2021
ANNUAL REPORT
C O N V E N I E N C E A U T O M O T I V E R E T A I L
Getty Realty Corp. (NYSE: GTY) is a publicly traded, net lease
REIT specializing in the acquisition, financing and development of
convenience, automotive and other single tenant retail real estate. As of
December 31, 2021, the Company’s portfolio included 1,028 properties
in 38 states across the United States plus Washington, D.C.
99.5%
$145M
Occupied
ABR
All portfolio metrics as of December 31, 2021.
ABR = annualized base rent. WALT = weighted average lease term.
Financial Highlights
(for the years ended December 31)
Number of Properties
Total Revenues
Adjusted Funds from Operations
Adjusted Funds from Operations Per Share
Dividends Per Share
2021
1,028
155,408
94,967
2.08
1.58
$
$
$
$
2020
959
147,346
83,317
1.94
1.50
$
$
$
$
2019
945
140,655
75,254
1.80
1.42
$
$
$
$
64%
Top 50 MSA
71%
Corner Locations
8.8
Years WALT
2.6X
Tenant Rent Coverage
1
Dear Shareholders
Christopher J. Constant President and Chief Executive Officer
As we entered 2021, Getty set a number of ambitious
goals related to diversifying and growing our portfolio,
scaling our overall platform, growing earnings, and
delivering strong returns to shareholders. I am proud
to report to you that we either achieved or exceeded
all of these business goals for the year.
The net result was that Getty invested $200 million
across 100 convenience and automotive retail
properties, produced 8% growth in cash rental
income, and grew our adjusted funds from operations
(“AFFO”) per share by 7% for the year. In addition to
our growth for the year, the Company’s performance
reflected the strength of our in-place portfolio which,
combined with our conservatively leveraged balance
sheet, positions the Company well for future success
as we continue to execute on our growth strategy in
2022 and beyond.
Convenience & Automotive Retail Real Estate
Over the last five years, Getty has invested more
than $725 million in 305 acquired properties and an
additional $15.6 million in 24 completed, value-add,
redevelopment projects. The Company’s growth has also
allowed Getty to add more than 25 new tenants to the
portfolio, including nationally recognized retailers such
as AutoZone, Bank of America, Circle-K, Go Car Wash,
Mavis Tires, Sheetz, Valvoline, and Zips Car Wash.
Our expanded focus on convenience and automotive
retail real estate continues to provide new
opportunities for Getty to deploy capital as we pursue
our long-term growth objectives. The net result of
our expanded investment activities is that we have
significantly diversified our portfolio and transformed
the company from one previously known as an owner
of gasoline and service stations in the Northeast
and Mid-Atlantic, to a mature institutional owner of
a diverse portfolio of convenience and automotive
retail real estate across the country. As of December
31, 2021, we have a portfolio of 1,028 properties
including convenience stores, car washes, automotive
service stations, auto parts retailers and quick serve
restaurants, and we now own properties in 38 states
across the United States.
Our investment strategy is predicated on the belief
that automobility will remain the dominant form of
consumer transportation in the United States and
that mobile consumers will increasingly prioritize
convenience, speed, and service. As we apply our
strategy to freestanding retail real estate across the
United States, our investment thesis encompasses
convenience stores, express car washes, automotive
service (instant oil change, tire & battery, and related
services), automotive parts, and drive thru quick-
serve restaurants. Put more simply - we seek to
invest in freestanding, single tenant properties where
consumers spend money in their cars or on their cars.
Looking ahead, we will invest in all of our target asset
classes while remaining focused on acquiring high-
quality retail real estate which is occupied by national
and regional operators that can deliver a quality
consumer experience in their sale and delivery of
essential goods and services.
2
GETTY REALTY 2021 Annual Report Sale leasebacks
Forward purchases
Programmatic relationships
Marketed transactions
Construction loans
Mortgage loans
Seller financing
Capital improvements
Acquisitions
Redevelopment
Financing
Asset Management
Single tenant retail
Ground leases
Build to suit
Other alternate uses
Portfolio optimization
Dispositions
Leasing
Ancillary income
Expanding Our Investment Approach
We are pleased by the success of our expanded
investment capabilities where we have added
development funding for new-to-industry (“NTI”) sites
and redevelopments of select properties in our existing
portfolio to complement our core sale-leaseback
(“SLB”) financing product. We believe this flexible
offering allows Getty to support our tenants as they
grow their businesses through acquisitions, ground-up
development or redevelopment and modernization of
existing stores. We have also expanded our investment
teams at Getty to meet the needs of our tenants by
adding dedicated business development associates and
personnel with expertise in real estate development.
We pride ourselves on being able to structure
transactions to creatively meet the financing needs of
our tenants.
Sustained Business Strategy Execution
Our team continued to demonstrate Getty’s strategic
growth strategy in 2021 by (i) enhancing our portfolio
through accretive acquisitions of convenience
and automotive retail real estate through SLBs,
development funding for NTIs, and acquisition of
properties subject to existing triple-net leases and (ii)
unlocking embedded value through the completion of
select redevelopment projects.
In 2021, we invested $200 million across 100 high-
quality properties. Our investment activity for the
year continued to reflect our disciplined investment
approach, which carefully considers real estate
attributes as well as the operational and credit
quality of our prospective tenants. During the year,
the Company underwrote a record $2.9 billion of
potential transactions with approximately 60% being
convenience stores and the remaining 40% focused
on our other target asset classes. More importantly,
our investment spending in 2021 displayed the
greatest amount of diversity in the Company’s
history and was spread across five industry verticals
(Convenience Stores – 44%, Express Car Washes
– 33%, Instant Oil Changes – 19%, Tires – 3% and
Drive Thrus – 1%). We were also pleased to introduce
several new, institutional tenants to our roster during
the year including Flash Markets, Mavis Tires,
Refuel, Splash Car Wash, Valvoline, and WhiteWater
Express Car Wash; and to expand our existing tenant
relationships with Go Car Wash, Jiffy Lube, United
Pacific, and Zips Car Wash.
Our redevelopment program continued to produce
results in 2021 as we completed five projects and
signed four new leases for future projects with national
tenants. The completed projects in 2021 added BJ’s
Wholesale Club as a new high-quality tenant and
extended our relationship with 7-11 (4 projects). We
invested a total of $1.3 million in these projects and
generated a considerable incremental return on our
investment of approximately 32%. In terms of our
redevelopment outlook, we maintain a solid pipeline,
including ending the year with four active projects and
three projects in planning stages with signed tenant
3
leases. We continue to believe that the redevelopment
program demonstrates the embedded value of our
in-place portfolio and that by strategically investing in
our assets, we can generate attractive risk-adjusted
returns, improve the credit quality of our portfolio, and
diversify our retail tenant base.
Stable Core Portfolio Operations
We also continued to benefit from the stability of our
existing portfolio of triple-net leases and the strength
of our tenants’ operating businesses. Getty realized
full, normalized rent collections throughout 2021
and collected 100% of the Company’s 2020 COVID-
related rent deferrals. On the asset management front,
we continued to refine the nature of our portfolio by
selectively disposing of 16 properties for $24.5 million,
while opportunistically exiting 11 third-party leased
sites. The net result is a healthy portfolio with stable
rent coverage of 2.6x and overall occupancy of 99.5%.
Scaling Our Conservatively Leveraged Balance Sheet
In a year which saw us increase our real estate assets
by approximately 12%, the Company’s ability to
efficiently raise long-term and permanent capital, which
provided for an accretive spread to our initial investment
yields, was critically important to our success.
To that end, we issued $94 million of common equity
through the use of our at-the-market (“ATM”) program
Portfolio
Composition
75% Convenience & Gas
11% Legacy Gas & Repair
10% Car Wash
2% Auto Service
1% Other Retail
<1% Auto Parts
National
Footprint with
Concentrations
in High Density
Metropolitan
Areas
% of ABR
23%
0%
4
GETTY REALTY 2021 Annual Report during 2021 – a record amount for the Company. The
ATM program continues to be a valuable tool for our
Company as it is a cost effective and efficient way to
raise equity capital and allows us to match fund our
acquisitions and redevelopment projects.
The Company also successfully refinanced its $300
million revolving credit facility in October 2021. The
revised credit agreement, which now matures in
October 2025, reduces the interest rate for borrowings
by 20 to 50 basis points depending on the Company’s
leveraged based borrowing grid, and amends certain
covenant provisions to adhere to those generally
applicable to investment grade rated REITs.
As further demonstration of our commitment
to financing our Company for the long-term and
supporting our growth initiatives, we announced in
February 2022 the issuance of $225 million of senior
unsecured notes, including (i) $100 million of 3.45%
notes funded at closing and maturing in February
2032, and (ii) $125 million of 3.65% notes to be funded
in January 2023 and mature in January 2033 (with
a portion of the delayed issuance earmarked for the
early retirement of our $75 million, 5.35% series B
notes coming due in June 2023).
Post this transaction, Getty’s net debt to EBITDA ratio
remains below 5.0x and our revolving credit facility is
completely undrawn meaning that we have significant
capacity to fund our growth plans as we look ahead.
We will have no debt maturities until 2025 and the
weighted average term of our indebtedness will be the
longest in the Company’s history at more than 7 years.
Driving Growth and Shareholder Returns
Our 2021 financial results, strategic growth and capital
markets activities resulted in our Board’s decision
to increase our dividend by 5.1% to an annualized
rate of $1.64 per share – making 2021 the seventh
consecutive year that the Company has rewarded
shareholders with a significant increase in its recurring
cash dividend rate. The dividend remains well-covered
and its increase stems from the stability of our current
portfolio along with our expectation of continued
growth in AFFO.
Commitment to ESG
Getty continues to enhance its efforts regarding
Environmental, Social and Governance (“ESG”)
reporting. Earlier this year, we provided our initial
disclosures regarding our ESG programs on our
website and in our quarterly corporate profile, and I
am pleased to report that we plan to publish our first
standalone sustainability report in 2022.
As an organization, we place a high priority on
the protection of our assets and the environment.
Our team includes full-time environmental experts
and we actively manage a program to oversee
legacy environmental remediation for which we are
responsible. In addition, our leases require tenants to
comply with environmental laws and regulations, and
19%
New York
8%
Washington, D.C.
6%
Boston
4%
Columbia, SC
3%
Denver
5
to have insurance to protect against any environmental
impacts that arises during their tenancy. We also
emphasize sustainability at our new corporate
headquarters where among other things we utilize
energy efficient computer equipment, filtered water
machines, timed or sensor-controlled HVAC and
lighting systems, and eliminated single-use plastics in
our kitchen facilities.
We are also committed to providing the best possible
experience for our employees. We deeply value our
team members and are committed to maintaining a
safe and healthy workplace that allows our employees
to engage professionally and personally. We aim
to foster a diverse and inclusive work environment
where women comprise 48% of our full-time team.
We also offer team members a highly competitive
compensation package, comprehensive health
insurance with substantially all premiums paid by the
Company, and several company-funded healthcare and
commuter related reimbursement benefits, as well as
other standard benefits.
Finally, we are dedicated to maintaining high standards
for corporate governance predicated on integrity
and transparency. Our Board of Directors is directly
engaged with the critical initiatives that help us
establish and maintain Getty’s policies related to
sustainability, corporate citizenship, and effective
governance. In this regard, our Board has delegated
oversight of our ESG efforts to our Nominating &
Corporate Governance Committee, and oversight of
enterprise risk management to our Audit Committee.
In addition to our corporate ESG-related activities and
objectives, we are pleased to report that many of our
tenants have already completed projects including
upgrading to LED lighting, installing energy efficient
coolers and HVAC units, and, in select cases, utilizing
EV charging stations at our properties. The terms of
our long-term, triple-net leases delegate property-
specific investments to our tenants, and we appreciate
that many of our tenants have committed to “green”
projects with their own capital and/or have taken
advantage of government and other subsidies for
qualifying renewable energy technologies and projects.
Getty’s commitment to corporate sustainability
has given rise to a new financing product, which
we have made available to our tenants who may
need incremental financing to complete “green”
projects. We are committed to helping tenants fund
sustainability initiatives that help position our portfolio
for long-term success.
6
A Bright Future
As we enter 2022, we remain committed to growing
our portfolio and I believe the expansion of our growth
strategy will provide us with ample investment
opportunities throughout the year. We are also
pleased, as I am sure everyone is, that the ongoing
public health crisis caused by COVID-19 and prolonged
by the Omicron variant continues to subside. We have
proven that Getty can be a highly effective organization
and transcend adversity in the face of an unexpected
crisis such as the COVID-19 pandemic. We have
grown our readiness to meet the challenges ahead
and have learned many valuable lessons which we
will carry forward. I remain firmly of the opinion that
Getty is at its best when we are together as a team,
and I am thrilled to report that we will all be together
on a regular basis in our new corporate headquarters
this spring. I believe we have the strongest group of
leaders and high potential associates in place since
I joined the Company in 2010 and we are poised to
deliver a strong year of growth in 2022 and to create
value for our shareholders for years to come.
A Final Thought About the Passing of Leo Liebowitz
I would be remiss if I did not once again remark on the
passing this past year of Leo Liebowitz, our co-founder
and stalwart leader for many decades. We have
previously reflected on Leo’s extraordinary lifetime
of leadership until his retirement as the Company’s
Chairman over a year ago. His warmth, energy, and
intelligence will be missed by all of us at Getty Realty.
I will conclude by reiterating how proud I am of Getty’s
2021 accomplishments and how optimistic I am about
Getty’s prospects. While it remains an honor for
me to lead the Company, I would not be successful
without the contributions of Board of Directors, our
management team, and our employees. I would like
to personally thank everyone for all of their hard work
during the past year. I would also like to thank our
shareholders for their continued support.
Best Regards,
Christopher J. Constant
President and Chief Executive Officer
GETTY REALTY 2021 Annual Report UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(cid:1409)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021
OR
(cid:1407)
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 001-13777
GETTY REALTY CORP.
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction of
incorporation or organization)
11-3412575
(I.R.S. employer
identification no.)
292 Madison Avenue, 9th Floor
New York, New York 10017-6318
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (646) 349-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $0.01 par value
Trading Symbol(s)
GTY
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:1409) No (cid:1407)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes (cid:1407) No (cid:1409)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes (cid:1409) No (cid:1407)
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes (cid:1409) No (cid:1407)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of
the Exchange Act.
Large accelerated filer
Non-accelerated filer
(cid:1409)
(cid:1407)
Smaller reporting company
(cid:1407)
Accelerated filer
Emerging growth company
(cid:1407)
(cid:1407)
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. (cid:1407)(cid:3)
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its report. (cid:1409)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes (cid:1407) No (cid:1409)
The aggregate market value of common stock held by non-affiliates (based on 39,896,973 shares of common stock at a closing price per share of the registrant’s
common stock on the New York Stock Exchange at $31.15) of the Company was $1,242,800,000 as of June 30, 2021.
The registrant had outstanding 46,716,268 shares of common stock as of February 24, 2022.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT
Selected Portions of Definitive Proxy Statement for the 2021 Annual Meeting of Stockholders (the “Proxy Statement”), which will be filed by the
PART OF
FORM 10-K
registrant on or prior to 120 days following the end of the registrant’s year ended December 31, 2021, pursuant to Regulation 14A.
III
Auditor’s PCAOB ID Number: 238
Auditor’s Name: PricewaterhouseCoopers LLP
Auditor’s Location New York, New York
Item Description
Page
TABLE OF CONTENTS
Cautionary Note Regarding Forward-Looking Statements
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
PART I
PART II
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Reserved
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
PART IV
Exhibits and Financial Statement Schedules
Form 10-K Summary
Exhibit Index
Signatures
1
1A
1B
2
3
4
5
6
7
7A
8
9
9A
9B
9C
10
11
12
13
14
15
16
3
5
9
25
25
27
29
30
31
32
45
47
78
78
78
78
79
79
79
79
79
80
80
101
106
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this Annual Report on Form 10-K may constitute “forward-looking statements” within the meaning of the
federal securities laws, including Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements preceded by, followed by, or that otherwise include
the words “believes,” “expects,” “seeks,” “plans,” “projects,” “estimates,” “anticipates,” “predicts” and similar expressions or future
or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and are not
historical facts. (All capitalized and undefined terms used in this section shall have the same meanings hereafter defined in this Annual
Report on Form 10-K.)
Examples of forward-looking statements included in this Annual Report on Form 10-K include, but are not limited to, our
statements regarding our network of convenience stores, car washes, automotive service centers, automotive parts retailers, and certain
other freestanding retailers, including drive-thru quick service restaurants; substantial compliance of our properties with federal, state
and local provisions enacted or adopted pertaining to environmental matters; the effects of U.S. federal tax reform and other
legislative, regulatory and administrative developments; the impact of existing legislation and regulations on our competitive position;
our prospective future environmental liabilities, including those resulting from preexisting unknown environmental contamination; the
impact of the novel coronavirus (“COVID-19”) pandemic on our business and results of operations; quantifiable trends, which we
believe allow us to make reasonable estimates of fair value for the future costs of environmental remediation resulting from the
removal and replacement of USTs; the impact of our redevelopment efforts related to certain of our properties; the amount of revenue
we expect to realize from our properties; our belief that our owned and leased properties are adequately covered by casualty and
liability insurance; our workplace demographics, recruiting efforts, and employee compensation program; FFO and AFFO as
measures that represent our core operating performance and its utility in comparing our core operating performance between periods;
the reasonableness of our estimates, judgments, projections and assumptions used regarding our accounting policies and methods; our
critical accounting policies; our exposure and liability due to and our accruals, estimates and assumptions regarding our environmental
liabilities and remediation costs; loan loss reserves or allowances; our belief that our accruals for environmental and litigation matters,
including matters related to our former Newark, New Jersey Terminal and the Lower Passaic River, our MTBE multi-district litigation
cases in the states of Pennsylvania and Maryland, were appropriate based on the information then available; our claims for
reimbursement of monies expended in the defense and settlement of certain MTBE cases under pollution insurance policies;
compliance with federal, state and local provisions enacted or adopted pertaining to environmental matters; our beliefs about the
settlement proposals we receive and the probable outcome of litigation or regulatory actions and their impact on us; our expected
recoveries from UST funds; our indemnification obligations and the indemnification obligations of others; our investment strategy and
its impact on our financial performance; the adequacy of our current and anticipated cash flows from operations, borrowings under our
Second Restated Credit Agreement and available cash and cash equivalents; our continued compliance with the covenants in our
Second Restated Credit Agreement and our senior unsecured notes; our belief that certain environmental liabilities can be allocated to
others under various agreements; our belief that our real estate assets are not carried at amounts in excess of their estimated net
realizable fair value amounts; our beliefs regarding our properties, including their alternative uses and our ability to sell or lease our
vacant properties over time; and our ability to maintain our federal tax status as a REIT.
These forward-looking statements are based on our current beliefs and assumptions and information currently available to us,
and are subject to known and unknown risks, uncertainties and other factors and were derived utilizing numerous important
assumptions that may cause our actual results, performance or achievements to differ materially from any future results, performance
or achievements expressed or implied by such forward-looking statements. Factors and assumptions involved in the derivation of
forward-looking statements, and the failure of such other assumptions to be realized as well as other factors may also cause actual
results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our
control. These factors and assumptions may have an impact on the continued accuracy of any forward-looking statements that we
make.
Factors which may cause actual results to differ materially from our current expectations include, but are not limited to, the risks
described in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in this Annual Report on Form 10-K, as such risk factors may be updated from time to time in our public filings, and risks
associated with: complying with environmental laws and regulations and the costs associated with complying with such laws and
regulations; substantially all of our tenants depending on the same industry for their revenues; the creditworthiness of our tenants; our
tenants’ compliance with their lease obligations; renewal of existing leases and our ability to either re-lease or sell properties; our
dependence on external sources of capital; counterparty risks; the uncertainty of our estimates, judgments, projections and
assumptions associated with our accounting policies and methods; our ability to successfully manage our investment strategy;
potential future acquisitions and redevelopment opportunities; changes in interest rates and our ability to manage or mitigate this risk
effectively; owning and leasing real estate; our business operations generating sufficient cash for distributions or debt service; adverse
developments in general business, economic or political conditions; adverse effect of inflation; federal tax reform; property taxes;
potential exposure related to pending lawsuits and claims; owning real estate primarily concentrated in the Northeast and Mid-Atlantic
regions of the United States; competition in our industry; the adequacy of our insurance coverage and that of our tenants; failure to
qualify as a REIT; dilution as a result of future issuances of equity securities; our dividend policy, ability to pay dividends and
3
changes to our dividend policy; changes in market conditions; provisions in our corporate charter and by-laws; Maryland law
discouraging a third-party takeover; adverse effects by the transition from LIBOR; the loss of a member or members of our
management team or Board of Directors; changes in accounting standards; future impairment charges; terrorist attacks and other acts
of violence and war; our information systems; failure to maintain effective internal controls over financial reporting; and negative
impacts from the continued spread of the COVID-19 pandemic, including on the global economy or on our tenants’ businesses,
financial position, or results of operations.
As a result of these and other factors, we may experience material fluctuations in future operating results on a quarterly or
annual basis, which could materially and adversely affect our business, financial condition, operating results, our growth or
reinvestment strategies, our ability to pay dividends or stock price. An investment in our stock involves various risks, including those
mentioned above and elsewhere in this Annual Report on Form 10-K and those that are described from time to time in our other
filings with the SEC.
You should not place undue reliance on forward-looking statements, which reflect our view only as of the date hereof. Except
for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release
publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events, unless
required by law. For any forward-looking statements contained in this Annual Report on Form 10-K or in any other document, we
claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of
1995.
4
Item 1. Business
Company Profile
PART I
Getty Realty Corp., a Maryland corporation, is a publicly traded, net lease real estate investment trust (“REIT”) specializing in
the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. Our portfolio
includes convenience stores, car washes, automotive service centers (gasoline and repair, oil and maintenance, tire and battery,
collision), automotive parts retailers, and certain other freestanding retail properties, including drive-thru quick service restaurants.
Our predecessor was originally founded in 1955 and our common stock was listed on the NYSE in 1997.
Our portfolio includes 1,028 properties located in 38 states and Washington, D.C., and our tenants operate under a variety of
national and regional brands. We are internally managed by our management team, which has extensive experience acquiring,
financing, developing and managing convenience, automotive and other single tenant retail real estate.
We elected to be treated as a REIT under the federal income tax laws beginning January 1, 2001. The Internal Revenue Code
permits a qualifying REIT to deduct dividends paid, thereby effectively eliminating corporate level federal income tax and making the
REIT a pass-through vehicle for federal income tax purposes if certain REIT qualifications are met. To meet the applicable
requirements of the Internal Revenue Code, a REIT must, among other things, invest substantially all of its assets in interests in real
estate (including mortgages and other REITs) or cash and government securities, derive most of its income from rents from real
property or interest on loans secured by mortgages on real property, and distribute to stockholders annually a substantial portion of its
taxable income. As a REIT, we are required to distribute at least 90% of our taxable income to our stockholders each year and would
be subject to corporate level federal income taxes on any taxable income that is not distributed.
Our company is headquartered in New York, New York and as of February 24, 2022, we had 31 employees.
Recent Developments
Our investment strategy is predicated on the belief that automobility will remain the dominant form of consumer transportation
in the United States and that mobile consumers will increasingly prioritize convenience, speed, and service. As such, throughout the
year ended December 31, 2021, we focused on expanding our platform capabilities and growing our portfolio to increase and diversify
our investments in convenience, automotive and other freestanding retail properties. Specifically, we improved our access to and cost
of capital by expanding our at-the-market equity offering program (the “ATM Program”) and extending and reducing the cost of our
$300.0 million revolving credit facility (the “Revolving Facility”). We also executed on the most diverse set of annual acquisitions in
our history, acquiring a variety of high-quality convenience stores, car wash properties and auto service centers, and adding exposure
to eight new tenants and four new states across the country. Lastly, we advanced our investment program by providing construction
loans for new-to-industry developments with high-growth operators in both the convenience store and car wash sectors.
In February 2021, we extended and expanded our ATM Program to increase the amount of common stock we may sell under
the ATM Program to an aggregate sales price of up to $250.0 million through a consortium of agent banks. In connection with the
expansion of the ATM Program, we may also sell shares of common stock under forward sale agreements. For additional information
regarding our ATM Program see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Liquidity and Capital Resources” and Note 7 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K.
On October 27, 2021, we entered into a second amended restated credit agreement (as amended the “Second Restated Credit
Agreement”) with a group of banks led by Bank of America, N.A. Pursuant to the Second Restated Credit Agreement, we (i) extended
the maturity date of our Revolving Facility from March 2022 to October 2025, (ii) reduced the interest rate for borrowings under the
Revolving Facility and (iii) amended certain financial covenants and other provisions. As part of this transaction, we entered into
amendments to the each of the note purchase and guarantee agreements that govern our senior unsecured notes in order to conform the
financial covenant provisions therein to the corresponding provisions in the Second Restated Credit Agreement. For additional
information regarding our Second Restated Credit Agreement see Note 4 in “Item 8. Financial Statements and Supplementary Data” in
this Form 10-K.
During the year ended December 31, 2021, we invested $200.0 million across 100 properties, including the acquisition of fee
simple interests in 97 properties for an aggregate purchase price of $194.3 million. The properties we acquired included 25
convenience stores, 17 car wash properties, 54 automotive services centers (including 51 instant oil change centers and three tire
service centers) and one drive-thru quick service restaurant. The acquired properties were concentrated in the Southeast and Midwest
regions of the United States, including the Charleston (SC), Cincinnati and Toledo (OH), Charlotte and Raleigh (NC), Chicago (IL),
Detroit, Grand Rapids and Lansing (MI), and Lexington (KY) metropolitan areas. Other acquired assets were located in the Las
Vegas (NV), New Haven (CT), and San Antonio (TX) metropolitan areas.
5
In addition, during the year ended December 31, 2021, we advanced construction loans in an aggregate amount of $13.5
million for the development of four new-to-industry convenience stores and one new-to-industry car wash and, as of December 31,
2021, had outstanding $5.7 million of such construction loans, including accrued interest. At the end of the construction period, the
construction loans will be repaid with the proceeds from the sale of the properties. During the year ended December 31, 2021, we
acquired two properties for which we had previously funded construction loans in the amount of $7.8 million and the loans were
repaid in full.
For additional information regarding our property acquisitions see Note 13 in “Item 8. Financial Statements and
Supplementary Data” in this Form 10-K.
Company Operations
As of December 31, 2021, we owned 981 properties and leased 47 properties from third-party landlords. Our nationwide
portfolio includes a concentration in the Northeast and Mid-Atlantic regions that we believe is unique and not readily available for
purchase or lease from other owners or landlords. Our typical properties consist of approximately one acre of land in a larger
metropolitan area and are used as convenience stores, car washes, automotive service centers, automotive parts retailers, and certain
other freestanding retailers, including drive-thru quick service restaurants. Many of our properties are located at highly trafficked
urban intersections or conveniently close to highway entrances or exit ramps.
Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, car wash
operators and other automotive-related and retail tenants. Our tenants either operate their business at our properties directly or, in the
case of certain convenience stores and gasoline and repair stations, sublet our properties and supply fuel to third parties that operate
the businesses. Our triple-net lease tenants are responsible for the payment of all taxes, maintenance, repairs, insurance and other
operating expenses relating to our properties, and are also responsible for environmental contamination occurring during the terms of
their leases and in certain cases also for environmental contamination that existed before their leases commenced. For additional
information regarding our environmental obligations, see Note 5 in “Item 8. Financial Statements and Supplementary Data” in this
Form 10-K.
Convenience stores, car washes, automotive service centers, automotive parts retailers and certain other freestanding retail
properties, including drive-thru quick service restaurants, are integral components of a convenience and transportation infrastructure
supported by consumer demand for refined petroleum, day-to-day goods, prepared and fresh food offerings, and total automotive care
and maintenance. Significant portion of our tenants’ financial results depend on convenience store sales, the sale of refined petroleum
products and/or the sale of automotive services and parts. As a result, our tenants’ financial results can be dependent on the
performance of the automobile manufacturing, petroleum marketing and automobile aftermarket industries, each of which are highly
competitive and can be subject to variability. (For additional information regarding risks related to our tenants’ dependence on the
performance of the petroleum industry, see “Item 1A. Risk Factors – Significant number of our tenants depend on the same industry
for their revenues” in this Form 10-K.) During the terms of our leases, we monitor the credit quality of our triple-net lease tenants by
reviewing their published credit rating, if available, reviewing publicly available financial statements, or reviewing financial or other
operating statements which are delivered to us pursuant to applicable lease agreements, monitoring news reports regarding our tenants
and their respective businesses, and monitoring the timeliness of lease payments and the performance of other financial covenants
under their leases.
Our Properties
Net Lease. As of December 31, 2021, we leased 1,019 of our properties to tenants under triple-net leases.
Our net lease properties include 845 properties leased under 33 separate unitary or master triple-net leases and 174 properties
leased under single unit triple-net leases. These leases generally provide for an initial term of 15 or 20 years with options for
successive renewal terms of up to 20 years and periodic rent escalations. As of December 31, 2021, our contractual rent weighted
average lease term, excluding renewal options, was 8.8 years.
Certain of our leases provide for additional rent based on the aggregate volume of fuel sold. For the year ended December 31,
2021, additional rent based on the aggregate volume of fuel sold was not material to our financial results. In addition, certain of our
leases require the tenants to invest capital in our properties, substantially all of which are related to the replacement of underground
storage tanks (“UST” or “USTs”) that are owned by our tenants. As of December 31, 2021, we have a commitment to fund up to $7.0
million in the aggregate with our tenants for our portion of such capital improvements. For additional information regarding our
leases, see Note 2 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K.
Redevelopment. As of December 31, 2021, we were actively redeveloping four of our properties as new convenience stores or
for alternative single tenant retail uses. For additional information regarding our redevelopment properties, see “Redevelopment
Strategy and Activity” below.
6
Vacancies. As of December 31, 2021, five of our properties were vacant. We expect that we will either sell or enter into new
leases on these properties over time.
Human Capital Resources
As of December 31, 2021, we had 31 full-time employees, all of which are located in our New York office. While our
business operations were not significantly disrupted by the COVID-19 pandemic during the year ended December 31, 2021, our
employees continued to demonstrate resiliency and agility in responding to a frequently changing work environment and related
challenges that arose as a result of the pandemic. Our employees are offered necessary flexibility to meet personal and family needs
and to support the safety, health, and security of each member our team. We aim to maintain a workplace that is free from
discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, disability, sexual orientation, gender
identification or expression or any other status protected by applicable law. We conduct annual training to prevent harassment and
discrimination and monitor employee conduct year-round. We participate in annual performance reviews with our employees and hold
periodic meetings with employees to gather feedback, discuss opportunities to participate in various professional development
programs, and improve the overall employee experience. Our recruiting efforts, as well as employee training, compensation and
advancement are all based on qualifications, performance, skills and experience. We believe that our employees are fairly
compensated, without regard to gender, race and ethnicity, and are routinely recognized for outstanding performance. Our
compensation program is designed to attract and retain talent, and includes the employee benefit plans described in Note 8 “Employee
Benefit Plan” included in Part II, Item 8 of this Annual Report on Form 10-K. We continually assess and strive to enhance employee
satisfaction and engagement. Our employees, many of whom have a long tenure with the Company, frequently express satisfaction
with management and, in the opinion of management, our relations with our employees are good.
Investment Strategy and Activity
As part of our strategy to grow and diversify our portfolio, we regularly review acquisition and financing opportunities to invest
in additional convenience, automotive and other single tenant retail real estate. We primarily pursue sale leaseback transactions with
existing and prospective tenants and will pursue other transactions, including forward commitments to acquire new-to-industry
construction and the acquisition of assets with in-place leases, that result in us owning fee simple interests in our properties. Our
investment activities may also include purchase money financing with respect to properties we sell, real property loans relating to our
leasehold properties and construction loans. Our investment strategy seeks to generate current income and benefit from long-term
appreciation in the underlying value of our real estate. To achieve that goal, we seek to invest in well-located, freestanding properties
that support automobility and provide convenience and service to consumers in major markets across the country. A key element of
our investment strategy is to invest in properties that will enhance our property type, tenant and geographic diversification.
During the year ended December 31, 2021, we invested $200.0 million across 100 properties, including the acquisition of fee
simple interests in 97 properties for an aggregate purchase price of $194.3 million and $5.7 million of outstanding construction loans,
including accrued interest, for three new-to-industry developments. During the year ended December 31, 2020, we acquired fee simple
interests in 34 properties for an aggregate purchase price of $150.0 million. For additional information regarding our property
acquisitions, see Note 13 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K.
Over the last five years, we have acquired 302 properties, including single property and portfolio transactions located in various
states, for an aggregate purchase price of $723.0 million.
Redevelopment Strategy and Activity
We believe that certain of our properties, primarily those currently being used as gasoline and repair stations, are well-suited to
be redeveloped as new convenience stores or other single tenant retail uses, such as automotive parts, quick service restaurants, bank
branches and specialty retail. We believe that the redeveloped properties can be leased or sold at higher values than their current use.
During the years ended December 31, 2021 and 2020, rent commenced on five and six completed redevelopment projects,
respectively, that were placed back into service in our net lease portfolio. Since the inception of our redevelopment program in 2015,
we have completed 24 redevelopment projects.
For the year ended December 31, 2021, we spent $0.3 million (net of write-offs) of construction-in-progress costs related to our
redevelopment activities and transferred $0.4 million of construction-in-progress to buildings and improvements on our consolidated
balance sheet. For the year ended December 31, 2020, we spent $0.3 million of construction-in-progress costs related to our
redevelopment activities and transferred $1.6 million of construction-in-progress to buildings and improvements on our consolidated
balance sheet.
As of December 31, 2021, we had four properties under active redevelopment and others in various stages of feasibility
planning for potential recapture from our net lease portfolio, including three properties for which we have signed new leases or letters
of intent and which will be transferred to redevelopment when the appropriate entitlements, permits and approvals have been secured.
7
Major Tenants
As of December 31, 2021, we had four significant tenants by revenue:
• We leased 150 properties pursuant to three separate unitary leases and two stand-alone leases to subsidiaries of Global
Partners LP (NYSE: GLP) (“Global”). In the aggregate, our leases with subsidiaries of Global represented 16% of our
total revenues for the years ended December 31, 2021 and 2020. All of our unitary leases with subsidiaries of Global
are guaranteed by the parent company.
• We leased 128 properties pursuant to four separate unitary leases to subsidiaries of Arko Corp. (NASDAQ: ARKO)
(“Arko”). In the aggregate, our leases with subsidiaries of Arko represented 14% and 15% of our total revenues for the
years ended December 31, 2021 and 2020, respectively. All of our unitary leases with subsidiaries of Arko are
guaranteed by the parent company.
• We leased 78 properties pursuant to three separate unitary leases and one stand-alone lease to Apro, LLC (d/b/a
“United Oil”). In the aggregate, our leases with United Oil represented 11% and 12% of our total revenues for the years
ended December 31, 2021 and 2020, respectively.
• We leased 69 properties pursuant to two separate unitary leases to subsidiaries of Chestnut Petroleum Dist., Inc.
(“Chestnut”). In the aggregate, our leases with subsidiaries of Chestnut represented 9% and 10% of our total revenues
for the years ended December 31, 2021 and 2020, respectively. The largest of these unitary leases, covering 52 of our
properties, is guaranteed by the parent company, its principals and numerous Chestnut affiliates.
Our major tenants are part of larger corporate organizations and the financial distress of one subsidiary or other affiliated
companies or businesses in those organizations may negatively impact the ability or willingness of our tenant to perform its
obligations under its lease with us. For information regarding factors that could adversely affect us relating to our leases with these
tenants, see “Item 1A. Risk Factors”.
Competition
The single tenant net lease retail real estate sector in which we operate is highly competitive and we expect major investors with
significant capital will continue to compete with us for attractive acquisition opportunities. These competitors include publicly-traded
and non-traded REITs, public and private investment funds, petroleum manufacturing, distributing and marketing companies, and
other institutional and individual investors.
Trademarks
We own the Getty® name and trademark in connection with our real estate and the petroleum marketing business in the United
States and we permit certain of our tenants to use the Getty® trademark at properties that they lease from us.
Regulation
Our properties are subject to numerous federal, state and local laws and regulations including matters related to the protection of
the environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived
assets including buildings containing hazardous materials, USTs and other equipment. These laws include: (i) requirements to report
to governmental authorities discharges of petroleum products into the environment and, under certain circumstances, to remediate soil
and groundwater contamination, including pursuant to governmental order and directive, (ii) requirements to remove and replace
USTs that have exceeded governmental-mandated age limitations and (iii) the requirement to provide a certificate of financial
responsibility with respect to potential claims relating to UST failures. Our triple-net lease tenants are directly responsible for
compliance with environmental laws and regulations with respect to their operations at our properties.
We believe that our properties are in substantial compliance with federal, state and local provisions pertaining to environmental
matters. Although we are unable to predict what legislation or regulations may be adopted in the future with respect to environmental
protection and waste disposal, we do not believe that existing legislation and regulations will have a material adverse effect on our
competitive position. For additional information regarding pending environmental lawsuits and claims, see “Item 3. Legal
Proceedings” in this Form 10-K.
For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws
and regulations, removal of USTs at the end of their lease term (the cost of which in certain cases is partially borne by us) and
remediation of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering
properties previously leased to Getty Petroleum Marketing Inc. (“Marketing”) (substantially all of which commenced in 2012), we
have agreed to be responsible for environmental contamination at the premises that was known at the time the lease commenced, and
for environmental contamination which existed prior to commencement of the lease and is discovered (other than as a result of a
voluntary site investigation) during the first 10 years of the lease term (or a shorter period for a minority of such leases). After
expiration of such 10-year (or, in certain cases, shorter) period, responsibility for all newly discovered contamination, even if it relates
to periods prior to commencement of the lease, is contractually allocated to our tenant. Our tenants at properties previously leased to
8
Marketing are in all cases responsible for the cost of any remediation of contamination that results from their use and occupancy of
our properties. Under substantially all of our other triple-net leases, responsibility for remediation of all environmental contamination
discovered during the term of the lease (including known and unknown contamination that existed prior to commencement of the
lease) is the responsibility of our tenant.
For additional information, see “Item 1A. Risk Factors” and “Liquidity and Capital Resources,” “Environmental Matters” and
“Contractual Obligations” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
Note 5 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K.
In addition to the numerous federal, state and local laws and regulations to which are properties are subject, we elected to be
treated as a REIT under the federal income tax laws beginning January 1, 2001. Accordingly, we are subject to compliance the
applicable requirements of the Internal Revenue Code concerning REITs, including that a REIT must, among other things, invest
substantially all of its assets in interests in real estate (including mortgages and other REITs) or cash and government securities, derive
most of its income from rents from real property or interest on loans secured by mortgages on real property, and distribute to
stockholders annually a substantial portion of its taxable income. For additional information, see “Item 1A. Risk Factors,” “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 6 in “Item 8. Financial
Statements and Supplementary Data” in this Form 10-K.
Additional Information
Our website address is www.gettyrealty.com. Information available on our website shall not be deemed to be a part of this
Annual Report on Form 10-K. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available on our
website, free of charge, as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the U.S.
Securities and Exchange Commission (“SEC”).
Our website also contains our business conduct guidelines (“Code of Ethics”), corporate governance guidelines and the charters
of the Audit, Compensation and Nominating/Corporate Governance Committees of our Board of Directors. We intend to make
available on our website any future amendments or waivers to our Code of Ethics within four business days after any such
amendments or waivers become effective.
Item 1A. Risk Factors
We are subject to various risks, many of which are beyond our control. As a result of these and other factors, we may experience
material fluctuations in our future operating results on a quarterly or annual basis, which could materially and adversely affect our
business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. An investment in our stock
involves various risks, including those mentioned below and elsewhere in this Annual Report on Form 10-K and those that are
described from time to time in our other filings with the SEC.
Summary of Risk Factors
Our business is subject to risks and uncertainties, including those risks and uncertainties discussed at-length below, that could
cause our actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, the
following:
Risks Related to Our Business and Operations
• The risks inherent in owning or leasing real estate.
• The real estate industry is highly competitive.
• Our future cash flow is dependent on the performance of our tenants of their lease obligations, renewal of existing leases and
either re-leasing or selling our properties.
• Significant number of our tenants depend on the same industry for their revenues.
•
It may be difficult for our investors to determine the creditworthiness of our tenants.
• An increase in costs and liability accruals as a result of environmental laws and regulations could adversely affect our
business.
• We are defending pending lawsuits and claims that may subject us to material losses.
• We may be subject to losses that may not be covered by insurance.
9
• The concentration of a significant number of our properties in the Northeast and Mid-Atlantic regions of the United States,
and adverse conditions in those regions, in particular, could negatively impact our operations.
• Property taxes on our properties may increase without notice.
• Our business operations may not generate sufficient cash for distributions or debt service.
• Adverse developments in general business, economic or political conditions could have a material adverse effect on us.
• Terrorist attacks and other acts of violence or war may affect the market on which our common stock trades, the markets in
which we operate, our operations and our results of operations.
• Our exposure to counterparty risk.
•
Inflation may adversely affect our financial condition and results of operations.
• Our assets may be subject to impairment charges.
• Our accounting policies and methods require management to make estimates, judgments and assumptions about matters that
are inherently uncertain.
• Amendments to the Accounting Standards Codification made by the Financial Accounting Standards Board (the “FASB”) or
changes in accounting standards may adversely affect our reported revenues, profitability or financial position.
•
If we fail to maintain effective internal controls over financial reporting, we may not be able to accurately and timely report
our financial results.
• Our reliance on certain members of our management team or Board of Directors, the loss of any one of which could
adversely affect our business or the market price of our common stock.
• Our reliance on information technology in our operations, and any material failure, inadequacy, interruption or security
failure of that technology could harm our business.
• Our business and results of operations have been, and our financial condition may be, impacted by the COVID-19 pandemic.
Risks Related to Financing Our Business
• Our dependency on external sources of capital, which may or may not be available on favorable terms, or at all.
•
• Adverse effects by the transition from LIBOR.
Interest rate risk and our ability to manage or mitigate this risk effectively.
Risks Related to Our Investment Strategy
• We may not be able to successfully implement our investment strategy.
• We expect to acquire new properties and this may create risks.
• We are pursuing redevelopment opportunities and this creates risks to our Company.
Risks Related to Our Status as a REIT
• The failure to qualify as a REIT under the federal income tax laws would have adverse consequences to our stockholders.
Uncertain tax matters may have a significant impact on the results of operations for any single fiscal year or interim period or
may cause us to fail to qualify as a REIT.
• The uncertainty regarding the U.S. federal income tax treatment of the cash that we might receive from cash settlement of a
forward sale agreement under our ATM program could jeopardize our ability to meet the REIT qualification requirements.
• A risk of changes in the tax law applicable to REITs.
• U.S. federal tax reform legislation could affect REITs generally, our tenants, the markets in which we operate, the price of
our common stock and our results of operations.
•
In order to preserve our REIT status, our charter limits the number of shares a person may own, which may discourage a
takeover that could result in a premium price for our common stock or otherwise benefit our stockholders.
10
Risks Related to Ownership of Our Securities
• Changes in market conditions could adversely affect the market price of our publicly traded common stock.
• Changes in our dividend policy and the dividends we pay may be subject to significant volatility.
• Our forward sale agreement under our ATM Program could result in substantial dilution to our earnings per share and return
on equity or result in substantial cash payment obligations.
•
In case of our bankruptcy or insolvency, any forward sale agreement that is in effect under our ATM Program will
automatically terminate, and we would not receive the expected proceeds.
• Future issuances of equity securities could dilute the interest of holders of our equity securities.
• Maryland law may discourage a third-party from acquiring us.
Risks Related to Our Business and Operations
We are subject to risks inherent in owning and leasing real estate.
We are subject to varying degrees of risk generally related to leasing and owning real estate, many of which are beyond our
control. In addition to general risks applicable to us, our risks include, among others: our liability as a lessee for long-term lease
obligations regardless of our revenues; deterioration in national, regional and local economic and real estate market conditions;
potential changes in supply of, or demand for, rental properties similar to ours; competition for tenants and declining rental rates;
difficulty in selling or re-leasing properties on favorable terms or at all; impairments in our ability to collect rent or other payments
due to us when they are due; increases in interest rates and adverse changes in the availability, cost and terms of financing; uninsured
property liability; the impact of present or future environmental legislation and compliance with environmental laws; adverse changes
in zoning laws and other regulations; acts of terrorism and war; acts of God; the unforeseen impacts of climate change, compliance
with any future laws or regulations designed to prevent or mitigate the impacts of climate change, and any material costs related
thereto; the potential risk of functional obsolescence of properties over time the need to periodically renovate and repair our
properties; and physical or weather-related damage to our properties. Certain significant expenditures generally do not change in
response to economic or other conditions, including: (i) debt service, (ii) real estate taxes, (iii) environmental remediation costs and
(iv) operating and maintenance costs. The combination of variable revenue and relatively fixed expenditures may result, under certain
market conditions, in reduced earnings and could have an adverse effect on our financial condition.
Each of the factors listed above could cause a material adverse effect on our business, financial condition, results of operations,
liquidity, ability to pay dividends or stock price. In addition, real estate investments are relatively illiquid, which means that our ability
to vary our portfolio of properties in response to changes in economic and other conditions may be limited.
