proceeds of $65.3 million after fees and expenses[221]. - The company established an at-the-market equity offering program with an aggregate sales price of up to $350.0 million[222]. - The anticipated gross proceeds from remaining forward sales agreements are approximately $51.9 million[221]. - The company has $190.0 million under a Credit Facility maturing in January 2029 with an interest rate of 6.04%[220]. - The Series D-E Notes due June 2028 total $100.0 million with an interest rate of 5.47%[220]. - The company expects to settle outstanding forward sales agreements typically within 12 months of the respective agreement dates[228]. Environmental Liabilities - The company is subject to environmental liabilities and must accrue for these liabilities based on tenant compliance and financial capability[237]. - As of September 30, 2025, the company removed $4.1 million of unknown reserve liabilities, totaling $28.3 million removed since the beginning of the Lookback Periods[242]. - The company maintains $7.7 million of unknown reserve liabilities for certain properties where Lookback Periods have expired, reflecting ongoing risks associated with future UST removals[243]. - Total accrued environmental remediation obligations as of September 30, 2025, amounted to $16.5 million, consisting of $8.8 million of known reserve liabilities and $7.7 million of unknown reserve liabilities[245]. - The company recorded net accretion expenses of $0.2 million and $0.3 million for the nine months ended September 30, 2025 and 2024, respectively[246]. - Capitalized asset retirement costs were $29.5 million as of September 30, 2025, down from $33.2 million as of December 31, 2024[248]. - The company has a $25.0 million pollution legal liability insurance policy in place for properties with the highest risk of environmental liabilities[250]. Interest Rate Impact - An increase in market interest rates of 1.0% for 2025 would decrease the company's net income and cash flows by approximately $0.3 million[255]. - The effective interest rate for borrowings under the Credit Facility was 6.13% as of September 30, 2025, after accounting for interest rate swaps[254]. - The company had $190.0 million outstanding under the Credit Facility as of September 30, 2025, with $150.0 million subject to interest rate swaps[254]. - Temporary cash investments are currently held in an overnight bank time deposit with JPMorgan Chase Bank, N.A., which may exceed federally insurable limits[256].