2022 Annual Report
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, 2022, the
Company’s portfolio included
1,039 properties in 38 states
across the United States plus
Washington, D.C.
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
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
2022
1,039
165,588
102,487
2.14
1.66
$
$
$
$
2021
1,028
155,408
94,967
2.08
1.58
$
$
$
$
2020
959
147,346
83,317
1.94
1.50
$
$
$
$
65%
Top 50 MSA
71%
Corner Locations
8.8
Years WALT
99.8%
Occupied
$154M
2.7X
ABR
Tenant Rent Coverage
1
GETTY REALTY 2022 Annual Report Dear Shareholders
Christopher J. Constant President and Chief Executive Officer
2022 proved to be a strong
year for Getty Realty, from
both a financial performance
and growth perspective. We
continued to accomplish our
goals and provided sector-
leading total returns for our
shareholders.
2
As Chief Executive Officer, I am proud of the resilience
of our portfolio, the stability of our balance sheet, and
the hard work of our team, which allowed us to deliver
solid results and position Getty for continued success.
We began 2022 with business as usual. Starting
in February, however, we began to feel the impact
of a turbulent macroeconomic environment. The
outbreak of a foreign war and surging inflation in
the U.S. pushed costs for goods and labor higher.
These external factors contributed to a correction in
the capital markets, which increased capital costs
and disrupted the transaction market for most asset
types, including the convenience and automotive retail
properties in which we invest.
For our management team, 2022 reinforced that we
can only control our own actions, and there are times
when the broader economy dictates that we must
remain disciplined and nimble so that we can adapt
and produce sustained long-term success. This type
of patient execution by the team at Getty was on full
display last year as we overcame challenges, posted
strong results, and put our Company in an excellent
position to deliver on our long-term growth and
diversification objectives.
Navigating an Evolving Transaction Marketplace
The transaction market for real estate in our target
retail sectors began 2022 with pricing at record highs
and what seemed like a never-ending pool of well
capitalized buyers competing for every property.
Getty underwrote $6.4 billion of opportunities across
our five convenience and automotive retail asset
classes. Despite market pressure, we maintained
our disciplined approach to underwriting and did not
chase opportunities that were outside of our return
thresholds or quality standards. Nevertheless, our
consistent presence in the market, deep industry
relationships, and strong acquisition sourcing
capabilities led to success in the second half of 2022
as pricing for real estate began to reflect the reality of
higher capital costs.
Successfully Diversifying Our Portfolio
For the year, Getty invested more than $157 million
in 52 properties, with a key theme of our investment
activity being diversification. We diversified our
portfolio composition by allocating approximately 30%
of our investment spending to convenience stores, and
more than 70% to other convenience and automotive
retail real estate (express car washes, auto service
centers, and drive-thru quick serve restaurants). We
diversified our tenant roster by adding new tenants
to the portfolio and expanding into more meaningful
relationships with several existing tenants. Finally,
we diversified our geographic footprint by expanding
our presence in a number of attractive metro areas
including Austin, Charleston (South Carolina),
Charlotte, Las Vegas, and San Antonio.
As just a few examples of the growing tenant
relationships in which we take so much pride, during
2022, we increased our activity with Refuel, Inc.,
Go Car Wash and Splash Car Wash. Refuel is one
the fastest growing convenience store chains in the
U.S. and we are proud to be a trusted real estate
financing partner for them. And, in a car wash sector
that is experiencing rapid growth, we are excited to
have expanded our relationships with Go Car Wash
and Splash Car Wash, two of the best and largest
operators in the business, and look forward to
continuing to grow with these brands.
Portfolio
Composition
72% Convenience
& Gas
13% Car Wash
11% Legacy Gas
& Repair
3% Auto Service
1% Drive Thrus
<1% Auto Parts
<1% Other Retail
Executing on Our Formula for Success
We remain focused on originating, underwriting, and
executing real estate transactions in the convenience
and automotive retail sector. Convenience stores,
express car washes, auto service centers, auto parts
retailers, and drive thru retail, including quick-service
restaurants, have proven their resiliency as they
continue to (i) provide essential goods and services
which are largely recession and e-commerce resistant,
and (ii) meet the demands of an American consumer
who increasingly prioritizes convenience and “do
it for me” service. The fragmented nature of these
industries provides significant runway for operators
to grow, and Getty remains a key source of capital for
acquisitions, investments in new stores, and other
capital improvements (branding and technology) that are
characteristic of the most successful operators today.
Getty’s success investing in these asset classes can
be attributed to three key aspects of our strategy that
we believe benefit both investors and operators: (i) our
knowledge – we are experts in the industries in which
we own properties and take pride in our ability to
quickly underwrite real estate and provide indications
of whether a transaction aligns with our investment
objectives; (ii) our relationships – we value our
tenants and are proud of the fact that more than 85%
of our closed transactions over the past three years
3
GETTY REALTY 2022 Annual Report National Footprint with
Concentrations in High
Density Metropolitan Areas
% of ABR
19%
0%
17%
New York
8%
Washington, D.C.
5%
Boston
4%
Columbia, SC
3%
Denver
were sourced directly by our acquisitions team through
existing relationships or new business development;
and (iii) our track record – we are recognized for
our deal making and solution-oriented approach to
constructively and efficiently closing transactions
across a range of property types and deal structures.
We continue to believe that combining traditional
sale-leaseback financing with development funding
for new-to-industry sites allows Getty to best support
tenants as they grow their businesses through a
combination of acquisitions, ground-up development
or redevelopment, and modernization of existing
stores. As further demonstration of the success of our
flexible approach, we ended the year with a substantial
forward-looking pipeline of more than $100 million of
investments under contract.
Continued Portfolio Health and Optimization
Getty maintains a healthy in-place portfolio supported
by stable triple-net leases and a roster of tenants
with growing and profitable businesses. In addition
to growing and diversifying our portfolio through
our investment platform, we further enhance the
composition of our portfolio through active asset
management, including selective dispositions, leasing,
and redevelopment projects.
For the year ended 2022, we disposed of 24 properties
for $26 million and reduced our exposure to certain
property types, tenants, and geographies that no longer
met our long-term investment criteria. The majority of
the proceeds came from the sale of 14 properties that
were part of a larger portfolio in upstate New York with
the balance being comprised of the sale of one-off, non-
core assets. We also reduced the number of properties
that we lease from third parties by five in 2022, bringing
our leased property count to 42 at year-end.
Our redevelopment program continued to produce
results in 2022 as we completed two projects that
added Chase Bank and Murphy USA as new high-
quality tenants to our portfolio. We invested a total
of $1.1 million in these projects and generated an
incremental return on our investment of more than
15%. We also signed three new leases for future
4
Our 2022 financial results, strategic growth and
capital markets activities resulted in our Board’s
decision to increase our dividend by 4.9% to an
annualized rate of $1.72 per share
projects with national and regional tenants, and
we maintain a solid pipeline. We 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.
The net result of our asset management activities is a
healthy portfolio of 1,039 freestanding retail properties
located in 38 states across the U.S. with stable rent
coverage of 2.7x and an overall occupancy of 99.8% -
the highest level achieved by the Company in 10 years.