We are in a competitive business.
The real estate industry is highly competitive. Where we own properties, we compete for tenants with a large number of real
estate property owners and other companies that sublet properties. Our principal means of competition are rents we are able to charge
in relation to the income producing potential of the location. In addition, we expect other major real estate investors, some with much
greater financial resources or more experienced personnel than we have, will compete with us for attractive acquisition opportunities.
These competitors include petroleum manufacturing, distributing and marketing companies, convenience store retailers, other REITs,
public and private investment funds, and other individual and institutional investors. This competition has increased prices for
properties we seek to acquire and may impair our ability to make suitable property acquisitions on favorable terms in the future.
Our future cash flow is dependent on the performance of our tenants of their lease obligations, renewal of existing leases and
either re-leasing or selling our properties.
We are subject to risks that financial distress, default or bankruptcy of our tenants may lead to vacancy at our properties or
disruption in rent receipts as a result of partial payment or nonpayment of rent or that expiring leases may not be renewed. Under
unfavorable general economic conditions, there can be no assurance that our tenants’ level of sales and financial performance
generally will not be adversely affected, which in turn could negatively impact our rental revenues. We are subject to risks that the
terms governing renewal or re-leasing of our properties (including, compliance with numerous federal, state and local laws and
regulations related to the protection of the environment, such as the remediation of contamination and the retirement and
decommissioning or removal of long-lived assets, the cost of required renovations, or replacement of USTs and related equipment)
may be less favorable than current lease terms.
We are also subject to the risk that we may receive less net proceeds from the properties we sell as compared to their current
carrying value or that the value of our properties may be adversely affected by unfavorable general economic conditions. Unfavorable
general economic conditions may also negatively impact our ability to re-lease or sell our properties. Numerous properties compete
11
with our properties in attracting tenants to lease space. The number of available or competitive properties in a particular area could
have a material adverse effect on our ability to lease or sell our properties and on the rents we are able to charge. In addition to the risk
of disruption in rent receipts, we are subject to the risk of incurring real estate taxes, maintenance, environmental and other expenses
at vacant properties. The financial distress, default or bankruptcy of our tenants may also lead to protracted and expensive processes
for retaking control of our properties than would otherwise be the case, including, eviction or other legal proceedings related to or
resulting from the tenant’s default. These risks are greater with respect to certain of our tenants who lease multiple properties from us.
If a tenant files for bankruptcy protection it is possible that we would recover substantially less than the full value of our claims
against the tenant. If (i) our tenants do not perform their lease obligations, (ii) we are unable to renew existing leases and promptly
recapture and re-lease or sell our properties, (iii) lease terms upon renewal or re-leasing are less favorable than current or historical
lease terms, (iv) the values of properties that we sell are adversely affected by market conditions, or (v) we incur significant costs or
disruption related to or resulting from tenant financial distress, default or bankruptcy, then our cash flow could be significantly
adversely affected.
Significant number of our tenants depend on the same industry for their revenues.
We derive significant portion of our revenues from leasing, primarily on a triple-net basis, and financing convenience store and
gasoline station properties to tenants in the petroleum marketing industry. Accordingly, significant portion of our revenues depend on
the economic success of the petroleum marketing industry, and any factors that adversely affect that industry, such as disruption in the
supply of petroleum or a decrease in the demand for conventional motor fuels due to conservation, technological advancements in
petroleum-fueled motor vehicles or an increase in the use of, and consumer demand for, alternative fuel, electric and battery-operated
vehicles, or other “green technologies,” could have a material adverse effect on our business, financial condition and results of
operations, liquidity, ability to pay dividends or stock price. Similarly, governmental regulations regarding climate change and the
greenhouse gas emissions may accelerate these trends that could have a material adverse effect on our business, financial condition
and results of operations, liquidity, ability to pay dividends or stock price. The success of participants in the petroleum marketing
industry depends upon the sale of refined petroleum products at margins in excess of fixed and variable expenses. The petroleum
marketing industry is highly competitive and volatile. Petroleum products are commodities, the prices of which depend on numerous
factors that affect supply and demand. The prices paid by our tenants and other petroleum marketers for products are affected by
global, national and regional factors. A large, rapid increase in wholesale petroleum prices would adversely affect the profitability and
cash flows of our tenants if the increased cost of petroleum products could not be passed on to their customers or if automobile
consumption of gasoline was to decline significantly. We cannot be certain as to how these factors will affect petroleum product prices
or supply in the future, or how in particular they will affect our tenants.
Because certain of our tenants are not rated and their financial information is not available to you, it may be difficult for our
investors to determine their creditworthiness.
The majority of our properties are leased to tenants who are not rated by any nationally recognized statistical rating
organizations. In addition, our tenants’ financial information is not generally available to our investors. Additionally, many of our
tenants are part of larger corporate organizations and we do not receive financial information for the other entities in those
organizations. The financial distress of other affiliated companies or businesses in those organizations may negatively impact the
ability or willingness of our tenant to perform its obligations under its lease with us. Because of the lack of financial information or
credit ratings it is, therefore, difficult for our investors to assess the creditworthiness of our tenants and to determine the ability of our
tenants to meet their obligations to us. It is possible that the assumptions and estimates we make after reviewing publicly and privately
obtained information about our tenants are not accurate and that we may be required to increase reserves for bad debts, record
allowances for deferred rent receivable or record additional expenses if our tenants are unable or unwilling to meet their obligations to
us.
We incur significant operating costs and, from time to time, may have significant liability accruals as a result of environmental
laws and regulations, which costs and accruals could significantly increase, and reduce our profitability or have a material adverse
effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price.
We are subject to numerous federal, state and local laws and regulations, including matters relating to the protection of the
environment. Under certain environmental laws, a current or previous owner or operator of real estate may be liable for contamination
resulting from the presence or discharge of hazardous or toxic substances or petroleum products at, on, or under, such property, and
may be required to investigate and clean-up such contamination. Such laws typically impose liability and clean-up responsibility first
on the party responsible for the contamination, but can also impose liability and clean-up responsibility on the owner and the current
operator without regard to whether the owner or operator knew of or caused the presence of the contaminants, or the timing or cause
of the contamination. Liability under such environmental laws has been interpreted to be joint and several unless the harm is divisible
and there is a reasonable basis for allocation of responsibility and the financial resources are available to perform the remediation. For
example, liability may arise as a result of the historical use of a property or from the migration of contamination from adjacent or
nearby properties. Any such contamination or liability may also reduce the value of the property. In addition, the owner or operator of
12
a property may be subject to claims by third-parties based on injury, damage and/or costs, including investigation and clean-up costs,
resulting from environmental contamination present at or emanating from a property. We cannot predict what environmental
legislation or regulations may be enacted in the future, or how existing laws or regulations will be administered or interpreted with
respect to products or activities to which they have not previously been applied. Additionally, compliance with more stringent laws or
regulations, as well as more vigorous enforcement policies of the regulatory agencies or stricter interpretation of existing laws, which
may develop in the future, could have an adverse effect on our financial position, or that of our tenants, and could require substantial
additional expenditures for future remediation. Accordingly, compliance with environmental laws and regulations could have a
material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price.
The majority of the properties owned or controlled by us are leased as convenience store and gasoline station properties, and
therefore may contain, or may have contained, USTs for the storage of petroleum products and other hazardous or toxic substances,
which creates a potential for the release of such products or substances. Some of our properties are subject to regulations regarding the
retirement and decommissioning or removal of long-lived assets including buildings containing hazardous materials, USTs and other
equipment. Some of the properties may be adjacent to or near properties that have contained or currently contain USTs used to store
petroleum products or other hazardous or toxic substances. In addition, certain of the properties are on, adjacent to, or near properties
upon which others have engaged or may in the future engage in activities that may release petroleum products or other hazardous or
toxic substances. There may be other environmental problems associated with our properties of which we are unaware. These
problems may make it more difficult for us to re-lease or sell our properties on favorable terms, or at all.
We enter into leases and various other agreements which contractually allocate responsibility between the parties for known and
unknown environmental liabilities at or relating to the subject properties. We are contingently liable for these environmental
obligations in the event that our tenant does not satisfy them, and we are required to accrue for environmental liabilities that we
believe are allocable to others under our leases if we determine that it is probable that our tenant will not meet its environmental
obligations. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to
allocate environmental liabilities may change, which may result in material adjustments to the amounts recorded for environmental
litigation accruals and environmental remediation liabilities. We assess whether to accrue for environmental liabilities based upon
relevant factors including our tenants’ histories of paying for such obligations, our assessment of their financial capability, and their
intent to pay for such obligations. However, there can be no assurance that our assessments are correct or that our tenants who have
paid their obligations in the past will continue to do so. We may ultimately be responsible to pay for environmental liabilities as the
property owner if our tenant fails to pay them. The ultimate resolution of these matters could cause a material adverse effect on our
business, financial condition, results of operations, liquidity, ability to pay dividends or stock price.
For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws
and regulations, removal of USTs at the end of their lease term (the cost of which in certain cases is partially borne by us) and
remediation of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering
properties previously leased to Marketing (substantially all of which commenced in 2012), we have agreed to be responsible for
environmental contamination at the premises that was known at the time the lease commenced, and for environmental contamination
which existed prior to commencement of the lease and is discovered (other than as a result of a voluntary site investigation) during the
first 10 years of the lease term (or a shorter period for a minority of such leases). After expiration of such 10-year (or, in certain cases,
shorter) period, responsibility for all newly discovered contamination, even if it relates to periods prior to commencement of the lease,
is contractually allocated to our tenant. Our tenants at properties previously leased to Marketing are in all cases responsible for the cost
of any remediation of contamination that results from their use and occupancy of our properties. Under substantially all of our other
triple-net leases, responsibility for remediation of all environmental contamination discovered during the term of the lease (including
known and unknown contamination that existed prior to commencement of the lease) is the responsibility of our tenant.
We anticipate that USTs at a number of properties we currently own and which were previously leased to Marketing will be
replaced in the years ahead as these USTs near the end of their useful lives. For long-term, triple-net leases covering sites previously
leased to Marketing, our tenants are responsible for the cost of removal and replacement of USTs and for remediation of
contamination found during such UST removal and replacement, unless such contamination was found during the first 10 years of the
lease term and also existed prior to commencement of the lease. In those cases, we are responsible for costs associated with the
remediation of such preexisting contamination. We have also agreed to be responsible for environmental contamination that existed
prior to the sale of certain properties assuming the contamination is discovered (other than as a result of a voluntary site investigation)
during the first five years after the sale of the properties.
In the course of certain UST removals and replacements at properties previously leased to Marketing where we retained
continuing responsibility for preexisting environmental obligations, previously unknown environmental contamination was and
continues to be discovered. As a result, we have developed an estimate of fair value for the prospective future environmental liability
resulting from preexisting unknown environmental contamination and have accrued for these estimated costs. These estimates are
based primarily upon quantifiable trends which we believe allow us to make reasonable estimates of fair value for the future costs of
environmental remediation resulting from the removal and replacement of USTs. Our accrual of the additional liability represents our
estimate of the fair value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds
considering estimated recovery rates developed from prior experience with the funds. In arriving at our accrual, we analyzed the ages
of USTs at properties where we would be responsible for preexisting contamination found within 10 years after commencement of a
13
lease (for properties subject to long-term triple-net leases) or five years from a sale (for divested properties), and projected a cost to
closure for preexisting unknown environmental contamination.
We measure our environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for
inflation, and then discount them to present value. We adjust our environmental remediation liabilities quarterly to reflect changes in
projected expenditures, changes in present value due to the passage of time and reductions in estimated liabilities as a result of actual
expenditures incurred during each quarter. As of December 31, 2021, we had accrued a total of $47.6 million for our prospective
environmental remediation obligations. This accrual consisted of (a) $11.4 million, which was our estimate of reasonably estimable
environmental remediation liability, including obligations to remove USTs for which we are responsible, net of estimated recoveries
and (b) $36.2 million for future environmental liabilities related to preexisting unknown contamination.
For additional information regarding pending environmental lawsuits and claims, and environmental remediation obligations
and estimates, see “Item 3. Legal Proceedings”, “Environmental Matters” in “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and Notes 3 and 5 in “Item 8. Financial Statements and Supplementary Data” in this
Form 10-K.
Environmental exposures are difficult to assess and estimate for numerous reasons, including the amount of data available upon
initial assessment of contamination, alternative treatment methods that may be applied, location of the property which subjects it to
differing local laws and regulations and their interpretations, changes in costs associated with environmental remediation services and
equipment, the availability of state UST remediation funds and the possibility of existing legal claims giving rise to allocation of
responsibilities to others, as well as the time it takes to remediate contamination and receive regulatory approval. In developing our
liability for estimated environmental remediation obligations on a property by property basis, we consider, among other things, laws
and regulations, assessments of contamination and surrounding geology, quality of information available, currently available
technologies for treatment, alternative methods of remediation and prior experience. Environmental accruals are based on estimates
derived upon facts known to us at this time, which are subject to significant change as circumstances change, and as environmental
contingencies become more clearly defined and reasonably estimable.
We cannot predict if state UST fund programs will be administered and funded in the future in a manner that is consistent with
past practices and if future environmental spending will continue to be eligible for reimbursement at historical recovery rates under
these programs. As a result, our estimates in respect of recoveries from state UST remediation funds could change, which could
adversely affect our accruals for environmental remediation liabilities.
Any changes to our estimates or our assumptions that form the basis of our estimates may result in our providing an accrual, or
adjustments to the amounts recorded, for environmental remediation liabilities. Additional environmental liabilities could cause a
material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price.
We are defending pending lawsuits and claims and are subject to material losses.
We are subject to various lawsuits and claims, including litigation related to environmental matters, such as those arising from
leaking USTs, contamination of groundwater with methyl tertiary butyl ether (a fuel derived from methanol, commonly referred to as
“MTBE”) and releases of motor fuel into the environment, and toxic tort claims. The ultimate resolution of certain matters cannot be
predicted because considerable uncertainty exists both in terms of the probability of loss and the estimate of such loss. Our ultimate
liabilities resulting from the lawsuits and claims we face could cause a material adverse effect on our business, financial condition,
results of operations, liquidity, ability to pay dividends or stock price. For additional information with respect to certain pending
lawsuits and claims, see “Item 3. Legal Proceedings” and Note 3 in “Item 8. Financial Statements and Supplementary Data” in this
Form 10-K.
We are subject to losses that may not be covered by insurance.
We and our tenants carry insurance against certain risks and in such amounts as we believe are customary for businesses of our
kind. However, as the costs and availability of insurance change, we may decide not to be covered against certain losses (such as
certain environmental liabilities, earthquakes, hurricanes, floods and civil disorder) where, in the judgment of management, the
insurance is not warranted due to cost or availability of coverage or the remoteness of perceived risk. Furthermore, there are certain
types of losses, such as losses resulting from wars, terrorism or certain acts of God, that generally are not insured because they are
either uninsurable or not economically insurable. There is no assurance that the existing insurance coverages are or will be sufficient
to cover actual losses incurred. The destruction of, or significant damage to, or significant liabilities arising out of conditions at, our
properties due to an uninsured loss would result in an economic loss and could result in us losing both our investment in, and
anticipated profits from, such properties. When a loss is insured, the coverage may be insufficient in amount or duration, or a lessee’s
customers may be lost, such that the lessee cannot resume its business after the loss at prior levels or at all, resulting in reduced rent or
a default under its lease. Any such loss relating to a large number of properties could have a material adverse effect on our business,
financial condition, results of operations, liquidity, ability to pay dividends or stock price.
14
A significant portion of our properties are concentrated in the Northeast and Mid-Atlantic regions of the United States, and
adverse conditions in those regions, in particular, could negatively impact our operations.
A significant portion of the properties we own and lease are located in the Northeast and Mid-Atlantic regions of the United
States and, as of December 31, 2021, 38.7% of our properties are concentrated in three states (New York, Massachusetts and
Connecticut). Because of the concentration of our properties in those regions, in the event of adverse economic conditions in those
regions, we would likely experience higher risk of default on payment of rent to us than if our properties were more geographically
diversified. Additionally, the rents on our properties may be subject to a greater risk of default than other properties in the event of
adverse economic, political or business developments, natural disasters or severe weather that may affect the Northeast or Mid-
Atlantic regions of the United States and the ability of our lessees to make rent payments. This lack of geographical diversification
could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or
stock price.
Property taxes on our properties may increase without notice.
Each of the properties we own or lease is subject to real property taxes. The leases for certain of the properties that we lease
from third-parties obligate us to pay real property taxes with regard to those properties. The real property taxes on our properties and
any other properties that we acquire or lease in the future may increase as property tax rates change and as those properties are
assessed or reassessed by tax authorities. To the extent that our tenants are unable or unwilling to pay such increase in accordance with
their leases, our net operating expenses may increase.
Our business operations may not generate sufficient cash for distributions or debt service.
There is no assurance that our business will generate sufficient cash flow from operations or that future borrowings will be
available to us in an amount sufficient to enable us to pay dividends on our common stock, to pay our indebtedness or to fund our
other liquidity needs. We may not be able to repay or refinance existing indebtedness on favorable terms, which could force us to
dispose of properties on disadvantageous terms (which may also result in losses) or accept financing on unfavorable terms.
Adverse developments in general business, economic or political conditions could have a material adverse effect on us.
Adverse developments in general business and economic conditions, including through recession, downturn or otherwise, either
in the economy generally or in those regions in which a large portion of our business is conducted, could have a material adverse
effect on us and significantly increase certain of the risks we are subject to. Among other effects, adverse economic conditions could
depress real estate values, impact our ability to re-lease or sell our properties and have an adverse effect on our tenants’ level of sales
and financial performance generally. As our revenues are substantially dependent on the economic success of our tenants, any factors
that adversely impact our tenants could also have a material adverse effect on our business, financial condition and results of
operations, liquidity, ability to pay dividends or stock price.
Terrorist attacks and other acts of violence or war may affect the market on which our common stock trades, the markets in which
we operate, our operations and our results of operations.
Terrorist attacks or other acts of violence or war could negatively affect our business or the businesses of our tenants. These
attacks may directly or indirectly impact the physical facilities, networks or the business or the financial condition of us or those of our
tenants, vendors or financial institutions with which we have a relationship or conduct business. The consequences of armed conflicts
are unpredictable, and we may not be able to foresee events that could have a material adverse effect on us. More generally, any of
these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and
worldwide financial markets and economy. Terrorist attacks also could be a factor resulting in, or which could exacerbate, an
economic recession in the United States or abroad. Any of these occurrences could have a material adverse effect on our business,
financial condition, results of operations, liquidity, ability to pay dividends or stock price.
We are exposed to counterparty risk and there can be no assurances that we will effectively manage or mitigate this risk.
We regularly interact with counterparties in various industries. The types of counterparties most common to our transactions and
agreements include, but are not limited to, landlords, tenants, vendors and lenders. We also enter into agreements to acquire and sell
properties which allocate responsibility for certain costs to the counterparty. Our most significant counterparties include, but are not
limited to, the members of the bank syndicate related to our Second Restated Credit Agreement, the lenders that are the counterparties
to our senior unsecured notes and our major tenants from whom we derive a significant amount of rental revenue. The default,
insolvency or other inability or unwillingness of a significant counterparty to perform its obligations under an agreement, including,
without limitation, as a result of the rejection of an agreement in bankruptcy proceedings, is likely to have a material adverse effect on
us.
15
As of December 31, 2021, we leased 150 properties in three separate unitary leases and two stand-alone leases to subsidiaries of
Global. In the aggregate, our leases with subsidiaries of Global represented 16% of our total revenues for each of the years ended
December 31, 2021 and 2020, respectively. All of our unitary leases with subsidiaries of Global are guaranteed by the parent
company. As of December 31, 2021, we leased 128 properties in four separate unitary leases to subsidiaries of Arko. In the aggregate,
our leases with subsidiaries of Arko represented 14% and 15% of our total revenues for the years ended December 31, 2021 and 2020.
All of our unitary leases with subsidiaries of Arko are guaranteed by the parent company. As of December 31, 2021, we leased 78
properties in three separate unitary leases and one stand-alone lease to United Oil. In the aggregate, our leases with United Oil
represented 11% and 12% of our total revenues for each of the years ended December 31, 2021 and 2020, respectively. As of
December 31, 2021, we leased 69 properties in two separate unitary leases to subsidiaries of Chestnut. In the aggregate, our leases
with subsidiaries of Chestnut represented 9% and 10% of our total revenues for each of the years ended December 31, 2021 and 2020,
respectively. The largest of these unitary leases, covering 52 of our properties, is guaranteed by the parent company, its principals and
numerous Chestnut affiliates.
We may also undertake additional transactions with these or other existing tenants, which would further concentrate our sources
of rental revenues. Many of our tenants, including those noted above, are part of larger corporate organizations and the financial
distress of one subsidiary or other affiliated companies or businesses in those organizations may negatively impact the ability or
willingness of our tenant to perform its obligations under its lease with us. The failure of a major tenant or their default in their rental
and other obligations to us is likely to have a material adverse effect on our business, financial condition, results of operations,
liquidity, ability to pay dividends or stock price.
Inflation may adversely affect our financial condition and results of operations.
Although inflation has not materially impacted our results of operations in the recent past, increased inflation could have a more
pronounced negative impact on any variable rate debt we incur in the future and on our results of operations. During times when
inflation is greater than increases in rent, as provided for in our leases, rent increases may not keep up with the rate of inflation.
Likewise, even though our triple-net leases reduce our exposure to rising property expenses due to inflation, substantial inflationary
pressures and increased costs may have an adverse impact on our tenants if increases in their operating expenses exceed increases in
revenue, which may adversely affect our tenants’ ability to pay rent.
Also, during inflationary periods, interest rates have historically increased, which would have a direct effect on the interest
expense of our borrowings. Our exposure to increases in interest rates in the short term is limited to our variable-rate borrowings,
which consist of borrowings under our Revolving Facility. Additionally, inflationary pricing may have a negative effect on the real
estate acquisitions and construction costs necessary to complete our development and redevelopment projects, including, but not
limited to, costs of construction materials, labor, and services from third-party contractors and suppliers. Higher acquisition and
construction costs could adversely impact our net investments in real estate and expected yields on our development and
redevelopment projects, which may make otherwise lucrative investment opportunities less profitable to us. As a result, our financial
condition, results of operations, and cash flows, as well as our ability to pay dividends, could be adversely affected over time.
Our assets may be subject to impairment charges.
We periodically evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the
existence of impairment indicators is based on GAAP, and includes a variety of factors such as market conditions, the accumulation of
asset retirement costs due to changes in estimates associated with our estimated environmental liabilities, the status of significant
leases, the financial condition of major tenants and other assumptions and factors that could affect the cash flow from or fair value of
our properties. During the years ended December 31, 2021 and 2020, we incurred $4.4 million and $4.3 million, respectively, of
impairment charges. We may be required to take similar impairment charges, which could affect the implementation of our current
business strategy and have a material adverse effect on our financial condition and results of operations.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of
operations, and they require management to make estimates, judgments and assumptions about matters that are inherently
uncertain.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of
operations. We have identified several accounting policies as being critical to the presentation of our financial position and results of
operations because they require management to make particularly subjective or complex judgments about matters that are inherently
uncertain and because of the likelihood that materially different amounts would be recorded under different conditions or using
different assumptions. We cannot provide any assurance that we will not make subsequent significant adjustments to our consolidated
financial statements. Estimates, judgments and assumptions underlying our consolidated financial statements include, but are not
limited to, receivables and related reserves, deferred rent receivable, income under direct financing leases, asset retirement obligations
(including environmental remediation obligations and future environmental liabilities for pre-existing unknown environmental
contamination), real estate, depreciation and amortization, carrying value of our properties, impairment of long-lived assets, litigation,
16
accrued liabilities, income taxes and allocation of the purchase price of properties acquired to the assets acquired and liabilities
assumed. If our accounting policies, methods, judgments, assumptions, estimates and allocations prove to be incorrect, or if
circumstances change, our business, financial condition, revenues, operating expense, results of operations, liquidity, ability to pay
dividends or stock price may be materially adversely affected.
Amendments to the Accounting Standards Codification made by the Financial Accounting Standards Board (the “FASB”) or
changes in accounting standards issued by other standard-setting bodies may adversely affect our reported revenues, profitability
or financial position.
Our consolidated financial statements are subject to the application of Generally Accepted Accounting Principles (“GAAP”) in
accordance with the Accounting Standards Codification, which is periodically amended by the FASB. The application of GAAP is
also subject to varying interpretations over time. Accordingly, we are required to adopt amendments to the Accounting Standards
Codification or comply with revised interpretations that are issued from time-to-time by recognized authoritative bodies, including the
FASB and the SEC. Those changes could adversely affect our reported revenues, profitability or financial position.
If we fail to maintain effective internal controls over financial reporting, we may not be able to accurately and timely report our
financial results.
Effective internal controls over financial reporting are necessary for us to provide reliable financial reports, effectively prevent
fraud and operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and
operating results would be harmed. We are required to perform system and process evaluation and testing of our internal control over
financial reporting to allow management to report on, and our independent registered public accounting firm to attest to, the
effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002.
As a result of material weaknesses or significant deficiencies that may be identified in our internal control over financial
reporting in the future, we may also identify certain deficiencies in some of our disclosure controls and procedures that we believe
require remediation. If we or our independent registered public accounting firm discover any such weaknesses or deficiencies, we will
make efforts to further improve our internal control over financial reporting controls. However, there is no assurance that we will be
successful. Any failure to maintain effective controls or timely effect any necessary improvement of our internal control over financial
reporting controls could harm operating results or cause us to fail to meet our reporting obligations, which could affect the listing of
our common stock on the NYSE. Ineffective internal control over financial reporting and disclosure controls could also cause
investors to lose confidence in our reported financial information, which would likely have a negative effect on the per share trading
price of our common stock.
The loss of certain members of our management team or Board of Directors could adversely affect our business or the market
price of our common stock.
Our future success and ability to implement our business and investment strategy depends, in part, on our ability to attract and
retain key management personnel and directors, and on the continued contributions of such persons, each of whom may be difficult to
replace. As a REIT, we employ only 31 employees and have a cost-effective management structure. We do not have any employment
agreements with any of our executives. In the event of the loss of key management personnel or directors, or upon unexpected death,
disability or retirement, we may not be able to find replacements with comparable skill, ability and industry expertise, which could
have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock
price. Additionally, certain of our directors beneficially own more than 5% of the outstanding shares of our common stock. If any of
these directors cease to be a director of the Company and they or their estate sell a significant portion of such holdings into the public
market, it could adversely affect the market price of our common stock.
We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that
technology could harm our business. Additionally, our failure to comply with applicable privacy, data security or protection or
cybersecurity laws could adversely affect our business.
We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic
information and to manage or support a variety of our business processes, including financial transactions and maintenance of records,
which may include personal identifying information of tenants and lease data. We rely on commercially available systems, software,
tools and monitoring to provide security for processing, transmitting and storing confidential tenant information, such as individually
identifiable information relating to financial accounts. Although we have taken steps to protect the security of the data maintained in
our information systems, it is possible that our security measures will not be able to prevent the systems’ improper functioning, or the
improper disclosure of personally identifiable information such as in the event of cyberattacks. Security breaches, including physical
or electronic break-ins, computer viruses, attacks by hackers and similar breaches, whether of our systems or those of our vendors or
other third parties who hold or have access to our information, can create system disruptions, shutdowns or unauthorized disclosure of
confidential information. Any failure by us, or our vendors or other third parties who hold or have access to our information to
17
maintain proper function, security and availability of our information systems could interrupt our operations, damage our reputation,
subject us to liability claims or regulatory penalties and could materially and adversely affect us.
Governments are continuing to focus on privacy, cybersecurity, data protection and data security and it is possible that new
privacy or data security laws will be passed or existing laws will be amended in a way that is material to our business. Any significant
change to applicable laws, regulations, or industry practices regarding our employees’ and users’ data could require us to modify our
business, services and products features, possibly in a material manner, and may limit our ability to develop new products, services,
and features. Although we have made efforts to design our policies, procedures, and systems to comply with the current requirements
of applicable state, federal, and foreign laws, changes to applicable laws and regulations in this area could subject us to additional
regulation and oversight, any of which could significantly increase our operating costs.
Our business and results of operations have been, and our financial condition may be, impacted by the COVID-19 pandemic and
such impact could be materially adverse.
The global spread of COVID-19 has created significant volatility, uncertainty, and economic disruption. The extent to which
the COVID-19 pandemic impacts our business, operations and financial results is uncertain, and will depend on numerous evolving
factors that we may not be able to accurately predict, including the duration and scope of the pandemic; governmental, business and
individual actions taken in response to the pandemic and the impact of those actions on global economic activity; the actions taken in
response to economic disruption; the reduced economic activity, if not closures from time to time of our tenants’ facilities, may impact
our tenants' businesses, financial condition and liquidity, and may cause one or more of our tenants to be unable to meet their
obligations to us in full, or at all, or to otherwise seek modifications of such obligations; general decline in business activity and
demand for real estate transactions could adversely affect our ability or desire to grow our portfolio of properties; the financial impact
of the COVID-19 pandemic could negatively impact our future compliance with financial covenants of our Second Restated Credit
Agreement and our senior unsecured notes and result in a default and potentially an acceleration of indebtedness, which non-
compliance could negatively impact our ability to make additional borrowings under our Revolving Facility and pay dividends; and a
deterioration in our or our tenants’ ability to operate in affected areas or delays in the supply of products or services to us or our
tenants from vendors that are needed for our or our tenants’ efficient operations could adversely affect our operations and those of our
tenants.
The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19
pandemic. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our performance, financial
condition, results of operations, cash flows and performance. Moreover, many risk factors set forth in our Annual Report on Form 10-
K for the year ended December 31, 2021, should be interpreted as heightened risks as a result of the impact of the COVID-19
pandemic.
Risks Related to Financing Our Business
We are dependent on external sources of capital which may not be available on favorable terms, or at all.
We are dependent on external sources of capital to maintain our status as a REIT and must distribute to our stockholders each
year at least 90% of our net taxable income, excluding any net capital gain. Because of these distribution requirements, it is not likely
that we will be able to fund all future capital needs, including acquisitions, from income from operations. Therefore, we will have to
continue to rely on third-party sources of capital, which may or may not be available on favorable terms, or at all. We may need to
access the capital markets in order to execute future significant acquisitions. There can be no assurance that sources of capital will be
available to us on favorable terms, or at all.
Our principal sources of liquidity are the cash flows from our operations, funds available under our $300.0 million senior
unsecured credit agreement (as amended, the “Second Restated Credit Agreement”), with a group of commercial banks led by Bank of
America, N.A., proceeds from the sale of shares of our common stock through offerings, from time to time, under our at-the-market
program (“ATM Program”,) pursuant to which we may also sell shares of common stock under forward sale agreements and available
cash and cash equivalents. Pursuant to the Second Restated Credit Agreement, we (i) extended the maturity date of the Revolving
Facility from March 2022 to October 2025, (ii) reduced the interest rate for borrowings under the Revolving Facility and (iii) amended
certain financial covenants and other provisions. The Second Restated Credit Agreement provides for the Revolving Facility in an
aggregate principal amount of $300,000,000 and includes an accordion feature to increase the revolving commitments or add one or
more tranches of term loans up to an additional aggregate amount not to exceed $300,000,000, subject to certain conditions, including
one or more new or existing lenders agreeing to provide commitments for such increased amount and that no default or event of
default shall have occurred and be continuing under the terms of the Revolving Facility. We have also issued $525.0 million of senior
unsecured notes. For additional information, see “Credit Agreement” and “Senior Unsecured Notes” in Note 4 in “Item 8. Financial
Statements and Supplementary Data” in this Form 10-K.
The Second Restated Credit Agreement and our senior unsecured notes contain customary financial covenants such as leverage,
coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit our ability to incur
18
additional debt or pay dividends. The Second Restated Credit Agreement and our senior unsecured notes also contain customary
events of default, including cross defaults to each other, change of control and failure to maintain REIT status (provided that the senior
unsecured notes require a mandatory offer to prepay the notes upon a change in control in lieu of a change of control event of default).
Our ability to meet the terms of the agreements is dependent upon our continued ability to meet certain criteria, as further described in
Note 4 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K, the performance of our tenants and the other
risks described in this section. If we are not in compliance with one or more of our covenants, which could result in an event of default
under our Second Restated Credit Agreement or our senior unsecured notes, there can be no assurance that our lenders would waive
such non-compliance. This could have a material adverse effect on our business, financial condition, results of operation, liquidity,
ability to pay dividends or stock price.
Under our ATM Program, we may issue and sell shares of our common stock with an aggregate sales price of up to $250.0
million through a consortium of banks acting as agents. Sales of shares of our common stock under our ATM Program may be made
from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act of 1933, including by means of ordinary
brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to
prevailing market prices or as otherwise agreed to with the applicable agent. Sales of shares of our common stock under our ATM
Program, if any, will depend on a variety of factors to be determined by us from time to time, including among others, market
conditions and the trading price of our common stock. Our agents are not required to sell any specific number or dollar amount of our
common stock, but each agent will use its commercially reasonable efforts consistent with its normal trading and sales practices and
applicable law and regulation to sell shares designated by us in accordance with the terms of the distribution agreement with our
agents. The net proceeds we receive will be the gross proceeds received from such sales less the commissions and any other costs we
may incur in issuing the shares of our common stock. In connection with the expansion of the ATM Program in 2021, we may also
sell shares of common stock under forward sale agreements. The use of a forward sale agreement would allow us to lock in a price on
the sale of shares of common stock at the time the agreement is executed, but defer receiving the proceeds from the sale until a later
date.
We may use a portion of the net proceeds from any of such sales to reduce our outstanding indebtedness, including borrowings
under our Revolving Facility. The Revolving Credit Facility includes lenders who are affiliates of our agents and may be affiliates of
our forward sellers and/or forward purchasers. As a result, a portion of the net proceeds from any sale of shares of our common stock
under our ATM Program that is used to repay amounts outstanding under our Revolving Credit Facility will be received by these
affiliates. Because an affiliate may receive a portion of the net proceeds from any of these sales, each of our agents may have an
interest in these sales beyond the sales commission it will receive. This could result in a conflict of interest and cause such agents to
act in a manner that is not in the best interests of us or our investors in connection with any sale of shares of our common stock under
our ATM Program.
Our access to third-party sources of capital depends upon a number of factors including general market conditions, the market’s
perception of our growth potential, financial stability, our current and potential future earnings and cash distributions, covenants and
limitations imposed under our Second Restated Credit Agreement and our senior unsecured notes, and the market price of our
common stock.
We are exposed to interest rate risk and there can be no assurances that we will manage or mitigate this risk effectively.
We are exposed to interest rate risk, primarily as a result of our Second Restated Credit Agreement. Borrowings under our
Second Restated Credit Agreement bear interest at a floating rate. Accordingly, an increase in interest rates will increase the amount of
interest we must pay under our Second Restated Credit Agreement. Our interest rate risk may materially change in the future if we
increase our borrowings under the Second Restated Credit Agreement or amend our Second Restated Credit Agreement or our senior
unsecured notes, seek other sources of debt or equity capital or refinance our outstanding indebtedness. A significant increase in
interest rates could also make it more difficult to find alternative financing on desirable terms. For additional information with respect
to interest rate risk, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in this Form 10-K.
We may be adversely affected by the transition from LIBOR.
On July 27, 2017, the United Kingdom’s Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that it
intends to stop compelling banks to submit rates for the calculation of LIBOR after the end of 2021. The U.S. Federal Reserve Board
and the Federal Reserve Bank of New York convened the Alternative Reference Rates Committee (“ARRC”), a steering committee
comprised of large U.S. financial institutions, to identify an alternative reference rate. ARRC identified the Secured Overnight
Financing Rate (“SOFR”), calculated by reference to short-term repurchase agreements backed by U.S. Treasury securities, as the
recommended alternative reference rate for USD-LIBOR in derivative and other financial contracts and proposed a paced transition
plan to transition USD-LIBOR to SOFR. The first publication of SOFR was released by the Federal Reserve Bank of New York in
April 2018. In November 2020, the ICE Benchmark Administration Limited (the administrator of LIBOR) announced that it would
consult on its intention to cease the publication of the one-week and two-month USD-LIBOR tenors only on December 31, 2021 and
all other USD-LIBOR tenors on June 30, 2023. On March 5, 2021, the IBA issued a statement, based on such consultation,
19
announcing that the IBA shall cease publication of the respective USD-LIBOR tenors immediately after the foregoing dates and the
FCA issued a statement that it has no intention to use its proposed powers to compel the IBA to publish any of the foregoing USD-
LIBOR tenors and that such USD-LIBOR tenors shall no longer be representative after such dates. The Revolving Facility includes
customary LIBOR transition language that addresses the succession of LIBOR at a future date.
As of December 31, 2021, we had $60,000,000 of borrowings based on LIBOR. The consequences of these developments
with respect to LIBOR cannot be entirely predicted and span multiple future periods but could result in an increase in the cost of our
variable rate debt, which may be detrimental to our financial position or operating results.
Risks Related to Our Investment Strategy
We may not be able to successfully implement our investment strategy.
We may not be able to successfully implement our investment strategy. We cannot assure that our portfolio of properties will
expand at all, or if it will expand at any specified rate or to any specified size. As part of our overall growth strategy, we regularly
review acquisition, financing and redevelopment opportunities, and we expect to continue to pursue investments that we believe will
benefit our financial performance. We cannot assure that investment opportunities which meet our investment criteria will be
available. Pursuing our investment opportunities may result in additional debt or new equity issuances, that may initially be dilutive to
our net income, and such investments may not perform as we expect or produce the returns that we anticipate (including, without
limitation, as a result of tenant bankruptcies, tenant concessions, our inability to collect rents and higher than anticipated operating
expenses). Further, we may not be able to successfully integrate investments into our existing portfolio without operating disruptions
or unanticipated costs. To the extent that our current sources of liquidity are not sufficient to fund such investments, we will require
other sources of capital, which may or may not be available on favorable terms or at all. Additionally, to the extent that we increase
the size of our portfolio, we may not be able to adapt our management, administrative, accounting and operational systems, or hire and
retain sufficient operational staff to integrate investments into our portfolio or manage any future investments without operating
disruptions or unanticipated costs. Moreover, our continued growth will require increased investment in management personnel,
professional fees, other personnel, financial and management systems and controls and facilities, which will result in additional
operating expenses. Under the circumstances described above, our results of operations, financial condition and growth prospects may
be materially adversely affected.
We expect to acquire new properties and this may create risks.
We may acquire properties when we believe that an acquisition matches our business and investment strategies. These
properties may have characteristics or deficiencies currently unknown to us that affect their value or revenue potential. It is possible
that the operating performance of these properties may decline after we acquire them, or that they may not perform as expected.
Further, if financed by additional debt or new equity issuances, our acquisition of properties may result in stockholder dilution. Our
acquisition of properties will expose us to the liabilities of those properties, some of which we may not be aware of at the time of such
acquisitions. We face competition in pursuing these acquisitions and we may not succeed in leasing acquired properties at rents
sufficient to cover the costs of their acquisition and operations.
Newly acquired properties may require significant management attention that would otherwise be devoted to our ongoing
business. We may not succeed in consummating desired acquisitions. Consequences arising from or in connection with any of the
foregoing could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay
dividends or stock price.
We are pursuing redevelopment opportunities and this creates risks to our Company.
We have commenced a program to redevelop certain of our properties, and to recapture select properties from our net lease
portfolio in order to redevelop such properties, for either a new convenience and gasoline use or for alternative single tenant net lease
retail uses. The success at each stage of our redevelopment program is dependent on numerous factors and risks, including our ability
to identify and extract qualified sites from our portfolio and successfully prepare and market them for alternative uses, and project
development issues, including those relating to planning, zoning, licensing, permitting, third party and governmental authorizations,
changes in local market conditions, increases in construction costs, the availability and cost of financing, and issues arising from
possible discovery of new environmental contamination and the need to conduct environmental remediation. Occupancy rates and
rents at any particular redeveloped property may fail to meet our original expectations for reasons beyond our control, including
changes in market and economic conditions and the development by competitors of competing properties. We could experience
increased and unexpected costs or significant delays or abandonment of some or all of these redevelopment opportunities. For any of
the above-described reasons, and others, we may determine to abandon opportunities that we have already begun to explore or with
respect to which we have commenced redevelopment efforts and, as a result, we may fail to recover expenses already incurred. We
cannot assure you that we will be able to successfully redevelop and lease any of our identified opportunities or that our overall
20
redevelopment program will be successful. Consequences arising from or in connection with any of the foregoing could have a
material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price.
Risks Related to Our Status as a REIT
Failure to qualify as a REIT under the federal income tax laws would have adverse consequences to our stockholders. Uncertain
tax matters may have a significant impact on the results of operations for any single fiscal year or interim period or may cause us
to fail to qualify as a REIT.
We elected to be treated as a REIT under the federal income tax laws beginning January 1, 2001. To qualify for taxation as a
REIT, we must, among other requirements such as those related to the composition of our assets and gross income, distribute annually
to our stockholders at least 90% of our taxable income, including taxable income that is accrued by us without a corresponding receipt
of cash. Accordingly, we generally will not be subject to federal income tax on qualifying REIT income, provided that distributions to
our stockholders equal at least the amount of our taxable income as defined under the Internal Revenue Code. But, we may have to
borrow money or sell assets to satisfy such distribution requirements even if the then prevailing market conditions are not favorable
for these borrowings. Many of the REIT requirements are highly technical and complex. If we were to fail to meet the requirements,
we may be subject to federal income tax, excise taxes, penalties and interest or we may have to pay a deficiency dividend. We may
have to borrow money or sell assets to pay such a deficiency dividend.
We cannot guarantee that we will continue to qualify in the future as a REIT. We cannot give any assurance that new legislation,
regulations, administrative interpretations or court decisions will not significantly change the requirements relating to our
qualification. If we fail to qualify as a REIT, we would not be allowed a deduction for distributions to stockholders in computing our
taxable income and will again be subject to federal income tax at regular corporate rates, we could be subject to the federal alternative
minimum tax for taxable years beginning before 2019, we could be required to pay significant income taxes and we would have less
money available for our operations and distributions to stockholders. This would likely have a significant adverse effect on the value
of our securities. We could also be precluded from treatment as a REIT for four taxable years following the year in which we lost the
qualification, and all distributions to stockholders would be taxable as regular corporate dividends to the extent of our current and
accumulated earnings and profits. Loss of our REIT status could have a material adverse effect on our business, financial condition,
results of operations, liquidity, ability to pay dividends or stock price.
The U.S. federal income tax treatment of the cash that we might receive from cash settlement of a forward sale agreement under
our ATM program is unclear and could jeopardize our ability to meet the REIT qualification requirements.
In the event that we elect to settle any forward sale agreement for cash and the settlement price is below the applicable forward
sale price, we would be entitled to receive a cash payment from the relevant Forward Purchaser. Under Section 1032 of the Code,
generally, no gains and losses are recognized by a corporation in dealing in its own shares, including pursuant to a “securities futures
contract,” as defined in the Code by reference to the Exchange Act. Although we believe that any amount received by us in exchange
for our stock would qualify for the exemption under Section 1032 of the Code, because it is not entirely clear whether a forward sale
agreement qualifies as a “securities futures contract,” the U.S. federal income tax treatment of any cash settlement payment we receive
is uncertain. In the event that we recognize a significant gain from the cash settlement of a forward sale agreement, we might not be
able to satisfy the gross income requirements applicable to REITs under the Code. In that case, we may be able to rely upon the relief
provisions under the Code in order to avoid the loss of our REIT status. Even if the relief provisions apply, we will be subject to a
100% tax on the greater of (i) the excess of 75% of our gross income (excluding gross income from prohibited transactions) over the
amount of such income attributable to sources that qualify under the 75% test or (ii) the excess of 95% of our gross income (excluding
gross income from prohibited transactions) over the amount of such gross income attributable to sources that qualify under the 95%
test, multiplied in either case by a fraction intended to reflect our profitability. In the event that these relief provisions were not
available, we could lose our REIT status under the Code.
There is a risk of changes in the tax law applicable to real estate investment trusts.
Because the IRS, the United States Treasury Department and Congress frequently review federal income tax legislation, we
cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Any of
such legislative actions may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us
and/or our investors.
The Tax Cuts and Jobs Act of 2017, or the TCJA, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or
the CARES Act, has significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and
their shareholders. Changes made by the TCJA and the CARES Act that could affect us and our shareholders include:
•
temporarily reducing individual U.S. federal income tax rates on ordinary income; the highest individual U.S. federal income
tax rate has been reduced from 39.6% to 37% for taxable years beginning after December 31, 2017 and before January 1,
2026;
21
•
•
•
•
•
•
permanently eliminating the progressive corporate tax rate structure, with a maximum corporate tax rate of 35%, and
replacing it with a flat corporate tax rate of 21%;
permitting a deduction for certain pass-through business income, including dividends received by our shareholders from us
that are not designated by us as capital gain dividends or qualified dividend income, which will generally allow individuals,
trusts, and estates to deduct up to 20% of such amounts for taxable years beginning after December 31, 2017 and before
January 1, 2026;
reducing the highest rate of withholding with respect to our distributions to non-U.S. stockholders that are treated as
attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%;
limiting our deduction for net operating losses to 80% of REIT taxable income (prior to the application of the dividends paid
deduction) for taxable years beginning after December 31, 2020;
generally limiting the deduction for net business interest expense in excess of a specified percentage (50% for taxable years
beginning in 2019 and 2020 and 30% for subsequent taxable years) of a business’s adjusted taxable income except for
taxpayers that engage in certain real estate businesses and elect out of this rule (provided that such electing taxpayers must
use an alternative depreciation system for certain property); and
eliminating the corporate alternative minimum tax.
