Financial Data and Key Metrics Changes - In Q2 2025, the company generated distributable earnings of $30.9 million or $0.23 per share, achieving a return on equity of 7.7% with adjusted leverage of 1.6 times [4][11] - The company achieved investment grade ratings from Moody's and Fitch, marking a significant milestone in its history [4][11] - The company had $1 billion in liquidity as of June 30, 2025, including an undrawn $850 million unsecured revolving credit facility [6][12] Business Line Data and Key Metrics Changes - The securities portfolio totaled $2 billion, up 82% from the end of the previous year, with a weighted average yield of 5.9% [16] - The loan portfolio stood at $1.6 billion with a weighted average yield of approximately 9%, and five loans on nonaccrual totaling $162.3 million [15][16] - The real estate portfolio generated $15.1 million in net operating income during Q2 2025, primarily consisting of net lease properties with long-term leases [8][16] Market Data and Key Metrics Changes - The company successfully issued a $500 million five-year investment grade unsecured bond at a fixed rate of 5.5%, which was oversubscribed by 5.5 times [5][11] - The company noted that the cost of debt capital has begun to decrease due to its investment grade status, with spreads tightening on new bond issuances [9][18] Company Strategy and Development Direction - The company aims to increase its stock price and position itself as the only current investment grade mortgage REIT in the country, focusing on a senior secured investment strategy [19][20] - The company plans to maintain a conservative balance sheet while deploying capital into new higher-yielding investments [10][22] - The management emphasized a focus on capital preservation and attractive dividend payments, with intentions to grow dividends in the future [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong liquidity and a disciplined approach to credit as key factors for capitalizing on investment opportunities [23] - The company anticipates continued tightening of credit spreads and a favorable market environment for investment-grade issuers [18][23] Other Important Information - The company repurchased $6.6 million of common stock during the quarter, with $93.4 million remaining under its stock repurchase program [14] - The company has a CECL reserve of $52 million, which is deemed adequate to cover potential losses in the loan portfolio [15] Q&A Session Summary Question: Thoughts on the securities portfolio and selling activity - Management indicated that the securities portfolio is performing well, and they are selectively selling as they transition from securities to loans [25][27] Question: Convertibility of the loan pipeline into the book - Management noted a dip in loan origination volume but indicated that they have already written more loans in the third quarter than in the entire second quarter [29][30] Question: Impact of investment grade rating on investment opportunities - Management stated that the investment grade rating has made investments more profitable but does not change their core investment strategy [36][37] Question: Expectations for net portfolio growth in the second half of the year - Management expects to write approximately $1 billion in loans by year-end, with a focus on acquisition loans as the market stabilizes [68][73]

Financial Data and Key Metrics Changes - Getty Realty reported an annualized base rent (ABR) of approximately $199 million, reflecting an 11.2% increase from $179 million in the prior year [7][18] - The company generated adjusted funds from operations (AFFO) per share of $0.59, a 3.5% increase compared to the same quarter last year [17][18] - General and administrative expenses (G&A) as a percentage of total revenue improved by 40 basis points to 13.2% [18] Business Line Data and Key Metrics Changes - The convenience and automotive retail sectors showed resilience, with strong performance from tenants despite macroeconomic challenges [7][8] - Rent coverage for convenience store assets remained consistent, while car wash sector rent coverage increased [8] - The company invested $10.9 million across six properties with an initial cash yield of 7.8% during the quarter [13] Market Data and Key Metrics Changes - The portfolio included 1,115 net leased properties with an occupancy rate of 99.7% and a weighted average lease term of ten years [12] - Approximately 61% of ABR came from the top 50 metropolitan statistical areas (MSAs) [12] Company Strategy and Development Direction - Getty Realty aims to maintain a disciplined acquisition strategy focused on high-density metro areas with creditworthy operators under long-term leases [11] - The company is committed to sourcing opportunities that align with its investment thesis, despite current market volatility [10] - The investment pipeline was increased to over $110 million, with a focus on development funding transactions [9][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their tenant base, which provides essential goods and services [7] - The company reaffirmed its AFFO per share guidance for 2025 in the range of $2.38 to $2.41, factoring in the anticipated resolution of the ZiPS situation [23] - Management noted that the economic and political uncertainty has created headwinds for closing deals but remains optimistic about sourcing new opportunities [10][23] Other Important Information - The company has no debt maturities until June 2028, with a weighted average debt maturity of 5.4 years and a cost of debt at 4.5% [21][22] - The company received all rent due through April 2025 from ZiPS, except for the period surrounding its bankruptcy filing [22] Q&A Session Summary Question: Can you describe the cadence of capital deployment in the next nine to twelve months for the $110 million investment pipeline? - Management indicated that about two-thirds of the pipeline consists of development funding, typically taking nine to twelve months for completion, while sale leaseback activity is expected within the next quarter [25][26] Question: Given the macro uncertainty, what is the current development demand? - Management noted ongoing discussions with operators looking to accelerate new store growth programs in 2025, but clarity on the situation is still developing [27] Question: How should we think about the timing of ZiPS rent income hitting the income statement? - Management expects the resolution of the ZiPS situation by the end of the second quarter, with continuity of rent for sites remaining with ZiPS [36][37] Question: Have you seen any impact from tariffs on your existing tenant base? - Management stated that the impact of tariffs is still uncertain, but their assets are not heavily reliant on manufacturing, which may mitigate direct effects [42] Question: What is your appetite for QSR investments going forward? - Management indicated that while QSRs currently represent a small portion of the portfolio, they are pleased with the progress made in developing relationships in this sector [75]