Strong Capital Markets Execution
In the net lease sector, access to and cost of capital
are critical to a company’s ability to grow its business.
In 2022, we effectively, and creatively, raised more
than $340 million of permanent debt and equity
capital at attractive rates that we believe provide for an
accretive spread to our initial investment yields.
Specifically, in February 2022, we closed on a $225
million private placement of senior unsecured notes
that included $100 million of notes priced at 3.45%
and funded at closing, and $125 million of notes priced
at 3.65% with a 12-month delayed draw that funded in
January 2023. We felt good about this transaction at
the time of execution, but given the passage of time
and the current interest rate environment, our ability
to lock in significant debt capital at these rates looks
especially attractive. In addition to providing capital to
fund our investment activity, we used a portion of the
proceeds from the new notes to accretively refinance
$75 million of 5.35% senior unsecured notes due in
June 2023, our only debt maturity until 2025.
We also selectively utilized our at-the-market (“ATM”)
equity program in the second half of the year to raise
$117.6 million at a weighted average of $31.61/share,
which set records for both the most equity we have
issued through the ATM program in a single year and
the highest average price per share. We are particularly
pleased with our ability to execute 100% of this ATM
activity on a forward basis, which allows us to lock in
what we deem to be attractive pricing, but not actually
issue the shares until we are ready to deploy the funds.
The ATM program continues to be a valuable financing
tool for our Company, as it is a cost effective and
efficient way to match fund, or in certain cases pre-
fund, our acquisition and redevelopment activity.
In addition to our capital raising activities, we continue
to maintain a conservative balance sheet with leverage
in the middle of our target range of 4.5x to 5.5x net
debt to EBITDA, no near term debt maturities, and a
weighted average term of our indebtedness of more
than 6 years, the longest in the Company’s history.
As a result of our disciplined and thoughtful approach
to capital raising and balance sheet management, we
have significant capacity to fund our growth plans.
Driving Growth and Shareholder Returns
Our 2022 financial results reflect the entirety of our
achievements discussed above. For the year, we
increased the annual base rent generated by our
portfolio by more than 6%, improved our adjusted
funds from operations (“AFFO”) profit margin by
more than 80 basis points, and grew AFFO/share by
3% to $2.14.
5
GETTY REALTY 2022 Annual Report We view ESG as an ongoing evolution and for 2023
we have committed to two projects to further the
Company’s ESG reporting. First, we are working
directly with our tenants to better understand their
corporate ESG policies and practices, including
sustainability initiatives at properties leased from
Getty. Second, we engaged a variety of our
stakeholders to provide their feedback on the
Company’s ESG priorities through a formal materiality
assessment. We look forward to reporting the results
of this outreach when we publish our 2023 corporate
responsibility report.
Defining Future Success at Getty
While we are pleased with our ability to successfully
navigate a changing landscape in 2022, we are
equally excited with our positioning as we enter
2023. We believe Getty is poised for success due to
our flexible capital position, experienced team, deep
relationships, and commitment to providing real estate
financing solutions to convenience and automotive
retailers. Our team is fully aligned with respect to
our 2023 goals; we know what it will take to operate
efficiently, and how we can best achieve our growth
and diversification objectives. This unwavering focus,
combined with our existing investment pipeline and
funded capital position, positions us well for success
in 2023 and beyond.
Thank You!
As always, I want to thank the dedicated team of 32
professionals at Getty for completing an outstanding
year despite difficult market conditions, and I want
to thank the Board of Directors for their continued
support. I also want to reiterate how proud I am of
our successful evolution and how excited I am for the
future of this Company. I look forward to another year
of growth and success for Getty!
Best Regards,
Christopher J. Constant
President and Chief Executive Officer
The Company’s strong financial performance, strategic
growth activities, and constructive outlook resulted in
our Board’s decision to increase our dividend by 4.9%
to an annualized rate of $1.72 per share – making 2022
the eighth 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.
It is also noteworthy that the market recognized the
quality of Getty’s portfolio and potential of its platform
in 2022, as our shares materially outperformed other
net lease REITs and helped to deliver an 11.7% total
return to Getty shareholders, including dividends, which
was among the best performances of all REITs in 2022.
Ongoing Commitment to Effective ESG Practices
Getty formally commenced its efforts to report on
our Environmental, Social and Governance (“ESG”)
programs in 2022 and these efforts culminated with
the publishing of our inaugural corporate responsibility
report in June.
We remain committed to best practices regarding the
protection of our assets and the environment and, in
early 2022, launched our Getty Green Loans program
which provides low-cost loans to our tenants for
qualified environmental and sustainability projects.
We also took steps to prioritize our employees
throughout the year by forming a Culture Committee
that engages with our team members to provide
professional development and organized team activities.
In 2022, we launched Getty Gives, a program that
supports causes dear to us and the communities in
which we live and work. For the year, I am pleased to
report that Getty made corporate charitable donations
to two organizations selected by our employees, and
matched employee charitable donations to several
worthy causes. Getty also expanded its philanthropic
initiatives in 2022 by launching a pro bono legal services
program which completed an initial project providing
representation to a local nonprofit organization that
supports low-income housing needs.
With respect to governance, our Board of Directors
proposed several changes to our by-laws in 2022, which
were approved by stockholders, and which we believe
further strengthen our corporate governance practices.
6
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022
OR
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 ☒ No ☐
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 ☐ No ☒
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 ☒ No ☐
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 ☒ No ☐
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
☒
Accelerated filer
☐
☐
Smaller reporting company
Non-accelerated filer
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. ☐
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. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Emerging growth company
☐
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of common stock held by non-affiliates (based on 41,843,833 shares of common stock at a closing price per share of the registrant’s common
stock on the New York Stock Exchange at $26.50) of the Company was $1,108,900,000 as of June 30, 2022.
The registrant had outstanding 46,737,837 shares of common stock as of February 23, 2023.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT
Selected Portions of Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders (the “Proxy Statement”), which will be filed by the
registrant on or prior to 120 days following the end of the registrant’s year ended December 31, 2022, pursuant to Regulation 14A.
PART OF
FORM 10-K
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
1
Business
1A Risk Factors
1B Unresolved Staff Comments
2
3
4
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
5
6
7
7A Quantitative and Qualitative Disclosures About Market Risk
8
9
9A Controls and Procedures
9B Other Information
9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
10 Directors, Executive Officers and Corporate Governance
11
12
13
14
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 III
PART IV
15
16
Exhibits and Financial Statement Schedules
Form 10-K Summary
Exhibit Index
Signatures
3
5
9
24
24
26
29
30
31
32
45
46
74
74
74
74
75
75
75
75
75
76
76
96
101
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, express tunnel 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 COVID-19 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 changes to our dividend policy;
changes in market conditions; provisions in our corporate charter and by-laws; Maryland law discouraging a third-party takeover;
3
adverse effects of 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 presence of COVID-19,
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. (“Getty Realty”) (NYSE: GTY), 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 predecessor was originally founded in 1955 and our common stock was listed on the New York Stock Exchange (“NYSE”)
in 1997. Unless otherwise expressly stated or the context otherwise requires, the “Company,” “we,” “us,” and “our” as used herein refer
to Getty Realty and its owned and controlled subsidiaries.