You are urged to consult with your tax advisor with respect to the status of legislative, regulatory, judicial or administrative
developments and proposals and their potential effect on an investment in our securities.
U.S. federal tax reform legislation could affect REITs generally, our tenants, the markets in which we operate, the price of our
common stock and our results of operations, in ways, both positively and negatively, that are difficult to predict.
Certain federal tax legislation more specifically described above (the “2017 Legislation”) included significant changes to
corporate and individual tax rates and the calculation of taxes. As a REIT, we are generally not required to pay federal taxes otherwise
applicable to regular corporations if we distribute all of our income and comply with the various tax rules governing REITs.
Stockholders, however, are generally required to pay taxes on REIT dividends. The 2017 Legislation changed the way in which
dividends paid on our stock are taxed by the holder of that stock and could impact the price of our common stock or how stockholders
and potential investors view an investment in REITs. In addition, while certain elements of the 2017 Legislation do not impact us
directly as a REIT, they could impact our tenants and the markets in which we operate in ways, both positive and negative, that are
difficult to predict.
Prospective stockholders are urged to consult with their tax advisors with respect to the 2017 Legislation and any other
regulatory or administrative developments and proposals and the potential effects thereof on an investment in our common stock.
In order to preserve our REIT status, our charter limits the number of shares a person may own, which may discourage a takeover
that could result in a premium price for our common stock or otherwise benefit our stockholders.
Our charter, with certain exceptions, authorizes our Board of Directors to take such actions as are necessary and desirable to
preserve our qualification as a REIT for federal income tax purposes. Unless exempted by our Board of Directors, no person may
(i) own, or be deemed to own by virtue of certain constructive ownership provisions of the Internal Revenue Code, in excess of 5.0%
(in value or in number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of our common stock or
(ii) own, or be deemed to own by virtue of certain other constructive ownership provisions of the Internal Revenue Code, in excess of
9.9% (by value or number of shares, whichever is more restrictive) of the outstanding shares of our common stock, which may
discourage large investors from purchasing our stock. This restriction may have the effect of delaying, deferring or preventing a
change in control, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets)
that might provide a premium price for our common stock or otherwise be in the best interest of our stockholders.
Risks Related to Ownership of Our Securities
Changes in market conditions could adversely affect the market price of our publicly traded common stock.
As with other publicly traded securities, the market price of our publicly traded common stock depends on various market
conditions, which may change from time-to-time. Among the market conditions that may affect the market price of our publicly traded
common stock are the following: our financial condition and performance and that of our significant tenants; the market’s perception
of our growth potential and potential future earnings; the reputation of REITs generally and the reputation of REITs with portfolios
similar to us; the attractiveness of the securities of REITs in comparison to securities issued by other entities (including securities
issued by other real estate companies); an increase in market interest rates, which may lead prospective investors to demand a higher
22
distribution rate in relation to the price paid for publicly traded securities; the extent of institutional investor interest in us; and general
economic and financial market conditions.
We may change our dividend policy and the dividends we pay may be subject to significant volatility.
The decision to declare and pay dividends on our common stock in the future, as well as the timing, amount and composition of
any such future dividends, will be at the sole discretion of our Board of Directors and will depend upon such factors as the Board of
Directors deems relevant and the dividend paid may vary from expected amounts. Any change in our dividend policy could adversely
affect our business and the market price of our common stock. In addition, each of the Second Restated Credit Agreement and senior
unsecured notes prohibit the payments of dividends during certain events of default. No assurance can be given that our financial
performance in the future will permit our payment of any dividends or that the amount of dividends we pay, if any, will not fluctuate
significantly. Under the Maryland General Corporation Law (“MGCL”), our ability to pay dividends would be restricted if, after
payment of the dividend, (i) we would not be able to pay indebtedness as it becomes due in the usual course of business or (ii) our
total assets would be less than the sum of our liabilities plus the amount that would be needed, if we were to be dissolved, to satisfy
the rights of any stockholders with liquidation preferences. There currently are no stockholders with liquidation preferences.
No assurance can be given that our financial performance in the future will permit our payment of any dividends. Each of the
Second Restated Credit Agreement our senior unsecured notes contain customary financial covenants such as availability, leverage
and coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit our ability to
incur additional debt or pay dividends. As a result of the factors described above, we may experience material fluctuations in future
operating results on a quarterly or annual basis, which could materially and adversely affect our business, stock price and ability to
pay dividends.
Future issuances of equity securities could dilute the interest of holders of our equity securities.
Our future growth depends upon our ability to raise additional capital. If we were to raise additional capital through the issuance
of equity securities, such issuance, the receipt of the net proceeds thereof and the use of such proceeds may have a dilutive effect on
our expected earnings per share, funds from operations per share and adjusted funds from operations per share. The actual amount of
such dilution cannot be determined at this time and will be based on numerous factors. Additionally, we are not restricted from issuing
additional shares of our common stock or preferred stock, including any securities that are convertible into or exchangeable for, or that
represent the right to receive, common stock or preferred stock or any substantially similar securities in the future. The market price of
our common stock could decline as a result of sales of a large number of shares of our common stock in the market after an offering or
the perception that such sales could occur.
Provisions contained in a forward sale agreement under our ATM Program could result in substantial dilution to our earnings per
share and return on equity or result in substantial cash payment obligations.
If we enter into one or more forward sale agreements in connection with the ATM Program, the relevant Forward Purchaser (as
defined in such forward sale agreement) will have the right to accelerate its forward sale agreement (with respect to all or any portion
of the transaction under such forward sale agreement that the Forward Purchaser determines is affected by an event described below)
and require us to physically settle on a date specified by such Forward Purchaser if:
•
in such Forward Purchaser’s good faith, commercially reasonable judgment, it or its affiliate (x) is unable to hedge its
exposure under such forward sale agreement because an insufficient number of shares of our common stock have been made
available for borrowing by securities lenders or (y) would incur a stock loan cost in excess of a specified threshold to hedge
its exposure under such forward sale agreement;
• we declare any dividend, issue or distribution on shares of our common stock (a) payable in cash in excess of specified
amounts (unless it is an extraordinary dividend), (b) payable in securities of another company that we acquire or own
(directly or indirectly) as a result of a spin-off or similar transaction, or (c) payable in any other type of securities (other than
shares of our common stock), rights, warrants or other assets for payment at less than the prevailing market price;
•
•
•
certain ownership thresholds applicable to such Forward Purchaser and its affiliates are exceeded;
an event is announced that if consummated would result in a specified extraordinary event (including certain mergers or
tender offers, as well as certain events involving our nationalization, or insolvency, or a delisting of shares of our common
stock) or the occurrence of a change in law under such forward sale agreement; or
certain other events of default or termination events occur, including, among others, any material misrepresentation made in
connection with such forward sale agreement (each as more fully described in each forward sale agreement).
A Forward Purchaser’s decision to exercise its right to accelerate the physical settlement of any forward sale agreement and
require us to physically settle on a date specified by such Forward Purchaser will be made irrespective of our interests, including our
23
need for capital. In such cases, we could be required to issue and deliver shares of shares of our common stock under the physical
settlement provisions of the applicable forward sale agreement, irrespective of our capital needs, which would result in dilution to our
earnings per share and return on equity.
We expect that settlement of any forward sale agreement will generally occur no later than the date specified in the particular
forward sale agreement, which will be no earlier than three months or later than two years following the trade date of that forward sale
agreement. However, any forward sale agreement may be settled earlier than that specified date in whole or in part at our option.
Subject to certain conditions, we have the right to elect physical, cash or net share settlement under each forward sale agreement. We
intend to physically settle each forward sale agreement by delivery of shares of our common stock. However, we may elect to cash
settle or net share settle such forward sale agreement. Delivery of shares of our common stock upon physical settlement (or, if we elect
net share settlement of a particular forward sale agreement, upon such settlement to the extent we are obligated to deliver shares of our
common stock) will result in dilution to our earnings per share and return on equity. If we elect cash settlement or net share settlement
with respect to all or a portion of the shares of common stock underlying a particular forward sale agreement, we expect the applicable
Forward Purchaser (or an affiliate thereof) to purchase a number of shares of our common stock in secondary market transactions over
an unwind period to:
•
•
return shares of our common stock to securities lenders in order to unwind such Forward Purchaser’s hedge (after taking into
consideration any shares of our common stock to be delivered by us to such Forward Purchaser, in the case of net share
settlement); and
if applicable, in the case of net share settlement, deliver shares of our common stock to us to the extent required in settlement
of such forward sale agreement.
The purchase of shares of our common stock in connection with a Forward Purchaser or its affiliate unwinding such Forward
Purchaser’s hedge positions could cause the price of shares of our common stock to increase over such time (or prevent a decrease
over such time), thereby increasing the amount of cash we would owe to such Forward Purchaser (or decreasing the amount of cash
that such Forward Purchaser would owe to us) upon a cash settlement of the relevant forward sale agreement or increasing the number
of shares of our common stock we would deliver to such Forward Purchaser (or decreasing the number of shares of our common stock
that such Forward Purchaser would deliver to us) upon net share settlement of the relevant forward sale agreement.
The forward sale price that we expect to receive upon physical settlement of a particular forward sale agreement will be subject
to adjustment on a daily basis based on a floating interest rate factor equal to the overnight bank rate less a spread and will be
decreased based on amounts related to expected dividends on shares of our common stock during the term of the applicable forward
sale agreement. If the overnight bank rate is less than the spread for a particular forward sale agreement on any day, the interest factor
will result in a daily reduction of the applicable forward sale price. If the volume-weighted average price at which a particular Forward
Purchaser (or its affiliate) is able to purchase (or is deemed able to purchase) shares during the applicable unwind period under a
particular forward sale agreement is above the relevant forward sale price, in the case of cash settlement, we would pay the relevant
Forward Purchaser under such forward sale agreement an amount in cash equal to the difference or, in the case of net share settlement,
we would deliver to such Forward Purchaser a number of shares of our common stock having a value equal to the difference. Thus, we
could be responsible for a potentially substantial cash payment in the case of cash settlement. If the volume-weighted average price at
which a particular Forward Purchaser (or its affiliate) is able to purchase (or is deemed able to purchase) shares during the applicable
unwind period under that particular forward sale agreement is below the relevant forward sale price, in the case of cash settlement, we
would be paid the difference in cash by the relevant Forward Purchaser under that particular forward sale agreement or, in the case of
net share settlement, we would receive from such Forward Purchaser a number of shares of our common stock having a value equal to
the difference.
In case of our bankruptcy or insolvency, any forward sale agreement under our ATM Program that is in effect will automatically
terminate, and we would not receive the expected proceeds from any forward sales of shares of our common stock.
If we or a regulatory authority with jurisdiction over us institutes, or we consent to, a proceeding seeking a judgment in
bankruptcy or insolvency or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or
we or a regulatory authority with jurisdiction over us presents a petition for our winding-up or liquidation, or we consent to such a
petition, any forward sale agreement that is then in effect will automatically terminate. If any such forward sale agreement so
terminates under these circumstances, we would not be obligated to deliver to the relevant Forward Purchaser any shares of common
stock not previously delivered, and the relevant Forward Purchaser would be discharged from its obligation to pay the applicable
forward sale price per share in respect of any shares of common stock not previously settled under the applicable forward sale
agreement. Therefore, to the extent that there are any shares of common stock with respect to which any forward sale agreement has
not been settled at the time of the commencement of any such bankruptcy or insolvency proceedings, we would not receive the
relevant forward sale price per share in respect of those shares of common stock.
24
Maryland law may discourage a third-party from acquiring us.
We are subject to the provisions of the Maryland Business Combination Act (the “Business Combination Act”) which prohibits
transactions between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder for five years
after the most recent date on which the interested stockholder becomes an interested stockholder. Generally, pursuant to the Business
Combination Act, an “interested stockholder” is a person who, together with affiliates and associates, beneficially owns, directly or
indirectly, 10% or more of a Maryland corporation’s voting stock. These provisions could have the effect of delaying, preventing or
deterring a change in control of our Company or reducing the price that certain investors might be willing to pay in the future for
shares of our capital stock. Additionally, the Maryland Control Share Acquisition Act may deny voting rights to shares involved in an
acquisition of one-tenth or more of the voting stock of a Maryland corporation. In our charter and bylaws, we have elected not to have
the Maryland Control Share Acquisition Act apply to any acquisition by any person of shares of stock of our Company. However, in
the case of the control share acquisition statute, our Board of Directors may opt to make this statute applicable to us at any time by
amending our bylaws, and may do so on a retroactive basis. Finally, the “unsolicited takeovers” provisions of the MGCL permit our
Board of Directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to implement
certain provisions that may have the effect of inhibiting a third-party from making an acquisition proposal for our Company or of
delaying, deferring or preventing a change in control of our Company under circumstances that otherwise could provide the holders of
our common stock with the opportunity to realize a premium over the then current market price or that stockholders may otherwise
believe is in their best interests; however, on February 23, 2022, our Board of Directors adopted a resolution prohibiting us from
electing to be subject to the classified board provisions of Section 3-803 of the MGCL, unless such election is first approved by the
stockholders of the Corporation by the affirmative vote of at least a majority of the votes cast on the matter by stockholders entitled to
vote generally in the election of directors.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, car wash
operators and other automotive-related and retail tenants. Our tenants are responsible for the operations conducted at our properties,
including the payment of all taxes, maintenance, repair, insurance and other operating expenses. We manage and evaluate our
operations as a single segment.
We independently obtain and maintain a program of insurance which we believe adequately covers our owned and leased
properties for casualty and liability risks. Our insurance program is underwritten in view of primary insurance coverages which we
require to be provided by most of our tenants for properties they lease from us, including in respect to casualty, liability, pollution
legal liability, fire and extended coverage risks.
25
The following table summarizes the geographic distribution of our properties as of December 31, 2021 . In addition, we lease
approximately 11,100 square feet of office space at 292 Madison Avenue, New York, New York for our corporate headquarters,
which we believe will remain suitable and adequate for such purposes for the immediate future.
Owned by
Getty Realty
Leased by
Getty Realty
Total
Properties
by State
Percent
of Total
Properties
New York
Massachusetts
Connecticut
Texas
South Carolina
Virginia
New Jersey
New Hampshire
Maryland
Michigan
California
Washington State
Arizona
Colorado
North Carolina
Ohio
Pennsylvania
Arkansas
Oregon
Hawaii
Kansas
Missouri
Maine
Nevada
Kentucky
Georgia
New Mexico
Florida
Louisiana
Oklahoma
Illinois
Alabama
Indiana
Mississippi
Rhode Island
Washington, D.C.
Minnesota
North Dakota
Vermont
Total
193
99
66
65
49
48
44
45
40
41
36
31
23
23
23
23
22
13
13
10
8
8
7
7
6
5
5
4
4
4
3
2
2
2
2
2
1
1
1
981
28
6
6
—
—
1
4
—
2
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
47
221
105
72
65
49
49
48
45
42
41
36
31
23
23
23
23
22
13
13
10
8
8
7
7
6
5
5
4
4
4
3
2
2
2
2
2
1
1
1
1,028
21.5 %
10.2
7.0
6.3
4.8
4.8
4.6
4.3
4.1
4.0
3.5
3.0
2.2
2.2
2.2
2.2
2.1
1.3
1.3
1.0
0.8
0.8
0.7
0.7
0.6
0.5
0.5
0.4
0.4
0.4
0.3
0.2
0.2
0.2
0.2
0.2
0.1
0.1
0.1
100.0 %
The properties that we lease from third parties have a remaining lease term, including renewal and extension option terms,
averaging approximately 8.0 years. The following table sets forth information regarding lease expirations, including renewal and
extension option terms, for properties that we lease from third parties:
CALENDAR YEAR
2022
2023
2024
2025
2026
Subtotal
Thereafter
Total
Number of
Leases
Expiring
Percent of
Total Leased
Properties
Percent
of Total
Properties
5
2
4
2
5
18
29
47
10.6 %
4.3
8.5
4.3
10.6
38.3
61.7
100 %
0.5 %
0.2
0.4
0.2
0.5
1.8
2.8
4.6 %
26
Revenues from rental properties for the year ended December 31, 2021 were $153.9 million, an average of approximately
$153,000 per property given the 1,004 average rental properties held during the year. Revenues from rental properties for the year
ended December 31, 2020, were $144.6 million, an average of $152,000 per property given the 952 average rental properties held
during the year. Rental property lease expirations and annualized contractual rent as of December 31, 2021 are as follows (in
thousands, except for number of properties):
CALENDAR YEAR
Redevelopment
Vacant
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Thereafter
Total
Number of
Rental
Properties (a)
Annualized
Contractual
Rent (b)
Percentage
of Total
Annualized Rent
—
—
2.4 %
2.5
2.0
5.1
9.5
14.0
5.4
8.0
1.2
6.5
43.4
100.0 %
—
—
3,524
3,627
3,000
7,450
14,059
20,638
7,899
11,784
1,717
9,515
63,931
147,144
4 $
5
32
26
24
43
79
261
45
70
21
63
355
1,028 $
(a) With respect to a unitary master lease that includes properties that we lease from third-parties, the expiration dates refer to the
dates that the leases with the third-parties expire and upon which date our tenant must vacate those properties, not the expiration
date of the unitary master lease itself.
(b) Represents the monthly contractual rent due from tenants under existing leases as of December 31, 2021, multiplied by 12.
Item 3. Legal Proceedings
We are involved in various legal proceedings, many of which we consider to be routine and incidental to our business. Many of
these legal proceedings involve claims relating to alleged discharges of petroleum into the environment at current and former gasoline
stations. We routinely assess our liabilities and contingencies in connection with these matters based upon the latest available
information. The following is a description of material legal proceedings, including those involving private parties and governmental
authorities under federal, state and local laws regulating the discharge of hazardous substances into the environment. We are
vigorously defending all of the legal proceedings against us, including each of the legal proceedings listed below. As of December 31,
2021 and 2020, we had accrued $1.9 million and $4.3 million, respectively, for certain of these matters which we believe were
appropriate based on information then currently available. It is possible that losses related to these legal proceedings could exceed the
amounts accrued as of December 31, 2021, and that such additional losses could cause a material adverse effect on our business,
financial condition, results of operations, liquidity, ability to pay dividends or stock price.
MTBE Litigation – State of Pennsylvania
On July 7, 2014, our subsidiary, Getty Properties Corp., was served with a complaint filed by the Commonwealth of
Pennsylvania (the “State”) in the Court of Common Pleas, Philadelphia County relating to alleged statewide MTBE contamination in
Pennsylvania. The named plaintiff is the State, by and through (then) Pennsylvania Attorney General Kathleen G. Kane (as Trustee of
the waters of the State), the Pennsylvania Insurance Department (which governs and administers the Underground Storage Tank
Indemnification Fund), the Pennsylvania Department of Environmental Protection (vested with the authority to protect the
environment) and the Pennsylvania Underground Storage Tank Indemnification Fund. The complaint names us and more than 50
other defendants, including Exxon Mobil, BP, Chevron, Citgo, Gulf, Lukoil Americas, Getty Petroleum Marketing Inc., Marathon,
Hess, Shell Oil, Texaco, Valero, as well as other smaller petroleum refiners, manufacturers, distributors and retailers of MTBE or
gasoline containing MTBE who are alleged to have distributed, stored and sold MTBE gasoline in Pennsylvania. The complaint seeks
compensation for natural resource damages and for injuries sustained as a result of “defendants’ unfair and deceptive trade practices
and act in the marketing of MTBE and gasoline containing MTBE.” The plaintiffs also seek to recover costs paid or incurred by the
State to detect, treat and remediate MTBE from public and private water wells and groundwater. The plaintiffs assert causes of action
against all defendants based on multiple theories, including strict liability – defective design; strict liability – failure to warn; public
nuisance; negligence; trespass; and violation of consumer protection law.
27
The case was filed in the Court of Common Pleas, Philadelphia County, but was removed by defendants to the United States
District Court for the Eastern District of Pennsylvania and then transferred to the United States District Court for the Southern District
of New York so that it may be managed as part of the ongoing MTBE MDL proceedings. In November 2015, plaintiffs filed a Second
Amended Complaint naming additional defendants and adding factual allegations against the defendants. We joined with other
defendants in the filing of a motion to dismiss the claims against us, which was granted in part and denied in part. We are vigorously
defending the claims made against us. Our ultimate liability in this proceeding is uncertain and subject to numerous contingencies
which cannot be predicted and the outcome of which are not yet known.
MTBE Litigation – State of Maryland
On December 17, 2017, the State of Maryland, by and through the Attorney General on behalf of the Maryland Department of
Environment and the Maryland Department of Health (the “State of Maryland”), filed a complaint in the Circuit Court for Baltimore
City related to alleged statewide MTBE contamination in Maryland. The complaint was served upon us on January 19, 2018. The
complaint names us and more than 60 other defendants, including Exxon Mobil, APEX Oil, Astra Oil, Atlantic Richfield, BP,
Chevron, Citgo, ConocoPhillips, Hess, Kinder Morgan, Lukoil, Marathon, Shell, Sunoco, Texaco, Valero, Cumberland Farms, Duke
Energy, El Paso Merchant Energy-Petroleum, Energy Transfer Partners, Equilon Enterprises, ETP Holdco, George E. Warren
Corporation, Getty Petroleum Marketing, Inc., Gulf, Guttman Energy, Hartree Partners, Holtzman Oil, Motiva Enterprises, Nustar
Terminals Operations Partnership, Phillips 66, Premcor, 7-Eleven, Sheetz, Total Petrochemicals & Refining USA, Transmontaigne
Product Services, Vitol S.A., WAWA, and Western Refining. The complaint seeks compensation for natural resource damages and for
injuries sustained as a result of the defendants’ unfair and deceptive trade practices in the marketing of MTBE and gasoline containing
MTBE. The plaintiffs also seek to recover costs paid or incurred by the State of Maryland to detect, investigate, treat and remediate
MTBE from public and private water wells and groundwater, punitive damages and the award of attorneys’ fees and litigation costs.
The plaintiffs assert causes of action against all defendants based on multiple theories, including strict liability – defective design;
strict liability – failure to warn; strict liability for abnormally dangerous activity; public nuisance; negligence; trespass; and violations
of Titles 4, 7 and 9 of the Maryland Environmental Code.
On February 14, 2018, defendants removed the case to the United States District Court for the District of Maryland. We are
vigorously defending the claims made against us. Our ultimate liability, if any, in this proceeding is uncertain and subject to numerous
contingencies which cannot be predicted and the outcome of which are not yet known.
Matters related to our former Newark, New Jersey Terminal and the Lower Passaic River
In 2004, the United States Environmental Protection Agency (“EPA”) issued General Notice Letters (“GNL”) to over 100
entities, including us, alleging that they are PRPs at the Diamond Alkali Superfund Site (“Superfund Site”), which includes the former
Diamond Shamrock Corporation manufacturing facility located at 80-120 Lister Ave. in Newark, New Jersey and a 17-mile stretch of
the Passaic River from Dundee Dam to the Newark Bay and its tributaries (the Lower Passaic River Study Area or “LPRSA”). In May
2007, over 70 GNL recipients, including us, entered into an Administrative Settlement Agreement and Order on Consent (“AOC”)
with the EPA to perform a Remedial Investigation and Feasibility Study (“RI/FS”) for the LPRSA, which is intended to address the
investigation and evaluation of alternative remedial actions with respect to alleged damages to the LPRSA. Many of the parties to the
AOC, including us, are also members of a Cooperating Parties Group (“CPG”). The CPG agreed to an interim allocation formula for
purposes of allocating the costs to complete the RI/FS among its members, with the understanding that this interim allocation formula
is not binding on the parties in terms of any potential liability for the costs to remediate the LPRSA. The CPG submitted to the EPA its
draft RI/FS in 2015, which sets forth various alternatives for remediating the entire 17 miles of the LPRSA. In October 2018, the EPA
issued a letter directing the CPG to prepare a streamlined feasibility study for just the upper 9-miles of the LPRSA based on an
iterative approach using adaptive management strategies. On December 4, 2020, The CPG submitted a Final Draft Interim Remedy
Feasibility Study (“IR/FS”) to the EPA which identifies various targeted dredge and cap alternatives for the upper 9-miles of the
LPRSA. On December 11, 2020, the EPA conditionally approved the CPG’s IR/FS for the upper 9-miles of the LPRSA, which
recognizes that interim actions and adaptive management may be appropriate before deciding a final remedy. The EPA published the
Proposed Plan for the upper 9-mile IR/FS for public comment and subsequently issued a Record of Decision (“ROD”) for the upper 9-
mile IR/FS (“Upper 9-mile IR ROD”). There is currently no mechanism in place requiring any parties to implement the Upper 9-mile
IR ROD.
In addition to the RI/FS activities, other actions relating to the investigation and/or remediation of the LPRSA have proceeded
as follows. First, in June 2012, certain members of the CPG entered into an Administrative Settlement Agreement and Order on
Consent (“10.9 AOC”) with the EPA to perform certain remediation activities, including removal and capping of sediments at the
river mile 10.9 area and certain testing. The EPA also issued a Unilateral Order to Occidental Chemical Corporation (“Occidental”),
the former owner/operator of the Diamond Shamrock Corporation facility responsible for the discharge of 2,3,8,8-TCDD (“dioxin”)
and other hazardous substances from the Lister facility. The Order directed Occidental to participate and contribute to the cost of the
river mile 10.9 work. Concurrent with the CPG’s work on the RI/FS, on April 11, 2014, the EPA issued a draft Focused Feasibility
Study (“FFS”) with proposed remedial alternatives to remediate the lower 8-miles of the LPRSA. The FFS was subject to public
comments and objections and, on March 4, 2016, the EPA issued a ROD for the lower 8-miles (“Lower 8-mile ROD”) selecting a
28
remedy that involves bank-to-bank dredging and installing an engineered cap with an estimated cost of $1.38 billion. On March 31,
2016, we and more than 100 other PRPs received from the EPA a “Notice of Potential Liability and Commencement of Negotiations
for Remedial Design” (“Notice”), which informed the recipients that the EPA intends to seek an Administrative Order on Consent and
Settlement Agreement with Occidental (who the EPA considers the primary contributor of dioxin and other pesticides generated from
the production of Agent Orange at its Diamond Shamrock Corporation facility and a discharger of other contaminants of concern
(“COCs”) to the Superfund Site for remedial design of the remedy selected in the Lower 8-mile ROD, after which the EPA plans to
begin negotiations with “major” PRPs for implementation and/or payment of the selected remedy. The Notice also stated that the EPA
believes that some of the PRPs and other parties not yet identified will be eligible for a cash out settlement with the EPA. On
September 30, 2016, Occidental entered into an agreement with the EPA to perform the remedial design for the Lower 8-mile ROD. In
December 2019, Occidental submitted a report to the EPA on the progress of the remedial design work, which is still ongoing.
Occidental has asserted that it is entitled to indemnification by Maxus Energy Corporation (“Maxus”) and Tierra Solutions, Inc.
(“Tierra”) for its liability in connection with the Site. Occidental has also asserted that Maxus and Tierra’s parent company, YPF, S.A.
(“YPF”) and certain of its affiliates must indemnify Occidental. On June 16, 2016, Maxus and Tierra filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. In July 2017, an amended Chapter 11 plan of liquidation became effective and, in
connection therewith, Maxus and Tierra entered into a mutual contribution release agreement with certain parties, including us,
pertaining to certain past costs, but not future remedy costs.
By letter dated March 30, 2017, the EPA advised the recipients of the Notice that it would be entering into cash out settlements
with 20 PRPs to resolve their alleged liability for the remedial actions addressed in the Lower 8-mile ROD, who the EPA stated did
not discharge any of the eight hazardous substances identified as a COC in the ROD. The letter also stated that other parties who did
not discharge dioxins, furans or polychlorinated biphenyls (which are considered the COCs posing the greatest risk to the river) may
also be eligible for cash out settlements, and that the EPA would begin a process for identifying other PRPs for negotiation of future
cash out settlements. We were not included in the initial group of 20 parties identified by the EPA for cash out settlements, but we
believe we meet the EPA’s criteria for a cash out settlement and should be considered for same in any future discussions. In January
2018, the EPA published a notice of its intent to enter into a final settlement agreement with 15 of the initial group of parties to resolve
their respective alleged liability for the Lower 8-mile ROD work, each for a payment to the EPA in the amount of $0.3 million. In
August 2017, the EPA appointed an independent third-party allocation expert to conduct allocation proceedings with most of the
remaining recipients of the Notice, which process has concluded leading to an agreement in principle between the EPA and certain of
the allocation proceeding participants, including us, concerning a cash-out settlement for the entire 17-mile stretch of the Lower
Passaic River and its tributaries, which is subject to negotiation and court approval and entry of a consent decree.
On June 30, 2018, Occidental filed a complaint in the United States District Court for the District of New Jersey seeking cost
recovery and contribution under the Comprehensive Environmental Response, Compensation, and Liability Act for its alleged
expenses with respect to the investigation, design, and anticipated implementation of the remedy for the Lower 8-mile ROD work (the
“Occidental lawsuit”). The complaint lists over 120 defendants, including us, many of whom were also named in the EPA’s 2016
Notice. Factual discovery is ongoing, and we are defending the claims consistent with our defenses in the related proceedings. In
January 2022, certain defendants in Occidental lawsuit, including us, collectively filed a motion seeking the Court’s permission to file
a motion to stay the litigation to allow the related allocation proceedings and resulting settlement discussions with the EPA to continue
unencumbered by the time and costs of litigation and discovery that could later be obviated by a settlement. The Court is currently
considering whether to rule on this motion for a stay of the proceedings.
Based on currently known facts and circumstances, including, among other factors, the agreement in principle with the EPA
noted above, anticipated allocations, our belief that there was not any use or discharge of dioxins, furans or polychlorinated biphenyls
in connection with our former petroleum storage operations at our former Newark, New Jersey Terminal, and because there are
numerous other parties who will likely bear the costs of remediation and/or damages, the Company does not believe that resolution of
this matter as relates to the Company is reasonably likely to have a material impact on our results of operations. Nevertheless, in the
event the agreement in principle is not approved by the Court, and/or there are one or more adverse determinations related to this
matter, performance of the EPA’s selected remedies for the LPRSA may be subject to future negotiation, potential enforcement
proceedings and/or possible litigation; hence, our ultimate liability in the pending and possible future proceedings pertaining to the
LPRSA remains uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet
known. For these reasons, we are unable to estimate a possible loss or range of loss in excess of the amount we have accrued for the
Lower Passaic River proceedings as of the date of this Annual Report on Form 10-K, and it is therefore possible that losses related to
the Lower Passaic River proceedings could exceed the amounts accrued as of the date hereof, which could cause a material adverse
effect on our results of operations.
For additional information see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in this Form 10-K.
Item 4. Mine Safety Disclosures
None.
29
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Capital Stock
Our common stock is traded on the New York Stock Exchange (symbol: GTY). There were approximately 23,925 beneficial
holders of our common stock as of February 14, 2022, of which approximately 850 were holders of record.
For a discussion of potential limitations on our ability to pay future dividends see “Item 1A. Risk Factors – We may change our
dividend policy and the dividends we pay may be subject to significant volatility” and “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”.
Issuer Purchases of Equity Securities
None.
Sales of Unregistered Securities
None.
Stock Performance Graph
Comparison of Five-Year Cumulative Total Return*
Getty Realty Corp.
Standard & Poor's 500
Peer Group
$100.00
$122.85
$113.38
$112.09
$153.34
$153.17
$147.77
$124.22
$116.64
$115.34
$233.41
$180.18
$162.26
$161.06
$131.49
$130.40
$250.00
$200.00
$150.00
$100.00
$50.00
$-
1 2 / 3 0 / 2 0 1 6
1 / 2 / 2 0 1 8
1 / 2 / 2 0 1 9
1 2 / 3 1 / 2 0 1 9
1 2 / 3 0 / 2 0 2 0
1 2 / 3 1 / 2 0 2 1
Source: SNL Financial
Getty Realty Corp.
Standard & Poor's 500
Peer Group
12/30/2016 1/02/2018 1/02/2019 12/31/2019 12/30/2020 12/31/2021
100.00 $ 112.09 $ 124.22 $ 147.77 $ 131.49 $ 161.06
100.00 $ 122.85 $ 116.64 $ 153.17 $ 180.18 $ 233.41
100.00 $ 113.38 $ 115.34 $ 153.34 $ 130.40 $ 162.26
Assumes $100 invested at the close of the last day of trading on the New York Stock Exchange on December 31, 2016, in Getty
Realty Corp. common stock, Standard & Poor’s 500 and Peer Group.
* Cumulative total return assumes reinvestment of dividends.
We have chosen as our Peer Group the following companies: Agree Realty Corporation, EPR Properties, Essential Properties
Realty Trust, Four Corners Properties Trust, and NETSTREIT Corp and One Liberty Properties. We have chosen these companies as
30
our Peer Group because a substantial segment of each of their businesses is owning and leasing single tenant net lease retail properties.
We cannot assure you that our stock performance will continue in the future with the same or similar trends depicted in the
performance graph above. We do not make or endorse any predictions as to future stock performance.
The above performance graph and related information shall not be deemed filed for the purposes of Section 18 of the Exchange
Act or otherwise subject to the liability of that Section and shall not be deemed to be incorporated by reference into any filing that we
make under the Securities Act or the Exchange Act.
Item 6. Reserved
31
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the
reader understand our operations and our present business environment from the perspective of management. The following
discussion and analysis should be read in conjunction with the “Cautionary Note Regarding Forward-Looking Statements”; the
sections in Part I entitled “Item 1A. Risk Factors”; and the consolidated financial statements and related notes in “Item 8. Financial
Statements and Supplementary Data”. We use certain non-GAAP measures that are more fully described below under the caption “—
Supplemental Non-GAAP Measures,” which we believe are appropriate supplemental non-GAAP measures of the performance of
REITs used by our management, as well as REIT analysts.
This section of this Form 10-K generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020.
Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Form 10-K can be found
in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
General
Real Estate Investment Trust
We are a REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant
retail real estate. Our portfolio includes convenience stores, express car washes, automotive service centers (including instant oil
change, tire and battery, gas and repair, and other related centers), automotive parts retailers, drive-thru quick service restaurants and
select other properties. As of December 31, 2021, our portfolio included 1,028 properties, including 981 properties owned by us and
47 properties that we leased from third-party landlords. As a REIT, we are not subject to federal corporate income tax on the taxable
income we distribute to our stockholders. In order to continue to qualify for taxation as a REIT, we are required, among other things,
to distribute at least 90% of our ordinary taxable income to our stockholders each year.
COVID-19
In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. The impact from the rapidly
changing market and economic conditions due to the COVID-19 pandemic remains uncertain. While we have not incurred significant
disruptions to our financial results thus far from the COVID-19 pandemic, we are unable to accurately predict the impact that COVID-
19 will have on our business, operations and financial result due to numerous evolving factors, including the severity of the disease,
the duration of the pandemic, actions that may be taken by governmental authorities, the impact to our tenants, including the ability of
our tenants to make their rental payments and any closures of tenants’ facilities. Additionally, while we expect to continue our overall
growth strategy during the 2022 and to fund our business operations from cash flows from our properties and our Revolving Facility,
the rapid developments and fluidity of COVID-19 may cause us to re-evaluate, if not suspend, our growth strategy and/or to rely more
heavily on borrowings under our Revolving Facility, proceeds from the sale of shares of our common stock under our ATM Program,
or other sources of liquidity. See “Part I. Item. 1A. Risk Factors” in this Annual Report on Form 10-K for additional information.
Our Triple-Net Leases
Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, car wash
operators and other automotive-related and retail tenants. Our tenants either operate their business at our properties directly or, in the
case of certain convenience stores and gasoline and repair stations, sublet our properties and supply fuel to third parties that operate
the businesses. Our triple-net lease tenants are responsible for the payment of all taxes, maintenance, repairs, insurance and other
operating expenses relating to our properties, and are also responsible for environmental contamination occurring during the terms of
their leases and in certain cases also for environmental contamination that existed before their leases commenced.
Significant portion of our tenants’ financial results depend on convenience store sales, the sale of refined petroleum products
and/or the sale of automotive services and parts. As a result, our tenants’ financial results can be dependent on the performance of the
automobile manufacturing, petroleum marketing and automobile aftermarket industries, each of which are highly competitive and can
be subject to variability. (For additional information regarding risks related to our tenants’ dependence on the performance of the
petroleum industry, see “Item 1A. Risk Factors – Significant number of our tenants depend on the same industry for their revenues” in
this Form 10-K.) During the terms of our leases, we monitor the credit quality of our triple-net lease tenants by reviewing their
published credit rating, if available, reviewing publicly available financial statements, or reviewing financial or other operating
statements which are delivered to us pursuant to applicable lease agreements, monitoring news reports regarding our tenants and their
respective businesses, and monitoring the timeliness of lease payments and the performance of other financial covenants under their
leases.
32
Our Properties
Net Lease. As of December 31, 2021, we leased 1,019 of our properties to tenants under triple-net leases.
Our net lease properties include 845 properties leased under 33 separate unitary or master triple-net leases and 174 properties
leased under single unit triple-net leases. These leases generally provide for an initial term of 15 or 20 years with options for
successive renewal terms of up to 20 years and periodic rent escalations. Several of our leases provide for additional rent based on the
aggregate volume of fuel sold. In addition, certain of our leases require the tenants to invest capital in our properties, substantially all
of which is related to the replacement of USTs that are owned by our tenants.
Redevelopment. As of December 31, 2021, we were actively redeveloping four of our properties as new convenience stores or
for alternative single tenant retail uses.
Vacancies. As of December 31, 2021, five of our properties were vacant. We expect that we will either sell or enter into new
leases on these properties over time.
Investment Strategy and Activity
As part of our strategy to grow and diversify our portfolio, we regularly review acquisition and financing opportunities to invest
in additional convenience, automotive and other single tenant retail real estate. We primarily pursue sale leaseback transactions with
existing and prospective tenants and will pursue other transactions, including forward commitments to acquire new-to-industry
construction and the acquisition of assets with in-place leases, that result in us owning fee simple interests in our properties. Our
investment activities may also include purchase money financing with respect to properties we sell, real property loans relating to our
leasehold properties and construction loans. Our investment strategy seeks to generate current income and benefit from long-term
appreciation in the underlying value of our real estate. To achieve that goal, we seek to invest in well-located, freestanding properties
that support automobility and provide convenience and service to consumers in major markets across the country. A key element of
our investment strategy is to invest in properties that will enhance our property type, tenant and geographic diversification.
During the year ended December 31, 2021, we invested $200.0 million across 100 properties, including the acquisition of fee
simple interests in 97 properties for an aggregate purchase price of $194.3 million and $5.7 million of outstanding construction loans,
including accrued interest, for three new-to-industry developments. During the year ended December 31, 2020, we acquired fee simple
interests in 34 properties for an aggregate purchase price of $150.0 million. We accounted for the acquisitions of fee simple interests
as asset acquisitions. For additional information regarding our property acquisitions, see Note 13 in “Item 8. Financial Statements and
Supplementary Data” in this Form 10-K.
Redevelopment Strategy and Activity
We believe that certain of our properties, primarily those currently being occupied by gas and repair businesses, are well-suited
to be redeveloped as new convenience stores or other single tenant retail uses, such as automotive parts, quick service restaurants,
bank branches and specialty retail. We believe that the redeveloped properties can be leased or sold at higher values than their current
use.
During the years ended December 31, 2021 and 2020, rent commenced on five and six completed redevelopment projects,
respectively, that were placed back into service in our net lease portfolio. Since the inception of our redevelopment program in 2015,
we have completed 24 redevelopment projects.
For the year ended December 31, 2021, we spent $0.3 million (net of write-offs) of construction-in-progress costs related to our
redevelopment activities and transferred $0.4 million of construction-in-progress to buildings and improvements on our consolidated
balance sheet. For the year ended December 31, 2020, we spent $0.3 million (net of write-offs) of construction-in-progress costs
related to our redevelopment activities and transferred $1.6 million of construction-in-progress to buildings and improvements on our
consolidated balance sheet.
As of December 31, 2021, we had four properties under active redevelopment and others in various stages of feasibility
planning for potential recapture from our net lease portfolio, including three properties for which we have signed new leases or letters
of intent and which will be transferred to redevelopment when the appropriate entitlements, permits and approvals have been secured.
Asset Impairment
We perform an impairment analysis for the carrying amounts of our properties in accordance with GAAP when indicators of
impairment exist. We reduced the carrying amounts to fair value, and recorded impairment charges aggregating $4.4 million and $4.3
million for the years ended December 31, 2021 and 2020, respectively, where the carrying amounts of the properties exceeded the
estimated undiscounted cash flows expected to be received during the assumed holding period which includes the estimated sales
value expected to be received at disposition. The impairment charges were attributable to (i) the effect of adding asset retirement costs
to certain properties due to changes in estimates associated with our environmental liabilities, which increased the carrying values of
33
these properties in excess of their fair values, (ii) reductions in estimated undiscounted cash flows expected to be received during the
assumed holding period for certain of our properties, and (iii) reductions in estimated sales prices from third-party offers based on
signed contracts, letters of intent or indicative bids for certain of our properties. The evaluation and estimates of anticipated cash flows
used to conduct our impairment analysis are highly subjective and actual results could vary significantly from our estimates. For a
discussion of the risks associated with asset impairments, see “Item 1A. Risk Factors – Our assets may be subject to impairment
charges.”
Supplemental Non-GAAP Measures
We manage our business to enhance the value of our real estate portfolio and, as a REIT, place particular emphasis on
minimizing risk, to the extent feasible, and generating cash sufficient to make required distributions to stockholders of at least 90% of
our ordinary taxable income each year. In addition to measurements defined by accounting principles generally accepted in the United
States of America (“GAAP”), we also focus on Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”)
(both AFFO and AFFO excluding stock-based compensation and amortization of debt issuance costs) to measure our performance.
We are updating our definition of AFFO to include adjustments for stock-based compensation and amortization of debt issuance costs
and are providing AFFO using both methods for the quarter and year ended December 31, 2021. We believe that conforming to this
market practice for calculating AFFO will improve the comparability of this measure of performance to other net lease REITs, and we
will report AFFO pursuant to this updated definition beginning in the first quarter of 2022.
FFO and AFFO are generally considered by analysts and investors to be appropriate supplemental non-GAAP measures of the
performance of REITs. FFO and AFFO are not in accordance with, or a substitute for, measures prepared in accordance with GAAP.
In addition, FFO and AFFO are not based on any comprehensive set of accounting rules or principles. Neither FFO nor AFFO
represent cash generated from operating activities calculated in accordance with GAAP and therefore these measures should not be
considered an alternative for GAAP net earnings or as a measure of liquidity. These measures should only be used to evaluate our
performance in conjunction with corresponding GAAP measures.
FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as GAAP net earnings before (i)
depreciation and amortization of real estate assets, (ii) gains or losses on dispositions of real estate assets, (iii) impairment charges,
and (iv) the cumulative effect of accounting changes.
Our definition of AFFO is defined as FFO plus or minus (i) certain revenue recognition adjustments (defined below), (ii) certain
environmental adjustments (defined below), (iii) other non-cash and/or unusual items that are not reflective of our core operating
performance, and (iv) beginning with our results for the quarter and year ended December 31, 2021, stock-based compensation and
amortization of debt issuance costs.
Other REITs may use definitions of FFO and/or AFFO that are different than ours and, accordingly, may not be comparable.
We believe that FFO and AFFO are helpful to analysts and investors in measuring our 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 core operating
performance of our portfolio. Specifically, FFO excludes items such as depreciation and amortization of real estate assets, gains or
losses on dispositions of real estate assets, and impairment charges. With respect to AFFO, we further exclude the impact of (i)
deferred rental revenue (straight-line rent), the net amortization of above-market and below-market leases, adjustments recorded for
the recognition of rental income from direct financing leases, and the amortization of deferred lease incentives (collectively, “Revenue
Recognition Adjustments”), (ii) environmental accretion expenses, environmental litigation accruals, insurance reimbursements, legal
settlements and judgments, and changes in environmental remediation estimates (collectively, “Environmental Adjustments”), (iii)
other items, which may include allowances for credit losses on notes and mortgages receivable and direct financing leases, losses on
extinguishment of debt, retirement and severance costs, and other items that do not impact our recurring cash flow and which are not
indicative of our core operating performance and (iv) beginning with our results for the quarter and year ended December 31, 2021,
stock-based compensation and amortization of debt issuance costs.
We pay particular attention to AFFO which it believes provides the most useful depiction of the core operating performance of
its portfolio. By providing AFFO, we believe we are presenting information that assists analysts and investors in their assessment of
our core operating performance, as well as the sustainability of our core operating performance with the sustainability of the core
operating performance of other real estate companies.
