Getty Realty (US:GTY)2020-10-22 15:19Financial Data and Key Metrics Changes - Total revenues for Q3 2020 increased by 4% to $37.9 million compared to the prior year's quarter [33] - Rental income grew by 5.3% to $31.9 million, driven by rent escalators and additional rent from acquisitions and redevelopment projects [33] - AFFO per share increased by 9% to $0.47, up from $0.43 in the prior year [34] Business Line Data and Key Metrics Changes - The company collected 98% of rent and mortgage payments during Q3 2020, with collections improving over the quarter [12] - The convenience store and gas station segments performed well, with many tenants reporting results slightly ahead of the previous year's performance [15] - The company acquired 32 properties for approximately $140 million year-to-date, contributing to earnings growth [10] Market Data and Key Metrics Changes - Fuel volumes have recovered to a decline of 17% year-over-year, compared to a 50% decline at the pandemic's peak [14] - Fuel margins remain elevated compared to 2019, indicating operators are making more money per gallon sold [14] Company Strategy and Development Direction - The company aims to continue its targeted investment strategy focusing on convenience and automotive sectors, which are largely internet-resistant [19] - Getty Realty is committed to an active approach in managing its portfolio, expanding through acquisitions, and selective redevelopment projects [19] - The company plans to optimize its portfolio and anticipates redevelopment opportunities involving 5% to 10% of its current portfolio over the next five years [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the uncertain environment and continue executing strategic objectives [18] - The company withdrew its 2020 AFFO per share guidance due to ongoing uncertainty related to COVID-19 [37] - Management noted that while the operating environment remains stressed, most properties and tenants have performed well [14] Other Important Information - The company ended Q3 2020 with $58 million in cash and $190 million available on its revolving credit facility [16] - The Board approved a 5.4% increase in the quarterly dividend to $0.39 per share, marking the seventh consecutive year of dividend increases [16] - Danion Fielding, the CFO, announced his departure for personal reasons, with a search for a successor underway [20] Q&A Session Summary Question: Changes in acquisition pricing post-COVID - Management indicated that there hasn't been much change in cap rates for acquisitions, and the sector has performed well [45] Question: Acquisition pipeline and expected closings - Management stated that the team is actively underwriting opportunities and feels confident in continuing to acquire attractive assets [46] Question: Update on February debt maturity - Management is in the process of refinancing the upcoming debt maturity and expects it to be a positive event for the company [48] Question: Cap rate spread between C-stores and car washes - Management noted that pricing is fairly consistent between C-stores and other automotive assets, with only small variations [53] Question: Impact of environmental obligations on balance sheet - Management clarified that remediation obligations are separate from environmental litigation matters, and they are working to resolve legacy issues [56] Question: Rent coverage and tenant profits - Management reported a strong rent coverage of 2.7, with many tenants experiencing stable margins despite volume reductions [62] Question: Deal flow and competition - Management indicated that deal flow has been consistent, with strong competition from institutional investors and the 1031 market [65]