Our portfolio includes convenience stores, car wash properties, automotive service centers (gasoline and repair, oil and
maintenance, tire and battery, and collision), automotive parts retailers, and certain other freestanding retail properties, including drive-
thru quick service restaurants. Our 1,039 properties as of December 31, 2022 are 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 23, 2023, we had 32 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 increasingly prioritize convenience, speed, and service. During the year ended December
31, 2022, we continued to grow and diversify our investments in convenience, automotive and other freestanding retail properties
through fee simple acquisitions and construction loan advances for new-to-industry developments. We were also active raising capital
to fund our investment activity through the issuance of new senior unsecured notes, and by entering into forward agreements to sell
common shares through our at-the-market equity offering program.
During the year ended December 31, 2022, we invested $157.5 million across 52 properties, including the acquisition of fee
simple interests in 40 properties for an aggregate purchase price of $137.3 million. The properties we acquired included nine convenience
stores, 16 car wash properties, 14 automotive services centers and one drive-thru quick service restaurant. In addition, we advanced
construction loans in the amount of $20.2 million, including accrued interest, for the development of 12 new-to-industry convenience
stores and car wash properties. In total, convenience stores represented approximately 30% of our investment activity during the year,
while other convenience and automotive retail properties made up the remaining 70% of our investments. We also added four new
tenants to our portfolio, expanded our relationships with several existing tenants, and added or increased exposure to a number of
attractive metropolitan areas, including Austin, Charleston (SC), Charlotte, Las Vegas, and San Antonio. For additional information
regarding our property acquisitions see Note 12 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K.
During the year ended December 31, 2022, we sold 24 properties that generated gross proceeds of approximately $26.0 million
and reduced our exposure to certain property types, tenants, and geographies that no longer met our long-term investment criteria. For
additional information regarding our property dispositions see Note 11 in “Item 8. Financial Statements and Supplementary Data” in
this Form 10-K.
In February 2022, we closed on the private placement of $225.0 million of new senior unsecured notes, including (i) $100.0
million of 3.45% notes that funded at closing and mature in February 2032, and (ii) $125.0 million of 3.65% notes that funded in January
2023 and mature in January 2033. Proceeds from the notes funded at closing were used to repay all amounts then outstanding under our
senior unsecured revolving credit facility and for general corporate purposes, including to fund investment activity. Proceeds from the
delayed funding notes were used to prepay $75.0 million of 5.35% senior unsecured notes maturing in June 2023 and for general
corporate purposes, including to fund investment activity. For additional information regarding our senior unsecured notes see “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note
4 in “Item 8. Financial Statements and Supplementary Data” in this Form 10-K.
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During the year ended December 31, 2022, we entered into forward sale agreements to sell an aggregate of 3.7 million shares of
common stock for anticipated gross proceeds of $117.6 million through our at-the-market equity offering program. No shares were
settled during the year ended December 31, 2022. 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.
Our Properties
As of December 31, 2022, our portfolio included 1,039 properties, of which we owned 997 properties and leased 42 properties
from third-party landlords. Our properties are located in 38 states and Washington D.C. and 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 property consists of approximately one acre of land in a larger metropolitan area and is used as a convenience store, express
tunnel car wash, automotive service center, automotive parts retailer, or 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.
As of December 31, 2022, we leased 1,034 of our properties to tenants under triple-net leases, including 866 properties leased
under 37 separate unitary or master triple-net leases, and 168 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, 2022, our weighted average remaining lease term, excluding renewal options, was 8.8 years.
Substantially all of our properties are leased 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. For
additional information regarding risks related to our tenants’ dependence on the performance of the industry, see “Item 1A. Risk Factors
– Significant number of our tenants depend on the same industry for their revenues” in this Form 10-K.
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.
As of December 31, 2022, we were also actively redeveloping three of our properties as new convenience stores or for alternative
single tenant retail uses, and two of our properties were vacant.
Human Capital Resources
As of December 31, 2022, we had 32 full-time employees, all of which are located in our New York office.
We are dedicated to conducting our business consistent with the highest standards of business ethics. Our Business Conduct
Guidelines and Employee Handbook govern our standards and policies with respect to our people, our partners, our health and safety,
and our IT security.
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 prioritize empathy and flexibility to support the safety, health, and security of each member of our team and ensure they
are able to meet their personal and family needs, as well as their professional goals. In 2022, we implemented a permanent hybrid work
schedule, allowing team members to work from home two days per week while maintaining COVID-related policies that support the
overall health and wellness of our people and our office space.
We appreciate the important role that our team and the Company play in the communities in which we live and operate. We
support individual volunteerism and provide team members with work schedule flexibility to support causes and organizations that are
meaningful to them. In 2022, we implemented our Getty Gives program to facilitate volunteerism and charitable contributions in support
of our communities and other causes meaningful to our team members. We also launched a pro bono legal services program to benefit
communities in need and provide opportunities for personal philanthropic fulfillment.
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, compensation and advancement are all based on qualifications, performance, skills and experience.
We continue to emphasize employee development and training and our employees are offered regular opportunities to participate in
formal and informal professional development through in-person training and online learning resources. We also support and pay for
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external education classes and seminars requested by our employees if doing so will advance their work-related skills or professional
development.
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, 2022, we invested $157.5 million across 52 properties, including the acquisition of fee simple
interests in 40 properties for an aggregate purchase price of $137.3 million. The properties we acquired included nine convenience
stores, 16 car wash properties, 14 automotive services centers and one drive-thru quick service restaurant. We also advanced construction
loans in the amount of $20.2 million, including accrued interest, for the development of 12 new-to-industry convenience stores and car
wash properties.
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 and one drive-thru quick service restaurant. We also advanced construction
loans in the amount of $5.7 million, including accrued interest, for the development of three new-to-industry convenience stores.
For additional information regarding our property acquisitions, see Note 12 in “Item 8. Financial Statements and Supplementary
Data” in this Form 10-K.
Over the last five years, we have acquired 239 properties, including single property and portfolio transactions located in various
states, for an aggregate purchase price of $646.7 million.
Redevelopment Strategy and Activity
We believe that certain of our properties, primarily those currently being used as 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, 2022 and 2021, rent commenced on two and five 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 26 redevelopment projects.
For the year ended December 31, 2022, we spent $0.1 million (net of write-offs) of construction-in-progress costs related to our
redevelopment activities and transferred $36 thousand of construction-in-progress to buildings and improvements on our consolidated
balance sheet. 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.
As of December 31, 2022, we had three properties under active redevelopment and others in various stages of feasibility planning
for potential recapture from our net lease portfolio, including one property for which we have signed a new lease and which will be
transferred to redevelopment when the appropriate entitlements, permits and approvals have been secured.
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.
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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 substantially all of our triple-net leases,
contractual 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 with 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.