34
A reconciliation of net earnings to FFO and AFFO is as follows (in thousands, except per share amounts):
Net earnings
Depreciation and amortization of real estate assets
Gains on dispositions of real estate
Impairments
Funds from operations (FFO)
Revenue recognition adjustments
Allowance for credit loss on notes and mortgages receivable
and direct financing leases
Loss on extinguishment of debt
Changes in environmental estimates
Accretion expense
Environmental litigation accruals
Insurance reimbursements
Legal settlements and judgments
Retirement and severance costs
Adjusted funds from operations (AFFO)
Stock-based compensation expense
Amortization of debt issuance costs
AFFO (excluding stock-based compensation and amortization
of debt issuance costs)
Basic per share amounts:
Net earnings
FFO (1)
AFFO (1)
AFFO (excluding stock-based compensation and amortization
of debt issuance costs) (1)
Diluted per share amounts:
Net earnings
FFO (1)
AFFO (1)
AFFO (excluding stock-based compensation and amortization
of debt issuance costs) (1)
Weighted average common shares outstanding:
Basic
Diluted
2021
Year ended December 31,
2020
2019
$
$
62,860 $
35,518
(16,718 )
4,404
86,064
1,964
(132 )
—
(1,768 )
1,705
1,909
(92 )
(493 )
800
89,957 $
3,997
1,013
69,388 $
30,191
(4,548 )
4,258
99,289
895
368
1,233
(3,135 )
1,841
85
(142 )
(21,300 )
—
79,134 $
3,130
1,053
49,723
25,161
(1,063 )
4,012
77,833
(960 )
—
—
(5,386 )
2,006
5,896
(4,866 )
(2,707 )
—
71,816
2,468
970
$
94,967 $
83,317
$
75,254
$
$
1.37 $
1.88
1.97
1.62 $
2.32
1.85
2.08
1.94
1.37 $
1.88
1.97
1.62 $
2.31
1.84
2.08
1.94
1.19
1.86
1.72
1.80
1.19
1.86
1.72
1.80
44,782
44,819
42,040
42,070
41,072
41,110
(1) Dividends paid and undistributed earnings allocated, if any, to unvested restricted stockholders are deducted from FFO and AFFO
for the computation of the per share amounts. The following amounts were deducted:
FFO
AFFO
AFFO (excluding stock-based compensation and amortization
of debt issuance costs)
2021
Year ended December 31,
2020
2019
$
1,771
1,814
$
1,939
1,546
$
1,915
1,627
1,308
1,207
1,265
Results of Operations
Year ended December 31, 2021, compared to year ended December 31, 2020
Revenues from rental properties increased by $9.3 million to $153.9 million for the year ended December 31, 2021, as
compared to $144.6 million for the year ended December 31, 2020. The increase in revenues from rental properties was primarily due
35
to incremental rental income from acquired properties, as well as rent commencements from completed redevelopments and
contractual rent increases for certain in-place leases .
Rental income contractually due from our tenants included in revenues from rental properties was $138.7 million for the year
ended December 31, 2021, as compared to $128.2 million for the year ended December 31, 2020.
In accordance with GAAP, we recognize revenues from rental properties in amounts which vary from the amount of rent
contractually due during the periods presented. As a result, revenues from rental properties include Revenue Recognition Adjustments
comprised of non-cash adjustments recorded for deferred rental revenue due to the recognition of rental income on a straight-line basis
over the current lease term, the net amortization of above-market and below-market leases, recognition of rental income under direct
financing leases using the effective interest rate method which produces a constant periodic rate of return on the net investments in the
leased properties and the amortization of deferred lease incentives. Revenues from rental properties include Revenue Recognition
Adjustments which decreased rental revenue by $2.0 million and by $0.9 million for the years ended December 31, 2021 and 2020,
respectively.
Tenant reimbursements, which are included in revenues from rental properties, and which consist of real estate taxes and other
municipal charges paid by us which are reimbursable by our tenants pursuant to the terms of triple-net lease agreements, were $17.2
million and $17.3 million for the years ended December 31, 2021 and 2020, respectively.
Interest income on notes and mortgages receivable was $1.5 million for the year ended December 31, 2021, as compared to $2.7
million for the year ended December 31, 2020.
Property costs, which are primarily comprised of rent expense, real estate and other state and local taxes, municipal charges,
professional fees, maintenance expense and reimbursable tenant expenses, were $22.0 million for the year ended December 31, 2021,
as compared to $23.5 million for the year ended December 31, 2020. The decrease in property costs for the year ended December 31,
2021, was principally due to a decrease in rent expense, professional fees related to property redevelopments, non-reimbursable real
estate taxes, maintenance expenses and other professional fees.
Impairment charges were $4.4 million for the year ended December 31, 2021, as compared to $4.3 million for the year ended
December 31, 2020. Impairment charges are recorded when the carrying value of a property is reduced to fair value. Impairment
charges for the years ended December 31, 2021 and 2020, were attributable to the effect of adding asset retirement costs to certain
properties due to changes in estimates associated with our environmental liabilities, which increased the carrying values of these
properties in excess of their fair values, reductions in estimated undiscounted cash flows expected to be received during the assumed
holding period for certain of our properties, and reductions in estimated sales prices from third-party offers based on signed contracts,
letters of intent or indicative bids for certain of our properties.
Environmental expenses were $3.5 million for the year ended December 31, 2021, as compared to $1.1 million for the year
ended December 31, 2020. The increase in environmental expenses for the year ended December 31, 2021, was principally due to a
$1.8 million increase in environmental litigation accruals and a $1.2 million increase in net environmental remediation costs and
estimates, partially offset by a $0.5 million decrease in environmental legal and professional fees. Environmental expenses vary from
period to period and, accordingly, undue reliance should not be placed on the magnitude or the direction of change in reported
environmental expenses for one period, as compared to prior periods.
General and administrative expense was $20.2 million for the year ended December 31, 2021, as compared to $17.3 million for
the year ended December 31, 2020. The increase in general and administrative expense for the year ended December 31, 2021, was
principally due to a $0.9 million increase in stock-based compensation, a $0.8 million increase in non-recurring employee-related
expenses and a $0.7 million increase in other employee-related expenses.
Depreciation and amortization expense was $35.5 million for the year ended December 31, 2021, as compared to $30.2 million
for the year ended December 31, 2020. The increase in depreciation and amortization expense was primarily due to depreciation and
amortization of properties acquired offset by a decrease in depreciation charges related to asset retirement costs, the effect of certain
assets becoming fully depreciated, lease terminations and dispositions of real estate.
Gains on dispositions of real estate were $16.7 million for the year ended December 31, 2021, as compared to $4.5 million for
the year ended December 31, 2020. The gains were primarily the result of the sale of 16 and 11 properties during the years ended
December 31, 2021 and 2020, respectively.
Other income was $1.1 million for the year ended December 31, 2021, as compared to $21.1 million for the year ended
December 31, 2020. For the year ended December 31, 2021, other income was primarily attributable to $0.5 million received from
legal settlements and judgments and $0.4 million received for lease considerations and easements. Other income for the year ended
December 31, 2020, was primarily attributable to $21.3 million received from legal settlements and judgments, partially offset by a
$0.4 million allowance for credit loss on notes and mortgages receivable and direct financings leases.
Interest expense was $24.7 million for the year ended December 31, 2021, as compared to $26.1 million for the year ended
December 31, 2020. The decrease was due to lower average interest rates for the year ended December 31, 2021, as compared to the
year ended December 31, 2020.
36
Liquidity and Capital Resources
General
Our principal sources of liquidity are the cash flows from our operations, funds available under our Revolving Facility (which is
scheduled to mature in October 2025), proceeds from the sale of shares of our common stock through offerings under our ATM
Program, and available cash and cash equivalents. Our business operations and liquidity are dependent on our ability to generate cash
flow from our properties. Our principal uses for liquidity include normal operating activities, payments of interest on outstanding debt,
redevelopment projects, real estate acquisitions, and environmental remediation. We believe that our operating cash needs for the next
twelve months, as well as our long-term liquidity requirements, can be met by cash flows from operations, borrowings under our
Revolving Facility, proceeds from the sale of shares of our common stock under our ATM Program and available cash and cash
equivalents. We have not historically incurred significant capital expenditures other than those related to acquisitions. For a discussion
of our capital expenditures, see “—Property Acquisitions and Capital Expenditures.
As of December 31, 2021, we had $60 million outstanding on our Revolving Facility and our total cash and cash equivalents
were $26.5 million. During the year ended December 31, 2021, we raised gross proceeds of $94.1 million through our ATM equity
program pursuant to which we are able to issue and sell shares of our common stock with an aggregate sales price of up to $250.0
million. We expect existing cash and cash equivalents, net cash from operating activities, proceeds from real estate asset sales,
borrowings under our unsecured Revolving Facility, issuances under our ATM Program, issuances of unsecured notes and issuances
of common stock to continue to be sufficient to fund our operating activities and cash needed for investing and financing activities,
such as regular quarterly dividends, scheduled debt repayments, acquisitions, and certain capital expenditures, including expenditures
related to redevelopment activities. We also expect to continue meeting our short-term liquidity and capital requirements, generally
through our working capital and net cash provided by operating activities. We believe that the net cash provided by operating
activities will continue to be sufficient to enable us to make the distributions necessary to continue qualifying as a REIT.
On February 22, 2022, we closed on the private placement of $225 million of senior unsecured notes, including (i) $100
million of 3.45% notes funded at closing and maturing in February 2032, and (ii) $125 million of 3.65% notes to be funded in January
2023 and mature in January 2033. Proceeds from the notes funded at closing were used to repay all amounts outstanding on the
Revolving Facility and for general corporate purposes, including to fund investment activity. Proceeds from the delayed funding notes
will be used to prepay $75 million of 5.35% senior unsecured notes maturing in June 2023 and for general corporate purposes,
including to fund investment activity.
Our cash flow activities for the years ended December 31, 2021 and 2020 are summarized as follows (in thousands):
Net cash flow provided by operating activities
Net cash flow used in investing activities
Net cash flow provided by (used in) financing activities
Operating Activities
Year ended December 31,
2021
2020
$
$
86,818 $
(169,732 )
52,321 $
82,827
(127,417 )
77,980
Net cash flow from operating activities increased by $4.0 million for the year ended December 31, 2021, to $86.8 million, as
compared to $82.8 million for the year ended December 31, 2020. Net cash provided by operating activities represents cash received
primarily from rental and interest income less cash used for property costs, environmental expense, general and administrative
expense and interest expense. The change in net cash flow provided by operating activities for the years ended December 31, 2021,
2020 is primarily the result of changes in revenues and expenses as discussed in “Results of Operations” above and the other changes
in assets and liabilities on our consolidated statements of cash flows.
Investing Activities
Our investing activities are primarily real estate-related transactions. Because we generally lease our properties to tenants on a
triple-net basis, we have not historically incurred significant capital expenditures other than those related to investments in real estate
and our redevelopment activities. Net cash flow used in investing activities increased by $42.3 million for the year ended
December 31, 2021, to a use of $169.7 million, as compared to a use of $127.4 million for the year ended December 31, 2020. The
increase in net cash flow used in investing activities for the year ended December 31, 2021, was primarily due to an increase of $44.3
million of property acquisitions, a $10.6 million increase in issuance of notes receivable, and a decrease of $12.4 million in collections
of notes and mortgages receivable, partially offset by an increase of $19.4 million in proceeds from dispositions of real estate and an
increase of $5.7 million in deposits for property acquisitions.
37
Financing Activities
Net cash flow provided by financing activities decreased by $25.7 million for the year ended December 31, 2021, to $52.3
million, as compared to $78.0 million for the year ended December 31, 2020. The decrease in net cash flow from financing activities
for the year ended December 31, 2021, was primarily due to a decrease in net borrowings of $44.0 million and an increase in
dividends paid of $8.2 million, partially offset by an increase in net proceeds from issuances of common stock of $29.1 million.
Credit Agreement
On June 2, 2015, we entered into a $225.0 million senior unsecured credit agreement (the “Credit Agreement”) with a group of
banks led by Bank of America, N.A. The Credit Agreement consisted of a $175.0 million unsecured revolving credit facility (the
“Revolving Facility”) and a $50.0 million unsecured term loan (the “Term Loan”).
On March 23, 2018, we entered in to an amended and restated credit agreement (as amended, the “Restated Credit Agreement”)
amending and restating our Credit Agreement. Pursuant to the Restated Credit Agreement, we (a) increased the borrowing capacity
under the Revolving Facility from $175.0 million to $250.0 million, (b) extended the maturity date of the Revolving Facility from
June 2018 to March 2022, (c) extended the maturity date of the Term Loan from June 2020 to March 2023 and (d) amended certain
financial covenants and provisions.
On September 19, 2018, we entered into an amendment (the “First Amendment”) of our Restated Credit Agreement. The First
Amendment modified the Restated Credit Agreement to, among other things: (i) reflect that we had previously entered into (a) an
amended and restated note purchase and guarantee agreement with The Prudential Insurance Company of America (“Prudential”) and
certain of its affiliates and (b) a note purchase and guarantee agreement with the Metropolitan Life Insurance Company (“MetLife”)
and certain of its affiliates; and (ii) permit borrowings under each of the Revolving Facility and the Term Loan at three different
interest rates, including a rate based on the LIBOR Daily Floating Rate (as defined in the First Amendment) plus the Applicable Rate
(as defined in the First Amendment) for such facility.
On September 12, 2019, in connection with prepayment of the Term Loan, we entered into a consent and amendment (the
“Second Amendment”) of our Restated Credit Agreement. The Second Amendment modifies the Restated Credit Agreement to,
among other things, (a) increase our borrowing capacity under the Revolving Facility from $250.0 million to $300.0 million and (b)
decrease lender commitments under the Term Loan to $0.0 million.
On October 27, 2021, we entered into second amended and restated credit agreement (as amended, the “Second Restated Credit
Agreement”) amending and restating our Restated Credit Agreement. Pursuant to the Second Restated Credit Agreement, we (i)
extended the maturity date of the Revolving Facility from March 2022 to October 2025, (ii) reduced the interest rate for borrowings
under the Revolving Facility and (iii) amended certain financial covenants and other provisions.
The Second Restated Credit Agreement provides for the Revolving Facility in an aggregate principal amount of $300.0 and
includes an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional
aggregate amount not to exceed $300 million, subject to certain conditions, including one or more new or existing lenders agreeing to
provide commitments for such increased amount and that no default or event of default shall have occurred and be continuing under
the terms of the Revolving Facility.
The Revolving Facility matures October 27, 2025, subject to two six-month extensions (for a total of 12 months) exercisable at
the Company's option. The Company's exercise of an extension option is subject to the absence of any default under the Second
Restated Credit Agreement and the Company's compliance with certain conditions, including the payment of extension fees to the
Lenders under the Revolving Facility and that no default or event of default shall have occurred and be continuing under the terms of
the Revolving Facility.
The Second Restated Credit Agreement reflects reductions in the interest rates for borrowings under the Revolving Facility and
permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.30% to 0.90% or a LIBOR rate plus a margin
of 1.30% to 1.90% based on the Company’s consolidated total indebtedness to total asset value ratio at the end of each quarterly
reporting period. The Revolving Facility includes customary LIBOR transition language that addresses the succession of LIBOR at a
future date.
The per annum rate of the unused line fee on the undrawn funds under the Revolving Facility is 0.15% to 0.25% based on the
Company’s daily unused portion of the available Revolving Facility.
The Second Restated Credit Agreement contains customary financial covenants, including covenants with respect to total
leverage, secured leverage and unsecured leverage ratios, fixed charge and interest coverage ratios, and minimum tangible net worth,
as well as limitations on restricted payments, which may limit the Company’s ability to incur additional debt or pay dividends. The
Second Restated Credit Agreement contains customary events of default, including cross default provisions with respect to the
Company’s existing senior unsecured notes. Any event of default, if not cured or waived in a timely manner, could result in the
acceleration of the Company’s indebtedness under the Second Restated Credit Agreement and could also give rise to an event of
default and the acceleration of the Company’s existing senior unsecured notes.
38
Senior Unsecured Notes
On December 4, 2020, we entered into a fifth amended and restated note purchase and guarantee agreement (the “Fifth
Amended and Restated Prudential Agreement”) with Prudential and certain of its affiliates amending and restating our existing fourth
amended and restated note purchase and guarantee agreement. Pursuant to the Fifth Amended and Restated Prudential Agreement, we
issued $100.0 million of 3.43% Series I Guaranteed Senior Notes due November 25, 2030 (the “Series I Notes”) to Prudential, and
completed the early redemption of our 6.0% Series A Guaranteed Senior Notes due February 25, 2021 in the original aggregate
principal amount of $100.0 million. The other senior unsecured notes outstanding under the fourth amended and restated note
purchase and guarantee agreement with Prudential, including (i) $75.0 million of 5.35% Series B Guaranteed Senior Notes due June 2,
2023 (the “Series B Notes”), (ii) $50.0 million of 4.75% Series C Guaranteed Senior Notes due February 25, 2025 (the “Series C
Notes”), (iii) $50.0 million of 5.47% Series D Guaranteed Senior Notes due June 21, 2028 (the “Series D Notes”), and (iv) $50.0
million of 3.52% Series F Guaranteed Senior Notes due September 12, 2029 (the “Series F Notes”) remain outstanding under the Fifth
Amended and Restated Prudential Agreement.
On December 4, 2020, we entered into a first amended and restated note purchase and guarantee agreement (the “First Amended
and Restated AIG Agreement”) with American General Life Insurance Company amending and restating our existing note purchase
and guarantee agreement. Pursuant to the First Amended and Restated AIG Agreement, we issued $50.0 million of 3.43% Series J
Guaranteed Senior Notes due November 25, 2030 (the “Series J Notes”) to AIG. The $50.0 million of 3.52% Series G Guaranteed
Senior Notes due September 12, 2029 (the “Series G Notes”) that were outstanding under the existing note purchase and guarantee
agreement remain outstanding under the First Amended and Restated AIG Agreement.
On December 4, 2020, we entered into a first amended and restated note purchase and guarantee agreement (the “First Amended
and Restated MassMutual Agreement”) with Massachusetts Mutual Life Insurance Company and certain of its affiliates amending and
restating our existing note purchase and guarantee agreement. Pursuant to the First Amended and Restated MassMutual Agreement,
we issued $25.0 million of 3.43% Series K Guaranteed Senior Notes due November 25, 2030 (the “Series K Notes”) to MassMutual.
The $25.0 million of 3.52% Series H Guaranteed Senior Notes due September 12, 2029 (the “Series H Notes”) that were outstanding
under the existing note purchase and guarantee agreement remain outstanding under the First Amended and Restated MassMutual.
On June 21, 2018, we entered into a note purchase and guarantee agreement (the “MetLife Note Agreement”) with MetLife and
certain of its affiliates. Pursuant to the MetLife Note Agreement, we issued $50.0 million of 5.47% Series E Guaranteed Senior Notes
due June 21, 2028 (the “Series E Notes”).
The Series B Notes, Series C Notes, Series D Notes, Series E Notes, Series F Note, Series G Notes, Series H Notes, Series I
Notes, Series J Notes, and Series K Notes are collectively referred to as the “senior unsecured notes.”
On October 27, 2021, we entered into amendments to each of the note purchase and guarantee agreements governing the senior
unsecured notes in order to conform the financial covenants therein to the corresponding provisions in the Second Restated Credit
Agreement.
Debt Maturities
The amounts outstanding under our Second Restated Credit Agreement and our senior unsecured notes, exclusive of extension
options, are as follows (in thousands):
Revolving Facility
Series B Notes
Series C Notes
Series D Notes
Series E Notes
Series F Notes
Series G Notes
Series H Notes
Series I Notes
Series J Notes
Series K Notes
Total debt
Unamortized debt issuance costs, net (a)
Total debt, net
Maturity
Date
October 2025
June 2023
February 2025
June 2028
June 2028
September 2029
September 2029
September 2029
November 2030
November 2030
November 2030
Interest
Rate
December 31,
2021
December 31,
2020
1.40 % $
5.35 %
4.75 %
5.47 %
5.47 %
3.52 %
3.52 %
3.52 %
3.43 %
3.43 %
3.43 %
$
60,000 $
75,000
50,000
50,000
50,000
50,000
50,000
25,000
100,000
50,000
25,000
585,000
(3,880 )
581,120 $
25,000
75,000
50,000
50,000
50,000
50,000
50,000
25,000
100,000
50,000
25,000
550,000
(2,307 )
547,693
(a) Unamortized debt issuance costs, related to the Revolving Facility, at December 31, 2021 and 2020, of $2,730 and $1,135,
respectively, are included in prepaid expenses and other assets on our consolidated balance sheets.
39
As of December 31, 2021, we are in compliance with all of the material terms of the Second Restated Credit Agreement and our
senior unsecured notes.
ATM Program
In March 2018, we established an at-the-market equity offering program (the “2018 ATM Program”), pursuant to which we are
able to issue and sell shares of our common stock with an aggregate sales price of up to $125.0 million through a consortium of banks
acting as agents. The 2018 ATM Program was terminated in January 2021.
In February 2021, we established a new at-the-market equity offering program (the “ATM Program”), pursuant to which we are
able to issue and sell shares of our common stock with an aggregate sales price of up to $250.0 million through a consortium of banks
acting as agents. Sales of the shares of common stock may be made, as needed, from time to time in at-the-market offerings as defined
in Rule 415 of the Securities Act, including by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise
at market prices prevailing at the time of sale, at prices related to prevailing market prices or as otherwise agreed to with the applicable
agent. In connection with the expansion of the ATM Program, we may also sell shares of common stock under forward sale
agreements. The use of a forward sale agreement would allow us to lock in a price on the sale of shares of common stock at the time
the agreement is executed, but defer receiving the proceeds from the sale until a later date.
During the years ended December 31, 2021 and 2020, we issued 3.0 million and 2.2 million shares of common stock and
received net proceeds of $92.3 million and $63.2 million, respectively, under the 2018 ATM Program and the ATM Program. Future
sales, if any, will depend on a variety of factors to be determined by us from time to time, including among others, market conditions,
the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding
available to us. We have not entered into any forward sale agreements.
Property Acquisitions and Capital Expenditures
As part of our overall business strategy, we regularly review acquisition and financing opportunities to invest in additional
convenience, automotive and other single tenant retail real estate, and we expect to continue to pursue acquisitions that we believe will
benefit our financial performance.
During the year ended December 31, 2021, we invested $200.0 million across 100 properties, including the acquisition of fee
simple interests in 97 properties for an aggregate purchase price of $194.3 million and $5.7 million of outstanding loans, including
accrued interest, for three new-to-industry developments . During the year ended December 31, 2020, we acquired fee simple interests
in 34 properties for an aggregate purchase price of $150.0 million. We accounted for the acquisitions of fee simple interests as asset
acquisitions. For additional information regarding our property acquisitions, see Note 13 in “Item 8. Financial Statements and
Supplementary Data” in this Form 10-K.
We also seek opportunities to recapture select properties from our net lease portfolio and redevelop such properties as new
convenience stores or other single tenant retail uses. For the year ended December 31, 2021, we spent $0.3 million (net of write-offs)
of construction-in-progress costs related to our redevelopment activities. For the year ended December 31, 2020, we spent $0.3 million
(net of write-offs) of construction-in-progress costs related to our redevelopment activities.
Because we generally lease our properties to tenants on a triple-net basis, we have not historically incurred significant capital
expenditures other than those related to acquisitions. However, our tenants frequently make improvements to the properties leased
from us at their expense. As of December 31, 2021, we have a commitment to fund up to $7.0 million in the aggregate in capital
improvements in certain properties with our tenants.
Dividends
We elected to be treated as a REIT under the federal income tax laws with the year beginning January 1, 2001. To qualify for
taxation as a REIT, we must, among other requirements such as those related to the composition of our assets and gross income,
distribute annually to our stockholders at least 90% of our taxable income, including taxable income that is accrued by us without a
corresponding receipt of cash. We cannot provide any assurance that our cash flows will permit us to continue paying cash dividends.
It is also possible that instead of distributing 100% of our taxable income on an annual basis, we may decide to retain a portion
of our taxable income and to pay taxes on such amounts as permitted by the Internal Revenue Service. Payment of dividends is subject
to market conditions, our financial condition, including but not limited to, our continued compliance with the provisions of the Second
Restated Credit Agreement, our senior unsecured notes and other factors, and therefore is not assured. In particular, the Second
Restated Credit Agreement and our senior unsecured notes prohibit the payment of dividends during certain events of default.
Regular quarterly dividends paid to our stockholders aggregated $70.8 million, $62.6 million and $56.9 million for the years
ended December 31, 2021, 2020 and 2019, respectively. There can be no assurance that we will continue to pay dividends at historical
rates.
40
Contractual Obligations
Our significant contractual obligations and commitments, excluding extension options and unamortized debt issuance costs, as
of December 31, 2021, were comprised of borrowings under the Second Restated Credit Agreement, our senior unsecured notes,
operating and finance lease payments due to landlords, estimated environmental remediation expenditures and our funding
commitments for capital improvements at certain properties. Our contractual obligations and commitments as of December 31, 2021,
exclusive of extension options and unamortized debt issuance costs, are summarized below (in thousands):
Less
Than
One Year
One to
Three
Years
Total
Three
to
Five
Years
More
Than
Five
Years
Operating and finance leases
Credit agreement
Senior unsecured notes
Interest on debt (a)
Estimated environmental remediation expenditures (b)
Capital improvements (c)
Total
$
15,736 $
60,000
525,000
139,297
47,597
7,016
$ 794,646 $
3,821 $
—
—
23,101
6,613
809
2,738
—
400,000
43,331
14,431
—
34,344 $ 140,630 $ 159,172 $ 460,500
3,296 $
60,000
50,000
32,793
8,683
4,400
5,881 $
—
75,000
40,072
17,870
1,807
(a) For our Second Restated Credit Agreement, which bears interest at variable rates, future interest expense was calculated using the
cost of borrowing as of December 31, 2021.
(b) Estimated environmental remediation expenditures have been adjusted for inflation and discounted to present value.
(c) The actual timing of funding of capital improvements is dependent on the timing of such capital improvement projects and the
terms of our leases. Our commitments provide us with the option to either reimburse our tenants, or to offset rent when these
capital expenditures are made.
Generally, leases with our tenants are triple-net leases with the tenant responsible for the operations conducted at our properties
and for the payment of taxes, maintenance, repair, insurance, environmental remediation and other operating expenses.
We have no significant contractual obligations that are not fully recorded on our consolidated balance sheets or fully disclosed
in the notes to our consolidated financial statements. We have no off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of
Regulation S-K promulgated by the Exchange Act.
Critical Accounting Policies and Estimates
The consolidated financial statements included in this Form 10-K have been prepared in conformity with accounting principles
generally accepted in the United States of America. The preparation of consolidated financial statements in accordance with GAAP
requires us to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements.
Although we have made estimates, judgments and assumptions regarding future uncertainties relating to the information included in
our consolidated financial statements, giving due consideration to the accounting policies selected and materiality, actual results could
differ from these estimates, judgments and assumptions and such differences could be material.
Estimates, judgments and assumptions underlying the accompanying consolidated financial statements include, but are not
limited to, real estate, receivables, deferred rent receivable, direct financing leases, depreciation and amortization, impairment of long-
lived assets, environmental remediation obligations, litigation, accrued liabilities, income taxes and the allocation of the purchase price
of properties acquired to the assets acquired and liabilities assumed. The information included in our consolidated financial statements
that is based on estimates, judgments and assumptions is subject to significant change and is adjusted as circumstances change and as
the uncertainties become more clearly defined.
Our accounting policies are described in Note 1 in “Item 8. Financial Statements and Supplementary Data”. The SEC’s
Financial Reporting Release (“FRR”) No. 60, Cautionary Advice Regarding Disclosure About Critical Accounting Policies (“FRR
60”), suggests that companies provide additional disclosure on those accounting policies considered most critical. FRR 60 considers
an accounting policy to be critical if it is important to our financial condition and results of operations and requires significant
judgment and estimates on the part of management in its application. We believe that our most critical accounting policies relate to
revenue recognition and deferred rent receivable, direct financing leases, impairment of long-lived assets, environmental remediation
obligations, litigation, income taxes, and the allocation of the purchase price of properties acquired to the assets acquired and liabilities
assumed as described below.
41
Revenue Recognition and Deferred Rent Receivable
We earn revenue primarily from operating leases with our tenants. We recognize income under leases with our tenants, on the
straight-line method, which effectively recognizes contractual lease payments evenly over the current term of the leases. The present
value of the difference between the fair market rent and the contractual rent for in-place leases at the time properties are acquired is
amortized into revenue from rental properties over the remaining lives of the in-place leases. A critical assumption in applying the
straight-line accounting method is that the tenant will make all contractual lease payments during the current lease term and that the
net deferred rent receivable balance will be collected when the payment is due, in accordance with the annual rent escalations
provided for in the leases. We may be required to reserve, or provide reserves for a portion of, the recorded deferred rent receivable if
it becomes apparent that the tenant may not make all of its contractual lease payments when due during the current term of the lease.
In April 2020, the FASB issued interpretive guidance relating to the accounting for lease concessions provided as a result of
COVID-19. In this guidance, entities can elect not to apply lease modification accounting with respect to such lease concessions and
instead, treat the concession as if it was a part of the existing contract. This guidance is only applicable to COVID-19 related lease
concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. Some concessions will
provide a deferral of payments with no substantive changes to the consideration in the original contract. A deferral affects the timing
of cash receipts, but the amount of the consideration is substantially the same as that required by the original contract. The FASB staff
provides two ways to account for those deferrals:
(1) Account for the concessions as if no changes to the lease contract were made. Under that accounting, a lessor would
increase its lease receivable. In its income statement, a lessor would continue to recognize income during the deferral
period.
(2) Account for the deferred payments as variable lease payments.
We elected to treat lease concessions with option (1) above for the year ended December 31, 2021. There were no outstanding
balances for lease concessions provided as a result of COVID-19 at December 31, 2021.
The present value of the difference between the fair market rent and the contractual rent for above-market and below-market
leases at the time properties are acquired is amortized into revenues from rental properties over the remaining terms of the in-place
leases. Lease termination fees are recognized as other income when earned upon the termination of a tenant’s lease and relinquishment
of space in which we have no further obligation to the tenant.
The sales of nonfinancial assets, such as real estate, are to be recognized when control of the asset transfers to the buyer, which
will occur when the buyer has the ability to direct the use of or obtain substantially all of the remaining benefits from the asset. This
generally occurs when the transaction closes and consideration is exchanged for control of the property.
Direct Financing Leases
Income under direct financing leases is included in revenues from rental properties and is recognized over the lease terms using
the effective interest rate method which produces a constant periodic rate of return on the net investments in the leased properties. The
investments in direct financing leases represents the investments in leased assets accounted for as direct financing leases. The
investments in direct financing leases are increased for interest income earned and amortized over the life of the leases and reduced by
the receipt of lease payments.
Impairment of Long-Lived Assets
Real estate assets represent “long-lived” assets for accounting purposes. We review the recorded value of long-lived assets for
impairment in value whenever any events or changes in circumstances indicate that the carrying amount of the assets may not be
recoverable. We may become aware of indicators of potentially impaired assets upon tenant or landlord lease renewals, upon receipt
of notices of potential governmental takings and zoning issues, or upon other events that occur in the normal course of business that
would cause us to review the operating results of the property. We believe our real estate assets are not carried at amounts in excess of
their estimated net realizable fair value amounts.
Environmental Remediation Obligations
We provide for the estimated fair value of future environmental remediation obligations when it is probable that a liability has
been incurred and a reasonable estimate of fair value can be made. See “Environmental Matters” below for additional information.
Environmental liabilities net of related recoveries are measured based on their expected future cash flows which have been adjusted
for inflation and discounted to present value. Since environmental exposures are difficult to assess and estimate and knowledge about
these liabilities is not known upon the occurrence of a single event, but rather is gained over a continuum of events, we believe that it
is appropriate that our accrual estimates are adjusted as the remediation treatment progresses, as circumstances change and as
environmental contingencies become more clearly defined and reasonably estimable. A critical assumption in accruing for these
liabilities is that the state environmental laws and regulations will be administered and enforced in the future in a manner that is
42
consistent with past practices. Environmental liabilities are estimated net of recoveries of environmental costs from state UST
remediation funds, with respect to past and future spending based on estimated recovery rates developed from our experience with the
funds when such recoveries are considered probable. A critical assumption in accruing for these recoveries is that the state UST fund
programs will be administered and funded in the future in a manner that is consistent with past practices and that future environmental
spending will be eligible for reimbursement at historical rates under these programs. We accrue environmental liabilities based on our
share of responsibility as defined in our lease contracts with our tenants and under various other agreements with others or if
circumstances indicate that our counterparty may not have the financial resources to pay its share of the costs. It is possible that our
assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may
change, which may result in material adjustments to the amounts recorded for environmental litigation accruals and environmental
remediation liabilities. We may ultimately be responsible to pay for environmental liabilities as the property owner if our tenants or
other counterparties fail to pay them. In certain environmental matters the effect on future financial results is not subject to reasonable
estimation because considerable uncertainty exists both in terms of the probability of loss and the estimate of such loss. The ultimate
liabilities resulting from such lawsuits and claims, if any, may be material to our results of operations in the period in which they are
recognized.
Litigation
Legal fees related to litigation are expensed as legal services are performed. We provide for litigation accruals, including certain
litigation related to environmental matters (see “Environmental Litigation” below for additional information), when it is probable that
a liability has been incurred and a reasonable estimate of the liability can be made. If the estimate of the liability can only be identified
as a range, and no amount within the range is a better estimate than any other amount, the minimum of the range is accrued for the
liability.
Income Taxes
Our financial results generally do not reflect provisions for current or deferred federal income taxes because we elected to be
treated as a REIT under the federal income tax laws effective January 1, 2001. Our intention is to operate in a manner that will allow
us to continue to be treated as a REIT and, as a result, we do not expect to pay substantial corporate-level federal income taxes. Many
of the REIT requirements, however, are highly technical and complex. If we were to fail to meet the requirements, we may be subject
to federal income tax, excise taxes, penalties and interest or we may have to pay a deficiency dividend to eliminate any earnings and
profits that were not distributed. Certain states do not follow the federal REIT rules and we have included provisions for these taxes in
property costs.
Allocation of the Purchase Price of Properties Acquired
Upon acquisition of real estate and leasehold interests, we estimate the fair value of acquired tangible assets (consisting of land,
buildings and improvements) “as if vacant” and identified intangible assets and liabilities (consisting of leasehold interests, above-
market and below-market leases, in-place leases and tenant relationships) and assumed debt. Based on these estimates, we allocate the
purchase price to the applicable assets and liabilities. Assumptions used are property and geographic specific and may include, among
other things, capitalization rates, market rental rates and EBITDA to rent coverage ratios.
Environmental Matters
General
We are subject to numerous federal, state and local laws and regulations, including matters relating to the protection of the
environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived assets
including buildings containing hazardous materials, USTs and other equipment. Environmental costs are principally attributable to
remediation costs which are incurred for, among other things, removing USTs, excavation of contaminated soil and water, installing,
operating, maintaining and decommissioning remediation systems, monitoring contamination and governmental agency compliance
reporting required in connection with contaminated properties.
We enter into leases and various other agreements which contractually allocate responsibility between the parties for known and
unknown environmental liabilities at or relating to the subject properties. We are contingently liable for these environmental
obligations in the event that our tenant does not satisfy them, and we are required to accrue for environmental liabilities that we
believe are allocable to others under our leases if we determine that it is probable that our tenant will not meet its environmental
obligations. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to
allocate environmental liabilities may change, which may result in material adjustments to the amounts recorded for environmental
litigation accruals and environmental remediation liabilities. We assess whether to accrue for environmental liabilities based upon
relevant factors including our tenants’ histories of paying for such obligations, our assessment of their financial capability, and their
intent to pay for such obligations. However, there can be no assurance that our assessments are correct or that our tenants who have
43
paid their obligations in the past will continue to do so. We may ultimately be responsible to pay for environmental liabilities as the
property owner if our tenant fails to pay them.
The estimated future costs for known environmental remediation requirements are accrued when it is probable that a liability has
been incurred and a reasonable estimate of fair value can be made. The accrued liability is the aggregate of our estimate of the fair
value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds considering estimated
recovery rates developed from prior experience with the funds.
For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws
and regulations, removal of USTs at the end of their lease term (the cost of which in certain cases is partially borne by us) and
remediation of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering
properties previously leased to Marketing (substantially all of which commenced in 2012), we have agreed to be responsible for
environmental contamination at the premises that was known at the time the lease commenced, and for environmental contamination
which existed prior to commencement of the lease and is discovered (other than as a result of a voluntary site investigation) during the
first 10 years of the lease term (or a shorter period for a minority of such leases). After expiration of such 10-year (or, in certain cases,
shorter) period, responsibility for all newly discovered contamination, even if it relates to periods prior to commencement of the lease,
is contractually allocated to our tenant. Our tenants at properties previously leased to Marketing are in all cases responsible for the cost
of any remediation of contamination that results from their use and occupancy of our properties. Under substantially all of our other
triple-net leases, responsibility for remediation of all environmental contamination discovered during the term of the lease (including
known and unknown contamination that existed prior to commencement of the lease) is the responsibility of our tenant.
We anticipate that USTs at a number of properties we currently own and which were previously leased to Marketing will be
replaced in the years ahead as these USTs near the end of their useful lives. For long-term, triple-net leases covering sites previously
leased to Marketing, our tenants are responsible for the cost of removal and replacement of USTs and for remediation of
contamination found during such UST removal and replacement, unless such contamination was found during the first 10 years of the
lease term and also existed prior to commencement of the lease. In those cases, we are responsible for costs associated with the
remediation of such preexisting contamination. We have also agreed to be responsible for environmental contamination that existed
prior to the sale of certain properties assuming the contamination is discovered (other than as a result of a voluntary site investigation)
during the first five years after the sale of the properties.
In the course of certain UST removals and replacements at properties previously leased to Marketing where we retained
continuing responsibility for preexisting environmental obligations, previously unknown environmental contamination was and
continues to be discovered. As a result, we have developed an estimate of fair value for the prospective future environmental liability
resulting from preexisting unknown environmental contamination and have accrued for these estimated costs. These estimates are
based primarily upon quantifiable trends which we believe allow us to make reasonable estimates of fair value for the future costs of
environmental remediation resulting from the removal and replacement of USTs. Our accrual of the additional liability represents our
estimate of the fair value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds
considering estimated recovery rates developed from prior experience with the funds. In arriving at our accrual, we analyzed the ages
of USTs at properties where we would be responsible for preexisting contamination found within 10 years after commencement of a
lease (for properties subject to long-term triple-net leases) or five years from a sale (for divested properties), and projected a cost to
closure for preexisting unknown environmental contamination.
We measure our environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for
inflation (using a range of 2.0% to 2.75%), and then discount them to present value (using a range of 4.0% to 7.0%). We adjust our
environmental remediation liabilities quarterly to reflect changes in projected expenditures, changes in present value due to the
passage of time and reductions in estimated liabilities as a result of actual expenditures incurred during each quarter. As of
December 31, 2021, we had accrued a total of $47.6 million for our prospective environmental remediation obligations. This accrual
consisted of (a) $11.4 million, which was our estimate of reasonably estimable environmental remediation liability, including
obligations to remove USTs for which we are responsible, net of estimated recoveries and (b) $36.2 million for future environmental
liabilities related to preexisting unknown contamination. As of December 31, 2020, we had accrued a total of $48.1 million for our
prospective environmental remediation obligations. This accrual consisted of (a) $11.7 million, which was our estimate of reasonably
estimable environmental remediation liability, including obligations to remove USTs for which we are responsible, net of estimated
recoveries and (b) $36.4 million for future environmental liabilities related to preexisting unknown contamination.
Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $1.7 million,
$1.8 million and $2.0 million of net accretion expense was recorded for the years ended December 31, 2021, 2020 and 2019,
respectively, which is included in environmental expenses. In addition, during the years ended December 31, 2021, 2020 and 2019, we
recorded credits to environmental expenses aggregating $1.8 million, $3.1 million and $5.4 million, respectively, where decreases in
estimated remediation costs exceeded the depreciated carrying value of previously capitalized asset retirement costs. Environmental
expenses also include project management fees, legal fees and environmental litigation accruals.
44
During the years ended December 31, 2021 and 2020, we increased the carrying values of certain of our properties by $3.0
million and $2.6 million, respectively, due to changes in estimated environmental remediation costs. The recognition and subsequent
changes in estimates in environmental liabilities and the increase or decrease in carrying values of the properties are non-cash
transactions which do not appear on our consolidated statements of cash flows.
Capitalized asset retirement costs are being depreciated over the estimated remaining life of the UST, a 10-year period if the
increase in carrying value is related to environmental remediation obligations or such shorter period if circumstances warrant, such as
the remaining lease term for properties we lease from others. Depreciation and amortization expense related to capitalized asset
retirement costs in our consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019, were $4.0
million, $4.0 million and $4.1 million, respectively. Capitalized asset retirement costs were $39.7 million (consisting of $24.1 million
of known environmental liabilities and $15.6 million of reserves for future environmental liabilities) as of December 31, 2021, and
$39.6 million (consisting of $23.6 million of known environmental liabilities and $16.0 million of reserves for future environmental
liabilities) as of December 31, 2020. We recorded impairment charges aggregating $3.1 million and $3.5 million for the years ended
December 31, 2021 and 2020, respectively, for capitalized asset retirement costs.
Environmental exposures are difficult to assess and estimate for numerous reasons, including the amount of data available upon
initial assessment of contamination, alternative treatment methods that may be applied, location of the property which subjects it to
differing local laws and regulations and their interpretations, changes in costs associated with environmental remediation services and
equipment, the availability of state UST remediation funds and the possibility of existing legal claims giving rise to allocation of
responsibilities to others, as well as the time it takes to remediate contamination and receive regulatory approval. In developing our
liability for estimated environmental remediation obligations on a property by property basis, we consider, among other things, laws
and regulations, assessments of contamination and surrounding geology, quality of information available, currently available
technologies for treatment, alternative methods of remediation and prior experience. Environmental accruals are based on estimates
derived upon facts known to us at this time, which are subject to significant change as circumstances change, and as environmental
contingencies become more clearly defined and reasonably estimable.
Any changes to our estimates or our assumptions that form the basis of our estimates may result in our providing an accrual, or
adjustments to the amounts recorded, for environmental remediation liabilities.
In July 2012, we purchased a 10-year pollution legal liability insurance policy covering substantially all of our properties at that
time for preexisting unknown environmental liabilities and new environmental events. The policy has a $50.0 million aggregate limit
and is subject to various self-insured retentions and other conditions and limitations. Our intention in purchasing this policy was to
obtain protection predominantly for significant events. In addition to the environmental insurance policy purchased by the Company,
we also took assignment of certain environmental insurance policies, and rights to reimbursement for claims made thereunder, from
Marketing, by order of the U.S. Bankruptcy Court during Marketing’s bankruptcy proceedings. Under these assigned polices, we have
received and expect to continue to receive reimbursement of certain remediation expenses for covered claims.
In light of the uncertainties associated with environmental expenditure contingencies, we are unable to estimate ranges in excess
of the amount accrued with any certainty; however, we believe that it is possible that the fair value of future actual net expenditures
could be substantially higher than amounts currently recorded by us. Adjustments to accrued liabilities for environmental remediation
obligations will be reflected in our consolidated financial statements as they become probable and a reasonable estimate of fair value
can be made.
Environmental Litigation
We are subject to various legal proceedings and claims which arise in the ordinary course of our business. As of December 31,
2021 and 2020, we had accrued $1.9 million and $4.3 million, respectively, for certain of these matters which we believe were
appropriate based on information then currently available. It is possible that our assumptions regarding the ultimate allocation method
and share of responsibility that we used to allocate environmental liabilities may change, which may result in our providing an accrual,
or adjustments to the amounts recorded, for environmental litigation accruals. Matters related to our former Newark, New Jersey
Terminal and the Lower Passaic River and MTBE litigations in the states of Pennsylvania and Maryland, in particular, could cause a
material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. For
additional information with respect to these and other pending environmental lawsuits and claims, see “Item 3. Legal Proceedings”
and Note 3 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to interest rate risk, primarily as a result of the Second Restated Credit Agreement which provides for the
Revolving Facility in an aggregate principal amount of $300.0 million and includes an accordion feature to increase the revolving
commitments or add one or more tranches of term loans up to an additional aggregate amount not to exceed $300.0 million. The
Second Restated Credit Agreement permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.30% to
0.90% or a LIBOR rate plus a margin of 1.30% to 1.90% based on the Company’s consolidated total indebtedness to total asset value
45
ratio at the end of each quarterly reporting period. The Revolving Facility includes customary LIBOR transition language that
addresses the succession of LIBOR at a future date. We use borrowings under the Second Restated Credit Agreement to finance
acquisitions and for general corporate purposes. Borrowings outstanding at variable interest rates under the Second Restated Credit
Agreement as of December 31, 2021, were $60.0 million.
Based on our outstanding borrowings under the Second Restated Credit Agreement of $60.0 million for the year ended
December 31, 2021, an increase in market interest rates of 1.0% for 2022 would decrease our 2022 net income and cash flows by
approximately $0.6 million. This amount was determined by calculating the effect of a hypothetical interest rate change on our
borrowings floating at market rates and assumes that the $60.0 million outstanding borrowings under the Second Restated Credit
Agreement is indicative of our future average floating interest rate borrowings for 2021 before considering additional borrowings
required for future acquisitions or repayment of outstanding borrowings from proceeds of future equity offerings. The calculation also
assumes that there are no other changes in our financial structure or the terms of our borrowings. Our exposure to fluctuations in
interest rates will increase or decrease in the future with increases or decreases in the outstanding amount under our Second Restated
Credit Agreement and with increases or decreases in amounts outstanding under borrowing agreements entered into with interest rates
floating at market rates.
In order to minimize our exposure to credit risk associated with financial instruments, we place our temporary cash investments,
if any, with high credit quality institutions. Temporary cash investments, if any, are currently held in an overnight bank time deposit
with JPMorgan Chase Bank, N.A. and these balances, at times, may exceed federally insurable limits.
As discussed elsewhere in this report, the COVID-19 pandemic may negatively impact our business and results of operations.
As we cannot predict the duration or scope of COVID-19 there is potential for future negative financial impacts to our
results that could be material. Our business and results of operations will be, and our financial condition may be, impacted by COVID-
19 pandemic and such impact could be materially adverse. See “Part I. Item. 1A. Risk Factors” in this Annual Report on Form 10-
K for additional information.
46
Item 8. Financial Statements and Supplementary Data
GETTY REALTY CORP. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
Consolidated Balance Sheets as of December 31, 2021 and 2020
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Page
48
49
50
51
75
47
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
December 31,
2021
December 31,
2020
ASSETS:
Real Estate:
Land
Buildings and improvements
Investment in direct financing leases, net
Construction in progress
Real estate held for use
Less accumulated depreciation and amortization
Real estate held for use, net
Real estate held for sale, net
Real estate, net
Notes and mortgages receivable
Cash and cash equivalents
Restricted cash
Deferred rent receivable
Accounts receivable
Right-of-use assets - operating
Right-of-use assets - finance
Prepaid expenses and other assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Borrowings under credit agreement
Senior unsecured notes, net
Environmental remediation obligations
Dividends payable
Lease liability - operating
Lease liability - finance
Accounts payable and accrued liabilities
Total liabilities
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 20,000,000 authorized; unissued
Common stock, $0.01 par value; 100,000,000 shares authorized; 46,715,734 and
43,605,759 shares issued and outstanding, respectively
Additional paid-in capital
Dividends paid in excess of earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
$
$
$
772,088 $
632,074
71,647
693
1,476,502
(209,040 )
1,267,462
3,621
1,271,083
14,699
24,738
1,723
46,933
3,538
21,092
379
82,763
1,466,948 $
60,000 $
523,850
47,597
19,467
22,980
2,005
45,941
721,840
—
707,613
537,272
77,238
734
1,322,857
(186,964 )
1,135,893
872
1,136,765
11,280
55,075
1,979
44,155
3,811
24,319
763
71,365
1,349,512
25,000
523,828
48,084
17,332
25,045
3,541
47,081
689,911
—
—
—
467
818,209
(73,568 )
745,108
1,466,948 $
436
722,608
(63,443 )
659,601
1,349,512
The accompanying notes are an integral part of these consolidated financial statements.
48
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Revenues:
Revenues from rental properties
Interest on notes and mortgages receivable
Total revenues
Operating expenses:
Property costs
Impairments
Environmental
General and administrative
Depreciation and amortization
Total operating expenses
2021
Year ended December 31,
2020
2019
$
153,886 $
1,522
155,408
144,601 $
2,745
147,346
137,736
2,919
140,655
22,048
4,404
3,548
20,151
35,518
85,669
23,520
4,258
1,054
17,294
30,191
76,317
24,978
4,012
5,428
15,377
25,161
74,956
Gains on dispositions of real estate
16,718
4,548
1,063
Operating income
Other income, net
Interest expense
Loss on extinguishment of debt
Net earnings
Basic earnings per common share:
Net Earnings
Diluted earnings per common share:
Net Earnings
Weighted average common shares outstanding:
Basic
Diluted
86,457
75,577
66,762
1,075
(24,672 )
—
62,860 $
21,129
(26,085 )
(1,233 )
69,388 $
7,593
(24,632 )
—
49,723
$
$
1.37 $
1.62 $
1.19
$
1.37 $
1.62 $
1.19
44,782
44,819
42,040
42,070
41,072
41,110
The accompanying notes are an integral part of these consolidated financial statements.
49
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
Adjustments to reconcile net earnings to net cash flow provided by
operating activities:
Depreciation and amortization expense
Impairment charges
Gains on dispositions of real estate
Loss on extinguishment of debt
Deferred rent receivable
Allowance for credit loss on notes and mortgages receivable
and direct financing leases
Amortization of above-market and below-market leases
Amortization of investment in direct financing leases
Amortization of debt issuance costs
Accretion expense
Stock-based compensation expense
Changes in assets and liabilities:
Accounts receivable
Prepaid expenses and other assets
Environmental remediation obligations
Accounts payable and accrued liabilities
Net cash flow provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Property acquisitions
Capital expenditures
Addition to construction in progress
Proceeds from dispositions of real estate
Deposits for property acquisitions
Issuance of notes and mortgages receivable
Collection of notes and mortgages receivable
Net cash flow used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit agreements
Repayments under credit agreements
Proceeds from senior unsecured notes
Repayments under senior unsecured notes
Payment for extinguishment of debt
Payments of finance lease liability
Payments of cash dividends
Payments of debt issuance costs
Security deposits refunded
Payments in settlement of restricted stock units
Proceeds from issuance of common stock, net - ATM
Net cash flow provided by (used in) financing activities
Change in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of year
Cash, cash equivalents and restricted cash at end of year
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest
Income taxes
Environmental remediation obligations
Non-cash transactions
Dividends declared but not yet paid
Issuance of notes and mortgages receivable related to property
dispositions
2021
Year ended December 31,
2020
2019
$
62,860 $
69,388 $
49,723
35,518
4,404
(16,718 )
—
(2,778 )
(132 )
(71 )
4,846
1,013
1,705
3,997
60
(997 )
(6,335 )
(554 )
86,818
(194,292 )
(271 )
(312 )
24,796
3,298
(13,515 )
10,564
(169,732 )
175,000
(140,000 )
—
—
—
(645 )
(70,770 )
(2,586 )
(233 )
(730 )
92,285
52,321
(30,593 )
57,054
26,461 $
30,191
4,258
(4,548 )
1,233
(2,903 )
368
(314 )
4,210
1,053
1,841
3,130
(1,048 )
(1,253 )
(9,490 )
(13,289 )
82,827
(149,955 )
(282 )
(275 )
5,433
(2,368 )
(2,932 )
22,962
(127,417 )
140,000
(135,000 )
175,000
(100,000 )
(1,233 )
(650 )
(62,626 )
(410 )
(31 )
(257 )
63,187
77,980
33,390
23,664
57,054 $
25,161
4,012
(1,063 )
—
(3,530 )
—
(623 )
3,526
971
2,006
2,468
(546 )
(503 )
(12,931 )
8,103
76,774
(87,157 )
(14 )
(365 )
1,558
(510 )
(464 )
4,399
(82,553 )
75,000
(175,000 )
125,000
—
—
(542 )
(56,889 )
(556 )
(347 )
(115 )
14,150
(19,299 )
(25,078 )
48,742
23,664
2021
Year ended December 31,
2020
2019
23,690 $
355
4,568
25,651 $
350
6,355
19,467
17,332
23,030
304
7,544
15,557
$
$
$
428 $
792 $
1,206
The accompanying notes are an integral part of these consolidated financial statements.
50
GETTY REALTY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements include the accounts of Getty Realty Corp. and its wholly-owned subsidiaries. The
accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in
the United States of America (“GAAP”). We do not distinguish our principal business or our operations on a geographical basis for
purposes of measuring performance. We manage and evaluate our operations as a single segment. All significant intercompany
accounts and transactions have been eliminated.
Use of Estimates, Judgments and Assumptions
The consolidated financial statements have been prepared in conformity with GAAP, which requires management to make
estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and revenues and expenses during the period reported. Estimates,
judgments and assumptions underlying the accompanying consolidated financial statements include, but are not limited to, real estate,
receivables, deferred rent receivable, direct financing leases, depreciation and amortization, impairment of long-lived assets,
environmental remediation costs, environmental remediation obligations, litigation, accrued liabilities, income taxes and the allocation
of the purchase price of properties acquired to the assets acquired and liabilities assumed. Application of these estimates and
assumptions requires exercise of judgment as to future uncertainties and, as a result, actual results could differ materially from these
estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform to current year presentation. Such reclassifications had no impact
on previously reported net earnings.
Real Estate
Real estate assets are stated at cost less accumulated depreciation and amortization. For acquisitions of real estate we estimate
the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant” and identified intangible
assets and liabilities (consisting of leasehold interests, above-market and below-market leases, in-place leases and tenant relationships)
and assumed debt. Based on these estimates, we allocate the estimated fair value to the applicable assets and liabilities. Fair value is
determined based on an exit price approach, which contemplates the price that would be received from the sale of an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. Assumptions used are property and
geographic specific and may include, among other things, capitalization rates, market rental rates, discount rates and EBITDA to rent
coverage ratios.
We expense transaction costs associated with business combinations in the period incurred. Acquisitions of real estate which do
not meet the definition of a business are accounted for as asset acquisitions. The accounting model for asset acquisitions is similar to
the accounting model for business combinations except that the acquisition costs are capitalized and allocated to the individual assets
acquired and liabilities assumed on a relative fair value basis. For additional information regarding property acquisitions, see Note 13
– Property Acquisitions.
We capitalize direct costs, including costs such as construction costs and professional services, and indirect costs associated
with the development and construction of real estate assets while substantive activities are ongoing to prepare the assets for their
intended use. The capitalization period begins when development activities are underway and ends when it is determined that the asset
is substantially complete and ready for its intended use.
We evaluate the held for sale classification of our real estate as of the end of each quarter. Assets that are classified as held for
sale are recorded at the lower of their carrying amount or fair value less costs to sell.
When real estate assets are sold or retired, the cost and related accumulated depreciation and amortization is eliminated from the
respective accounts and any gain or loss is credited or charged to income. We evaluate real estate sale transactions where we provide
seller financing to determine sale and gain recognition in accordance with GAAP. Expenditures for maintenance and repairs are
charged to income when incurred.
51
Depreciation and Amortization
Depreciation of real estate is computed on the straight-line method based upon the estimated useful lives of the assets, which
generally range from 16 to 25 years for buildings and improvements, or the term of the lease if shorter. Asset retirement costs are
depreciated over the shorter of the remaining useful lives of USTs or 10 years for asset retirement costs related to environmental
remediation obligations, which costs are attributable to the group of assets identified at a property. Leasehold interests and in-place
leases are amortized over the remaining term of the underlying lease.
Direct Financing Leases
Income under direct financing leases is included in revenues from rental properties and is recognized over the lease terms using
the effective interest rate method which produces a constant periodic rate of return on the net investments in the leased properties. The
investments in direct financing leases are increased for interest income earned and amortized over the life of the leases and reduced by
the receipt of lease payments. We consider direct financing leases to be past-due or delinquent when a contractually required payment
is not remitted in accordance with the provisions of the underlying agreement.
On June 16, 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments –
Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments (“ASU 2016-13”). The accounting standard
became effective for us and was adopted on January 1, 2020. Upon adoption, we had five unitary leases subject to this standard
classified as a direct financing leases with a net investment balance aggregating $82,366,000 prior to the credit loss adjustment. In
these direct financing leases, the payment obligations of the lessees are collateralized by real estate properties. Historically, we have
had no collection issues related to these direct financing leases; therefore, we assessed the probability of default on these leases based
on the lessee’s financial condition, business prospects, remaining term of the lease, expected value of the underlying collateral upon its
repossession, and our historical loss experience related to other leases in which we are the lessor. Based on the aforementioned
considerations, we estimated a credit loss reserve related to these direct financing leases totaling $578,000, which was recognized as a
cumulative adjustment to retained earnings and as a reduction of the investment in direct financing leases balance on our consolidated
balance sheets on January 1, 2020. Periods prior to the adoption date that are presented for comparative purposes were not adjusted.
During the year ended December 31, 2020, we recorded an allowance for credit losses of $340,000 on our net investments in direct
financing leases due to changes in expected economic conditions, which was included within other income in our consolidated
statements of operations. In addition, during the year ended December 31, 2021, we reduced our allowance for credit losses by
$92,000 on our net investments in direct financing leases due to changes in expected economic conditions, which was included within
other income in our consolidated statements of operations.
We review our direct financing leases each reporting period to determine whether there were any indicators that the value of our
net investments in direct financing leases may be impaired and adjust the allowance for any estimated changes in the credit loss with
the resulting change recorded through our consolidated statement of operations. When determining a possible impairment, we take
into consideration the collectability of direct financing lease receivables for which a reserve would be required. In addition, we
determine whether there has been a permanent decline in the current estimate of the residual value of the property.
When we enter into a contract to sell properties that are recorded as direct financing leases, we evaluate whether we believe that
it is probable that the disposition will occur. If we determine that the disposition is probable and therefore the property’s holding
period is reduced, we record an allowance for credit losses to reflect the change in the estimate of the undiscounted future rents.
Accordingly, the net investment balance is written down to fair value.
Notes and Mortgages Receivable
Notes and mortgages receivable consists of loans originated by us in conjunction with property dispositions and funding
provided to tenants in conjunction with property acquisitions and capital improvements. Notes and mortgages receivable are recorded
at stated principal amounts. In conjunction with our adoption of ASU 2016-13 on January 1, 2020, we estimate our credit loss reserve
for our notes and mortgages receivable using the weighted average remaining maturity (“WARM”) method, which has been identified
as an acceptable loss-rate method for estimating credit loss reserves in the FASB Staff Q&A Topic 326, No. 1. The WARM method
requires us to reference historic loan loss data across a comparable data set and apply such loss rate to our notes and mortgages
portfolio over its expected remaining term, taking into consideration expected economic conditions over the relevant timeframe. We
applied the WARM method for our notes and mortgages portfolio, which share similar risk characteristics. Application of the WARM
method to estimate a credit loss reserve requires significant judgment, including (i) the historical loan loss reference data, (ii) the
expected timing and amount of loan repayments, and (iii) the current credit quality of our portfolio and our expectations of
performance and market conditions over the relevant time period. To estimate the historic loan losses relevant to our portfolio, we
used our historical loan performance since the launch of our loan origination business in 2013. Upon adoption of ASU 2016-13 on
January 1, 2020, we recorded a credit loss reserve of $309,000, which was recognized as a cumulative adjustment to retained earnings
and as a reduction of the aggregate outstanding principal balance of $30,855,000 on the notes and mortgages receivable balance on our
consolidated balance sheets on January 1, 2020. Periods prior to the adoption date that are presented for comparative purposes were
not adjusted. During the year ended December 31, 2020, we recorded an additional allowance for credit losses of $28,000 on these
52
notes and mortgages receivable due to changes in expected economic conditions, which was included within other income in our
consolidated statements of operations. In addition, during the year ended December 31, 2021, we reduced our allowance for credit
losses by $40,000 on these notes and mortgages receivable due to changes in expected economic conditions, which was included
within other income in our consolidated statements of operations
From time to time, we may originate construction loans for the construction of income-producing properties. During the year
ended December 31, 2021, we funded construction loans in the amount of $13.5 million. During the year ended December 31, 2021,
we exercised our option to purchase two properties for $10.0 million for which we had previously funded construction loans in the
amount of $7.8 million, at which time the loans were repaid in full. At December 31, 2021, there were $ 5.7 million of outstanding
balances for construction loans. Our construction loans generally provide for funding only during the construction phase, which is
typically up to nine months, although our policy is to consider construction periods as long as 24 months. Funds are disbursed based
on inspections in accordance with a schedule reflecting the completion of portions of the project. We also review and inspect each
property before disbursement of funds during the term of the construction loan. At the end of the construction phase, the construction
loan will be repaid with the proceeds from the sale of the property. We have the option to purchase the property at the end of the
construction period.
Cash and Cash Equivalents
We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Our
cash and cash equivalents are held in the custody of financial institutions, and these balances, at times, may exceed federally insurable
limits.
Restricted Cash
Restricted cash consists of cash that is contractually restricted or held in escrow pursuant to various agreements with
counterparties. At December 31, 2021 and 2020, restricted cash of $1,723,000 and $1,979,000, respectively, consisted of security
deposits received from our tenants.
Revenue Recognition and Deferred Rent Receivable
On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (“Topic 606”) using the
modified retrospective method applying it to any open contracts as of January 1, 2018. The new guidance provides a unified model to
determine how revenue is recognized. To determine the proper amount of revenue to be recognized, we perform the following steps:
(i) identify the contract with the customer, (ii) identify the performance obligations within the contract, (iii) determine the transaction
price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when (or as) a performance
obligation is satisfied. Our primary source of revenue consists of revenue from rental properties and tenant reimbursements that is
derived from leasing arrangements, which is specifically excluded from the standard, and thus had no material impact on our
consolidated financial statements or notes to our consolidated financial statements as of December 31, 2021, 2020 and 2019.
Lease payments from operating leases are recognized on a straight-line basis over the term of the leases. The cumulative
difference between lease revenue recognized under this method and the contractual lease payment terms is recorded as deferred rent
receivable on our consolidated balance sheets. We review our accounts receivable, including its deferred rent receivable, related to
base rents, straight-line rents, tenant reimbursements and other revenues for collectability. Our evaluation of collectability primarily
consists of reviewing past due account balances and considers such factors as the credit quality of our tenant, historical trends of the
tenant, changes in tenant payment terms, current economic trends, including the novel coronavirus (“COVID-19”) pandemic, and
other facts and circumstances related to the applicable tenants. In addition, with respect to tenants in bankruptcy, we estimate the
probable recovery through bankruptcy claims. If a tenant’s accounts receivable balance is considered uncollectable, we will write off
the related receivable balances and cease to recognize lease income, including straight-line rent unless cash is received. If the
collectability assessment subsequently changes to probable, any difference between the lease income that would have been recognized
if collectability had always been assessed as probable and the lease income recognized to date, is recognized as a current-period
adjustment to revenues from rental properties. Our reported net earnings are directly affected by our estimate of the collectability of
our accounts receivable.
53
In April 2020, the FASB issued interpretive guidance relating to the accounting for lease concessions provided as a result of
COVID-19. In this guidance, entities can elect not to apply lease modification accounting with respect to such lease concessions and
instead, treat the concession as if it was a part of the existing contract. This guidance is only applicable to COVID-19 related lease
concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. Some concessions will
provide a deferral of payments with no substantive changes to the consideration in the original contract. A deferral affects the timing
of cash receipts, but the amount of the consideration is substantially the same as that required by the original contract. The FASB staff
provides two ways to account for those deferrals:
(1) Account for the concessions as if no changes to the lease contract were made. Under that accounting,
a lessor would increase its lease receivable. In its income statement, a lessor would continue to
recognize income during the deferral period.
(2) Account for the deferred payments as variable lease payments.
We elected to treat lease concessions with option (1) above for the year ended December 31, 2021. There were no outstanding
balances for lease concessions provided as a result of COVID-19 at December 31, 2021.
The present value of the difference between the fair market rent and the contractual rent for above-market and below-market
leases at the time properties are acquired is amortized into revenues from rental properties over the remaining terms of the in-place
leases. Lease termination fees are recognized as other income when earned upon the termination of a tenant’s lease and relinquishment
of space in which we have no further obligation to the tenant.
The sales of nonfinancial assets, such as real estate, are to be recognized when control of the asset transfers to the buyer, which
will occur when the buyer has the ability to direct the use of or obtain substantially all of the remaining benefits from the asset. This
generally occurs when the transaction closes and consideration is exchanged for control of the property.
Impairment of Long-Lived Assets
Assets are written down to fair value when events and circumstances indicate that the assets might be impaired and the projected
undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Assets held for
disposal are written down to fair value less estimated disposition costs.
We recorded impairment charges aggregating $4,404,000, $4,258,000 and $4,012,000 for the years ended December 31, 2021,
2020 and 2019, respectively. Our estimated fair values, as they relate to property carrying values, were primarily based upon
(i) estimated sales prices from third-party offers based on signed contracts, letters of intent or indicative bids, for which we do not
have access to the unobservable inputs used to determine these estimated fair values, and/or consideration of the amount that currently
would be required to replace the asset, as adjusted for obsolescence (this method was used to determine $964,000 of the $4,404,000 in
impairments recognized during the year ended December 31, 2021) and (ii) discounted cash flow models (this method was used to
determine $484,000 of the $4,404,000 in impairments recognized during the year ended December 31, 2021). During the year ended
December 31, 2021, we recorded the remaining impairments of $2,956,000 of the $4,404,000 due to the accumulation of asset
retirement costs as a result of changes in estimates associated with our estimated environmental liabilities which increased the carrying
values of certain properties in excess of their fair values. For the years ended December 31, 2021, 2020 and 2019, impairment charges
aggregating $919,000, $932,000 and $1,202,000, respectively, were related to properties that were previously disposed of by us.
The estimated fair value of real estate is based on the price that would be received from the sale of the property in an orderly
transaction between market participants at the measurement date. In general, we consider multiple internal valuation techniques when
measuring the fair value of a property, all of which are based on unobservable inputs and assumptions that are classified within
Level 3 of the Fair Value Hierarchy. These unobservable inputs include assumed holding periods ranging up to 15 years, assumed
average rent increases of 2.0% annually, income capitalized at a rate of 8.0% and cash flows discounted at a rate of 7.0%. These
assessments have a direct impact on our net income because recording an impairment loss results in an immediate negative adjustment
to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future rental
rates and operating expenses that could differ materially from actual results in future periods. Where properties held for use have been
identified as having a potential for sale, additional judgments are required related to the determination as to the appropriate period
over which the projected undiscounted cash flows should include the operating cash flows and the amount included as the estimated
residual value. This requires significant judgment. In some cases, the results of whether impairment is indicated are sensitive to
changes in assumptions input into the estimates, including the holding period until expected sale.
Fair Value of Financial Instruments
All of our financial instruments are reflected in the accompanying consolidated balance sheets at amounts which, in our
estimation based upon an interpretation of available market information and valuation methodologies, reasonably approximate their
fair values, except those separately disclosed in the notes below.
54
The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates of fair
value that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the consolidated
financial statements and revenues and expenses during the period reported using a hierarchy (the “Fair Value Hierarchy”) that
prioritizes the inputs to valuation techniques used to measure the fair value. The Fair Value Hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements). The levels of the Fair Value Hierarchy are as follows: “Level 1” – inputs that reflect
unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date;
“Level 2” – inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in
markets that are not considered to be active; and “Level 3” – inputs that are unobservable. Certain types of assets and liabilities are
recorded at fair value either on a recurring or non-recurring basis. Assets required or elected to be marked-to-market and reported at
fair value every reporting period are valued on a recurring basis. Other assets not required to be recorded at fair value every period
may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the
asset to market as of the reporting date. Such assets are valued on a non-recurring basis.
Environmental Remediation Obligations
We record the fair value of a liability for an environmental remediation obligation as an asset and liability when there is a legal
obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. Environmental
remediation obligations are estimated based on the level and impact of contamination at each property. The accrued liability is the
aggregate of our estimate of the fair value of cost for each component of the liability. The accrued liability is net of estimated
recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds.
Net environmental liabilities are currently measured based on their expected future cash flows which have been adjusted for inflation
and discounted to present value. We accrue for environmental liabilities that we believe are allocable to other potentially responsible
parties if it becomes probable that the other parties will not pay their environmental remediation obligations.
Litigation
Legal fees related to litigation are expensed as legal services are performed. We provide for litigation accruals, including certain
litigation related to environmental matters, when it is probable that a liability has been incurred and a reasonable estimate of the
liability can be made. If the estimate of the liability can only be identified as a range, and no amount within the range is a better
estimate than any other amount, the minimum of the range is accrued for the liability. We accrue our share of environmental litigation
liabilities based on our assumptions of the ultimate allocation method and share that will be used when determining our share of
responsibility.
Income Taxes
We file a federal income tax return on which are consolidated our tax items and the tax items of our subsidiaries that are pass-
through entities. Effective January 1, 2001, we elected to qualify, and believe that we are operating so as to qualify, as a REIT for
federal income tax purposes. Accordingly, we generally will not be subject to federal income tax on qualifying REIT income,
provided that distributions to our stockholders equal at least the amount of our taxable income as defined under the Internal Revenue
Code. We accrue for uncertain tax matters when appropriate. The accrual for uncertain tax positions is adjusted as circumstances
change and as the uncertainties become more clearly defined, such as when audits are settled or exposures expire. Tax returns for the
years 2018, 2019 and 2020, and tax returns which will be filed for the year ended 2021, remain open to examination by federal and
state tax jurisdictions under the respective statutes of limitations.
New Accounting Pronouncements
On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04
contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The
guidance in ASU 2020-04 provides optional expedients and exceptions for applying generally accepted accounting principles to
contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate
expected to be discontinued. We are currently evaluating the impact the adoption of ASU 2020-04 will have on our consolidated
financial statements.
NOTE 2. — LEASES
As of December 31, 2021, we owned 981 properties and leased 47 properties from third-party landlords. These 1,028 properties
are located in 38 states across the United States and Washington, D.C. Substantially all of our properties are leased on a triple-net
basis to convenience store operators, petroleum distributors, car wash operators and other automotive-related and retail tenants. Our
tenants either operate their business at our properties directly or, in the case of certain convenience stores and gasoline and repair
stations, sublet our properties and supply fuel to third parties that operate the businesses. Our triple-net lease tenants are responsible
55
for the payment of all taxes, maintenance, repairs, insurance and other operating expenses relating to our properties, and are also
responsible for environmental contamination occurring during the terms of their leases and in certain cases also for environmental
contamination that existed before their leases commenced. For additional information regarding our environmental obligations, see
Note 5 – Environmental Obligations.
Significant portion of our tenants’ financial results depend on convenience store sales, the sale of refined petroleum products
and/or the sale of automotive services and parts. As a result, our tenants’ financial results can be dependent on the performance of the
automobile manufacturing, petroleum marketing and automobile aftermarket industries, each of which are highly competitive and can
be subject to variability. During the terms of our leases, we monitor the credit quality of our triple-net lease tenants by reviewing their
published credit rating, if available, reviewing publicly available financial statements, or reviewing financial or other operating
statements which are delivered to us pursuant to applicable lease agreements, monitoring news reports regarding our tenants and their
respective businesses, and monitoring the timeliness of lease payments and the performance of other financial covenants under their
leases.
We adopted ASU 2016-02 as of January 1, 2019. ASU 2016-02 amends the existing accounting standards for lease accounting,
including requiring lessees to recognize most leases on their balance sheets. Under ASU 2016-02, lessor accounting will remain
similar to lessor accounting under previous GAAP, while aligning with the FASB’s new revenue recognition guidance.
For leases in which we are the lessor, we are (i) retaining classification of our historical leases as we are not required to reassess
classification upon adoption of the new standard, (ii) expensing indirect leasing costs in connection with new or extended tenant
leases, the recognition of which would have been deferred under prior accounting guidance and (iii) aggregating revenue from our
lease components and non-lease components (comprised of tenant reimbursements) into revenue from rental properties.
Revenues from rental properties for the years ended December 31, 2021, 2020 and 2019, were $153,886,000, $144,601,000 and
$137,736,000, respectively. Rental income contractually due from our tenants included in revenues from rental properties was
$138,691,000, $128,246,000 and $119,293,000 for the years ended December 31, 2021, 2020 and 2019, respectively.
In accordance with GAAP, we recognize rental revenue in amounts which vary from the amount of rent contractually due during
the periods presented. As a result, revenues from rental properties include non-cash adjustments recorded for deferred rental revenue
due to the recognition of rental income on a straight-line basis over the current lease term, the net amortization of above-market and
below-market leases, rental income recorded under direct financing leases using the effective interest method which produces a
constant periodic rate of return on the net investments in the leased properties and the amortization of deferred lease incentives
(collectively, “Revenue Recognition Adjustments”). Revenue Recognition Adjustments included in revenues from rental properties
resulted in a reduction in revenue of $1,964,000 and $895,000, for the year ended December 31, 2021 and 2020, respectively, and
increases in revenue of $960,000 for the year ended December 31, 2019.
Tenant reimbursements, which are included in revenues from rental properties and which consist of real estate taxes and other
municipal charges paid by us which were reimbursed by our tenants pursuant to the terms of triple-net lease agreements, were
$17,159,000, $17,250,000 and $17,483,000 for the years ended December 31, 2021, 2020 and 2019, respectively.
We incurred $298,000, $351,000 and $373,000 of lease origination costs for the years ended December 31, 2021, 2020 and
2019, respectively. This deferred expense is recognized on a straight-line basis as amortization expense in our consolidated statements
of operations over the terms of the various leases.
The components of the $71,647,000 investment in direct financing leases as of December 31, 2021 are lease payments
receivable of $98,539,000 plus unguaranteed estimated residual value of $13,928,000 less unearned income of $39,994,000 and
$826,000 allowance for credit losses. The components of the $77,238,000 investment in direct financing leases as of December 31,
2020 are lease payments receivable of $113,256,000 plus unguaranteed estimated residual value of $13,928,000 less unearned income
of $49,028,000 and $918,000 allowance for credit losses.
In accordance with ASU 2016-13, we applied changes in loss reserves related to these direct financing leases totaling $578,000,
as a cumulative adjustment to retained earnings and as a reduction of the investment in direct financing leases balance on our
consolidated balance sheets on January 1, 2020. During the year ended December 31, 2021 and 2020, we recorded a reduction and an
additional allowance for credit losses of $92,000 and $340,000, respectively, on our net investments in direct financing leases due to
changes in expected economic conditions, which was included within other income in our consolidated statements of operations.
56
Future contractual annual rentals receivable from our tenants, which have terms in excess of one year as of December 31, 2021,
are as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total
Operating
Leases
Direct
Financing Leases
$
$
131,868 $
131,442
129,834
129,466
116,994
651,396
1,291,000 $
13,203
13,237
13,380
13,412
10,386
34,921
98,539
For leases in which we are the lessee, ASU 2016-02 requires leases with durations greater than twelve months to be recognized
on our consolidated balance sheets. We elected the package of transition provisions available for expired or existing contracts, which
allowed us to carryforward our historical assessments of (i) whether contracts are or contain leases, (ii) lease classification and
(iii) initial direct costs.
As of January 1, 2019, we recognized operating lease right-of-use assets of $25,561,000 (net of deferred rent expense) and
operating lease liabilities of $26,087,000, which were presented on our consolidated financial statements. The right-of-use assets and
lease liabilities are carried at the present value of the remaining expected future lease payments. When available, we use the rate
implicit in the lease to discount lease payments to present value; however, our current leases did not provide a readily determinable
implicit rate. Therefore, we estimated our incremental borrowing rate to discount the lease payments based on information available
and considered factors such as interest rates available to us on a fully collateralized basis and terms of the leases. ASU 2016-02 did not
have a material impact on our consolidated balance sheets or on our consolidated statements of operations. The most significant
impact was the recognition of right-of-use assets and lease liabilities for operating leases, while our accounting for finance leases
remained substantially unchanged.
The following presents the lease-related assets and liabilities (in thousands):
Assets
Right-of-use assets – operating
Right-of-use assets – finance
Total lease assets
Liabilities
Lease liability – operating
Lease liability – finance
Total lease liabilities
The following presents the weighted average lease terms and discount rates of our leases:
Weighted-average remaining lease term (years)
Operating leases
Finance leases
Weighted-average discount rate
Operating leases (a)
Finance leases
$
$
$
$
December 31,
2021
21,092
379
21,471
22,980
2,005
24,985
8.8
6.8
4.80 %
16.90 %
(a) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.
57
The following presents our total lease costs (in thousands):
Operating lease cost
Finance lease cost
Amortization of leased assets
Interest on lease liabilities
Short-term lease cost
Total lease cost
The following presents supplemental cash flow information related to our leases (in thousands):
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases
Operating cash flows for finance leases
Financing cash flows for finance leases
As of December 31, 2021, scheduled lease liabilities mature as follows (in thousands):
December 31,
2021
4,240
645
615
-
5,500
December 31,
2021
3,255
615
645
$
$
$
$
2022
2023
2024
2025
2026
Thereafter
Total lease payments
Less: amount representing interest
Present value of lease payments
Operating
Leases
Direct
Financing Leases
$
$
3,795 $
3,695
3,549
3,173
2,963
11,213
28,388
(5,408 )
22,980 $
838
586
515
362
265
523
3,089
(1,084 )
2,005
We have obligations to lessors under non-cancelable operating leases which have terms in excess of one year, principally for
convenience store and gasoline station properties. The leased properties have a remaining lease term averaging approximately eight
years, including renewal options. Future minimum annual rentals payable under such leases, excluding renewal options, are as
follows: 2022 – $3,821,000, 2023 – $3,267,000, 2024 – $2,614,000, 2025 – $1,825,000, 2026 – $1,471,000 and $2,738,000 thereafter.
Rent expense, substantially all of which consists of minimum rentals on non-cancelable operating leases, amounted to
$3,393,000, $3,769,000 and $4,664,000 for the years ended December 31, 2021, 2020 and 2019, respectively, and is included in
property costs. Rent received under subleases for the years ended December 31, 2021, 2020 and 2019, was $7,333,000, $7,892,000
and $8,699,000, respectively, and is included in rental revenue discussed above.
Major Tenants
As of December 31, 2021, we had four significant tenants by revenue:
• We leased 150 properties in three separate unitary leases and two stand-alone leases to subsidiaries of Global Partners
LP (NYSE: GLP) (“Global”). In the aggregate, our leases with subsidiaries of Global represented 16% of our total
revenues for the years ended December 31, 2021 and 2020. All of our unitary leases with subsidiaries of Global are
guaranteed by the parent company.
• We leased 128 properties in four separate unitary leases to subsidiaries of ARKO Corp. (NASDAQ: ARKO) (“Arko”).
In the aggregate, our leases with subsidiaries of Arko represented 14% and 15% of our total revenues for the years
ended December 31, 2021 and 2020, respectively. All of our unitary leases with subsidiaries of Arko are guaranteed by
the parent company.
58
• We leased 78 properties pursuant to three separate unitary leases and one stand-alone lease to Apro, LLC (d/b/a
“United Oil”). In the aggregate, our leases with United Oil represented 11% and 12% of our total revenues for the years
ended December 31, 2021 and 2020, respectively.
• We leased 69 properties pursuant to two separate unitary leases to subsidiaries of Chestnut Petroleum Dist., Inc.
(“Chestnut”). In the aggregate, our leases with subsidiaries of Chestnut represented 9% and 10% of our total revenues
for the years ended December 31, 2021 and 2020, respectively. The largest of these unitary leases, covering 52 of our
properties, is guaranteed by the parent company, its principals and numerous Chestnut affiliates.
Getty Petroleum Marketing Inc.
Getty Petroleum Marketing Inc. (“Marketing”) was our largest tenant from 1997 until 2012 under a unitary triple-net master
lease that was terminated in April 2012 as a consequence of Marketing’s bankruptcy, at which time we either sold or released these
properties. As of December 31, 2021, 342 of the properties we own or lease were previously leased to Marketing, of which 310
properties are subject to long-term triple-net leases with petroleum distributors in 14 separate property portfolios and 24 properties are
leased as single unit triple-net leases. The leases covering properties previously leased to Marketing are unitary triple-net lease
agreements generally with an initial term of 15 years and options for successive renewal terms of up to 20 years. Rent is scheduled to
increase at varying intervals during both the initial and renewal terms of the leases. Several of the leases provide for additional rent
based on the aggregate volume of fuel sold. In addition, the majority of the leases require the tenants to invest capital in our properties,
substantially all of which are related to the replacement of USTs that are owned by our tenants. As of December 31, 2021, we have a
remaining commitment to fund up to $6,616,000 in the aggregate with our tenants for our portion of such capital improvements. Our
commitment provides us with the option to either reimburse our tenants or to offset rent when these capital expenditures are made.
This deferred expense is recognized on a straight-line basis as a reduction of rental revenue in our consolidated statements of
operations over the life of the various leases.
As part of the triple-net leases for properties previously leased to Marketing, we transferred title of the USTs to our tenants, and
the obligation to pay for the retirement and decommissioning or removal of USTs at the end of their useful lives, or earlier if
circumstances warranted, was fully or partially transferred to our new tenants. We remain contingently liable for this obligation in the
event that our tenants do not satisfy their responsibilities. Accordingly, through December 31, 2021, we removed $13,813,000 of asset
retirement obligations and $10,808,000 of net asset retirement costs related to USTs from our balance sheet. The cumulative change of
$1,104,000 (net of accumulated amortization of $1,901,000) is recorded as deferred rental revenue and will be recognized on a
straight-line basis as additional revenues from rental properties over the terms of the various leases.
NOTE 3. — COMMITMENTS AND CONTINGENCIES
Credit Risk
In order to minimize our exposure to credit risk associated with financial instruments, we place our temporary cash investments,
if any, with high credit quality institutions. Temporary cash investments, if any, are currently held in an overnight bank time deposit
with JPMorgan Chase Bank, N.A. and these balances, at times, may exceed federally insurable limits.
Legal Proceedings
We are involved in various legal proceedings and claims which arise in the ordinary course of our business. As of December 31,
2021 and 2020, we had accrued $1,925,000 and $4,275,000, respectively, for certain of these matters which we believe were
appropriate based on information then currently available. We are unable to estimate ranges in excess of the amount accrued with any
certainty for these matters. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that
we used to allocate environmental liabilities may change, which may result in our providing an accrual, or adjustments to the amounts
recorded, for environmental litigation accruals. Matters related to our former Newark, New Jersey Terminal and the Lower Passaic
River, our methyl tertiary butyl ether (a fuel derived from methanol, commonly referred to as “MTBE”) litigations in the states of
Pennsylvania and Maryland, could cause a material adverse effect on our business, financial condition, results of operations, liquidity,
ability to pay dividends or stock price. During the year ended December 31, 2020, we received $21,300,000 for legal litigation
settlements.
Matters related to our former Newark, New Jersey Terminal and the Lower Passaic River.
In 2004, the United States Environmental Protection Agency (“EPA”) issued General Notice Letters (“GNL”) to over 100
entities, including us, alleging that they are PRPs at the Diamond Alkali Superfund Site (“Superfund Site”), which includes the former
Diamond Shamrock Corporation manufacturing facility located at 80-120 Lister Ave. in Newark, New Jersey and a 17-mile stretch of
the Passaic River from Dundee Dam to the Newark Bay and its tributaries (the Lower Passaic River Study Area or “LPRSA”). In May
2007, over 70 GNL recipients, including us, entered into an Administrative Settlement Agreement and Order on Consent (“AOC”)
59
with the EPA to perform a Remedial Investigation and Feasibility Study (“RI/FS”) for the LPRSA, which is intended to address the
investigation and evaluation of alternative remedial actions with respect to alleged damages to the LPRSA. Many of the parties to the
AOC, including us, are also members of a Cooperating Parties Group (“CPG”). The CPG agreed to an interim allocation formula for
purposes of allocating the costs to complete the RI/FS among its members, with the understanding that this interim allocation formula
is not binding on the parties in terms of any potential liability for the costs to remediate the LPRSA. The CPG submitted to the EPA its
draft RI/FS in 2015, which sets forth various alternatives for remediating the entire 17 miles of the LPRSA. In October 2018, the EPA
issued a letter directing the CPG to prepare a streamlined feasibility study for just the upper 9-miles of the LPRSA based on an
iterative approach using adaptive management strategies. On December 4, 2020, The CPG submitted a Final Draft Interim Remedy
Feasibility Study (“IR/FS”) to the EPA which identifies various targeted dredge and cap alternatives for the upper 9-miles of the
LPRSA. On December 11, 2020, the EPA conditionally approved the CPG’s IR/FS for the upper 9-miles of the LPRSA, which
recognizes that interim actions and adaptive management may be appropriate before deciding a final remedy. The EPA published the
Proposed Plan for the upper 9-mile IR/FS for public comment and subsequently issued a Record of Decision (“ROD”) for the upper 9-
mile IR/FS (“Upper 9-mile IR ROD”). There is currently no mechanism in place requiring any parties to implement the Upper 9-mile
IR ROD.
In addition to the RI/FS activities, other actions relating to the investigation and/or remediation of the LPRSA have proceeded
as follows. First, in June 2012, certain members of the CPG entered into an Administrative Settlement Agreement and Order on
Consent (“10.9 AOC”) with the EPA to perform certain remediation activities, including removal and capping of sediments at the
river mile 10.9 area and certain testing. The EPA also issued a Unilateral Order to Occidental Chemical Corporation (“Occidental”),
the former owner/operator of the Diamond Shamrock Corporation facility responsible for the discharge of 2,3,8,8-TCDD (“dioxin”)
and other hazardous substances from the Lister facility. The Order directed Occidental to participate and contribute to the cost of the
river mile 10.9 work. Concurrent with the CPG’s work on the RI/FS, on April 11, 2014, the EPA issued a draft Focused Feasibility
Study (“FFS”) with proposed remedial alternatives to remediate the lower 8-miles of the LPRSA. The FFS was subject to public
comments and objections and, on March 4, 2016, the EPA issued a ROD for the lower 8-miles (“Lower 8-mile ROD”) selecting a
remedy that involves bank-to-bank dredging and installing an engineered cap with an estimated cost of $1,380,000,000. On March 31,
2016, we and more than 100 other PRPs received from the EPA a “Notice of Potential Liability and Commencement of Negotiations
for Remedial Design” (“Notice”), which informed the recipients that the EPA intends to seek an Administrative Order on Consent and
Settlement Agreement with Occidental (who the EPA considers the primary contributor of dioxin and other pesticides generated from
the production of Agent Orange at its Diamond Shamrock Corporation facility and a discharger of other contaminants of concern
(“COCs”) to the Superfund Site for remedial design of the remedy selected in the Lower 8-mile ROD, after which the EPA plans to
begin negotiations with “major” PRPs for implementation and/or payment of the selected remedy. The Notice also stated that the EPA
believes that some of the PRPs and other parties not yet identified will be eligible for a cash out settlement with the EPA. On
September 30, 2016, Occidental entered into an agreement with the EPA to perform the remedial design for the Lower 8-mile ROD. In
December 2019, Occidental submitted a report to the EPA on the progress of the remedial design work, which is still ongoing.
Occidental has asserted that it is entitled to indemnification by Maxus Energy Corporation (“Maxus”) and Tierra Solutions, Inc.
(“Tierra”) for its liability in connection with the Site. Occidental has also asserted that Maxus and Tierra’s parent company, YPF, S.A.
(“YPF”) and certain of its affiliates must indemnify Occidental. On June 16, 2016, Maxus and Tierra filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. In July 2017, an amended Chapter 11 plan of liquidation became effective and, in
connection therewith, Maxus and Tierra entered into a mutual contribution release agreement with certain parties, including us,
pertaining to certain past costs, but not future remedy costs.
By letter dated March 30, 2017, the EPA advised the recipients of the Notice that it would be entering into cash out settlements
with 20 PRPs to resolve their alleged liability for the remedial actions addressed in the Lower 8-mile ROD, who the EPA stated did
not discharge any of the eight hazardous substances identified as a COC in the ROD. The letter also stated that other parties who did
not discharge dioxins, furans or polychlorinated biphenyls (which are considered the COCs posing the greatest risk to the river) may
also be eligible for cash out settlements, and that the EPA would begin a process for identifying other PRPs for negotiation of future
cash out settlements. We were not included in the initial group of 20 parties identified by the EPA for cash out settlements, but we
believe we meet the EPA’s criteria for a cash out settlement and should be considered for same in any future discussions. In January
2018, the EPA published a notice of its intent to enter into a final settlement agreement with 15 of the initial group of parties to resolve
their respective alleged liability for the Lower 8-mile ROD work, each for a payment to the EPA in the amount of $280,600. In August
2017, the EPA appointed an independent third-party allocation expert to conduct allocation proceedings with most of the remaining
recipients of the Notice, which process has concluded leading to an agreement in principle between the EPA and certain of the
allocation proceeding participants, including us, concerning a cash-out settlement for the entire 17-mile stretch of the Lower Passaic
River and its tributaries, which is subject to negotiation and court approval and entry of a consent decree.
On June 30, 2018, Occidental filed a complaint in the United States District Court for the District of New Jersey seeking cost
recovery and contribution under the Comprehensive Environmental Response, Compensation, and Liability Act for its alleged
expenses with respect to the investigation, design, and anticipated implementation of the remedy for the Lower 8-mile ROD work the
(“Occidental lawsuit”). The complaint lists over 120 defendants, including us, many of whom were also named in the EPA’s 2016
Notice. Factual discovery is ongoing, and we are defending the claims consistent with our defenses in the related proceedings. In
60
January 2022, the defendants in the Occidental lawsuit, including us, collectively filed a motion seeking the Court’s permission to file
a motion to stay the litigation to allow the related allocation proceedings and resulting settlement discussions with the EPA to continue
unencumbered by the time and costs of litigation and discovery that could later be obviated by a settlement. The Court is currently
considering whether to rule on this motion for a stay of the proceedings.