Climate Change
As an organization, we are committed to the protection of our assets, communities, and the environment. We emphasize
sustainability at our new corporate headquarters where we utilize energy efficient computer equipment, filtered water machines, and
timed or sensor-controlled HVAC and lighting systems, among other sustainability practices. In 2022, we began tracking our
environmental footprint within our leased corporate office space including monitoring monthly energy usage, recycling efforts, and
waste disposal. With our landlord’s support, we will work to construct a full picture of our environmental footprint, maximize diversion
of recyclable waste in accordance with local regulations, and implement energy conservation measures in our leased space as appropriate
and feasible.
Under our triple-net leases, tenants are responsible for operating the businesses conducted at our sites, keeping the properties in
good order and repair, and making capital investments as they deem appropriate to optimize their business operations. As such, it is our
tenants who control the environmental impact of their operations, including energy efficiency, water usage, and waste and recycling
practices, and decide when and how to adopt environmentally sustainable practices and make related investments.
We are pleased that many of our tenants have already completed environmental and sustainability projects, including upgrading
to LED lighting, installing energy efficient coolers and HVAC units, and, in select cases, installing electric vehicle (EV) charging
stations at our properties. We appreciate that many of our tenants have completed these “green” projects with their own capital and/or
have taken advantage of government and other subsidies for qualifying renewable energy technologies and projects. As part of our
commitment to Environmental, Social, and Governance matters, in 2022 we implemented our “Getty Green Loans” program to provide
low-cost loans to our tenants for the express purpose of investing in environmental and sustainability projects.
As discussed above, we also maintain a robust redevelopment program that repositions select properties within our portfolio to
uses other than traditional gas stations, including modern convenience stores or alternative property uses such as automotive parts
retailers, quick service restaurants, and multifamily residential buildings, among others. We continue to look for opportunities within
8
our portfolio to redevelop properties for less environmentally sensitive uses and to support economic growth in communities where our
properties are located.
For additional information, see “Item 1A. Risk Factors” and “Environmental Matters” in “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations” 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.
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:
Summary of Risk Factors
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.
•
•
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 (including the escalating conflict between Russia and Ukraine
and the related impact on macroeconomic conditions as a result of such conflict).
• Our exposure to counterparty risk.
9
•
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, results of operations, and financial condition may be impacted by the continued presence of COVID-19.
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.
•
Interest rate risk and our ability to manage or mitigate this risk effectively.
• Adverse effects by the transition from LIBOR.
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.
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.
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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 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.
11
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 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
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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. Under applicable laws, 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 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). Substantially all of these 10-year (or, in certain cases, shorter) “look
back” periods have now expired, therefore responsibility for all newly discovered contamination, even if it relates to periods prior to
commencement of these leases, is contractually allocated to our tenant. Our tenants at properties previously leased to Marketing are in
all cases contractually 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 (i.e., leases covering properties not previously leased to Marketing),
contractual 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 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,
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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.
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, 2022, 34.4% of our annual base rent is derived from four states (New York, Massachusetts, Maryland, 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
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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 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.
As of December 31, 2022, we leased:
•
•
•
150 properties in three separate unitary leases and two stand-alone leases to subsidiaries of Global which represented, in the
aggregate, 16% of our total revenues for the years ended December 31, 2022 and 2021.
128 properties in four separate unitary leases to subsidiaries of Arko which represented, in the aggregate, 14% of our total
revenues for the years ended December 31, 2022 and 2021.
78 properties in three separate unitary leases and one stand-alone lease to United Oil which, in the aggregate, represented
11% of our total revenues for the years ended December 31, 2022 and 2021.
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 Generally Accepted Accounting Principles (”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, 2022 and 2021, we incurred $3.5
million and $4.4 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.
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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, 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 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 32 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.
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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 cyber
security 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 cyber attacks. 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 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, results of operations, and financial condition may be impacted by the continued presence of COVID-19 and such
impact could be materially adverse.
The global spread of COVID-19 created significant volatility, uncertainty, and economic disruption. The extent to which the
continued presence of COVID-19 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 governmental, business, and individual actions taken in response
to COVID-19 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 COVID-19 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 fluidity of this situation precludes any prediction as to the full adverse impact of COVID-19 . Nevertheless, the COVID-19
continues to present 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, 2022, should
be interpreted as heightened risks as a result of the impact of COVID-19.
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 Second Restated Credit
Agreement, proceeds from the sale of shares of our common stock through offerings, from time to time, under our ATM Program,
pursuant to which we may also sell shares of common stock under forward sale agreements, and available cash and cash equivalents. In
2021, 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
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$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, 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. As of December 31, 2022, we have also issued $625.0 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
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 allows 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
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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, 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.
On December 22, 2022, we entered into an amendment to the Second Amended and Restated Credit Agreement to transition the
applicable interest rates and default rate thereunder from LIBOR-based rates to SOFR-based rates. Accordingly, as of December 31,
2022, we had no 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,
19
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 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:
20
•
•
•
•
•
•
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;
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 distribution
21
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
need for capital. In such cases, we could be required to issue and deliver shares of shares of our common stock under the physical
22
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.
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
23
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.
24
The following table summarizes the geographic distribution of our properties as of December 31, 2022. 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
Texas
Connecticut
South Carolina
Virginia
New Jersey
New Hampshire
Maryland
Michigan
North Carolina
California
Washington State
Arizona
Colorado
Ohio
Pennsylvania
Nevada
Oregon
Arkansas
Hawaii
Kansas
Missouri
Maine
Kentucky
Georgia
New Mexico
Florida
Illinois
Louisiana
Oklahoma
Alabama
Indiana
Mississippi
Rhode Island
Washington, D.C.
Minnesota
North Dakota
Vermont
Total
179
99
78
68
49
48
43
45
40
41
36
34
31
23
23
23
21
14
13
11
10
8
8
7
6
5
5
4
4
4
4
2
2
2
2
2
1
1
1
997
24
5
—
6
—
1
4
—
2
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
42
203
104
78
74
49
49
47
45
42
41
36
34
31
23
23
23
21
14
13
11
10
8
8
7
6
5
5
4
4
4
4
2
2
2
2
2
1
1
1
1,039
19.5%
10.0
7.5
7.1
4.7
4.7
4.5
4.3
4.0
3.9
3.5
3.3
3.0
2.2
2.2
2.2
2.0
1.3
1.3
1.1
1.0
0.8
0.8
0.7
0.6
0.5
0.5
0.4
0.4
0.4
0.4
0.2
0.2
0.2
0.2
0.2
0.1
0.1
0.1
100.0%
25
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:
2023
2024
2025
2026
2027
Subtotal
Thereafter
Total
Number of
Leases
Expiring
Percent of
Total Leased
Properties
Percent
of Total
Properties
3
4
2
5
4
18
24
42
7.2%
9.5
4.8
11.9
9.5
42.9
57.1
100.0%
0.3%
0.4
0.2
0.5
0.4
1.8
2.3
4.1%
For the year ended December 31, 2022, revenues from rental properties, which includes base rental income, additional rental
income, if any, and certain GAAP revenue recognition adjustments, were $163.9 million, an average of approximately $160,000 per
property given the 1,025 average rental properties held during the year. For the year ended December 31, 2021, revenues from rental
properties were $153.9 million, an average of $153,000 per property given the 1,004 average rental properties held during the year.
Rental property lease expirations and annualized base rent (“ABR”) as of December 31, 2022 are as follows (dollars in thousands):
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
Thereafter
Subtotal
Redevelopment
Vacant
Total
Number of
Properties (a)
ABR (b)
Percentage
of Total ABR
25
17
21
68
270
45
75
46
64
138
265
1,034
3
2
1,039
$
$
$
2,764
1,791
4,462
13,614
22,407
7,975
12,196
5,494
9,756
17,770
55,862
154,091
—
—
154,091
1.8%
1.2
2.9
8.8
14.5
5.2
7.9
3.6
6.3
11.5
36.3
100.0%
—
—
100.0%
(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 base rent due from tenants under existing leases as of December 31, 2022, 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, 2022 and
2021, we had accrued $0.3 million and $1.9 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, 2022, 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.
26
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.
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 potentially responsible parties (“PRPs”) with respect to 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”). The LPRSA is part of the
Diamond Alkali Superfund Site (“Superfund Site”) that includes the former Diamond Shamrock Corporation manufacturing facility
located at 80-120 Lister Ave. in Newark, New Jersey (the “Diamond Shamrock Facility”), the LPRSA, and the Newark Bay Study Area
(i.e, Newark Bay and portions of surrounding rivers and channels). One of the GNL recipients is Occidental Chemical Corporation
(“Occidental”), the predecessor to the former owner/operator of the Diamond Shamrock Facility responsible for the discharge of 2,3,8,8-
TCDD (“dioxin”) and other hazardous substances. 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 to address investigation and evaluation of alternative remedial actions with respect to alleged damages to the
entire 17-mile LPRSA, which EPA has designated Operable Unit 4 or “OU4”. Many of the parties to the AOC, including us, are also
members of a Cooperating Parties Group (“CPG”). In 2015, the CPG submitted a draft RI/FS to EPA setting forth various alternatives
27
for remediating 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 identified various targeted dredge and cap
alternatives for the upper 9-miles of the LPRSA. On September 28, 2021, the EPA issued a Record of Decision (“ROD”) for the upper
9-mile IR/FS (“Upper 9-mile IR ROD”) consisting of dredging and capping to control sediment sources of dioxin and PCBs at an
estimated cost of $441 million.
In addition to the RI/FS activities, 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, which remedial work has been completed. 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
8.3-miles of the LPRSA. On March 4, 2016, the EPA issued a ROD for the lower 8.3-miles (“Lower 8-mile ROD”) selecting a remedy
that involves bank-to-bank dredging and installing an engineered cap with an estimated cost of $1.38 billion.
On March 31, 2016, the EPA issued a “Notice of Potential Liability and Commencement of Negotiations for Remedial Design”
(“Notice”) to more than 100 PRPs, including us, 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 Facility and a discharger of other contaminants of concern
(“COCs”) to the Superfund Site) requiring Occidental to prepare the remedial design of the remedy selected in the Lower 8-mile ROD.
The EPA has designated the lower 8.3 miles of the LPRSA as Operable Unit 2 or “OU2”, which is geographically subsumed within
OU4. On September 30, 2016, Occidental entered into an agreement with the EPA to perform the remedial design for OU2.
By letter dated March 30, 2017, the EPA advised the recipients of the Notice that it would be entering into cash out settlements
with certain PRPs who the EPA stated did not discharge any of the eight hazardous substances identified as a COC in the Lower 8-mile
ROD to resolve their alleged liability for OU2. Cash out settlements were finalized in 2018 and 2021 with a total of 21 PRPs. EPA’s
March 30, 2017 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 such other PRPs for negotiation of future cash out settlements and to initiate negotiations with Occidental and
other major PRPs for the implementation and funding of the OU2 remedy. In August 2017, the EPA appointed an independent third-
party allocation expert to conduct a confidential allocation proceeding that would assign non-binding shares of responsibility to PRPs
identified by EPA for cash out settlements. Most of the PRPs identified by EPA, including the Company, participated in the allocation
process. Occidental did not participate in the allocation proceedings, but filed a complaint on June 30, 2018, listing over 120 defendants,
including us, 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 response costs incurred and to be incurred relating to the
LPRSA, including the investigation, design, and anticipated implementation of the OU2 remedy (the “Occidental Lawsuit”). We
continue to defend the claims asserted in the Occidental Lawsuit individually and in coordination with a group of several other named
defendants known as the “Small Parties Group” or “SPG” consistent with our defenses in the related proceedings. On December 20,
2022, the parties filed an uncontested motion to stay the Occidental Lawsuit proceedings for six months while the court considers a
proposed consent decree, discussed below, which, if approved, would bar the claims asserted against us for past and/or future response
costs relating to the LPRSA, including the OU2 remedy.
The allocator issued a final Allocation Recommendation Report in December 2020, which was based upon an allocation
methodology approved by EPA that contains associated allocation shares for each of the parties invited to participate in the allocation,
including Occidental - who the allocator concluded was responsible for more than 99% of the costs to implement the OU2 remedy. As
a result of the allocation process, the EPA and 85 parties (the “Settling Parties”), including us, began settlement negotiations and reached
an agreement on a cash-out settlement to resolve their alleged liability for the remediation of the entire LPRSA. The EPA concluded
that the Settling Parties, individually and collectively, were responsible for only a minor share of the response costs incurred and to be
incurred at or in connection with implementing the OU2 and OU4 remedies for the entire 17-mile Lower Passaic River.
28
In December 2022, the EPA and the Settling Parties finalized their agreement in a proposed consent decree (“CD”), pursuant to
which and without admitting liability, the Settling Parties agree to pay EPA the collective sum of $150 million in exchange for
contribution protection from claims by non-settling PRPs (including Occidental) for the matters addressed in the CD and the issuance
of a notice of completion by EPA of both the 2007 RI/FS AOC and the 10.9 AOC, upon completion of certain defined tasks in the CD.
All 85 Settling Parties contributed an agreed upon share of the settlement amount, which are subject to a confidentiality agreement. Our
settlement contribution is in line with our legal reserves previously established and transferred to an escrow account based on likelihoods
reasonably known to us at this time. On December 16, 2022, the United States filed an action in the New Jersey District Court against
the Settling Defendants which included lodging of the proposed CD to resolve claims against the Settling Parties for costs associated
with cleaning up the LPRSA. This action (the “CD Action”) is subject to public comment and court approval. On December 22, 2022,
the EPA published a notice of lodging of the proposed CD in the Federal Register, opening a 45-day public comment period, which was
subsequently extended to 90-days. On December 23, 2022, Occidental filed a motion to intervene in the CD Action contending that it
intends to challenge the proposed CD and seek to preserve its contribution claims against the Settling Parties in the pending Occidental
Lawsuit.