Based on currently known facts and circumstances, including, among other factors, the agreement in principle with the EPA
noted above, anticipated allocations, our belief that there was not any use or discharge of dioxins, furans or polychlorinated biphenyls
in connection with our former petroleum storage operations at our former Newark, New Jersey Terminal, and because there are
numerous other parties who will likely bear the costs of remediation and/or damages, the Company does not believe that resolution of
this matter as relates to the Company is reasonably likely to have a material impact on our results of operations. Nevertheless, in the
event the agreement in principle is not approved by the Court, and/or there are one or more adverse determinations related to this
matter, performance of the EPA’s selected remedies for the LPRSA may be subject to future negotiation, potential enforcement
proceedings and/or possible litigation; hence our ultimate liability in the pending and possible future proceedings pertaining to the
LPRSA remains uncertain and subject to numerous contingencies which cannot be predicted and the outcome of which are not yet
known. For these reasons, we are unable to estimate a possible loss or range of loss in excess of the amount we have accrued for the
Lower Passaic River proceedings as of the date of this Annual Report on Form 10-K, and it is therefore possible that losses related to
the Lower Passaic River proceedings could exceed the amounts accrued as of the date hereof, which could cause a material adverse
effect on our results of operations.
MTBE Litigation – State of Pennsylvania
On July 7, 2014, our subsidiary, Getty Properties Corp., was served with a complaint filed by the Commonwealth of
Pennsylvania (the “State”) in the Court of Common Pleas, Philadelphia County relating to alleged statewide MTBE contamination in
Pennsylvania. The named plaintiff is the State, by and through (then) Pennsylvania Attorney General Kathleen G. Kane (as Trustee of
the waters of the State), the Pennsylvania Insurance Department (which governs and administers the Underground Storage Tank
Indemnification Fund), the Pennsylvania Department of Environmental Protection (vested with the authority to protect the
environment) and the Pennsylvania Underground Storage Tank Indemnification Fund. The complaint names us and more than 50
other petroleum refiners, manufacturers, distributors and retailers of MTBE or gasoline containing MTBE who are alleged to have
distributed, stored and sold MTBE gasoline in Pennsylvania. The complaint seeks compensation for natural resource damages and for
injuries sustained as a result of “defendants’ unfair and deceptive trade practices and act in the marketing of MTBE and gasoline
containing MTBE.” The plaintiffs also seek to recover costs paid or incurred by the State to detect, treat and remediate MTBE from
public and private water wells and groundwater. The plaintiffs assert causes of action against all defendants based on multiple
theories, including strict liability – defective design; strict liability – failure to warn; public nuisance; negligence; trespass; and
violation of consumer protection law.
The case was filed in the Court of Common Pleas, Philadelphia County, but was removed by defendants to the United States
District Court for the Eastern District of Pennsylvania and then transferred to the United States District Court for the Southern District
of New York so that it may be managed as part of the ongoing MTBE MDL proceedings. In November 2015, plaintiffs filed a Second
Amended Complaint naming additional defendants and adding factual allegations against the defendants. We joined with other
defendants in the filing of a motion to dismiss the claims against us, which was granted in part and denied in part. We are vigorously
defending the claims made against us. Our ultimate liability in this proceeding is uncertain and subject to numerous contingencies
which cannot be predicted and the outcome of which are not yet known.
MTBE Litigation – State of Maryland
On December 17, 2017, the State of Maryland, by and through the Attorney General on behalf of the Maryland Department of
Environment and the Maryland Department of Health (the “State of Maryland”), filed a complaint in the Circuit Court for Baltimore
City related to alleged statewide MTBE contamination in Maryland. The complaint was served upon us on January 19, 2018. The
complaint names us and more than 60 other defendants. The complaint seeks compensation for natural resource damages and for
injuries sustained as a result of the defendants’ unfair and deceptive trade practices in the marketing of MTBE and gasoline containing
MTBE. The plaintiffs also seek to recover costs paid or incurred by the State of Maryland to detect, investigate, treat and remediate
MTBE from public and private water wells and groundwater, punitive damages and the award of attorneys’ fees and litigation costs.
The plaintiffs assert causes of action against all defendants based on multiple theories, including strict liability – defective design;
strict liability – failure to warn; strict liability for abnormally dangerous activity; public nuisance; negligence; trespass; and violations
of Titles 4, 7 and 9 of the Maryland Environmental Code.
On February 14, 2018, defendants removed the case to the United States District Court for the District of Maryland. We are
vigorously defending the claims made against us. Our ultimate liability, if any, in this proceeding is uncertain and subject to numerous
contingencies which cannot be predicted and the outcome of which are not yet known.
61
NOTE 4. — DEBT
The amounts outstanding under our Second Restated Credit Agreement and our senior unsecured notes are as follows (in
thousands):
Revolving Facility
Series B Notes
Series C Notes
Series D Notes
Series E Notes
Series F Notes
Series G Notes
Series H Notes
Series I Notes
Series J Notes
Series K Notes
Total debt
Unamortized debt issuance costs, net (a)
Total debt, net
Maturity
Date
October 2025
June 2023
February 2025
June 2028
June 2028
September 2029
September 2029
September 2029
November 2030
November 2030
November 2030
Interest
Rate
December 31,
2021
December 31,
2020
1.40 % $
5.35 %
4.75 %
5.47 %
5.47 %
3.52 %
3.52 %
3.52 %
3.43 %
3.43 %
3.43 %
$
60,000 $
75,000
50,000
50,000
50,000
50,000
50,000
25,000
100,000
50,000
25,000
585,000
(3,880 )
581,120 $
25,000
75,000
50,000
50,000
50,000
50,000
50,000
25,000
100,000
50,000
25,000
550,000
(2,307 )
547,693
(a) Unamortized debt issuance costs, related to the Revolving Facility, at December 31, 2021 and 2020, of $2,730 and $1,135,
respectively, are included in prepaid expenses and other assets on our consolidated balance sheets.
Credit Agreement
On June 2, 2015, we entered into a $225,000,000 senior unsecured credit agreement (the “Credit Agreement”) with a group of
banks led by Bank of America, N.A. The Credit Agreement consisted of a $175,000,000 unsecured revolving credit facility (the
“Revolving Facility”) and a $50,000,000 unsecured term loan (the “Term Loan”).
On March 23, 2018, we entered into an amended and restated credit agreement (as amended, the “Restated Credit Agreement”)
amending and restating our Credit Agreement. Pursuant to the Restated Credit Agreement, we (a) increased the borrowing capacity
under the Revolving Facility from $175,000,000 to $250,000,000, (b) extended the maturity date of the Revolving Facility from June
2018 to March 2022, (c) extended the maturity date of the Term Loan from June 2020 to March 2023 and (d) amended certain
financial covenants and provisions.
On September 19, 2018, we entered into an amendment (the “First Amendment”) of our Restated Credit Agreement. The First
Amendment modifies the Restated Credit Agreement to, among other things: (i) reflect that we had previously entered into (a) an
amended and restated note purchase and guarantee agreement with The Prudential Insurance Company of America (“Prudential”) and
certain of its affiliates and (b) a note purchase and guarantee agreement with the Metropolitan Life Insurance Company (“MetLife”)
and certain of its affiliates; and (ii) permit borrowings under each of the Revolving Facility and the Term Loan at three different
interest rates, including a rate based on the LIBOR Daily Floating Rate (as defined in the First Amendment) plus the Applicable Rate
(as defined in the First Amendment) for such facility.
On September 12, 2019, in connection with prepayment of the Term Loan, we entered into a consent and amendment (the
“Second Amendment”) of our Restated Credit Agreement. The Second Amendment modifies the Restated Credit Agreement to,
among other things, (a) increase our borrowing capacity under the Revolving Facility from $250,000,000 to $300,000,000 and
(b) decrease lender commitments under the Term Loan to $0.
On October 27, 2021, we entered into second amended and restated credit agreement (as amended, the “Second Restated Credit
Agreement”) amending and restating our Restated Credit Agreement. Pursuant to the Second Restated Credit Agreement, we (i)
extended the maturity date of the Revolving Facility from March 2022 to October 2025, (ii) reduced the interest rate for borrowings
under the Revolving Facility and (iii) amended certain financial covenants and other provisions.
The Second Restated Credit Agreement provides for the Revolving Facility in an aggregate principal amount of $300,000,000
and includes an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional
aggregate amount not to exceed $300,000,000, subject to certain conditions, including one or more new or existing lenders agreeing to
provide commitments for such increased amount and that no default or event of default shall have occurred and be continuing under
the terms of the Revolving Facility.
The Revolving Facility matures October 27, 2025, subject to two six-month extensions (for a total of 12 months) exercisable at
the Company's option. The Company's exercise of an extension option is subject to the absence of any default under the Second
62
Restated Credit Agreement and the Company's compliance with certain conditions, including the payment of extension fees to the
Lenders under the Revolving Facility and that no default or event of default shall have occurred and be continuing under the terms of
the Revolving Facility.
The Second Restated Credit Agreement reflects reductions in the interest rates for borrowings under the Revolving Facility and
permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.30% to 0.90% or a LIBOR rate plus a margin
of 1.30% to 1.90% based on the Company’s consolidated total indebtedness to total asset value ratio at the end of each quarterly
reporting period. The Revolving Facility includes customary LIBOR transition language that addresses the succession of LIBOR at a
future date.
The per annum rate of the unused line fee on the undrawn funds under the Revolving Facility is 0.15% to 0.25% based on the
Company’s daily unused portion of the available Revolving Facility.
The Second Restated Credit Agreement contains customary financial covenants, including covenants with respect to total
leverage, secured leverage and unsecured leverage ratios, fixed charge and interest coverage ratios, and minimum tangible net worth,
as well as limitations on restricted payments, which may limit the Company’s ability to incur additional debt or pay dividends. The
Second Restated Credit Agreement contains customary events of default, including cross default provisions with respect to the
Company’s existing senior unsecured notes. Any event of default, if not cured or waived in a timely manner, could result in the
acceleration of the Company’s indebtedness under the Second Restated Credit Agreement and could also give rise to an event of
default and the acceleration of the Company’s existing senior unsecured notes.
Senior Unsecured Notes
On December 4, 2020, we entered into a fifth amended and restated note purchase and guarantee agreement (the “Fifth
Amended and Restated Prudential Agreement”) with Prudential and certain of its affiliates amending and restating our existing fourth
amended and restated note purchase and guarantee agreement. Pursuant to the Fifth Amended and Restated Prudential Agreement, we
issued $100.0 million of 3.43% Series I Guaranteed Senior Notes due November 25, 2030 (the “Series I Notes”) to Prudential, and
completed the early redemption of our 6.0% Series A Guaranteed Senior Notes due February 25, 2021 in the original aggregate
principal amount of $100.0 million. The other senior unsecured notes outstanding under the fourth amended and restated note
purchase and guarantee agreement with Prudential, including (i) $75.0 million of 5.35% Series B Guaranteed Senior Notes due June 2,
2023 (the “Series B Notes”), (ii) $50.0 million of 4.75% Series C Guaranteed Senior Notes due February 25, 2025 (the “Series C
Notes”), (iii) $50.0 million of 5.47% Series D Guaranteed Senior Notes due June 21, 2028 (the “Series D Notes”), and (e) $50.0
million of 3.52% Series F Guaranteed Senior Notes due September 12, 2029 (the “Series F Notes”) remain outstanding under the Fifth
Amended and Restated Prudential Agreement.
On December 4, 2020, we entered into a first amended and restated note purchase and guarantee agreement (the “First Amended
and Restated AIG Agreement”) with American General Life Insurance Company amending and restating our existing note purchase
and guarantee agreement. Pursuant to the First Amended and Restated AIG Agreement, we issued $50.0 million of 3.43% Series J
Guaranteed Senior Notes due November 25, 2030 (the “Series J Notes”) to AIG. The $50.0 million of 3.52% Series G Guaranteed
Senior Notes due September 12, 2029 (the “Series G Notes”) that were outstanding under the existing note purchase and guarantee
agreement remain outstanding under the First Amended and Restated AIG Agreement.
On December 4, 2020, we entered into a first amended and restated note purchase and guarantee agreement (the “First Amended
and Restated MassMutual Agreement”) with Massachusetts Mutual Life Insurance Company and certain of its affiliates amending and
restating our existing note purchase and guarantee agreement. Pursuant to the First Amended and Restated MassMutual Agreement,
we issued $25.0 million of 3.43% Series K Guaranteed Senior Notes due November 25, 2030 (the “Series K Notes”) to MassMutual.
The $25.0 million of 3.52% Series H Guaranteed Senior Notes due September 12, 2029 (the “Series H Notes”) that were outstanding
under the existing note purchase and guarantee agreement outstanding under the First Amended and Restated MassMutual.
On June 21, 2018, we entered into a note purchase and guarantee agreement (the “MetLife Note Agreement”) with MetLife and
certain of its affiliates. Pursuant to the MetLife Note Agreement, we issued $50,000,000 of 5.47% Series E Guaranteed Senior Notes
due June 21, 2028 (the “Series E Notes).
On October 27, 2021, we entered into amendments to each of the note purchase and guarantee agreements governing the senior
unsecured notes in order to conform the financial covenants therein to the corresponding provisions in the Second Restated Credit
Agreement.
Covenants
The Second Restated Credit Agreement and our senior unsecured notes contain customary financial covenants such as leverage,
coverage ratios and minimum tangible net worth, as well as limitations on restricted payments, which may limit our ability to incur
additional debt or pay dividends. The Second Restated Credit Agreement and our senior unsecured notes also contain customary
events of default, including cross defaults to each other, change of control and failure to maintain REIT status (provided that the senior
63
unsecured notes require a mandatory offer to prepay the notes upon a change in control in lieu of a change of control event of default).
Any event of default, if not cured or waived in a timely manner, would increase by 200 basis points (2.00%) the interest rate we pay
under the Second Restated Credit Agreement and our senior unsecured notes, and could result in the acceleration of our indebtedness
under the Second Restated Credit Agreement and our senior unsecured notes. We may be prohibited from drawing funds under the
Revolving Facility if there is any event or condition that constitutes an event of default under the Second Restated Credit Agreement
or that, with the giving of any notice, the passage of time, or both, would be an event of default under the Second Restated Credit
Agreement.
As of December 31, 2021, we are in compliance with all of the material terms of the Second Restated Credit Agreement and our
senior unsecured notes, including the various financial covenants described herein.
Debt Maturities
As of December 31, 2021, scheduled debt maturities, including balloon payments, are as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total
Revolving
Facility
Senior
Unsecured Notes
Total
$
$
— $
—
—
60,000
—
—
60,000 $
— $
75,000
—
50,000
—
400,000
525,000 $
—
75,000
—
110,000
—
400,000
585,000
(a) The Revolving Facility matures in October 2025. Subject to the terms of the Second Restated Credit Agreement and our
continued compliance with its provisions, we have the option to extend the term of the Revolving Facility for two six months
periods to October 2026.
NOTE 5. — ENVIRONMENTAL OBLIGATIONS
We are subject to numerous federal, state and local laws and regulations, including matters relating to the protection of the
environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived assets
including buildings containing hazardous materials, USTs and other equipment. Environmental costs are principally attributable to
remediation costs which are incurred for, among other things, removing USTs, excavation of contaminated soil and water, installing,
operating, maintaining and decommissioning remediation systems, monitoring contamination and governmental agency compliance
reporting required in connection with contaminated properties.
We enter into leases and various other agreements which contractually allocate responsibility between the parties for known and
unknown environmental liabilities at or relating to the subject properties. We are contingently liable for these environmental
obligations in the event that our tenant does not satisfy them, and we are required to accrue for environmental liabilities that we
believe are allocable to others under our leases if we determine that it is probable that our tenant will not meet its environmental
obligations. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to
allocate environmental liabilities may change, which may result in material adjustments to the amounts recorded for environmental
litigation accruals and environmental remediation liabilities. We assess whether to accrue for environmental liabilities based upon
relevant factors including our tenants’ histories of paying for such obligations, our assessment of their financial capability, and their
intent to pay for such obligations. However, there can be no assurance that our assessments are correct or that our tenants who have
paid their obligations in the past will continue to do so. We may ultimately be responsible to pay for environmental liabilities as the
property owner if our tenant fails to pay them.
The estimated future costs for known environmental remediation requirements are accrued when it is probable that a liability has
been incurred and a reasonable estimate of fair value can be made. The accrued liability is the aggregate of our estimate of the fair
value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds considering estimated
recovery rates developed from prior experience with the funds.
For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws
and regulations, removal of USTs at the end of their lease term (the cost of which in certain cases is partially borne by us) and
remediation of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering
properties previously leased to Marketing (substantially all of which commenced in 2012), we have agreed to be responsible for
environmental contamination at the premises that was known at the time the lease commenced, and for environmental contamination
which existed prior to commencement of the lease and is discovered (other than as a result of a voluntary site investigation) during the
64
first 10 years of the lease term (or a shorter period for a minority of such leases). After expiration of such 10-year (or, in certain cases,
shorter) period, responsibility for all newly discovered contamination, even if it relates to periods prior to commencement of the lease,
is contractually allocated to our tenant. Our tenants at properties previously leased to Marketing are in all cases responsible for the cost
of any remediation of contamination that results from their use and occupancy of our properties. Under substantially all of our other
triple-net leases, responsibility for remediation of all environmental contamination discovered during the term of the lease (including
known and unknown contamination that existed prior to commencement of the lease) is the responsibility of our tenant.
We anticipate that USTs at a number of properties we currently own and which were previously leased to Marketing will be
replaced in the years ahead as these USTs near the end of their useful lives. For long-term, triple-net leases covering sites previously
leased to Marketing, our tenants are responsible for the cost of removal and replacement of USTs and for remediation of
contamination found during such UST removal and replacement, unless such contamination was found during the first 10 years of the
lease term and also existed prior to commencement of the lease. In those cases, we are responsible for costs associated with the
remediation of such preexisting contamination. We have also agreed to be responsible for environmental contamination that existed
prior to the sale of certain properties assuming the contamination is discovered (other than as a result of a voluntary site investigation)
during the first five years after the sale of the properties.
In the course of certain UST removals and replacements at properties previously leased to Marketing where we retained
continuing responsibility for preexisting environmental obligations, previously unknown environmental contamination was and
continues to be discovered. As a result, we have developed an estimate of fair value for the prospective future environmental liability
resulting from preexisting unknown environmental contamination and have accrued for these estimated costs. These estimates are
based primarily upon quantifiable trends which we believe allow us to make reasonable estimates of fair value for the future costs of
environmental remediation resulting from the removal and replacement of USTs. Our accrual of the additional liability represents our
estimate of the fair value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds
considering estimated recovery rates developed from prior experience with the funds. In arriving at our accrual, we analyzed the ages
of USTs at properties where we would be responsible for preexisting contamination found within 10 years after commencement of a
lease (for properties subject to long-term triple-net leases) or five years from a sale (for divested properties), and projected a cost to
closure for preexisting unknown environmental contamination.
We measure our environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for
inflation (using a range of 2.0% to 2.75%), and then discount them to present value (using a range of 4.0% to 7.0%). We adjust our
environmental remediation liabilities quarterly to reflect changes in projected expenditures, changes in present value due to the
passage of time and reductions in estimated liabilities as a result of actual expenditures incurred during each quarter. As of
December 31, 2021, we had accrued a total of $47,597,000 for our prospective environmental remediation obligations. This accrual
consisted of (a) $11,382,000, which was our estimate of reasonably estimable environmental remediation liability, including
obligations to remove USTs for which we are responsible, net of estimated recoveries and (b) $36,215,000 for future environmental
liabilities related to preexisting unknown contamination. As of December 31, 2020, we had accrued a total of $48,084,000 for our
prospective environmental remediation obligations. This accrual consisted of (a) $11,718,000, which was our estimate of reasonably
estimable environmental remediation liability, including obligations to remove USTs for which we are responsible, net of estimated
recoveries and (b) $36,366,000 for future environmental liabilities related to preexisting unknown contamination.
Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $1,705,000,
$1,841,000 and $2,006,000 of net accretion expense was recorded for the years ended December 31, 2021, 2020 and 2019,
respectively, which is included in environmental expenses. In addition, during the years ended December 31, 2021, 2020 and 2019, we
recorded credits to environmental expenses aggregating $1,768,000, $3,136,000 and $5,386,000, respectively, where decreases in
estimated remediation costs exceeded the depreciated carrying value of previously capitalized asset retirement costs. Environmental
expenses also include project management fees, legal fees and environmental litigation accruals. For the years ended December 31,
2021, 2020 and 2019, changes in environmental estimates aggregating, $147,000, $154,000 and $324,000, respectively, were related
to properties that were previously disposed of by us.
During the years ended December 31, 2021 and 2020, we increased the carrying values of certain of our properties by
$3,004,000 and $2,596,000, respectively, due to changes in estimated environmental remediation costs. The recognition and
subsequent changes in estimates in environmental liabilities and the increase or decrease in carrying values of the properties are non-
cash transactions which do not appear on our consolidated statements of cash flows.
Capitalized asset retirement costs are being depreciated over the estimated remaining life of the UST, a 10-year period if the
increase in carrying value is related to environmental remediation obligations or such shorter period if circumstances warrant, such as
the remaining lease term for properties we lease from others. Depreciation and amortization expense related to capitalized asset
retirement costs in our consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019, were
$4,004,000, $4,020,000 and $4,132,000, respectively. Capitalized asset retirement costs were $39,670,000 (consisting of $24,075,000
of known environmental liabilities and $15,595,000 of reserves for future environmental liabilities) as of December 31, 2021, and
$39,610,000 (consisting of $23,573,000 of known environmental liabilities and $16,037,000 of reserves for future environmental
65
liabilities) as of December 31, 2020. We recorded impairment charges aggregating $3,074,000 and $3,502,000 for the years ended
December 31, 2021 and 2020, respectively, for capitalized asset retirement costs.
Environmental exposures are difficult to assess and estimate for numerous reasons, including the amount of data available upon
initial assessment of contamination, alternative treatment methods that may be applied, location of the property which subjects it to
differing local laws and regulations and their interpretations, changes in costs associated with environmental remediation services and
equipment, the availability of state UST remediation funds and the possibility of existing legal claims giving rise to allocation of
responsibilities to others, as well as the time it takes to remediate contamination and receive regulatory approval. In developing our
liability for estimated environmental remediation obligations on a property by property basis, we consider, among other things, laws
and regulations, assessments of contamination and surrounding geology, quality of information available, currently available
technologies for treatment, alternative methods of remediation and prior experience. Environmental accruals are based on estimates
derived upon facts known to us at this time, which are subject to significant change as circumstances change, and as environmental
contingencies become more clearly defined and reasonably estimable.
Any changes to our estimates or our assumptions that form the basis of our estimates may result in our providing an accrual, or
adjustments to the amounts recorded, for environmental remediation liabilities.
In July 2012, we purchased a 10-year pollution legal liability insurance policy covering substantially all of our properties at that
time for preexisting unknown environmental liabilities and new environmental events. The policy has a $50,000,000 aggregate limit
and is subject to various self-insured retentions and other conditions and limitations. Our intention in purchasing this policy was to
obtain protection predominantly for significant events. In addition to the environmental insurance policy purchased by the Company,
we also took assignment of certain environmental insurance policies, and rights to reimbursement for claims made thereunder, from
Marketing, by order of the U.S. Bankruptcy Court during Marketing’s bankruptcy proceedings. Under these assigned polices, we have
received and expect to continue to receive reimbursement of certain remediation expenses for covered claims.
In light of the uncertainties associated with environmental expenditure contingencies, we are unable to estimate ranges in excess
of the amount accrued with any certainty; however, we believe that it is possible that the fair value of future actual net expenditures
could be substantially higher than amounts currently recorded by us. Adjustments to accrued liabilities for environmental remediation
obligations will be reflected in our consolidated financial statements as they become probable and a reasonable estimate of fair value
can be made.
NOTE 6. — INCOME TAXES
Net cash paid for income taxes for the years ended December 31, 2021, 2020 and 2019, of $355,000, $350,000 and $304,000,
respectively, includes amounts related to state and local income taxes for jurisdictions that do not follow the federal tax rules, which
are provided for in property costs in our consolidated statements of operations.
Earnings and profits (as defined in the Internal Revenue Code) are used to determine the tax attributes of dividends paid to
stockholders and will differ from income reported for consolidated financial statements purposes due to the effect of items which are
reported for income tax purposes in years different from that in which they are recorded for consolidated financial statements
purposes. The federal tax attributes of the common dividends for the years ended December 31, 2021, 2020 and 2019, were: ordinary
income of 73.0%, 88.7% and 96.6%, capital gain distributions of 5.5%, 3.4% and 3.4% and non-taxable distributions of 21.5%, 7.9%
and 0.0%, respectively.
To qualify for taxation as a REIT, we, among other requirements such as those related to the composition of our assets and gross
income, must distribute annually to our stockholders at least 90% of our taxable income, including taxable income that is accrued by
us without a corresponding receipt of cash. We cannot provide any assurance that our cash flows will permit us to continue paying
cash dividends. Should the Internal Revenue Service successfully assert that our earnings and profits were greater than the amount
distributed, we may fail to qualify as a REIT; however, we may avoid losing our REIT status by paying a deficiency dividend to
eliminate any remaining earnings and profits. We may have to borrow money or sell assets to pay such a deficiency dividend.
Although tax returns for the years 2018, 2019 and 2020, and tax returns which will be filed for the year ended 2021, remain open to
examination by federal and state tax jurisdictions under the respective statute of limitations, we have not currently identified any
uncertain tax positions related to those years and, accordingly, have not accrued for uncertain tax positions as of December 31, 2021
or 2020. However, uncertain tax matters may have a significant impact on the results of operations for any single fiscal year or interim
period.
66
NOTE 7. — STOCKHOLDERS’ EQUITY
A summary of the changes in stockholders’ equity for the years ended December 31, 2021, 2020 and 2019, is as follows (in
thousands except per share amounts):
BALANCE, DECEMBER 31, 2018
Net earnings
Dividends declared — $1.42 per share
Shares issued pursuant to ATM Program, net
Shares issued pursuant to dividend reinvestment
Stock-based compensation and settlements
BALANCE, DECEMBER 31, 2019
Cumulative-effect adjustment for the adoption of new
accounting pronouncement
Net earnings
Dividends declared — $1.50 per share
Shares issued pursuant to ATM Program, net
Shares issued pursuant to dividend reinvestment
Stock-based compensation and settlements
BALANCE, DECEMBER 31, 2020
Net earnings
Dividends declared — $1.58 per share
Shares issued pursuant to ATM Program, net
Shares issued pursuant to dividend reinvestment
Stock-based compensation and settlements
BALANCE, DECEMBER 31, 2021
Common Stock
Shares
Amount
40,855 $
Additional
Paid-in
Capital
409 $ 638,178 $
Dividends
Paid
in Excess
of Earnings
449
47
17
41,368 $
14,146
4
1,450
1
—
2,353
414 $ 656,127 $
$
2,208
14
16
43,606 $
63,165
22
443
—
—
2,873
436 $ 722,608 $
3,043
3
64
46,716 $
30
—
1
92,255
80
3,266
467 $ 818,209 $
Total
(57,423 ) $ 581,164
49,723
49,723
(59,402 )
(59,402 )
14,150
—
1,451
—
2,353
—
(67,102 ) $ 589,439
(886 )
69,388
(64,843 )
—
—
—
(886 )
69,388
(64,843 )
63,187
443
2,873
(63,443 ) $ 659,601
62,860
(72,985 )
—
—
—
62,860
(72,985 )
92,285
80
3,267
(73,568 ) $ 745,108
On March 1, 2021 and July 19, 2021, our Board of Directors granted 192,550 and 3,500 restricted stock units (“RSU” or
“RSUs”), respectively, under our Amended and Restated 2004 Omnibus Incentive Compensation Plan. On March 1, 2020, and
December 14, 2020, our Board of Directors granted 176,050 and 15,000 of RSUs under our Amended and Restated 2004 Omnibus
Incentive Compensation Plan.
ATM Program
In March 2018, we established an at-the-market equity offering program (the “2018 ATM Program”), pursuant to which we are
able to issue and sell shares of our common stock with an aggregate sales price of up to $125,000,000 through a consortium of banks
acting as agents. The 2018 ATM Program was terminated in January 2021. In February 2021, we established a new at-the-market
equity offering program (the “ATM Program”), pursuant to which we are able to issue and sell shares of our common stock with an
aggregate sales price of up to $250,000,000 through a consortium of banks acting as agents. Sales of the shares of common stock may
be made, as needed, from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act, including by means of
ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices
related to prevailing market prices or as otherwise agreed to with the applicable agent. In connection with the expansion of the ATM
Program, we may also sell shares of common stock under forward sale agreements. The use of a forward sale agreement would allow
us to lock in a price on the sale of shares of common stock at the time the agreement is executed, but defer receiving the proceeds
from the sale until a later date.
During the years ended December 31, 2021 and 2020, we issued 3,043,000 and 2,208,000 shares of common stock and received
net proceeds of $92,285,000 and $63,187,000, respectively, under the 2018 ATM Program and ATM Program. Future sales, if any,
will depend on a variety of factors to be determined by us from time to time, including among others, market conditions, the trading
price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding available to
us. We have not entered into any forward sale agreements.
67
Dividends
For the year ended December 31, 2021, we paid regular quarterly dividends of $70,770,000 or $1.56 per share. For the year
ended December 31, 2020, we paid regular quarterly dividends of $62,626,000 or $1.48 per share.
Dividend Reinvestment Plan
Our dividend reinvestment plan provides our common stockholders with a convenient and economical method of acquiring
additional shares of common stock by reinvesting all or a portion of their dividend distributions. During the years ended December 31,
2021 and 2020, we issued 2,681 and 14,229 shares of common stock, respectively, under the dividend reinvestment plan and received
proceeds of $80,000 and $443,000, respectively.
Stock-Based Compensation
Compensation cost for our stock-based compensation plans using the fair value method was $3,997,000, $3,130,000 and
$2,468,000 for the years ended December 31, 2021, 2020 and 2019, respectively, and is included in general and administrative
expense in our consolidated statements of operations.
NOTE 8. — EMPLOYEE BENEFIT PLANS
The Getty Realty Corp. 2004 Omnibus Incentive Compensation Plan (the “2004 Plan”) provided for the grant of restricted stock,
restricted stock units (“RSUs”), performance awards, dividend equivalents, stock payments and stock awards to all employees and
members of the Board of Directors. In May 2014, an Amended and Restated 2004 Omnibus Incentive Compensation Plan (the
“Restated Plan”) was approved at our annual meeting of stockholders. The Restated Plan maintained the 2004 Plan’s authorization to
grant awards with respect to an aggregate of 1,000,000 shares of common stock, extended the term to May 2019 and increased the
aggregate maximum number of shares of common stock that may be subject to awards granted during any calendar year to 100,000. In
May 2017, the Second Amended and Restated 2004 Omnibus Incentive Compensation Plan (the “Second Restated Plan”) was
approved at our annual meeting of stockholders, in order to, among other things, (i) increase by 500,000 to a total of 1,500,000 the
aggregate number of shares that the Company may issue under awards granted pursuant to the Second Restated Plan; (ii) increase
from 100,000 to 200,000 the maximum number of shares that may be subject to awards made in a calendar year to all participants
under the Second Restated Plan; and (iii) extended the term of the Second Restated Plan to May 2022. In April 2021, the Third
Amended and Restated 2004 Omnibus Incentive Compensation Plan (the “Third Restated Plan”) was approved at our annual meeting
of stockholders, in order to, among other things: (i) increase by 2,500,000, to a total of 4,000,000 the aggregate number of shares that
the Company may issue under awards granted pursuant to the Third Restated Plan; (ii) remove the limit on the maximum number of
shares that may be subject to awards made in a calendar year to all participants under the Third Restated Plan; (iii) include a minimum
restriction period of one year for all awards (subject to certain exceptions); (iv) extend the term of the Restated Plan until February 22,
2031. RSUs awarded under the 2004 Plan, the Restated Plan, the Second Restated Plan and the Third Restated Plan vest on a
cumulative basis ratably over a five-year period with the first 20% vesting occurring on the first anniversary of the date of the grant.
We awarded to employees and directors 196,050, 191,050 and 156,750 RSUs and dividend equivalents in 2021, 2020 and 2019,
respectively. RSUs granted before 2009 provide for settlement upon termination of employment with the Company or termination of
service from the Board of Directors. RSUs granted in 2009 and thereafter provide for settlement upon the earlier of 10 years after the
grant date (or the tenth anniversary of the first vesting date for RSU’s granted in 2016-2018) or termination of employment with the
Company. On the settlement date each vested RSU will have a value equal to one share of common stock and may be settled, at the
sole discretion of the Compensation Committee, in cash or by the issuance of one share of common stock. The RSUs do not provide
voting or other stockholder rights unless and until the RSU is settled for a share of common stock. The RSUs vest starting one year
from the date of grant, on a cumulative basis at the annual rate of 20% of the total number of RSUs covered by the award. The
dividend equivalents represent the value of the dividends paid per common share multiplied by the number of RSUs covered by the
award. For the years ended December 31, 2021, 2020 and 2019, dividend equivalents aggregating approximately $1,485,000,
$1,279,000 and $997,000, respectively, were charged against retained earnings when common stock dividends were declared.
68
The following is a schedule of the activity relating to RSUs outstanding:
RSUs OUTSTANDING AT DECEMBER 31, 2018
Granted
Settled
Cancelled
RSUs OUTSTANDING AT DECEMBER 31, 2019
Granted
Settled
Cancelled
RSUs OUTSTANDING AT DECEMBER 31, 2020
Granted
Settled
Cancelled
RSUs OUTSTANDING AT DECEMBER 31, 2021
Number of
RSUs
Outstanding
Fair Value
Amount
Average
Per RSU
573,575
156,750 $
(28,300 ) $
— $
702,025
191,050 $
(24,250 ) $
(31,350 ) $
837,475
196,050 $
(112,125 ) $
— $
921,400
5,203,000 $
943,800 $
— $
5,534,000 $
701,500 $
904,552 $
5,594,000 $
3,293,000 $
— $
33.19
33.35
—
28.97
28.93
28.85
28.53
29.37
—
The fair values of the RSUs were determined based on the closing market price of our stock on the date of grant. The fair value
of the grants is recognized as compensation expense ratably over the five-year vesting period of the RSUs. Compensation expense
related to RSUs for the years ended December 31, 2021, 2020 and 2019, was $3,976,000, $3,109,000 and $2,447,000, respectively,
and is included in general and administrative expense in our consolidated statements of operations. As of December 31, 2021, there
was $10,739,000 of unrecognized compensation cost related to RSUs granted under the 2004 Plan, which cost is expected to be
recognized over a weighted average period of approximately four years. The aggregate intrinsic value of the 921,400 outstanding
RSUs and the 456,190 vested RSUs as of December 31, 2021, was $29,568,000 and $14,639,000, respectively.
The following is a schedule of the vesting activity relating to RSUs outstanding:
RSUs VESTED AT DECEMBER 31, 2018
Vested
Settled
RSUs VESTED AT DECEMBER 31, 2019
Vested
Settled
RSUs VESTED AT DECEMBER 31, 2020
Vested
Settled
RSUs VESTED AT DECEMBER 31, 2021
Number of
RSUs Vested
Fair
Value
289,020
88,415 $
(28,300 ) $
349,135
95,750 $
(24,250 ) $
420,635
147,680 $
(112,125 ) $
456,190
2,906,200
943,800
2,637,000
701,500
4,739,000
3,293,000
We have a retirement and profit sharing plan with deferred 401(k) savings plan provisions (the “Retirement Plan”) for
employees meeting certain service requirements and a supplemental plan for executives (the “Supplemental Plan”). Under the terms of
these plans, the annual discretionary contributions to the plans are determined by the Compensation Committee of the Board of
Directors.
Also, under the Retirement Plan, employees may make voluntary contributions and we have elected to match an amount equal
to fifty percent of such contributions but in no event more than three percent of the employee’s eligible compensation. Under the
Supplemental Plan, a participating executive may receive an amount equal to 10 percent of eligible compensation, reduced by the
amount of any contributions allocated to such executive under the Retirement Plan. Contributions, net of forfeitures, under the
retirement plans approximated $379,000, $353,000 and $327,000 for the years ended December 31, 2021, 2020 and 2019,
respectively. These amounts are included in general and administrative expense in our consolidated statements of operations. For the
year ended December 31, 2021 and 2019, we distributed $95,000 and $30,000, respectively from the Supplemental Plan to former
officers of the Company. There were no distributions from the Supplemental Plan for the year ended December 31, 2020.
69
NOTE 9. — EARNINGS PER COMMON SHARE
Basic and diluted earnings per common share gives effect, utilizing the two-class method, to the potential dilution from the
issuance of shares of our common stock in settlement of RSUs which provide for non-forfeitable dividend equivalents equal to the
dividends declared per common share. Basic and diluted earnings per common share is computed by dividing net earnings less
dividend equivalents attributable to RSUs by the weighted average number of common shares outstanding during the year.
Diluted earnings per common share, also gives effect to the potential dilution from the exercise of stock options utilizing the
treasury stock method. There were no options outstanding as of December 31, 2021, 2020 and 2019.
The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings
per common share using the two-class method (in thousands except per share data):
(in thousands):
Net earnings
Less dividend equivalents attributable to RSUs outstanding
Net earnings attributable to common stockholders used in basic
and diluted earnings per share calculation
Weighted average common shares outstanding:
Basic
Incremental shares from stock-based compensation
Diluted
Basic earnings per common share
Diluted earnings per common share
$
$
NOTE 10. — FAIR VALUE MEASUREMENTS
Debt Instruments
2021
$
Year ended December 31,
2020
62,860 $
(1,437 )
69,388 $
(1,355 )
2019
49,723
(997 )
61,423
68,033
48,726
44,782
37
44,819
1.37 $
1.37 $
42,040
30
42,070
1.62 $
1.62 $
41,072
38
41,110
1.19
1.19
As of December 31, 2021 and 2020, the carrying value of the borrowings under the Second Restated Credit Agreement
approximated fair value. As of December 31, 2021 and 2020, the fair value of the borrowings under senior unsecured notes was
$561,600,000 and $549,800,000, respectively. The fair value of the borrowings outstanding as of December 31, 2021 and 2020, was
determined using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, risk
profile and borrowings outstanding, which are based on unobservable inputs within Level 3 of the Fair Value Hierarchy.
Supplemental Retirement Plan
We have mutual fund assets that are measured at fair value on a recurring basis using Level 1 inputs. We have a Supplemental
Retirement Plan for executives. The amounts held in trust under the Supplemental Retirement Plan using Level 2 inputs may be used
to satisfy claims of general creditors in the event of our or any of our subsidiaries’ bankruptcy. We have liability to the executives
participating in the Supplemental Retirement Plan for the participant account balances equal to the aggregate of the amount invested at
the executives’ direction and the income earned in such mutual funds.
The following summarizes as of December 31, 2021, our assets and liabilities measured at fair value on a recurring basis by
level within the Fair Value Hierarchy (in thousands):
Assets:
Mutual funds
Liabilities:
Deferred compensation
Level 1
Level 2
Level 3
Total
$
$
1,168 $
— $
— $
1,168
— $
1,168 $
— $
1,168
The following summarizes as of December 31, 2020, our assets and liabilities measured at fair value on a recurring basis by
level within the Fair Value Hierarchy (in thousands):
Assets:
Mutual funds
Liabilities:
Deferred compensation
Level 1
Level 2
Level 3
Total
970 $
— $
— $
970
— $
970 $
— $
970
$
$
70
Real Estate Assets
We have certain real estate assets that are measured at fair value on a non-recurring basis using Level 3 inputs as of
December 31, 2021 and 2020, of $1,102,000 and $1,979,000, respectively, where impairment charges have been recorded. Due to the
subjectivity inherent in the internal valuation techniques used in estimating fair value, the amounts realized from the sale of such
assets may vary significantly from these estimates. For information regarding the valuation techniques and unobservable inputs used
when assessing impairments of real estate assets, see Note 1 - Summary of Significant Accounting Policies.
NOTE 11. —ASSETS HELD FOR SALE
We evaluate the held for sale classification of our real estate as of the end of each quarter. Assets that are classified as held for
sale are recorded at the lower of their carrying amount or fair value less costs to sell. As of December 31, 2021 and 2020, there were
13 and three properties, respectively, that met criteria to be classified as held for sale.
Real estate held for sale consisted of the following at December 31, 2021 and 2020 (in thousands):
Land
Buildings and improvements
Accumulated depreciation and amortization
Real estate held for sale, net
Year ended December 31,
2021
2020
$
$
2,949 $
2,247
5,196
(1,575 )
3,621 $
486
483
969
(97 )
872
During the year ended December 31, 2021, we sold 16 properties, in separate transactions, which resulted in an aggregate gain
of $16,408,000, included in gain on dispositions of real estate, on our consolidated statements of operations. We also received funds
from property condemnations resulting in a gain of $478,000 and realized a loss of $168,000 related to lease expirations, included in
gain on dispositions of real estate, on our consolidated statements of operations.
During the year ended December 31, 2020, we sold 11 properties, in separate transactions, which resulted in an aggregate gain
of $4,368,000, included in gain on dispositions of real estate, on our consolidated statements of operations. We also received funds
from property condemnations resulting in a gain of $180,000, included in gain on dispositions of real estate, on our consolidated
statements of operations.
NOTE 12. — QUARTERLY FINANCIAL DATA
The following is a summary of the quarterly results of operations for the years ended December 31, 2021 and 2020 (unaudited
as to quarterly information) (in thousands, except per share amounts):
Three Months Ended
Year Ended December 31, 2021
Revenues from rental properties
Net earnings
Diluted earnings per common share:
Net earnings
Year Ended December 31, 2020
Revenues from rental properties
Net earnings
Diluted earnings per common share:
Net earnings
March 31,
$
$
36,951 $
17,927 $
June 30,
September 30, December 31,
39,005
18,032
39,667 $
14,011 $
38,263 $
12,890 $
$
0.40 $
0.28 $
0.30 $
0.38
March 31,
$
$
34,650 $
12,700 $
June 30,
September 30, December 31,
36,421
33,831
37,194 $
11,884 $
36,336 $
10,973 $
$
0.30 $
0.26 $
0.27 $
0.77
71
NOTE 13. — PROPERTY ACQUISITIONS
2021
During the twelve months ended December 31, 2021, we acquired fee simple interests in 97 properties for an aggregate
purchase price of $194,292,000.
In September 2021 and November 2021, we acquired fee simple interests in a total of 22 convenience stores located in the
Charlotte (NC), Raleigh (NC) and other metropolitan areas in the Southeast for an aggregate purchase price of $65,457,000 and
entered into a unitary lease at the closing of the transactions. We funded the transaction with available cash and funds available under
our Revolving Facility. The unitary lease provides for an initial term of 15 years, with four five-year renewal options. The unitary
lease requires our tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including environmental expenses,
real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental charges. Rent is
scheduled to increase annually beginning in year three of the initial term and each year of the renewal terms of the lease. We
accounted for the acquisitions as asset acquisitions. We estimated the fair value of acquired tangible assets (consisting of land,
buildings and improvements) “as if vacant.” Based on these estimates, we allocated $40,935,000 of the purchase price to land,
$20,242,000 to buildings and improvements, $5,375,000 to in-place leases and $1,095,000 to below-market leases which is accounted
for as a deferred liability.
In May 2021, we acquired fee simple interests in 46 oil change centers located throughout Michigan and Ohio and subject to
existing, individual leases for an aggregate purchase price of $31,018,000. We funded the transaction with available cash and funds
available under our Revolving Facility. The leases had approximately 11.5 years of initial term remaining as of the date of acquisition
and include three five-year renewal options. The leases require our tenant to pay a fixed annual rent plus all amounts pertaining to the
properties, including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all
other governmental charges. Rent is scheduled to increase every five years during the initial and renewal terms of the lease. We
accounted for the acquisitions as asset acquisitions. We estimated the fair value of acquired tangible assets (consisting of land,
buildings and improvements) “as if vacant.” Based on these estimates, we allocated $4,551,000 of the purchase price to land,
$22,539,000 to buildings and improvements, $3,120,000 to in-place leases, $2,224,000 to above-market leases, and $1,416,000 to
below-market leases which is accounted for as a deferred liability.
On multiple dates in March, April, May, July, September and November 2021, we acquired fee simple interests in a total of ten
car wash properties in the Cincinnati (OH), Lansing (MI) and Lexington (KY) metropolitan areas for an aggregate purchase price of
$35,002,000 and entered into a single unitary lease at the closing of the transactions. We funded the transactions with available cash
and funds available under our Revolving Facility. The unitary lease provides for an initial term of 15 years, with five five-year
renewal options. The unitary lease requires our tenant to pay a fixed annual rent plus all amounts pertaining to the properties,
including environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other
governmental charges. Rent is scheduled to increase annually during the initial and renewal terms of the lease. We accounted for the
acquisitions as asset acquisitions. We estimated the fair value of acquired tangible assets (consisting of land, buildings and
improvements) “as if vacant.” Based on these estimates, we allocated $6,266,000 of the purchase price to land, $25,805,000 to
buildings and improvements, and $2,931,000 to in-place leases.
In addition, during the twelve months ended December 31, 2021, we acquired fee simple interests in seven car wash properties,
five oil change centers, three convenience stores, three tire service centers and one quick service restaurant in various individual
transactions for an aggregate purchase price of $62,815,000. We accounted for the acquisitions as asset acquisitions. We estimated the
fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we
allocated $20,781,000 of the purchase price to land, $36,554,000 to buildings and improvements and $5,119,000 to in-place leases,
$606,000 to above-market leases and $244,000 to below-market leases which is accounted for as a deferred liability.