If the CD Action is approved in its current form, our alleged liability to the EPA as well as any non-settling parties, including
Occidental, for the remediation of the entire 17-mile Lower Passaic River and its tributaries will be resolved. In the event the District
Court does not approve the proposed CD, based on currently known facts and circumstances, including, among other factors, the EPA’s
conclusion that we are individually and collectively with numerous other parties only responsible for a minor share of the response costs
incurred or to be incurred in connection with the LPRSA, our relative participation in the costs related to the 2007 AOC and 10.9 AOC,
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 that there are numerous other parties who will likely bear the costs
of remediation and/or damages, we do not believe that resolution of the Lower Passaic River proceedings as relates to us is reasonably
likely to have a material impact on our results of operations. Nevertheless, if the proposed CD is not approved by the District Court in
its current form, performance of the EPA’s selected remedies for the LPRSA may be subject to future negotiation, potential enforcement
proceedings and/or possible litigation and, on this basis, our ultimate liability in the pending and possible future proceedings pertaining
to the LPRSA remains uncertain and subject to contingencies which cannot be predicted and the outcome of which are not yet known.
The Company has established an estimated legal reserve and transferred funds to an escrow account based on likelihoods reasonably
known to us at this time, however it is possible that circumstances may change and losses related to the Lower Passaic River proceedings
could exceed the amounts we have accrued.
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 40,505 beneficial
holders of our common stock as of February 1, 2023, of which approximately 800 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*
Source: SNL Financial
Getty Realty Corp.
Standard & Poor's 500
Peer Group
12/30/2017
$ 100.00
100.00
100.00
12/31/2018
115.23
$
97.76
110.99
12/31/2019
141.12
$
120.56
146.50
12/29/2020
117.39
$
146.45
117.99
12/29/2021
142.03
$
191.04
158.25
12/30/2022
160.45
$
155.59
136.92
Assumes $100 invested at the close of the last day of trading on the New York Stock Exchange on December 31, 2017, in Getty
Realty Corp. common stock, Standard & Poor’s 500 and Peer Group.
30
* 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, NETSTREIT Corp., and One Liberty Properties. We have chosen these companies as 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 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
Discussions of 2021 items and year-to-year comparisons between 2021 and 2020 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, 2021.
General
Real Estate Investment Trust
We are a net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single
tenant retail real estate. Our portfolio is comprised of convenience stores, car wash properties, automotive service centers (gasoline and
repair, oil and maintenance, tire and battery, and collision), automotive parts retailers, and certain other freestanding retail properties,
including drive-thru quick service restaurants. As of December 31, 2022, our portfolio included 1,039 properties, including 997
properties owned by us and 42 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.
Our Properties
Our 1,039 properties are located in 38 states and Washington D.C. and include 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 property
consists of approximately one acre of land in a larger metropolitan area and is used as a convenience store, express tunnel car wash,
automotive service center, automotive parts retailer, or 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.
As of December 31, 2022, we leased 1,034 of our properties to tenants under triple-net leases, including 866 properties leased
under 37 separate unitary or master triple-net leases, and 168 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, 2022, our weighted average remaining lease term, excluding renewal options, was 8.8 years.
Substantially all of our properties are leased 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. For
additional information regarding risks related to our tenants’ dependence on the performance of the industry, see “Item 1A. Risk Factors
– Significant number of our tenants depend on the same industry for their revenues” in this Form 10-K.
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.
As of December 31, 2022, we were also actively redeveloping three of our properties as new convenience stores or for alternative
single tenant retail uses, and two of our properties were vacant.
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
32
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, 2022, we invested $157.5 million across 52 properties, including the acquisition of fee simple
interests in 40 properties for an aggregate purchase price of $137.3 million. The properties we acquired included nine convenience
stores, 16 car wash properties, 14 automotive services centers and one drive-thru quick service restaurant. We also advanced construction
loans in the amount of $20.2 million, including accrued interest, for the development of 12 new-to-industry convenience stores and car
wash properties.
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 and one drive-thru quick service restaurant. We also advanced construction
loans in the amount of $5.7 million, including accrued interest, for the development of three new-to-industry convenience stores.
For additional information regarding our property acquisitions, see Note 12 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 used as 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, 2022 and 2021, rent commenced on two and five 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 26 redevelopment projects.
For the year ended December 31, 2022, we spent $0.1 million (net of write-offs) of construction-in-progress costs related to our
redevelopment activities and transferred $36 thousand of construction-in-progress to buildings and improvements on our consolidated
balance sheet. 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.
As of December 31, 2022, we had three properties under active redevelopment and others in various stages of feasibility planning
for potential recapture from our net lease portfolio, including one property for which we have signed a new lease and which will be
transferred to redevelopment when the appropriate entitlements, permits and approvals have been secured.
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 GAAP, we also focus on Funds From Operations (“FFO”) and
Adjusted Funds From Operations (“AFFO”) to measure our performance. As previously disclosed, beginning with our results for the
quarter and year ended December 31, 2021, we updated our definition of AFFO to include adjustments for stock-based compensation
and amortization of debt issuance costs. We believe that conforming to this market practice for calculating AFFO improves the
comparability of this measure of performance to other net lease REITs.
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.
We define AFFO as FFO excluding (i) certain revenue recognition adjustments (defined below), (ii) certain environmental
adjustments (defined below), (iii) stock-based compensation, (iv) amortization of debt issuance costs and (v) other non-cash and/or
unusual items that are not reflective of our core operating performance.
Other REITs may use definitions of FFO and/or AFFO that are different than ours and, accordingly, may not be comparable.
33
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) stock-based
compensation expense, (iv) amortization of debt issuance costs and (v) 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.
We pay particular attention to AFFO which we believe 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.
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
Deferred rental revenue (straight-line rent)
Amortization of above and below market leases, net
Amortization of investments in direct financing leases
Amortization of lease incentives
Total revenue recognition adjustments
Environmental Adjustments
Accretion expense
Changes in environmental estimates
Environmental litigation accruals
Insurance reimbursements
Legal settlements and judgments
Total environmental adjustments
Other Adjustments
Stock-based compensation expense
Amortization of debt issuance costs
Allowance for credit loss on notes and mortgages receivable
and direct financing leases
Loss on extinguishment of debt
Retirement and severance costs
Total other adjustments
Adjusted funds from operations (AFFO)
Basic per share amounts:
Net earnings
FFO (1)
AFFO (1)
Diluted per share amounts:
Net earnings
FFO (1)
AFFO (1)
2022
Year ended December 31,
2021
2020
$
$
$
$
$
$
$
$
90,043
39,902
(16,423)
3,545
117,067
(3,458)
(1,184)
5,392
1,198
1,948
1,259
(23,837)
279
(85)
—
(22,384)
4,775
946
50
—
85
5,856
102,487
1.88
2.45
2.14
1.88
2.44
2.14
$
62,860
35,518
(16,718)
4,404
86,064
(2,778)
(1,221)
4,844
1,119
1,964
1,705
(1,768)
1,909
(92)
(493)
1,261
3,997
1,013
(132)
—
800
5,678
94,967
1.37
1.88
2.08
1.37
1.88
2.08
$
$
$
69,388
30,191
(4,548)
4,258
99,289
(2,903)
(1,438)
4,210
1,026
895
1,841
(3,135)
85
(142)
(21,300)
(22,651)
3,130
1,053
368
1,233
—
5,784
83,317
1.62
2.32
1.94
1.62
2.31
1.94
Weighted average common shares outstanding:
Basic
Diluted
46,730
46,838
44,782
44,819
42,040
42,070
34
(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
Results of Operations
2022
Year ended December 31,
2021
2020
$
2,734
2,394
$
1,771
1,915
$
1,939
1,627
Year ended December 31, 2022, compared to year ended December 31, 2021
The following table presents select data and comparative results from the Company’s consolidated statements of operations for the year
ended December 31, 2022, as compared to the year ended December 31, 2021 (in thousands):
Revenues:
Revenues from rental properties
Interest on notes and mortgages receivable
Operating expenses:
Property costs
Impairments
Environmental
General and administrative
Depreciation and amortization
Other items:
Gains on dispositions of real estate
Interest expense
Revenues from Rental Properties
Year ended December 31,
2021
2022
$ Change
$
163,889
1,699
$
153,886
1,522
$
10,003
177
21,553
3,545
(20,902)
20,621
39,902
16,423
27,662
22,048
4,404
3,548
20,151
35,518
16,718
24,672
(495)
(859)
(24,450)
470
4,384
(295)
2,990
The following table presents the results for revenues from rental properties for the year ended December 31, 2022, as compared
to the year ended December 31, 2021 (in thousands):
Rental income
Revenue recognition adjustments
Tenant reimbursement income
Total revenues from rental properties
$
Year ended December 31,
2021
2022
$
149,098
(1,948)
16,739
163,889
$
138,691
(1,964)
17,159
153,886
$ Change
10,407
16
(420)
10,003
Rental income includes base rental income and additional rental income, if any, based on the aggregate volume of fuel sold at
certain properties. The increase in rental income was primarily due to additional base rental income from properties acquired during the
years ended December 31, 2022 and 2021, as well as rent commencements from completed redevelopments and contractual rent
increases for certain in-place leases, partially offset by dispositions of real estate during the same period.
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 (i) 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, (ii) the net amortization of above-market and below-market leases, (iii) 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 (iv) the amortization of deferred lease incentives.
Tenant reimbursements 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.
Interest on Notes and Mortgages Receivable
The increase in interest on notes and mortgages receivable was primarily due to an increase in construction loan advances for the
development of new-to-industry properties during the years ended December 31, 2022 and 2021, partially offset by collections of notes
and mortgages receivable during the same period.
35
Property Costs
Property costs are comprised of (i) property operating expenses, including rent expense, reimbursable and non-reimbursable real
estate taxes and municipal charges, certain state and local taxes, and maintenance expenses, and (ii) leasing and redevelopment expenses,
including professional fees, demolition costs, and redevelopment project cost write-offs, if any.
The following table presents the results for property costs for the year ended December 31, 2022, as compared to the year ended
December 31, 2021 (in thousands):
Property operating expenses
Leasing and redevelopment expenses
Total property costs
Year ended December 31,
2021
2022
$
$
20,843
710
21,553
$
21,608
440
22,048
$ Change
(765)
270
(495)
The decrease in property costs was primarily due to a decrease in property expenses driven by lower rent expense and reimbursable
and non-reimbursable real estate taxes, partially offset by an increase in state and local taxes, as well as an increase in leasing and
redevelopment expenses driven by an increase in demolition costs for redevelopment projects.
Impairment Charges
Impairment charges are recorded when the carrying value of a property is reduced to fair value. Impairment charges for the years
ended December 31, 2022 and 2021 were attributable to (i) the addition of 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, (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.
Environmental Expenses
The decrease in environmental expenses for the year ended December 31, 2022 was primarily due to a reduction in estimates
related to unknown environmental liabilities. Specifically, during the year ended December 31, 2022, we concluded that there was no
material continued risk of having to satisfy contractual obligations relating to preexisting unknown environmental contamination at
certain properties. Accordingly, we removed $23.5 million of unknown reserve liabilities which had previously been accrued for these
properties. This resulted in a net credit of $22.2 million being recorded to environmental expense for the year ended December 31, 2022.
In addition, during the year ended December 31, 2022, there was a decrease in environmental litigation accruals of $1.6 million.
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 Expenses
The increase in general and administrative expenses was primarily due to a $1.1 million increase in employee-related expenses,
including a $0.8 million increase in stock-based compensation, partially offset by a $0.7 million reduction in non-recurring employee-
related expenses and a $0.4 million decrease in legal and other professional fees.
Depreciation and Amortization Expenses
The increase in depreciation and amortization expense was primarily due to additional depreciation and amortization from
properties acquired during the years ended December 31, 2022 and 2021, partially 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 during
the same period.
Gains on Disposition of Real Estate
The gains on dispositions of real estate were primarily the result of the sale of 24 and 16 properties during the years ended
December 31, 2022 and 2021, respectively.
Interest Expense
The increase in interest expense was due to higher average borrowings and higher average interest rates for the year ended
December 31, 2022, as compared to the year ended December 31, 2021.
36
Liquidity and Capital Resources
General
Our primary uses of liquidity include payments of operating expenses, interest on our outstanding debt and environmental
remediation costs, distributions to shareholders, and future acquisitions and redevelopment projects. 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.”
We expect to meet our short-term liquidity requirements through cash flow from operations, funds available under our Revolving
Facility, proceeds from new senior unsecured notes that we closed in February 2022, but were not funded until January 2023, proceeds
from the sale of shares of common stock pursuant to forward agreements under our ATM Program, and available cash and cash
equivalents.
As of December 31, 2022, we had $230.0 million of availability under our Revolving Facility, and our total cash and cash
equivalents were $11.2 million.
In February 2022, we closed on the private placement of $225.0 million of senior unsecured notes, including (i) $100.0 million
of 3.45% notes funded at closing and maturing in February 2032, and (ii) $125 million of 3.65% notes 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 were 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.
During the year ended December 31, 2022, we entered into forward sale agreements to sell an aggregate of 3.7 million common
shares for anticipated gross proceeds of $117.6 million through our ATM Program.
We anticipate meeting our longer-term capital needs through cash flow from operations, funds available under our Revolving
Facility, available cash and cash equivalents, proceeds from future real estate asset sales, and the future issuance of shares of common
stock or debt securities.
Our cash flow activities for the years ended December 31, 2022 and 2021 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 financing activities
Operating Activities
Year ended December 31,
2021
2022
$
$
93,086
(139,056)
30,758
$
86,818
(169,732)
52,321
$ Change
6,268
30,676
(21,563)
The change in net cash flow provided by operating activities for the years ended December 31, 2022 and 2021 was primarily the
result of changes in revenues and expenses as discussed in “Results of Operations” above and the other changes in assets and liabilities
as presented on our consolidated statements of cash flows.
Investing Activities
The change in net cash flow used in investing activities for the year ended December 31, 2022, was primarily due to a reduction
in property acquisitions of $57.0 million, partially offset by an $11.6 million increase in deposits for property acquisitions, a $9.0 million
decrease in collections of notes and mortgages receivable, and an increase of $5.8 million in issuance of notes and mortgages receivable.
Financing Activities
The change in net cash flow provided by financing activities for the year ended December 31, 2022, was primarily due to a
decrease in proceeds from issuances of common stock of $92.5 million and an increase in dividends paid of $7.5 million, partially offset
by an increase in net borrowings of $75.0 million.