2020
During the twelve months ended December 31, 2020, we acquired fee simple interest in eight convenience stores and 26 car
wash properties for an aggregate purchase price of $149,955,000.
In February 2020, we acquired fee simple interests in ten car wash properties located in the Kansas City metropolitan area for an
aggregate purchase price of $50,303,000 and entered into a unitary lease at the closing of the transactions. We funded the transactions
through funds available under our Revolving Facility. The unitary lease provides for an initial term of 15 years, with five five-year
renewal options. The unitary lease requires the tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including
environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental
charges. Rent is scheduled to increase annually during the initial and renewal terms of the lease. We accounted for the acquisition of
the properties as an asset acquisition. We estimated the fair value of acquired tangible assets (consisting of land, buildings and
improvements) “as if vacant.” Based on these estimates, we allocated $4,775,000 of the purchase price to land, $41,093,000 to
buildings and improvements, $3,727,000 to in-place leases, $1,955,000 to above-market leases and $1,247,000 to below-market
leases, which is accounted for as a deferred liability.
72
In August 2020, we acquired fee simple interests in seven car wash properties located in the San Antonio metropolitan area for
an aggregate purchase price of $28,302,000 and entered into a unitary lease at the closing of the transaction. We funded the transaction
through funds available under our Revolving Facility. The unitary lease provides for an initial term of 15 years, with five five-year
renewal options. The unitary lease requires the tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including
environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental
charges. Rent is scheduled to increase on the third anniversary of the commencement date and annually thereafter during the initial
and renewal terms of the lease. We accounted for the acquisition of the properties as an asset acquisition. We estimated the fair value
of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated
$5,335,000 of the purchase price to land, $21,093,000 to buildings and improvements, $2,396,000 to in-place leases and $522,000 to
below-market leases, which is accounted for as a deferred liability.
In October 2020, we acquired fee simple interests in six convenience stores located throughout the state of Texas for an
aggregate purchase price of $28,722,000 and entered into a unitary lease at the closing of the transaction. We funded the transaction
through funds available under our Revolving Facility. The unitary lease provides for an initial term of 15 years, with five five-year
renewal options. The unitary lease requires the tenant to pay a fixed annual rent plus all amounts pertaining to the properties, including
environmental expenses, real estate taxes, assessments, license and permit fees, charges for public utilities and all other governmental
charges. Rent is scheduled to increase on the fifth and tenth anniversary of the commencement date during the initial and renewal
terms of the lease. We accounted for the acquisition of the properties as an asset acquisition. We estimated the fair value of acquired
tangible assets (consisting of land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $16,561,000 of
the purchase price to land, $9,595,000 to buildings and improvements and $2,566,000 to in-place leases.
In addition, during the year ended December 31, 2020, we acquired fee simple interests in nine car wash properties and two
convenience stores in various individual transactions for an aggregate purchase price of $42,628,000. We accounted for these
acquisitions as asset acquisitions. We estimated the fair value of acquired tangible assets for each of these acquisitions (consisting of
land, buildings and improvements) “as if vacant.” Based on these estimates, we allocated $13,601,000 of the purchase price to land,
$26,032,000 to buildings and improvements and $2,995,000 to in-place leases.
NOTE 14. — ACQUIRED INTANGIBLE ASSETS
Acquired above-market (when we are a lessor) and below-market leases (when we are a lessee) are included in prepaid expenses
and other assets and had a balance of $6,164,000 and $3,859,000 (net of accumulated amortization of $6,572,000 and $6,047,000,
respectively) at December 31, 2021 and 2020, respectively. Acquired above-market (when we are lessee) and below-market (when we
are lessor) leases are included in accounts payable and accrued liabilities and had a balance of $19,827,000 and $18,787,000 (net of
accumulated amortization of $23,356,000 and $21,641,000, respectively) at December 31, 2021 and 2020, respectively. When we are
a lessor, above-market and below-market leases are amortized and recorded as either an increase (in the case of below-market leases)
or a decrease (in the case of above-market leases) to rental revenue over the remaining term of the associated lease in place at the time
of purchase. When we are a lessee, above-market and below-market leases are amortized and recorded as either an increase (in the
case of below-market leases) or a decrease (in the case of above-market leases) to rental expense over the remaining term of the
associated lease in place at the time of purchase. Rental income included amortization from acquired leases of $1,221,000, $1,438,000
and $1,955,000 for the years ended December 31, 2021, 2020 and 2019, respectively. Rent expense included amortization from
acquired leases of $31,000, $97,000 and $333,000 for the years ended December 31, 2021, 2020 and 2019, respectively.
In-place leases are included in prepaid expenses and other assets and had a balance of $60,928,000 and $49,031,000 (net of
accumulated amortization of $21,435,000 and $16,788,000, respectively) at December 31, 2021 and 2020, respectively. The value
associated with in-place leases and lease origination costs are amortized into depreciation and amortization expense over the
remaining life of the lease. Depreciation and amortization expense included amortization from in-place leases of $4,647,000,
$3,745,000 and $3,134,000 for the years ended December 31, 2021, 2020 and 2019, respectively.
73
The amortization for acquired intangible assets during the next five years and thereafter, assuming no early lease terminations, is
as follows:
As Lessor:
Year ending December 31,
2022
2023
2024
2025
2026
Thereafter
Above-Market
Leases
Below-Market
Leases
In-Place
Leases
$
$
597,000 $
597,000
583,000
524,000
524,000
3,339,000
6,164,000 $
1,748,000 $
1,658,000
1,658,000
1,635,000
1,550,000
11,578,000
19,827,000 $
4,143,000
4,061,000
3,993,000
3,941,000
3,892,000
40,898,000
60,928,000
NOTE 15. — SUBSEQUENT EVENTS
In preparing our consolidated financial statements, we have evaluated events and transactions occurring after December 31,
2021, for recognition or disclosure purposes. Based on this evaluation, there were no significant subsequent events, other than as
described below, from December 31, 2021, through the date the financial statements were issued.
On February 22, 2022, we entered into (i) an amended and restated note purchase and guarantee agreement (the “Sixth
Amended and Restated Prudential Agreement”) with The Prudential Insurance Company of America and certain of its affiliates
(collectively, “Prudential”), (ii) an amended and restated note purchase and guarantee agreement (the “Second Amended and Restated
AIG Agreement”) with American General Life Insurance Company (“AIG”), (iii) an amended and restated note purchase and
guarantee agreement (the “Second Amended and Restated MassMutal Agreement”) with Massachusetts Mutual Life Insurance
Company and certain of its affiliates (collectively, “MassMutual”), and (iv) a note purchase and guarantee agreement (the “New York
Life Agreement”) with New York Life Insurance Company and certain of its affiliates (collectively, “New York Life”). Together, the
Sixth Amended and Restated Prudential Agreement, the Second Amended and Restated AIG Agreement, the Second Amended and
Restated MassMutal Agreement, and the New York Life Agreement are the “Note Purchase Agreements”.
Pursuant to the Sixth Amended and Restated Prudential Agreement, we will issue $80,000,000 of 3.65% Series Q Guaranteed
Senior Notes due January 20, 2033 (the “Series Q Notes”) to Prudential on January 20, 2023.
Pursuant to the Second Amended and Restated AIG Agreement, we issued $55,000,000 of 3.45% Series L Guaranteed Senior
Notes due February 22, 2032 (the “Series L Notes”) to AIG.
Pursuant to the Second Amended and Restated MassMutual Agreement, we issued $20,000,000 of 3.45% Series M Guaranteed
Senior Notes due February 22, 2032 (the “Series M Notes”) to MassMutual, and will issue $20,000,000 of 3.65% Series O Guaranteed
Senior Notes due January 20, 2033 (the “Series O Notes”) to MassMutual on January 20, 2023.
Pursuant to the New York Life Agreement, we issued $25,000,000 of 3.45% Series N Guaranteed Senior Notes due
February 22, 2032 (the “Series N Notes”) to New York Life, and will issue $25,000,000 of 3.65% Series P Guaranteed Senior Notes
due January 20, 2033 (the “Series P Notes”) to New York Life on January 20, 2023.
The Note Purchase Agreements contain customary financial covenants such as leverage, coverage ratios and minimum tangible
net worth, as well as limitations on restricted payments, which may limit our ability to incur additional debt or pay dividends. The
Note Purchase Agreements also contain customary events of default, including default under the Second Restated Credit Agreement
and failure to maintain REIT status. Any event of default, if not cured or waived, could result in the acceleration of our indebtedness
under the Note Purchase Agreements and could also give rise to an event of default under, and result in the acceleration of our
obligations under, the Second Restated Credit Agreement.
We used the net proceeds from the issuance of the Series L Notes, Series M Notes and Series N Notes to repay all amounts
outstanding on the Revolving Facility and for general corporate purposes, including to fund investment activity. We will use the net
proceeds from the issuance of the Series O Notes, Series P Notes and Series Q Notes to prepay in full our $75,000,000 5.35% Series B
Notes due June 2, 2023 and for general corporate purposes, including to fund investment activity.
The foregoing descriptions of the Note Purchase Agreements do not purport to be complete and are subject to, and qualified in
their entirety by reference to, the full text of such documents, copies of which will be filed as Exhibits to the Company’s Quarterly
Report on Form 10-Q for the quarter ending on March 31, 2022.
74
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Getty Realty Corp.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the consolidated financial statements, including the related notes, as listed in the index appearing under Item 8,
and the financial statement schedules listed in the index appearing under Item 15(a)(2), of Getty Realty Corp. and its subsidiaries (the
“Company”) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control
over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of
America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as
of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control
over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in
Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express
opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on
our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether
due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of
the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.
75
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures
that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements,
taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
Purchase Price Allocation for Asset Acquisitions
As described in Notes 1 and 13 to the consolidated financial statements, during the year ended December 31, 2021, the
Company acquired fee simple interests in 97 properties which were accounted for as asset acquisitions for an aggregate purchase price
of $194,292,000. For acquired properties accounted for as asset acquisitions management estimates the fair value of acquired tangible
assets (consisting of land, buildings and improvements) “as if vacant” and identified intangible assets and liabilities (consisting of
leasehold interests, above-market and below-market leases, in-place leases and tenant relationships) and assumed debt. Based on these
estimates, management allocates the estimated fair value to the applicable assets and liabilities. Fair value is determined based on an
exit price approach, which contemplates the price that would be received from the sale of an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The valuation of the applicable assets and liabilities involves
the use of significant estimates and assumptions related to capitalization rates, market rental rates, discount rates, and the EBITDA-to-
rent coverage ratios.
The principal considerations for our determination that performing procedures relating to the purchase price allocation for asset
acquisitions is a critical audit matter are (i) the significant judgment by management when developing the fair value measurements for
purchase price allocations, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures related to
these fair value measurements, (ii) significant auditor judgment was necessary to evaluate the audit evidence for the relevant
significant assumptions relating to the tangible and intangible assets, such as the capitalization rates, market rental rates, discount
rates, and EBITDA-to-rent coverage ratios, and (iii) the audit effort included the involvement of professionals with specialized skill
and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to purchase
price accounting, including controls over the development of significant inputs and assumptions used in the estimated fair values of
tangible and intangible assets. These procedures also included, among others, the involvement of professionals with specialized skill
and knowledge to assist in testing the process used by management to develop fair value estimates of acquired tangible and intangible
assets, which involved evaluating the appropriateness of the valuation methods used and the reasonableness of the significant
assumptions related to capitalization rates, market rental rates, discount rates, and EBITDA-to-rent coverage ratios. Evaluating the
reasonableness of the significant assumptions included considering whether these assumptions were consistent with external market
data, comparable transactions, and evidence obtained in other areas of the audit. Testing the process used by management involved
testing the completeness and accuracy of data provided by management.
76
Environmental Remediation Obligations
As described in Notes 1 and 5 to the consolidated financial statements, as of December 31, 2021 management has accrued a
total of $47,597,000 for their prospective environmental remediation obligations. Management records the fair value for an
environmental remediation obligation as an asset and liability when there is a legal obligation associated with the retirement of a
tangible long-lived asset and the liability can be reasonably estimated. Environmental remediation obligations are estimated based on
the level and impact of contaminations at each property.
Management measures their environmental remediation liabilities at fair value based on expected future net cash flows, adjusted
for inflation and discounted to present value.
The principal considerations for our determination that performing procedures relating to environmental remediation obligations
is a critical audit matter are (i) the significant judgment by management when developing the fair value measurements for the
environmental remediation obligations, which in turn led to a high degree of auditor judgment and subjectivity in performing
procedures related to these fair value measurements, (ii) significant auditor judgment was necessary to evaluate the significant
assumption and audit evidence relating to the projections of future net cash flows and estimated remediation costs and (iii) the audit
effort included the involvement of professionals with specialized skill and knowledge to assist in performing these procedures and
evaluating the audit evidence obtained.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the
valuation of the environmental remediation obligation, including controls over the development of the significant inputs and
assumptions related to estimated remediation costs. These procedures also included, among others, testing the process used by
management to develop fair value estimates of environmental remediation obligations, which involved evaluating the appropriateness
of the methods and testing the completeness and accuracy of the data provided by management. Evaluating the reasonableness of the
estimated remediation costs assumption included considering whether the assumption was consistent with external market data and
evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the
reasonableness of the significant assumptions related to estimated remediation costs.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 24, 2022
We have served as the Company’s auditor since at least 1975. We have not been able to determine the specific year we began
serving as auditor of the Company.
77
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our
reports filed or furnished pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the Commission’s rules and forms, and that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and
procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible
controls and procedures.
As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we have carried out an evaluation, under the supervision
and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual
Report on Form 10-K. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of December 31,
2021, at the reasonable assurance level.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term
is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, we have conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on our assessment under the framework in Internal Control – Integrated
Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2021.
The effectiveness of our internal control over financial reporting as of December 31, 2021, has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in “Item 8.
Financial Statements and Supplementary Data”.
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the fourth fiscal quarter to which this report relates that materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None
78
Item 10. Directors, Executive Officers and Corporate Governance
PART III
Information with respect to our executive officers is incorporated herein by reference to information under the heading
“Executive Officers” in the Proxy Statement. Information with respect to compliance with Section 16(a) of the Exchange Act is
incorporated herein by reference to information under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” in the
Proxy Statement. Information with respect to directors, the audit committee and the audit committee financial expert, and procedures
by which stockholders may recommend nominees to the board of directors in response to this item is incorporated herein by reference
to information under the headings “Election of Directors” and “Directors’ Meetings, Committees and Executive Officers” in the Proxy
Statement.
Item 11. Executive Compensation
Information in response to this item is incorporated herein by reference to information under the heading “Executive
Compensation” in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information in response to this item is incorporated herein by reference to information under the heading “Beneficial Ownership
of Capital Stock” and “Executive Compensation – Compensation Discussion and Analysis – Equity Compensation – Equity
Compensation Plan Information” in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
There were no such relationships or transactions to report for the year ended December 31, 2021.
Information with respect to director independence is incorporated herein by reference to information under the heading
“Directors’ Meetings, Committees and Executive Officers – Independence of Directors” in the Proxy Statement.
Item 14. Principal Accountant Fees and Services
Information in response to this item is incorporated herein by reference to information under the heading “Ratification of
Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement.
79
Item 15. Exhibits and Financial Statement Schedules
(a) (1) Financial Statements
PART IV
Information in response to this Item is included in “Item 8. Financial Statements and Supplementary Data” of this Annual
Report on Form 10-K.
(a) (2) Financial Statement Schedules
The following Financial Statement Schedules are included beginning on page 77 of this Annual Report on Form 10-K.
Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2021, 2020 and 2019
Schedule III — Real Estate and Accumulated Depreciation and Amortization as of December 31, 2021
Schedule IV — Mortgage Loans on Real Estate as of December 31, 2021
(a) (3) Exhibits
Information in response to this Item is incorporated herein by reference to the Exhibit Index on page 96 of this Annual Report
on Form 10-K.
Item 16. Form 10-K Summary
None.
80
GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE II — VALUATION and QUALIFYING ACCOUNTS and RESERVES
for the years ended December 31, 2021, 2020 and 2019
(in thousands)
December 31, 2021:
Allowance for accounts receivable
December 31, 2020:
Allowance for accounts receivable
December 31, 2019:
Allowance for accounts receivable
Balance at
Beginning
of Year
Additions
Deductions
Balance
at End
of Year
$
$
$
— $
— $
— $
— $
— $
— $
2,094 $
480 $
2,574 $
—
—
—
81
GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION
As of December 31, 2021
(in thousands)
The summarized changes in real estate assets and accumulated depreciation are as follows:
Investment in real estate:
Balance at beginning of year
Acquisitions and capital expenditures
Impairments
Sales and condemnations
Lease expirations/settlements
Balance at end of year
Accumulated depreciation and amortization:
Balance at beginning of year
Depreciation and amortization
Impairments
Sales and condemnations
Lease expirations/settlements
Balance at end of year
2021
2020
2019
1,246,588 $
182,110
(5,409 )
(12,595 )
(643 )
1,410,051 $
1,113,651 $
141,240
(5,324 )
(2,603 )
(376 )
1,246,588 $
1,043,106
80,518
(4,252 )
(2,246 )
(3,475 )
1,113,651
187,061 $
30,126
(1,382 )
(4,256 )
(934 )
210,615 $
165,892 $
25,869
(1,066 )
(929 )
(2,705 )
187,061 $
150,691
21,573
(240 )
(546 )
(5,586 )
165,892
$
$
$
$
82
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Phenix City, AL
Troy, AL
Fayetteville, AR
Fayetteville, AR
Hope, AR
Jacksonville, AR
Jonesboro, AR
Lake Charles, AR
Lake Charles, AR
Little Rock, AR
Little Rock, AR
Marion, AR
Pine Bluff, AR
Rogers, AR
Sulphur, AR
Texarkana, AR
Buckeye, AZ
Chandler, AZ
Gilbert, AZ
Gilbert, AZ
Gilbert, AZ
Gilbert, AZ
Glendale, AZ
Mesa, AZ
Mesa, AZ
Mesa, AZ
Peoria, AZ
Phoenix, AZ
Phoenix, AZ
Phoenix, AZ
Queen Creek, AZ
San Tan Valley, AZ
Sierra Vista, AZ
Sierra Vista, AZ
Tucson, AZ
Tucson, AZ
Tucson, AZ
Tucson, AZ
Tucson, AZ
Alhambra, CA
Bellflower, CA
Benicia, CA
Chula Vista, CA
Coachella, CA
Cotati, CA
Fillmore, CA
Grass Valley, CA
Harbor City, CA
$
1,670 $
2,595
2,266
2,867
1,472
1,526
2,985
1,069
1,468
978
2,763
1,991
2,985
927
777
1,592
3,928
1,838
1,448
1,602
3,112
3,204
1,722
1,503
2,185
3,169
1,331
1,943
2,177
2,415
2,868
4,022
1,765
4,440
1,261
1,301
1,303
2,085
3,652
6,591
1,369
2,224
2,385
2,235
6,072
1,354
1,485
4,442
728 $
1,918
629
896
473
796
2,655
449
466
443
2,266
584
819
394
402
534
1,594
577
465
806
1,519
1,365
544
664
573
1,164
339
632
645
1,982
1,613
1,473
1,496
2,591
597
744
713
598
728
513
459
1,166
1,496
1,018
2,064
404
632
845
1,670 $
2,595
2,266
2,867
1,472
1,526
2,985
1,069
1,468
978
2,763
1,991
2,985
927
777
1,592
3,928
1,838
1,448
1,602
3,112
3,204
1,722
1,503
2,185
3,169
1,331
1,943
2,177
2,415
2,868
4,022
1,765
4,440
1,261
1,301
1,303
2,085
3,652
6,591
1,369
2,224
2,385
2,235
6,072
1,354
1,485
4,442
942 $
0 $
-
677
- 1,637
- 1,971
999
-
730
-
330
-
-
620
- 1,002
535
-
-
497
- 1,407
- 2,166
533
-
-
375
- 1,058
- 2,334
- 1,261
983
-
-
796
- 1,593
- 1,839
- 1,178
-
839
- 1,612
- 2,005
-
992
- 1,311
- 1,532
433
-
- 1,255
- 2,549
-
269
- 1,849
664
-
557
-
-
590
- 1,487
- 2,924
- 6,078
-
910
- 1,058
-
889
- 1,217
- 4,008
950
-
-
853
- 3,597
83
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2019
2021
2018
2018
2018
2021
2007
2018
2018
2018
2019
2021
2018
2018
2018
2018
2017
2017
2017
2017
2017
2017
2017
2017
2017
2017
2017
2018
2017
2017
2017
2017
2017
2017
2017
2017
2017
2017
2017
2019
2007
2007
2014
2007
2015
2007
2015
2019
112
32
117
166
88
13
1,597
88
86
93
283
10
148
83
89
104
376
163
129
220
385
346
146
177
155
284
99
123
172
406
416
386
340
590
158
195
190
170
193
80
314
817
518
687
748
276
236
147
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Hercules, CA
Hesperia, CA
Hesperia, CA
Indio, CA
Indio, CA
La Palma, CA
La Puente, CA
Lakeside, CA
Lakewood, CA
Los Angeles, CA
Oakland, CA
Ontario, CA
Phelan, CA
Pomona, CA
Pomona, CA
Riverside, CA
Riverside, CA
Sacramento, CA
Sacramento, CA
Sacramento, CA
San Dimas, CA
San Jose, CA
San Leandro, CA
Shingle Springs, CA
Stockton, CA
Stockton, CA
Torrance, CA
Aurora, CO
Boulder, CO
Broomfield, CO
Broomfield, CO
Castle Rock, CO
Colorado Springs, CO
Colorado Springs, CO
Denver, CO
Englewood, CO
Golden, CO
Golden, CO
Greenwood Village, CO
Highlands Ranch, CO
Lakewood, CO
Littleton, CO
Lone Tree, CO
Longmont, CO
Louisville, CO
Monument, CO
Morrison, CO
Superior, CO
$
6,900 $
1,643
2,055
1,250
2,727
1,971
7,615
3,715
2,612
6,612
5,434
6,613
4,611
1,497
2,347
2,130
2,737
3,193
4,247
5,942
1,941
5,412
5,978
4,751
1,187
3,001
5,386
2,874
3,900
1,785
2,380
5,269
1,382
3,274
2,157
2,495
4,641
6,151
4,077
4,356
2,349
4,139
6,612
3,619
6,605
3,828
5,081
3,748
Land
0 $ 6,018 $
849
-
492
-
-
302
- 1,486
- 1,389
- 6,405
- 2,695
- 1,804
- 5,006
- 4,123
- 4,523
- 3,276
-
674
- 1,916
- 1,619
- 1,216
- 2,207
- 2,604
- 4,233
-
749
- 4,219
- 5,078
- 3,489
-
627
- 1,460
- 4,017
- 2,284
- 2,875
- 1,388
- 1,496
(128 ) 3,141
-
756
- 2,865
- 1,579
- 2,207
- 3,247
- 4,201
- 2,889
- 2,921
- 1,541
- 2,272
- 5,125
- 2,315
- 5,228
- 2,798
- 3,018
- 2,477
84
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2021
2007
2015
2015
2015
2007
2015
2015
2019
2015
2015
2015
2015
2019
2019
2015
2014
2015
2015
2015
2007
2015
2015
2015
2015
2015
2019
2017
2015
2017
2017
2015
2017
2017
2017
2017
2015
2015
2015
2015
2015
2015
2015
2015
2015
2017
2015
2015
5
520
688
369
507
394
519
415
123
682
548
887
579
122
72
259
563
427
629
700
748
545
404
533
243
601
185
160
394
118
216
819
161
118
164
95
555
817
452
584
312
758
631
554
574
304
867
516
882 $
794
1,563
948
1,241
582
1,210
1,020
808
1,606
1,311
2,090
1,335
823
431
511
1,521
986
1,643
1,709
1,192
1,193
900
1,262
560
1,541
1,369
590
1,025
397
884
2,000
626
409
578
288
1,394
1,950
1,188
1,435
808
1,867
1,487
1,304
1,377
1,030
2,063
1,271
6,900 $
1,643
2,055
1,250
2,727
1,971
7,615
3,715
2,612
6,612
5,434
6,613
4,611
1,497
2,347
2,130
2,737
3,193
4,247
5,942
1,941
5,412
5,978
4,751
1,187
3,001
5,386
2,874
3,900
1,785
2,380
5,141
1,382
3,274
2,157
2,495
4,641
6,151
4,077
4,356
2,349
4,139
6,612
3,619
6,605
3,828
5,081
3,748
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Thornton, CO
Westminster, CO
Avon, CT
Bridgeport, CT
Bridgeport, CT
Bridgeport, CT
Bristol, CT
Brookfield, CT
Cheshire, CT
Darien, CT
Durham, CT
Ellington, CT
Hamden, CT
Hartford, CT
Meriden, CT
Middletown, CT
New Haven, CT
New Haven, CT
New Haven, CT
Newington, CT
North Haven, CT
Norwalk, CT
Norwalk, CT
Old Greenwich, CT
Plymouth, CT
Shelton, CT
South Windham, CT
South Windsor, CT
Stamford, CT
Stamford, CT
Stamford, CT
Suffield, CT
Wallingford, CT
Waterbury, CT
Waterbury, CT
Waterbury, CT
Watertown, CT
West Haven, CT
Westport, CT
Willimantic, CT
Wilton, CT
Windsor Locks, CT
Windsor Locks, CT
Washington, DC
Washington, DC
Callahan, FL
Largo, FL
Orlando, FL
$
5,003 $
1,457
731
313
350
377
1,594
58
490
667
994
1,295
645
665
1,532
133
217
539
1,413
954
90
511
-
-
931
3,679
644
545
507
603
507
237
551
469
515
804
925
1,215
604
717
519
1,031
1,434
848
941
2,894
2,064
868
Land
0 $ 2,722 $
752
-
403
50
204
298
228
330
246
391
- 1,036
20
483
267
(17 )
434
267
-
-
842
-
527
-
432
-
989
-
131
429
141
297
351
209
569
(264 )
620
-
365
617
332
39
402
693
620
1,219
-
605
- 1,645
598
337
330
393
330
201
335
305
335
516
567
790
393
466
338
670
1,400 1,055
418
-
-
664
- 2,056
- 1,143
401
1,398
-
16
103
450
603
-
-
-
-
-
-
12
-
208
-
33
85
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2015
2015
2002
1985
1985
1985
2004
1985
1985
1985
2004
2004
2018
2004
2004
1987
1985
1985
1985
2004
1982
1985
1988
1969
2004
2021
2004
2004
1985
1985
1985
2004
2004
2004
2004
2004
2004
2004
1985
2004
1985
2004
2004
2013
2013
2017
2019
2000
928
279
316
320
364
434
383
434
124
490
994
311
17
160
376
341
287
367
376
229
209
210
189
403
224
30
837
151
185
277
505
541
159
113
124
201
262
292
214
172
359
248
1,529
186
138
230
113
445
2,281 $
705
378
407
452
522
558
521
206
500
994
453
118
233
543
431
373
397
580
334
342
218
291
599
326
2,034
1,444
208
193
313
627
639
216
164
180
288
358
425
223
251
389
361
1,779
430
277
838
921
500
5,003 $
1,457
781
611
680
768
1,594
541
473
934
994
1,295
645
665
1,532
562
514
748
1,149
954
707
550
693
1,219
931
3,679
2,042
545
523
706
957
840
551
469
515
804
925
1,215
616
717
727
1,031
2,834
848
941
2,894
2,064
901
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Yulee, FL
Augusta, GA
Augusta, GA
Columbus, GA
Hinesville, GA
Perry, GA
Haleiwa, HI
Honolulu, HI
Honolulu, HI
Honolulu, HI
Honolulu, HI
Kaneohe, HI
Kaneohe, HI
Waianae, HI
Waianae, HI
Waipahu, HI
Bolingbrook, IL
Prospect Heights, IL
Roselle, IL
Merrillville, IN
Schererville, IN
Kansas City, KS
Leavenworth, KS
Lenexa, KS
Merriam, KS
Olathe, KS
Overland Park, KS
Overland Park, KS
Topeka, KS
Bowling Green, KY
Lexington, KY
Lexington, KY
Louisville, KY
Louisville, KY
Owensboro, KY
Bossier City, LA
Arlington, MA
Auburn, MA
Auburn, MA
Auburn, MA
Auburn, MA
Barre, MA
Bedford, MA
Bellingham, MA
Bellingham, MA
Bradford, MA
Burlington, MA
Burlington, MA
$
1,963 $
1,843
3,150
1,617
995
1,724
1,522
1,071
1,539
1,769
9,211
1,364
1,978
1,520
1,997
2,458
3,814
1,547
2,851
1,911
1,519
4,666
1,110
1,144
4,659
4,658
945
4,620
1,200
3,153
3,195
3,195
3,356
4,450
3,810
2,181
518
369
600
625
725
536
1,350
734
3,961
650
600
1,250
1,393 $
766
2,864
633
750
412
464
120
320
577
1,017
542
721
872
1,126
1,513
2,859
849
1,110
1,693
1,250
4,335
904
674
3,916
4,160
592
3,109
1,005
2,654
2,519
2,392
2,538
3,096
2,799
848
208
360
-
-
-
200
-
331
1,919
-
-
-
1,963 $
1,843
3,150
1,617
995
1,724
1,522
1,101
1,539
1,769
9,211
1,364
2,194
1,520
1,997
2,458
3,814
1,547
2,851
1,911
1,519
4,666
1,110
1,144
4,659
4,658
945
4,620
1,200
3,153
3,195
3,195
3,356
4,450
3,810
2,181
546
600
600
625
725
548
1,350
807
3,961
650
600
1,250
30
570 $
0 $
- 1,077
286
-
984
-
245
-
- 1,312
- 1,058
981
- 1,219
- 1,192
- 8,194
822
-
216 1,473
-
648
-
871
-
945
-
955
698
-
- 1,741
218
-
269
-
331
-
206
-
470
-
743
-
498
-
-
353
- 1,511
195
-
499
-
676
-
803
-
-
818
- 1,354
- 1,011
- 1,333
338
240
600
625
725
348
- 1,350
476
- 2,042
650
-
-
600
- 1,250
28
231
-
-
-
12
73
86
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2017
2019
2017
2019
2019
2017
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2021
2018
2019
2021
2021
2020
2021
2021
2020
2020
2021
2020
2021
2020
2021
2021
2019
2021
2019
2017
1985
1991
2011
2011
2011
1991
2011
1985
2019
2011
2011
2011
333
111
641
100
74
119
357
95
215
371
665
378
462
561
726
954
64
139
151
6
5
356
4
3
312
336
2
185
4
325
89
85
324
181
524
230
200
302
-
-
-
152
-
320
219
-
-
-
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Falmouth, MA
Foxborough, MA
Gardner, MA
Gardner, MA
Gardner, MA
Hyde Park, MA
Leominster, MA
Littleton, MA
Lowell, MA
Lynn, MA
Marlborough, MA
Maynard, MA
Melrose, MA
Methuen, MA
Methuen, MA
Newton, MA
Peabody, MA
Peabody, MA
Randolph, MA
Revere, MA
Rockland, MA
Salem, MA
Seekonk, MA
Sterling, MA
Sutton, MA
Tewksbury, MA
Tewksbury, MA
Upton, MA
Wakefield, MA
Walpole, MA
Watertown, MA
Webster, MA
West Roxbury, MA
Wilmington, MA
Wilmington, MA
Woburn, MA
Worcester, MA
Worcester, MA
Worcester, MA
Worcester, MA
Worcester, MA
Worcester, MA
Accokeek, MD
Baltimore, MD
Baltimore, MD
Beltsville, MD
Beltsville, MD
Beltsville, MD
$
415 $
427
550
787
1,008
499
571
1,357
-
850
550
735
600
490
650
691
550
650
574
1,300
579
600
1,073
476
714
125
1,200
428
900
450
358
1,012
490
600
1,300
508
500
550
547
196
979
498
692
802
2,259
525
731
1,050
2,326 $
200
-
149
774
365
372
598
207
-
-
355
-
269
-
335
-
-
389
-
247
-
124
169
307
646
-
264
-
249
246
1,648
295
-
-
394
-
-
202
986
350
760
-
802
1,537
-
-
-
2,784 $
525
550
787
1,431
687
571
1,357
636
850
550
834
600
588
650
785
550
650
819
1,300
624
600
700
478
771
721
1,200
543
900
542
567
2,307
614
600
1,300
902
500
550
558
986
986
1,082
692
802
2,259
525
731
1,050
45
-
(373 )
2
57
596
2,369 $
98
-
-
423
188
-
-
636
-
-
99
-
98
-
94
-
-
245
458 $
325
550
638
657
322
199
759
429
850
550
479
600
319
650
450
550
650
430
- 1,300
377
600
576
309
464
75
- 1,200
115
279
-
900
92
293
209
321
1,295
659
124
319
600
-
- 1,300
508
394
500
-
550
-
356
11
-
790
636
7
322
584
692
-
-
-
722
-
525
-
-
731
- 1,050
87
Date of
Initial
Leasehold or
Acquisition
Investment (1)
1988
1990
2011
2014
1985
1985
2012
2017
1996
2011
2011
1985
2011
1985
2011
1985
2011
2011
1985
2011
1985
2011
1985
1991
1993
1986
2011
1991
2011
1985
1985
1985
1985
2011
2011
1985
2011
2011
1991
2017
1991
1985
2010
2007
2007
2009
2009
2009
469
175
-
70
627
302
193
145
119
-
-
316
-
237
-
324
-
-
335
-
238
-
102
127
244
432
-
199
-
218
213
958
265
-
-
354
-
-
153
206
264
493
-
594
979
-
-
-
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Beltsville, MD
Bladensburg, MD
Bowie, MD
Capitol Heights, MD
Capitol Heights, MD
Clinton, MD
College Park, MD
District Heights, MD
District Heights, MD
Ellicott City, MD
Greater Landover, MD
Greenbelt, MD
Hyattsville, MD
Hyattsville, MD
Landover, MD
Landover Hills, MD
Lanham, MD
Laurel, MD
Laurel, MD
Laurel, MD
Laurel, MD
Laurel, MD
Laurel, MD
Oxon Hill, MD
Riverdale, MD
Suitland, MD
Upper Marlboro, MD
Biddeford, ME
Lewiston, ME
Battle Creek, MI
Battle Creek, MI
Bay City, MI
Beverly Hills, MI
Canton, MI
Cutlerville, MI
Dearborn, MI
Detroit, MI
East Lansing, MI
Farmington, MI
Grand Blanc, MI
Grand Ledge, MI
Grand Rapids, MI
Grand Rapids, MI
Grand Rapids, MI
Grand Rapids, MI
Grandville, MI
Holland, MI
Jackson, MI
$
1,130 $
571
1,084
468
628
651
536
479
1,039
895
753
1,153
491
594
662
1,358
822
696
1,210
1,267
1,415
1,530
2,523
1,256
582
673
845
618
342
3,225
3,273
484
559
491
557
552
563
554
556
562
1,174
506
562
562
818
1,043
559
508
Land
0 $ 1,130 $
-
571
- 1,084
468
-
628
-
651
-
536
-
-
479
- 1,039
-
-
-
753
- 1,153
491
-
594
-
-
662
- 1,358
-
822
696
-
- 1,210
- 1,267
- 1,415
- 1,530
- 2,523
- 1,256
582
-
673
-
845
-
235
8
222
188
771
-
562
-
34
-
134
-
91
-
280
-
75
-
16
-
68
-
203
-
46
-
100
-
86
-
48
-
32
-
201
-
192
-
27
-
118
-
88
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2009
2009
2009
2009
2009
2009
2009
2009
2009
2007
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
1985
1985
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
0
-
-
-
-
-
-
-
-
697
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
391
273
59
22
14
12
12
11
14
15
14
12
15
31
13
14
15
18
25
15
12
0 $
-
-
-
-
-
-
-
-
895
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
391
308
2,454
2,711
450
425
400
277
477
547
486
353
516
1,074
420
514
530
617
851
532
390
1,130 $
571
1,084
468
628
651
536
479
1,039
895
753
1,153
491
594
662
1,358
822
696
1,210
1,267
1,415
1,530
2,523
1,256
582
673
845
626
530
3,225
3,273
484
559
491
557
552
563
554
556
562
1,174
506
562
562
818
1,043
559
508
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Jackson, MI
Jenison, MI
Lambertville, MI
Lansing, MI
Lansing, MI
Lansing, MI
Lansing, MI
Livonia, MI
Madison Heights, MI
Madison Heights, MI
Midland, MI
Midland, MI
Oak Park, MI
Redford Township, MI
Saginaw, MI
St Clair Shores, MI
Sterling Heights, MI
Trenton, MI
Warren, MI
Wyoming, MI
Zeeland, MI
Maple Grove, MN
Blue Springs, MO
Blue Springs, MO
Independence, MO
Kansas City, MO
Kansas City, MO
Parkville, MO
Raymore, MO
Summit, MO
Hattiesburg, MS
Hattiesburg, MS
Indian Trail, NC
Raleigh, NC
Cary, NC
Charlotte, NC
Charlotte, NC
Fayetteville, NC
Greensboro, NC
Henderson, NC
Henderson, NC
High Point, NC
Indian Trail, NC
Kannapolis, NC
Lexington, NC
Monroe, NC
Nashville, NC
$
558 $
615
617
467
488
916
3,230
526
562
1,760
518
630
562
560
523
483
555
561
489
511
715
4,233
4,646
5,065
5,109
3,863
4,982
4,636
3,582
1,503
1,760
2,143
4,582
2,929
1,939
1,967
5,194
986
3,857
1,356
2,680
1,155
5,895
3,791
1,776
1,886
4,025
376 $
578
272
360
410
726
2,378
404
524
1,568
508
620
455
516
399
416
385
513
448
474
623
3,278
4,260
4,711
4,509
3,497
4,373
4,319
3,012
1,152
910
885
1,513
472
647
510
1,524
477
2,888
582
762
787
1,088
3,175
1,475
654
1,647
558 $
615
617
467
488
916
3,230
526
562
1,760
518
630
562
560
523
483
555
561
489
511
715
4,233
4,646
5,065
5,109
3,863
4,982
4,636
3,582
1,503
1,760
2,143
4,582
2,929
1,939
1,967
5,194
986
3,857
1,356
2,680
1,155
5,895
3,791
1,776
1,886
4,025
182 $
0 $
37
-
345
-
107
-
78
-
190
-
852
-
122
-
38
-
192
-
10
-
10
-
107
-
44
-
124
-
67
-
170
-
48
-
41
-
37
-
92
-
955
-
386
-
354
-
600
-
366
-
609
-
317
-
570
-
351
-
-
850
- 1,258
- 3,069
- 2,457
- 1,292
- 1,457
- 3,670
509
-
969
-
-
774
- 1,918
368
-
- 4,807
616
-
-
301
- 1,232
- 2,378
89
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2019
2020
2020
2020
2020
2020
2020
2020
2021
2021
2021
2021
2021
2021
2021
2021
2018
2020
2021
2021
2020
2021
2019
2017
2021
2021
11
16
10
11
14
23
35
13
15
6
15
18
13
14
13
12
12
14
13
14
19
363
365
389
379
293
349
342
262
4
18
16
13
8
11
4
13
94
280
11
12
65
9
411
267
6
26
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Oxford, NC
Raleigh, NC
Rockingham, NC
Rolesville, NC
Wake Forest, NC
Wesley Chapel, NC
Youngsville, NC
Belfield, ND
Allenstown, NH
Concord, NH
Concord, NH
Derry, NH
Dover, NH
Dover, NH
Goffstown, NH
Hooksett, NH
Kingston, NH
Londonderry, NH
Londonderry, NH
Manchester, NH
Nashua, NH
Nashua, NH
Nashua, NH
Nashua, NH
Nashua, NH
Nashua, NH
Northwood, NH
Pelham, NH
Portsmouth, NH
Raymond, NH
Rochester, NH
Rochester, NH
Rochester, NH
Rochester, NH
Salem, NH
Salem, NH
Basking Ridge, NJ
Bergenfield, NJ
Brick, NJ
Flemington, NJ
Fort Lee, NJ
Freehold, NJ
Hasbrouck Heights, NJ
Lake Hopatcong, NJ
Lawrence Township, NJ
Livingston, NJ
Long Branch, NJ
Midland Park, NJ
Mountainside, NJ
$
1,529
1,601 $
3,035
1,329
1,114
7,158
4,701
1,232
1,787
675
900
950
650
1,200
1,737
1,562
1,500
703
1,100
550
500
550
750
825
1,132
1,750
500
-
525
550
700
939
1,400
1,600
743
450
362
382
1,508
547
1,246
494
640
1,305
1,303
872
514
201
664
30
309
-
0 $ 1,149 $
233
-
700
-
411
-
- 5,654
- 4,027
382
-
467
-
675
-
900
-
950
-
650
-
- 1,200
697
-
-
824
- 1,500
458
- 1,100
550
-
500
-
550
-
750
-
825
-
-
780
- 1,750
500
-
317
730
525
-
550
-
700
-
600
12
- 1,400
- 1,600
484
20
350
871
200
285
300
320
383 1,000
346
17
811
420
95
944
416
708
-
800
- 1,146
568
335
150
134
65
513
339
(191 )
90
1,220
452 $
2,802
629
703
1,504
674
850
1,320
-
-
-
-
-
1,040
738
-
275
-
-
-
-
-
-
352
-
-
413
-
-
-
351
-
-
279
971
447
402
891
218
855
1,343
932
505
157
369
692
390
339
1,529
1,601 $
3,035
1,329
1,114
7,158
4,701
1,232
1,787
675
900
950
650
1,200
1,737
1,562
1,500
733
1,100
550
500
550
750
825
1,132
1,750
500
730
525
550
700
951
1,400
1,600
763
1,321
647
702
1,891
564
1,666
1,438
1,348
1,305
1,303
937
1,027
540
473
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2021
2019
2019
2021
2021
2021
2021
2007
2007
2011
2011
2011
2011
2011
2012
2007
2011
1985
2011
2011
2011
2011
2011
2011
2017
2011
2011
1996
2011
2011
2011
1985
2011
2011
1985
1986
1986
1990
2000
1985
1985
1978
1985
2000
2012
1985
1985
1989
1985
18
69
353
11
12
12
12
775
887
-
-
-
-
-
653
686
-
265
-
-
-
-
-
-
103
-
-
198
-
-
-
337
-
-
268
238
362
313
654
209
695
510
659
473
87
337
484
289
254
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
North Bergen, NJ
North Plainfield, NJ
Paramus, NJ
Parlin, NJ
Paterson, NJ
Ridgewood, NJ
Somerset, NJ
Union, NJ
Vernon, NJ
Washington Township, NJ
Watchung, NJ
West Orange, NJ
Albuquerque, NM
Albuquerque, NM
Albuquerque, NM
Albuquerque, NM
Las Cruces, NM
Fernley, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Plattsburgh, NY
Astoria, NY
Batavia, NY
Bay Shore, NY
Bayside, NY
Brewster, NY
Briarcliff Manor, NY
Bronx, NY
Bronx, NY
Bronx, NY
Bronx, NY
Bronx, NY
Bronx, NY
Bronx, NY
Bronxville, NY
Brooklyn, NY
Brooklyn, NY
Brooklyn, NY
Brooklyn, NY
Buffalo, NY
Byron, NY
Chester, NY
Churchville, NY
Corona, NY
$
630 $
227
382
418
620
703
683
437
671
912
450
800
1,829
2,308
2,322
3,682
1,842
1,665
2,814
3,094
3,472
3,722
3,752
4,150
1,684
684
156
470
789
652
877
884
953
1,049
46
1,910
2,408
1,232
282
237
477
627
312
969
1,158
1,012
2,543
147 $
542
717
223
16
461
228
214
476
396
254
433
410 $
175
249
203
403
458
445
239
437
594
226
521
- 1,382
- 1,830
- 1,796
- 3,141
- 1,374
221
-
563
-
830
-
655
-
631
-
-
615
- 1,127
- 1,105
364
-
86
356
306
254
789
-
502
550
877
-
884
-
953
-
485
-
84
1,318
- 1,349
- 1,712
- 1,232
176
273
154
402
306
319
408
313
151
242
-
669
- 1,158
602
-
- 1,903
91
367 $
594
850
438
233
706
466
412
710
714
478
712
447
478
526
541
468
1,444
2,251
2,264
2,817
3,091
3,137
3,023
579
320
426
418
-
700
-
-
-
564
1,280
561
696
-
379
485
490
532
403
300
-
410
640
777 $
769
1,099
641
636
1,164
911
651
1,147
1,308
704
1,233
1,829
2,308
2,322
3,682
1,842
1,665
2,814
3,094
3,472
3,722
3,752
4,150
1,684
684
512
724
789
1,202
877
884
953
1,049
1,364
1,910
2,408
1,232
555
639
796
940
554
969
1,158
1,012
2,543
Date of
Initial
Leasehold or
Acquisition
Investment (1)
1985
1978
1985
1985
1985
1985
1985
1985
1985
1985
1985
1985
2017
2017
2017
2017
2017
2015
2019
2019
2019
2021
2019
2021
2013
2006
1981
1985
2011
1976
2013
2013
2013
2013
1972
2013
2013
2011
1967
1985
1985
1985
2000
2006
2011
2006
2013
343
539
274
281
224
546
440
317
505
535
257
625
121
138
148
156
129
672
210
226
257
57
293
32
288
203
356
310
-
658
-
-
-
282
253
293
327
-
323
351
410
445
317
190
-
260
306
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Dobbs Ferry, NY
Dobbs Ferry, NY
East Hampton, NY
East Meadow, NY
East Pembroke, NY
Eastchester, NY
Elmont, NY
Elmsford, NY
Elmsford, NY
Fishkill, NY
Floral Park, NY
Flushing, NY
Flushing, NY
Flushing, NY
Flushing, NY
Forest Hills, NY
Franklin Square, NY
Garden City, NY
Garnerville, NY
Glen Head, NY
Great Neck, NY
Hartsdale, NY
Hawthorne, NY
Hopewell Junction, NY
Hyde Park, NY
Katonah, NY
Lakeville, NY
Latham, NY
Levittown, NY
Levittown, NY
Long Island City, NY
Mamaroneck, NY
Massapequa, NY
Middletown, NY
Middletown, NY
Middletown, NY
Millwood, NY
Mount Kisco, NY
Mount Vernon, NY
Nanuet, NY
New Paltz, NY
New Rochelle, NY
New Rochelle, NY
New Windsor, NY
New York, NY
New York,
Newburgh, NY
Newburgh, NY
$
671 $
1,345
659
-
787
1,724
389
-
1,453
1,793
617
516
1,936
1,947
2,478
1,273
153
362
1,508
462
500
1,626
2,084
1,163
990
1,084
1,028
2,498
503
546
2,717
1,429
333
719
751
1,281
1,448
1,907
985
2,316
971
189
1,887
1,084
126
282
527
1,192
270 $
-
271
233
250
415
477
367
-
-
430
437
523
542
677
-
347
368
-
444
302
-
-
-
-
-
825
685
218
277
1,534
-
401
-
536
-
-
-
-
-
-
505
-
-
447
553
-
-
704 $
1,345
699
1,903
787
2,717
708
948
1,453
1,793
786
757
1,936
1,947
2,478
1,273
484
604
1,508
745
752
1,626
2,084
1,163
990
1,084
1,028
2,498
545
633
2,717
1,429
618
719
1,025
1,281
1,448
1,907
985
2,316
971
609
1,887
1,084
525
553
527
1,192
-
40
33 $
283
252
169
241
331
242
434 $
- 1,345
428
1,903 1,670
537
993 2,302
231
319
581
948
- 1,453
- 1,793
356
320
- 1,413
- 1,405
- 1,801
- 1,273
137
236
- 1,508
301
450
- 1,626
- 2,084
- 1,163
-
990
- 1,084
-
203
- 1,813
327
356
- 1,183
- 1,429
217
719
489
- 1,281
- 1,448
- 1,907
-
985
- 2,316
971
-
104
420
- 1,887
- 1,084
78
399
-
271
-
527
- 1,192
285
-
274
42
87
92
Date of
Initial
Leasehold or
Acquisition
Investment (1)
1985
2011
1985
1988
2006
2011
1978
1971
2011
2011
1998
1998
2013
2013
2013
2013
1978
1985
2011
1985
1985
2011
2011
2011
2011
2011
2008
2020
1985
1985
2013
2011
1985
2011
1985
2011
2011
2011
2011
2011
2011
1982
2011
2011
1972
2020
2011
2011
260
-
261
70
158
114
404
299
-
-
358
355
261
248
310
-
269
294
-
366
234
-
-
-
-
-
598
50
210
263
636
-
319
-
452
-
-
-
-
-
-
346
-
-
379
72
-
-
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Ossining, NY
Peekskill, NY
Pelham, NY
Pleasant Valley, NY
Port Chester, NY
Port Jefferson, NY
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Prattsburgh, NY
Rego Park, NY
Riverhead, NY
Rockaway Park, NY
Rye, NY
Sag Harbor, NY
Sayville, NY
Scarsdale, NY
Shrub Oak, NY
Sleepy Hollow, NY
Spring Valley, NY
Staten Island, NY
Staten Island, NY
Staten Island, NY
Tarrytown, NY
Troy, NY
Tuckahoe, NY
Wantagh, NY
Wappingers Falls, NY
Warwick, NY
West Nyack, NY
White Plains, NY
White Plains, NY
Yaphank, NY
Yonkers, NY
Yonkers, NY
Yonkers, NY
Yonkers, NY
Yorktown Heights, NY
Yorktown Heights, NY
Akron, OH
Amelia, OH
Bowling Green, OH
Cincinnati, OH
Cincinnati, OH
Cincinnati, OH
$
231 $
2,207
1,035
398
1,015
185
591
1,020
1,232
1,340
1,306
1,355
553
2,783
724
1,605
872
704
345
1,301
1,061
281
749
390
301
350
956
4,690
1,650
640
1,488
1,049
936
-
1,458
-
-
1,020
291
1,907
1,700
2,365
1,530
3,195
472
3,188
3,188
3,716
373 $
-
-
339
-
3,023
-
-
-
-
-
-
250
679
292
-
-
281
290
-
792
567
-
225
428
412
-
571
-
270
-
-
-
266
-
423
260
419
1,125
-
1,700
-
1,145
2,558
365
2,533
2,914
3,175
490 $
2,207
1,035
579
1,015
3,269
591
1,020
1,200
1,280
1,306
1,355
553
2,783
724
1,605
872
739
590
1,301
1,483
697
749
479
624
640
956
4,690
1,650
640
1,488
1,049
936
569
1,458
798
944
1,084
1,341
1,907
1,700
2,365
1,530
3,195
472
3,188
3,188
3,716
181
259 $
117 $
- 2,207
- 1,035
240
- 1,015
246
3,084
-
591
- 1,020
(32 ) 1,200
(60 ) 1,280
- 1,306
- 1,355
303
-
- 2,104
-
432
- 1,605
872
-
458
35
300
245
- 1,301
691
422
130
416
749
-
254
89
196
323
228
290
-
956
- 4,119
- 1,650
370
-
- 1,488
- 1,049
936
-
303
569
- 1,458
375
684
665
216
- 1,907
-
-
- 2,365
385
-
637
-
107
-
655
-
274
-
541
-
798
944
64
1,050
93
Date of
Initial
Leasehold or
Acquisition
Investment (1)
1985
2011
2011
1986
2011
1985
2011
2011
2011
2011
2011
2011
2006
2013
1998
2013
2011
1985
1998
2011
1985
1969
2011
1985
1985
1985
2011
2020
2011
1998
2011
2011
2011
1972
2011
1993
1990
1985
1972
2011
2013
2011
2017
2021
2021
2021
2021
2020
269
-
-
246
-
539
-
-
-
-
-
-
158
325
278
-
-
270
213
-
645
476
-
219
350
333
-
44
-
251
-
-
-
230
-
300
164
404
809
-
614
-
251
96
12
78
81
305
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Crestline, OH
Fairfield, OH
Hamilton, OH
Lima, OH
Loveland, OH
Mansfield, OH
Mansfield, OH
Maumee, OH
Monroeville, OH
Oregon, OH
Springdale, OH
Sylvania, OH
Toledo, OH
Toledo, OH
Toledo, OH
Toledo, OH
Tylersville, OH
Oklahoma City, OK
Oklahoma City, OK
Oklahoma City, OK
Stillwater, OK
Banks, OR
Estacada, OR
McMinnville, OR
Pendleton, OR
Portland, OR
Salem, OR
Salem, OR
Salem, OR
Salem, OR
Salem, OR
Silverton, OR
Springfield, OR
Stayton, OR
Allison Park, PA
Harrisburg, PA
Lancaster, PA
New Kensington, PA
Philadelphia, PA
Philadelphia, PA
Phoenixville, PA
Reading, PA
Barrington, RI
N. Providence, RI
Blythewood, SC
Chapin, SC
Charleston, SC
Columbia, SC
$
1,202 $
3,770
3,188
637
1,045
922
1,950
557
2,580
470
3,379
559
552
562
603
767
3,195
868
1,182
1,311
2,800
498
646
2,867
766
4,416
1,071
1,350
1,408
4,215
4,614
956
1,398
543
1,500
399
642
1,375
406
1,252
384
750
490
542
3,217
1,682
4,996
575
285 $
0 $
582
-
371
-
53
-
362
-
332
-
700
-
67
-
485
-
36
-
381
-
44
-
90
-
26
-
204
-
241
-
666
-
371
-
587
-
-
625
- 1,469
498
-
84
-
394
-
-
122
- 3,368
399
-
521
-
-
524
- 3,182
- 3,517
456
-
796
-
296
-
850
-
199
213
300
56
675
-
264
254
814
-
76
90
-
49
319
133
353
159
- 2,405
- 1,135
- 1,981
345
-
94
917 $
3,188
2,817
584
683
590
1,250
490
2,095
434
2,998
515
462
536
399
526
2,529
497
595
686
1,331
-
562
2,473
644
1,048
672
829
884
1,033
1,097
500
602
247
650
413
398
700
396
438
398
799
304
348
812
547
3,015
230
1,202 $
3,770
3,188
637
1,045
922
1,950
557
2,580
470
3,379
559
552
562
603
767
3,195
868
1,182
1,311
2,800
498
646
2,867
766
4,416
1,071
1,350
1,408
4,215
4,614
956
1,398
543
1,500
612
698
1,375
660
1,252
474
799
623
701
3,217
1,682
4,996
575
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2008
2020
2021
2021
2017
2008
2009
2021
2009
2021
2020
2021
2021
2021
2021
2021
2021
2018
2018
2018
2019
2015
2015
2017
2015
2015
2015
2015
2015
2015
2015
2017
2015
2017
2010
1989
1989
2010
1985
2009
1985
1989
1985
1985
2017
2017
2021
2017
556
206
90
17
167
343
720
14
1,201
12
276
14
14
15
12
15
88
94
108
120
137
-
201
538
254
392
320
316
348
415
413
140
279
80
519
354
371
353
309
229
148
799
249
309
222
148
13
55
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Elgin, SC
Elgin, SC
Gaston, SC
Gilbert, SC
Irmo, SC
Irmo, SC
Irmo, SC
Irmo, SC
Irmo, SC
Johns Island, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Lexington, SC
Myrtle Beach, SC
Pelion, SC
Simpsonville, SC
Summerville, SC
West Columbia, SC
West Columbia, SC
West Columbia, SC
Arlington, TX
Arlington, TX
Arlington, TX
Arlington, TX
Austin, TX
$
792 $
868
927
1,436
1,643
1,995
2,109
2,460
2,531
2,637
3,371
2,082
2,177
2,230
1,036
1,114
1,246
1,339
3,655
3,950
2,561
633
694
720
816
973
1,056
1,624
1,712
1,729
1,738
2,179
2,603
3,231
3,234
4,413
1,168
1,901
1,713
4,134
1,116
1,644
2,046
789
1,352
1,560
1,796
1,711
463 $
0 $
455
-
495
-
-
472
- 1,302
- 1,130
- 1,120
- 1,569
- 1,612
- 1,254
- 2,016
- 1,166
974
-
934
-
434
-
667
-
69
-
867
-
(178 ) 1,564
- 2,802
- 1,885
309
-
172
-
219
-
336
-
582
-
432
-
-
999
- 1,410
- 1,268
- 1,189
- 1,476
- 1,869
- 2,001
- 1,198
- 3,418
-
505
- 1,021
- 1,355
- 1,437
-
50
- 1,283
746
-
414
-
-
887
- 1,008
- 1,189
- 1,364
95
329 $
413
432
964
341
865
989
891
919
1,383
1,355
916
1,203
1,296
602
447
1,177
472
1,913
1,148
676
324
522
501
480
391
624
625
302
461
549
703
734
1,230
2,036
995
663
880
358
2,697
1,066
361
1,300
375
465
552
607
347
792 $
868
927
1,436
1,643
1,995
2,109
2,460
2,531
2,637
3,371
2,082
2,177
2,230
1,036
1,114
1,246
1,339
3,477
3,950
2,561
633
694
720
816
973
1,056
1,624
1,712
1,729
1,738
2,179
2,603
3,231
3,234
4,413
1,168
1,901
1,713
4,134
1,116
1,644
2,046
789
1,352
1,560
1,796
1,711
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2017
2017
2017
2017
2017
2018
2018
2017
2018
2017
2017
2017
2017
2017
2017
2017
2017
2017
2017
2017
2018
2017
2017
2017
2017
2017
2017
2017
2017
2017
2017
2017
2018
2018
2018
2017
2021
2017
2021
2021
2017
2017
2017
2018
2018
2018
2018
2017
84
118
90
239
65
176
189
242
174
330
352
230
286
311
144
108
266
117
453
284
115
81
141
121
91
101
160
153
63
131
106
171
154
247
372
274
6
249
7
44
263
93
306
77
89
101
113
101
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Austin, TX
Austin, TX
Bedford, TX
Cedar Park, TX
Center, TX
Childress, TX
Cibolo, TX
Corpus Christi, TX
Corpus Christi, TX
Corpus Christi, TX
El Paso, TX
El Paso, TX
El Paso, TX
El Paso, TX
El Paso, TX
El Paso, TX
Fort Worth, TX
Garland, TX
Garland, TX
Garland, TX
Grand Prairie, TX
Grand Prairie, TX
Harker Heights, TX
Houston, TX
Houston, TX
Keller, TX
Lewisville, TX
Linden, TX
Longview, TX
Mathis, TX
Mesquite, TX
Panhandle, TX
Paris, TX
Paris, TX
Port Arthur, TX
Rowlett, TX
San Antonio, TX
San Antonio, TX
San Antonio, TX
San Antonio, TX
San Antonio, TX
San Antonio, TX
San Antonio, TX
San Antonio, TX
San Antonio, TX
San Marcos, TX
Schertz, TX
Shamrock, TX
$
2,368 $
3,510
353
179
2,073
3,335
3,228
1,526
2,162
2,400
1,278
1,425
1,679
1,816
2,370
3,168
2,115
2,208
3,296
4,439
1,413
2,000
2,052
1,689
2,803
2,507
494
2,160
1,660
3,138
1,687
5,068
3,832
5,322
2,648
1,284
2,810
3,427
3,618
3,630
3,631
3,718
3,820
4,397
4,411
1,954
2,794
3,045
1,630 $
1,982
356
428
591
1,376
2,224
470
433
1,290
453
327
594
403
603
1,015
1,420
704
3,051
4,000
499
585
1,568
1,465
2,268
1,568
420
646
421
451
594
2,431
1,187
1,343
2,143
444
2,300
2,981
3,124
2,610
2,301
2,986
2,361
3,400
3,769
1,703
1,981
1,823
2,368 $
3,577
469
470
2,073
3,335
3,228
1,526
2,162
2,400
1,278
1,425
1,679
1,816
2,370
3,168
2,286
2,208
3,296
4,439
1,413
2,000
2,147
1,689
2,803
2,564
530
2,160
1,660
3,138
1,687
5,068
3,832
5,322
2,648
1,284
2,810
3,427
3,618
3,630
3,631
3,718
3,820
4,397
4,411
1,954
2,794
3,045
0 $
171
738 $
67 1,595
113
116
42
291
- 1,482
- 1,959
- 1,004
- 1,056
- 1,729
- 1,110
-
825
- 1,098
- 1,085
- 1,413
- 1,767
- 2,153
866
- 1,504
245
-
439
-
-
914
- 1,415
579
224
535
996
110
- 1,514
- 1,239
- 2,687
- 1,093
- 2,637
- 2,645
- 3,979
505
-
840
-
510
-
446
-
-
494
- 1,020
- 1,330
732
-
- 1,459
997
-
642
-
251
-
-
813
- 1,222
95
-
-
57
36
96
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2007
2007
2007
2007
2018
2020
2020
2017
2017
2017
2017
2017
2017
2017
2017
2017
2007
2018
2014
2014
2018
2018
2007
2007
2016
2007
2008
2018
2018
2017
2018
2020
2020
2020
2016
2018
2021
2020
2020
2020
2021
2020
2020
2020
2020
2007
2020
2020
1,029
1,226
234
260
122
94
150
116
121
321
125
93
146
114
154
260
845
130
947
1,297
102
112
1,219
902
525
1,033
274
125
78
126
114
177
67
86
512
81
92
180
182
183
49
182
135
226
231
1,063
115
129
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Temple, TX
Temple, TX
Texarkana, TX
Texarkana, TX
Texarkana, TX
Waco, TX
Wake Village, TX
Watauga, TX
Alexandria, VA
Alexandria, VA
Alexandria, VA
Alexandria, VA
Alexandria, VA
Alexandria, VA
Alexandria, VA
Alexandria, VA
Annandale, VA
Arlington, VA
Arlington, VA
Arlington, VA
Arlington, VA
Ashland, VA
Chesapeake, VA
Chesapeake, VA
Emporia, VA
Fairfax, VA
Fairfax, VA
Fairfax, VA
Fairfax, VA
Farmville, VA
Fredericksburg, VA
Fredericksburg, VA
Fredericksburg, VA
Glen Allen, VA
Glen Allen, VA
King William, VA
Mechanicsville, VA
Mechanicsville, VA
Mechanicsville, VA
Mechanicsville, VA
Mechanicsville, VA
Mechanicsville, VA
Montpelier, VA
Petersburg, VA
Portsmouth, VA
Richmond, VA
Salem, VA
Sandston, VA
$
2,406 $
5,554
1,791
1,861
2,316
3,884
1,637
1,771
649
656
712
735
1,327
1,388
1,582
1,757
1,718
1,083
1,464
2,014
2,062
840
780
1,004
3,364
1,825
2,078
3,348
4,454
1,227
1,279
1,716
3,623
1,037
1,077
1,688
903
957
1,043
1,125
1,476
1,677
2,481
1,441
562
1,132
3,337
722
Land
-11 $ 1,205 $
- 4,119
-
992
- 1,197
- 1,643
894
-
-
685
- 1,139
649
-
409
-
712
-
-
735
- 1,327
- 1,020
- 1,150
- 1,313
- 1,718
- 1,083
- 1,085
- 1,516
- 1,603
840
-
398
(186 )
385
110
- 2,227
- 1,190
- 1,365
- 2,351
- 3,370
622
-
469
-
-
996
- 2,828
412
-
-
322
- 1,068
248
(25 )
324
14
223
-
505
-
-
876
- 1,157
(114 ) 1,612
816
222
506
915
102
-
34
(41 )
-
-
97
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2007
2020
2018
2018
2018
2007
2018
2018
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2005
1990
1990
2019
2013
2013
2013
2013
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
1990
2005
2020
2005
784
95
143
137
119
1,974
168
118
-
133
-
-
-
201
214
234
-
-
192
245
223
-
108
698
131
313
302
461
502
406
544
484
534
420
507
416
423
443
551
416
403
349
507
420
371
393
279
416
1,190 $
1,435
799
664
673
2,990
952
632
-
247
-
-
-
368
432
444
-
-
379
498
459
-
196
729
1,137
635
713
997
1,084
605
810
720
795
625
755
620
630
647
820
620
600
520
755
625
374
585
2,422
620
2,395 $
5,554
1,791
1,861
2,316
3,884
1,637
1,771
649
656
712
735
1,327
1,388
1,582
1,757
1,718
1,083
1,464
2,014
2,062
840
594
1,114
3,364
1,825
2,078
3,348
4,454
1,227
1,279
1,716
3,623
1,037
1,077
1,688
878
971
1,043
1,125
1,476
1,677
2,367
1,441
596
1,091
3,337
722
Gross Amount at Which Carried
at Close of Period
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
Accumulated
Depreciation
Spotsylvania, VA
Springfield, VA
Woodstock, VA
Williston, VT
Auburn, WA
Bellevue, WA
Chehalis, WA
Colfax, WA
Federal Way, WA
Fife, WA
Kent, WA
Monroe, WA
Port Orchard, WA
Puyallup, WA
Puyallup, WA
Puyallup, WA
Renton, WA
Seattle, WA
Seattle, WA
Silverdale, WA
Snohomish, WA
South Bend, WA
Tacoma, WA
Tacoma, WA
Tenino, WA
Vancouver, WA
Wilbur, WA
various
$
1,290 $
4,257
612
3,957
3,022
1,725
1,176
4,800
4,218
1,181
2,900
2,792
2,019
831
2,035
4,050
1,485
717
1,884
2,178
955
760
518
671
937
1,214
629
58,615
490 $
2,969
355
1,538
1,965
886
313
3,611
2,973
414
2,066
1,556
161
172
465
2,394
952
193
1,223
1,217
955
121
518
671
219
163
153
73,015 31,082
$ 1,346,332 $ 122,334 $ 775,037 $
0 $
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2005
2013
2020
2021
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
800 $
1,288
257
2,419
1,057
839
863
1,189
1,245
767
834
1,236
1,858
659
1,570
1,656
533
524
661
961
-
639
-
-
718
1,051
476
41,933
1,290 $
4,257
612
3,957
3,022
1,725
1,176
4,800
4,218
1,181
2,900
2,792
2,019
831
2,035
4,050
1,485
717
1,884
2,178
955
760
518
671
937
1,214
629
73,015
635,014 $ 1,410,051 $ 210,615
537
590
23
27
411
327
368
464
522
324
352
493
619
298
601
791
282
196
247
405
-
233
-
-
265
351
195
34,667 various
1)
Initial cost of leasehold or acquisition investment to company represents the aggregate of the cost incurred during the year in
which we purchased the property for owned properties or purchased a leasehold interest in leased properties. Cost capitalized
subsequent to initial investment includes investments made in previously leased properties prior to their acquisition.
2) Depreciation of real estate is computed on the straight-line method based upon the estimated useful lives of the assets, which
generally range from 16 to 25 years for buildings and improvements, or the term of the lease if shorter. Leasehold interests are
amortized over the remaining term of the underlying lease.
3) The aggregate cost for federal income tax purposes was approximately $1,458,000 at December 31, 2021.
98
GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE IV—MORTGAGE LOANS ON REAL ESTATE
As of December 31, 2021
(in thousands)
Description
Location(s)
Interest
Rate
Final
Maturity
Date
Periodic
Payment
Terms (a)
Prior
Liens
Face Value
at
Inception
Amount of
Principal
Unpaid at
Close of Period
Type of
Loan/Borrower
Mortgage Loans:
Borrower A
Borrower B
Borrower C
Borrower D
Borrower E
Borrower F
Borrower G
Borrower H
Borrower I
Borrower J
Borrower K
Borrower L
Borrower M
Borrower N
Borrower O
Borrower P
Borrower Q
Borrower R
Borrower S
Borrower T
Borrower U
Borrower V
Borrower W
Borrower X
Borrower Y
Borrower Z
Borrower AA
Borrower AB
Borrower AC
Borrower AD
Borrower AE
Borrower AF
Borrower AG
Borrower AH
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
East Islip, NY
Middlesex, NJ
Valley Cottage, NY
Smithtown, NY
Nyack, NY
Baldwin, NY
Norwalk, CT
Stafford Springs, CT
Waterbury, CT
Bristol, CT
Hartford, CT
Middletown, CT
New Britain, CT
Plainville, CT
Simsbury, CT
Milford, CT
Fairfield, CT
Hartford, CT
Wilmington, DE
Fairhaven, MA
Irvington, NJ
Nutley, NJ
Colonia, NJ
Glendale, NY
Bayside, NY
Elmont, NY
Pleasant Valley, NY
Malta, NY
Brewster, NY
Rochester, NY
Savona, NY
Rochester, NY
Greigsville, NY
Warwick, RI
Note receivable
Total (c)
Promissory Note Various-SC
Promissory Note Various-CT
Promissory Note Various-CT
Allowance for
credit losses
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
P & I
9.0 %
9.0 %
9.0 %
9.5 %
9.0 %
9.0 %
9.0 %
9.0 %
9.0 %
9.0 %
9.5 %
9.0 %
9.5 %
9.5 %
9.0 %
9.0 %
9.0 %
9.0 %
9.0 %
9.0 %
9.0 %
9.5 %
9.0 %
9.0 %
9.5 %
9.0 %
9.5 %
9.0 %
9.0 %
9.0 %
9.0 %
9.0 %
9.0 %
9.0 %
11/2024
9/2021 (d)
10/2020 (d)
1/2027
9/2022
9/2020 (d)
4/2022
1/2021 (d)
2/2021 (d)
5/2026
2/2027
5/2026
4/2027
3/2027
5/2026
3/2025
3/2025
3/2024
11/2027
9/2020 (d)
8/2022
11/2028
7/2030
7/2025
12/2029
10/2021 (d)
9/2027
3/2023
10/2022
1/2025
2/2025
10/2025
11/2025
8/2022
6.9 %
6.9 %
9.0 %
8/2022 (b)
10/2022 (b)
12/2028 (b)
— $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
743 $
255
431
280
253
300
319
232
171
76
440
308
192
160
192
398
390
70
84
458
300
108
320
525
320
450
230
572
554
174
157
230
200
333
10,225
—
—
—
677
21
338
170
219
254
267
184
137
72
425
292
186
155
182
366
359
63
64
357
176
108
233
309
320
325
174
495
466
159
144
215
187
284
8,383
4,603
1,102
908
—
$ 10,225 $
(297 )
14,699
(a) P & I = Principal and interest paid monthly.
(b) Note for funding of capital improvements.
(c) The aggregate cost for federal income tax purposes approximates the amount of principal unpaid.
(d) Note is in the process of being refinanced or repaid.
We review payment status to identify performing versus non-performing loans. Interest income on performing loans is accrued
as earned. A non-performing loan is placed on non-accrual status when it is probable that the borrower may be unable to meet interest
payments as they become due. We adopted ASU 2016-13 on January 1, 2020 using the modified retrospective method, under which
we recorded a cumulative-effect adjustment as a charge to retained earnings of $309,000. In addition, during the years ended
99
December 31, 2021 and 2020, we recorded a credit and an additional allowance for credit losses of $40,000 and $28,000, respectively,
on these notes and mortgages receivable due to changes in expected economic conditions.
The summarized changes in the carrying amount of mortgage loans are as follows:
Balance at January 1,
Additions:
New mortgage loans
Deductions:
Loan repayments
Collection of principal
Credit (allowance) for credit losses
Balance at December 31,
2021
2020
2019
$
11,280 $
30,855 $
33,519
13,943
3,724
1,734
(9,893 )
(671 )
40
14,699 $
(22,260 )
(702 )
(337 )
11,280 $
(3,771 )
(627 )
—
30,855
$
100
EXHIBIT INDEX
GETTY REALTY CORP.
Annual Report on Form 10-K
for the year ended December 31, 2021
Exhibit
Number
3.1
3.2
Description of Document
Location of Document
Articles of Incorporation of Getty Realty Holding Corp.
(“Holdings”), now known as Getty Realty Corp., filed
December 23, 1997.
Annexed as Appendix D to the Joint Proxy/Prospectus that
is a part of the Company’s Registration Statement on
Form S-4 filed on January 12, 1998 (File No. 333- 44065)
and incorporated herein by reference.
Articles Supplementary to Articles of Incorporation of
Holdings, filed January 21, 1998.
3.3
By-Laws of Getty Realty Corp.
Filed as Exhibit 3.2 to the Company’s Annual Report on
Form 10-K
the year ended December 31, 2008
(File No. 001-13777) and incorporated herein by reference.
for
Filed as Exhibit 3.2 to the Company’s Current Report on
Form 8-K filed on November 14, 2011 (File No. 001-
13777) and incorporated herein by reference.
3.4
Articles of Amendment of Holdings, changing its name to
Getty Realty Corp., filed January 30, 1998.
3.5
Articles of Amendment of Holdings, filed August 1, 2001.
Filed as Exhibit 3.4 to the Company’s Annual Report on
the year ended December 31, 2008
Form 10-K
(File No. 001-13777) and incorporated herein by reference.
for
Filed as Exhibit 3.5 to the Company’s Annual Report on
the year ended December 31, 2008
Form 10-K
(File No. 001-13777) and incorporated herein by reference.
for
3.6
Articles Supplementary to Articles of Incorporation of
Holdings, filed October 25, 2017.
3.7
Articles of Amendment to Articles of Incorporation of Getty
Realty Corp. filed May 17, 2018
3.8
Amendment to By-Laws of Getty Realty Corp.
4.1
Dividend Reinvestment/Stock Purchase Plan.
Filed as Exhibit 3.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2017 (File
No. 001-13777) and incorporated herein by reference.
Filed as Exhibit 3.1 to the Company’s Current Report on
Form 8-K filed on May 18, 2018 (File No. 001-13777) and
incorporated herein by reference.
Filed as Exhibit 3.7 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2018 (File No.
001-13777) and incorporated herein by reference.
Included under the heading “Description of Plan” on pages
5 through 18 of the Company’s Registration Statement on
Form S-3D filed on April 22, 2004 (File No. 333-114730)
and incorporated herein by reference.
4.2
Description of Securities.
Filed herewith.
10.1*
10.4*
10.6*
10.7*
Retirement and Profit Sharing Plan (restated as of
December 1, 2012).
Filed as Exhibit 10.1 to the Company’s Annual Report on
the year ended December 31, 2012
Form 10-K
(File No. 001-13777) and incorporated herein by reference.
for
Amended and Restated Supplemental Retirement Plan for
Executives of the Getty Realty Corp. and Participating
Subsidiaries (adopted by the Company on December 16,
1997 and amended and restated effective January 1, 2009).
Filed as Exhibit 10.6 to the Company’s Annual Report on
the year ended December 31, 2008
Form 10-K
(File No. 001-13777) and incorporated herein by reference.
for
2004 Getty Realty Corp. Omnibus Incentive Compensation
Plan.
Annexed as Appendix B. to the Company’s Definitive
Proxy Statement filed on April 9, 2004 (File No. 001-
13777) and incorporated herein by reference.
Form of restricted stock unit grant award under the 2004
Getty Realty Corp. Omnibus Incentive Compensation Plan,
as amended.
Filed as Exhibit 10.15 to the Company’s Annual Report on
the year ended December 31, 2008
Form 10-K
(File No. 001-13777) and incorporated herein by reference.
for
101
Exhibit
Number
10.8*
Description of Document
Location of Document
Amendment to the 2004 Getty Realty Corp. Omnibus
Incentive Compensation Plan dated December 31, 2008.
Filed as Exhibit 10.19 to the Company’s Annual Report on
the year ended December 31, 2008
Form 10-K
(File No. 001-13777) and incorporated herein by reference.
for
10.15* Form of incentive restricted stock unit grant award under the
2004 Getty Realty Corp. Omnibus Incentive Compensation
Plan, as amended.
Filed as Exhibit 10.3 to the Company’s Quarterly Report on
Form 10-Q filed on May 10, 2013 (File No. 001-13777) and
incorporated herein by reference.
10.18* Getty Realty Corp. Amended and Restated 2004 Omnibus
Incentive Compensation Plan.
Filed as Exhibit 10.18 to the Company’s Annual Report on
Form 10-K filed on March 16, 2015 (File No. 001-13777)
and incorporated herein by reference.
10.19* Getty Realty Corp. Second Amended and Restated 2004
Annexed as Appendix A to the Company’s Definitive Proxy
Omnibus Incentive Compensation Plan
Statement on Schedule 14A filed on March 23, 2017
10.20** Credit Agreement, dated as of June 2, 2015, among Getty
Realty Corp., certain of its subsidiaries party thereto, Bank
of America, N.A. as Administrative Agent, Swing Line
Lender, an L/C Issuer and as a Lender, and the other leaders
party thereto.
Filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on August 10, 2015 (File No. 001-13777)
and incorporated herein by reference.
10.21** Amended and Restated Note Purchase and Guarantee
Agreement, dated as of June 2, 2015, among Getty Realty
Corp., certain of its subsidiaries party thereto, the Prudential
the Prudential
Insurance Company of America, and
Retirement Insurance and Annuity Company.
Filed as Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed on August 10, 2015 (File No. 001-13777)
and incorporated herein by reference.
10.28
First Amendment, dated as of February 21, 2017, to Credit
Agreement among Getty Realty Corp., certain of its
subsidiaries party thereto, Bank of America, N.A. as
Administrative Agent, Swing Line Lender, an L/C Issuer
and as a Lender, and the other leaders party thereto.
Filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on May 5, 2017 (File No. 001-13777) and
incorporated herein by reference.
10.29** Second Amended and Restated Note Purchase and
Guarantee Agreement, dated as of February 21, 2017,
among Getty Realty Corp., certain of its subsidiaries party
thereto, the Prudential Insurance Company of America
(“Prudential”) and certain affiliates of Prudential.
Filed as Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed on May 5, 2017 (File No. 001-13777) and
incorporated herein by reference.
10.30** Transaction Agreement between Empire Petroleum
Partners, LLC and Getty Realty Corp., dated June 22, 2017.
Filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on July 28, 2017 (File No. 001-13777) and
incorporated herein by reference.
10.31
Distribution Agreement by and among Getty Realty Corp.,
J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, KeyBanc Capital Markets Inc., RBC
Capital Markets, LLC, BTIG, LLC, Capital One Securities,
Inc. and JMP Securities LLC, dated March 9, 2018.
Filed as Exhibit 1.1 to the Company’s Current Report on
Form 8-K filed on March 9, 2016 (File No. 001-13777) and
incorporated herein by reference.
10.32** Amended and Restated Credit Agreement, dated as of
March 23, 2018, among Getty Realty Corp., certain of its
subsidiaries party thereto, Bank of America, N.A., as
Administrative Agent and Swing Line Lender, each lender
from time to time party thereto and each L/C Issuer from
time to time party thereto.
Filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on May 9, 2018 (File No. 001-13777) and
incorporated herein by reference.
10.33** Third Amended and Restated Note Purchase and Guarantee
Agreement, dated as of June 21, 2018, among Getty Realty
Corp., certain of its subsidiaries party thereto, the Prudential
and certain affiliates of Prudential.
Filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on July 26, 2018 (File No. 001-13777) and
incorporated herein by reference.
102
Exhibit
Number
Description of Document
Location of Document
10.34** Note Purchase and Guarantee Agreement, dated as of
June 21, 2018, among Getty Realty Corp., certain of its
subsidiaries party thereto, Metropolitan Life Insurance
Company (“MetLife”) and certain affiliates of MetLife.
Filed as Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed on July 26, 2018 (File No. 001-13777) and
incorporated herein by reference.
10.35* Form of Indemnification Agreement between the Company
and its directors.
Filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on October 25, 2018 (File No. 001-13777)
and incorporated herein by reference.
10.36** Fourth Amended and Restated Note Purchase and Guarantee
Agreement, dated as of September 12, 2019, among Getty
Realty Corp., certain of its subsidiaries party thereto, the
Prudential and certain affiliates of Prudential.
Filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on September 30, 2019 (File No. 001-
13777) and incorporated herein by reference.
10.37** Note Purchase and Guarantee Agreement, dated as of
September 12, 2019, among Getty Realty Corp., certain of
its subsidiaries party thereto and American General Life
Insurance Company (“AIG”).
Filed as Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed on September 30, 2019 (File No. 001-
13777) and incorporated herein by reference.
10.38** Note Purchase and Guarantee Agreement, dated as of
September 12, 2019, among Getty Realty Corp., certain of
its subsidiaries party thereto, Massachusetts Mutual Life
Insurance Company (“MassMutual”) and certain of its
affiliates.
Filed as Exhibit 10.3 to the Company’s Quarterly Report on
Form 10-Q filed on September 30, 2019 (File No. 001-
13777) and incorporated herein by reference.
10.39
Consent and Second Amendment, dated as of September 12,
2019, to Credit Agreement among Getty Realty Corp.,
certain of its subsidiaries party thereto, Bank of America,
N.A. as Administrative Agent, Swing Line Lender, an L/C
Issuer and as a Lender, and the other leaders party thereto.
Filed as Exhibit 10.4 to the Company’s Quarterly Report on
Form 10-Q filed on September 30, 2019 (File No. 001-
13777) and incorporated herein by reference.
10.40*** Fifth Amended and Restated Note Purchase and Guarantee
Agreement, dated as of December 4, 2020, among Getty
Realty Corp., Prudential and certain of its affiliates.
Filed as Exhibit 10.40 to the Company’s Annual Report on
Form 10-K filed on February 25, 2021 (File No. 001-13777)
and incorporated herein by reference.
10.41*** First Amended and Restated Note Purchase and Guarantee
Agreement, dated as of December 4, 2020, between Getty
Realty Corp. and AIG.
Filed as Exhibit 10.41 to the Company’s Annual Report on
Form 10-K filed on February 25, 2021 (File No. 001-13777)
and incorporated herein by reference.
10.42*** First Amended and Restated Note Purchase and Guarantee
Agreement, dated as of December 4, 2020, among Getty
Realty Corp., MassMutual and certain of its affiliates.
Filed as Exhibit 10.42 to the Company’s Annual Report on
Form 10-K filed on February 25, 2021 (File No. 001-13777)
and incorporated herein by reference.
10.43*
10.44*
10.45*
10.46
Form of Restricted Stock Unit Agreement under the Getty
Realty Corp. Second Amended and Restated 2004 Omnibus
Incentive Compensation Plan.
Filed as Exhibit 10.43 to the Company’s Annual Report on
Form 10-K filed on February 25, 2021 (File No. 001-13777)
and incorporated herein by reference.
Getty Realty Corp. Third Amended and Restated 2004
Omnibus Incentive Compensation Plan.
Filed as Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed on April 28, 2021 (File No. 001-13777) and
incorporated herein by reference.
Form of Restricted Stock Unit Grant Award under the 2004
Getty Realty Corp. Third Amended and Restated 2004
Omnibus Incentive Compensation Plan.
Filed as Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed on July 29, 2021 (File No. 001-13777) and
incorporated herein by reference.
Second Amended and Restated Credit Agreement, dated as
of October 27, 2021, among Getty Realty Corp., certain of
its subsidiaries party thereto, Bank of America, N.A., as
Administrative Agent, and the other agents and lenders
party thereto.
Filed as Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed on November 1, 2021 (File No. 001-13777)
and incorporated herein by reference.
103
Exhibit
Number
Description of Document
Location of Document
10.47*** First Amendment to the Note Purchase Agreement and
Guarantee Agreement, dated as of October 27, 2021, among
Getty Realty Corp., The Prudential Insurance Company of
America and certain of its affiliates that are the holders of
the notes signatory thereto.
Filed as Exhibit 10.2 to the Company’s Current Report on
Form 8-K filed on November 1, 2021 (File No. 001-13777)
and incorporated herein by reference.
10.48*** First Amendment to the Note Purchase Agreement and
Guarantee Agreement, dated as of October 27, 2021, among
Getty Realty Corp., American General Life Insurance
Company and certain of its affiliates that are the holders of
the notes signatory thereto.
Filed as Exhibit 10.3 to the Company’s Current Report on
Form 8-K filed on November 1, 2021 (File No. 001-13777)
and incorporated herein by reference.
10.49*** First Amendment to the Note Purchase Agreement and
Guarantee Agreement, dated as of October 27, 2021, among
Getty Realty Corp., {Barings} and certain of its affiliates
that are the holders of the notes signatory thereto.
Filed as Exhibit 10.4 to the Company’s Current Report on
Form 8-K filed on November 1, 2021 (File No. 001-13777)
and incorporated herein by reference.
10.50*** First Amendment to the Note Purchase Agreement and
Guarantee Agreement, dated as of October 27, 2021, among
Getty Realty Corp., Metropolitan Life Insurance Company
and certain of its affiliates that are the holders of the notes
signatory thereto.
Filed as Exhibit 10.5 to the Company’s Current Report on
Form 8-K filed on November 1, 2021 (File No. 001-13777)
and incorporated herein by reference.
10.51
Distribution Agreement by and among Getty Realty Corp.,
J.P. Morgan Securities LLC, BofA Securities, Inc.,
Citigroup Global Markets Inc., Goldman Sachs & Co. LLC,
KeyBanc Capital Markets Inc., RBC Capital Markets, LLC,
Robert W. Baird & Co. Incorporated, BTIG, LLC, Capital
One Securities, Inc. and JMP Securities LLC, dated
February 26, 2021.
Filed as Exhibit 1.1 to the Company’s Current Report on
Form 8-K filed on March 1, 2021 (File No. 001-13777) and
incorporated herein by reference.
10.52
Form of Master Forward Confirmation
Filed as Exhibit 1.2 to the Company’s Current Report on
Form 8-K filed on March 1, 2021 (File No. 001-13777) and
incorporated herein by reference.
21
23
31.1
31.2
32.1
32.2
Subsidiaries of the Company.
Filed herewith.
Consent of Independent Registered Public Accounting Firm. Filed herewith.
Certification of Christopher J. Constant, President and Chief
Executive Officer, pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as amended.
Filed herewith.
Certification of Brian Dickman, Executive Vice President,
Chief Financial Officer and Treasurer, pursuant to Rule 13a-
14(a) under the Securities Exchange Act of 1934, as
amended.
Filed herewith.
Certification of Christopher J. Constant, President and Chief
Executive Officer, pursuant to Rule 13a-14(b) under the
Securities Exchange Act of 1934, as amended, and 18
U.S.C. § 1350.
Filed herewith.
Certification of Brian Dickman, Executive Vice President,
Chief Financial Officer and Treasurer, pursuant to Rule 13a-
14(b) under the Securities Exchange Act of 1934, as
amended, and 18 U.S.C. § 1350.
Filed herewith.
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema
Filed herewith.
Filed herewith.
104
Exhibit
Number
Description of Document
Location of Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase
Filed herewith.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase
Filed herewith.
101.LAB Inline XBRL Taxonomy Extension Label Linkbase
Filed herewith.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase
Filed herewith.
104
Cover Page Interactive Data File
Formatted as Inline XBRL and contained in Exhibit 101.
* Management contract or compensatory plan or arrangement.
** Confidential treatment has been granted for certain portions of this Exhibit pursuant to Rule 24b-2 under the Exchange Act, which
portions are omitted and filed separately with the SEC.
*** Certain portions of this exhibit (indicated by “[***]”) have been omitted because they are not material.
Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.
The exhibits listed in this Exhibit Index which were filed or furnished with our 2021 Annual Report on Form 10-K filed with the
Securities and Exchange Commission are available upon payment of a $25 fee per exhibit, upon request from us, by writing to Investor
Relations addressed to Getty Realty Corp., 292 Madison Avenue, 9th Floor, New York, NY 10017. Our website address is
www.gettyrealty.com. Our website contains a hyperlink to the EDGAR database of the Securities and Exchange Commission at
www.sec.gov where you can access, free-of-charge, each exhibit that was filed or furnished with our 2021 Annual Report on Form 10-K.
105
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly
caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Getty Realty Corp.
(Registrant)
By:
By:
/S/ Brian Dickman
Brian Dickman
Executive
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
February 24, 2022
/S/ Eugene Shnayderman
Eugene Shnayderman
Chief Accounting Officer and Controller
(Principal Accounting Officer)
February 24, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been
signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By:
By:
By:
By:
/S/ CHRISTOPHER J. CONSTANT
Christopher J. Constant
President, Chief Executive Officer and Director
(Principal Executive Officer)
February 24, 2022
/S/ PHILIP E. COVIELLO
Philip E. Coviello
Director
February 24, 2022
/S/ Mary Lou Malanoski
Mary Lou Malanoski
Director
February 24, 2022
/s/ Evelyn Infurna
Evelyn Infurna
Director
February 24, 2022
By:
By:
By:
/S/ MILTON COOPER
Milton Cooper
Director
February 24, 2022
/S/ Howard Safenowitz
Howard Safenowitz
Director and Chairman of the Board
February 24, 2022
/S/ RICHARD E. MONTAG
Richard E. Montag
Director
February 24, 2022
106
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
BOARD OF DIRECTORS
EXECUTIVE OFFICERS
CORPORATE INFORMATION
Christopher J. Constant
President and Chief Executive Officer
Getty Realty Corp.
Christopher J. Constant
President and Chief Executive Officer
Annual Meeting of Shareholders
April 26, 2022
Virtual Meeting
Milton Cooper
Executive Chairman of the
Board of Directors
Kimco Realty Corporation
Philip E. Coviello
Retired Partner
Latham & Watkins LLP
Evelyn León Infurna
Senior Vice President,
Investor Relations
SmartRent.com Inc.
Mary Lou Malanoski
Chief Financial Officer
Colony S2k Holdings
Richard E. Montag
Former Senior Executive
Richard E. Jacobs Group
Howard B. Safenowitz
President
Safenowitz Family Corp.
Joshua Dicker
Executive Vice President,
General Counsel and Secretary
Brian R. Dickman
Executive Vice President,
Chief Financial Officer
and Treasurer
Mark J. Olear
Executive Vice President,
Chief Operating Officer
Investor Relations
(646) 349-0822
ir@gettyrealty.com
Independent Auditor
PricewaterhouseCoopers LLP
New York, NY
Transfer Agent
Computershare Inc.
462 South 4th Street,
Suite 1600
Louisville, KY 40202
(800) 368-5948
www.computershare.com
Corporate Headquarters
Getty Realty Corp.
292 Madison Avenue,
9th Floor
New York, NY 10017
(646) 349-6000
www.gettyrealty.com
GETTY REALTY CORP.
292 Madison Avenue, 9th Floor
New York, NY 10017