Credit Agreement
The Second Restated Credit Agreement provides for an unsecured revolving credit facility (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
our option. Our exercise of an extension option is subject to the absence of any default under the Second Restated Credit Agreement
37
and our 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.
In December 2022, we entered into an amendment to the Second Restated Credit Agreement to transition the applicable interest
rates and default rate thereunder from LIBOR-based rates to SOFR-based rates. Borrowings under the Revolving Facility bear interest
at a rate equal to (i) the sum of a SOFR rate plus a SOFR adjustment of 0.10% plus a margin of 1.30% to 1.90% or (ii) the sum of a base
rate plus a margin of 0.30% to 0.90% based on our consolidated total indebtedness to total asset value ratio at the end of each quarterly
reporting period.
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 our
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 our 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 our senior unsecured notes. Any
event of default, if not cured or waived in a timely manner, could result in the acceleration of our indebtedness under the Second Restated
Credit Agreement and could also give rise to an event of default and the acceleration of our senior unsecured notes.
As of December 31, 2022, we were in compliance with all of the material terms of the Second Restated Credit Agreement.
Senior Unsecured Notes
In February 2022, we entered into a sixth amended and restated note purchase and guarantee agreement with The Prudential
Insurance Company of America and certain of its affiliates (collectively, “Prudential”) (the "Sixth Amended and Restated Prudential
Agreement") pursuant to which, in January 2023, we issued $80.0 million of 3.65% Series Q Guaranteed Senior Notes due January 20,
2033 (the “Series Q Notes”) to Prudential and used the proceeds to repay the $75.0 million of 5.35% Series B Guaranteed Senior Notes
due June 2, 2023 (the “Series B Notes”) outstanding under our fifth amended and restated note purchase and guarantee agreement with
Prudential (the "Fifth Amended and Restated Prudential Agreement"). The other senior unsecured notes outstanding under the Fifth
Amended and Restated Prudential Agreement, including (i) $50.0 million of 4.75% Series C Guaranteed Senior Notes due February 25,
2025 (the “Series C Notes”), (ii) $50.0 million of 5.47% Series D Guaranteed Senior Notes due June 21, 2028 (the “Series D Notes”),
(iii) $50.0 million of 3.52% Series F Guaranteed Senior Notes due September 12, 2029 (the “Series F Notes”) and (iv) $100.0 million
of 3.43% Series I Guaranteed Senior Notes due November 25, 2030 (the “Series I Notes”), remain outstanding under the Sixth Amended
and Restated Prudential Agreement.
In February 2022, we entered into a second amended and restated note purchase and guarantee agreement with American General
Life Insurance Company and certain of its affiliates (collectively, “AIG”) (the “Second Amended and Restated AIG Agreement”)
pursuant to which we issued $55.0 million of 3.45% Series L Guaranteed Senior Notes due February 22, 2032 (the “Series L Notes”) to
AIG. The other senior unsecured notes outstanding under our first amended and restated note purchase and guarantee agreement with
AIG (the “First Amended and Restated AIG Agreement”), including (i) $50.0 million of 3.52% Series G Guaranteed Senior Notes due
September 12, 2029 (the “Series G Notes”) and (ii) $50.0 million of 3.43% Series J Guaranteed Senior Notes due November 25, 2030
(the “Series J Notes”), remain outstanding under the Second Amended and Restated AIG Agreement.
In February 2022, we entered into a second amended and restated note purchase and guarantee agreement with Massachusetts
Mutual Life Insurance Company and certain of its affiliates (collectively, “MassMutual”) (the “Second Amended and Restated
MassMutual Agreement”) pursuant to which we issued $20.0 million of 3.45% Series M Guaranteed Senior Notes due February 22,
2032 (the “Series M Notes”) and, in January 2023, $20.0 million of 3.65% Series O Guaranteed Senior Notes due January 20, 2033 (the
“Series O Notes”) to MassMutual. The other senior unsecured notes outstanding under our first amended and restated note purchase and
guarantee agreement with MassMutual (the “First Amended and Restated MassMutual Agreement”), including (i) $25.0 million of
3.52% Series H Guaranteed Senior Notes due September 12, 2029 (the “Series H Notes”) and (ii) $25.0 million of 3.43% Series K
Guaranteed Senior Notes due November 25, 2030 (the “Series K Notes”), remain outstanding under the Second Amended and Restated
MassMutual Agreement.
In February 2022, we entered into a note purchase and guarantee agreement with New York Life Insurance Company and certain
of its affiliates (collectively, “New York Life”) (the “New York Life Agreement”) pursuant to which we issued $25.0 million of 3.45%
Series N Guaranteed Senior Notes due February 22, 2032 (the “Series N Notes”) and, in January 2023, $25.0 million of 3.65% Series P
Guaranteed Senior Notes due January 20, 2033 (the “Series P Notes”) to New York Life.
On June 21, 2018, we entered into a note purchase and guarantee agreement with MetLife and certain of its affiliates (collectively,
"MetLife") (the “MetLife Agreement”) pursuant to which we issued $50.0 million of 5.47% Series E Guaranteed Senior Notes due June
21, 2028 (the “Series E Notes”) to MetLife.
38
The funded and outstanding 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, Series K Notes, Series L Notes, Series M Notes and Series N Notes are collectively referred to
the "senior unsecured notes".
As of December 31, 2022, we were in compliance with all of the material terms of our senior unsecured notes.
For additional information regarding our senior secured notes, see Note 4 in “Item 8. Financial Statements and Supplementary
Data” in this Form 10-K.
Debt Maturities
The amounts outstanding under the Second Restated Credit Agreement and our senior unsecured notes, exclusive of extension
options, are as follows (in thousands):
Revolving Facility
Series B Notes (a)
Series C Notes
Series D-E Notes
Series F-G Notes
Series I-K Notes
Series L-N Notes
Total debt
Unamortized debt issuance costs, net (b)
Total debt, net
Maturity
Date
October 2025
June 2023
February 2025
June 2028
September 2029
November 2030
February 2032
Interest
Rate
5.60%
5.35%
4.75%
5.47%
3.52%
3.43%
3.45%
Year ended December 31,
2022
2021
70,000
75,000
50,000
100,000
125,000
175,000
100,000
695,000
(3,545)
691,455
$
$
60,000
75,000
50,000
100,000
125,000
175,000
—
585,000
(3,880)
581,120
$
$
(a) Pursuant to the Sixth Amended and Restated Prudential Agreement, we issued $80,000 of 3.65% Series Q Notes due January 20,
2033 to Prudential in January 2023 and used a portion of the proceeds to repay in full the $75,000 of 5.35% Series B Notes due
June 2, 2023.
(b) Unamortized debt issuance costs, related to the Revolving Facility, at December 31, 2022 and 2021, of $2,036 and $2,730,
respectively, are included in prepaid expenses and other assets on our consolidated balance sheets.
ATM Program
In March 2018, we established an at-the-market equity offering program (the “2018 ATM Program”), pursuant to which we were
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 an 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 our sales agents or acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. 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.
The use of a forward sale agreement allows us to lock in a share price on the sale of shares at the time the forward sales agreement
becomes effective but defer receiving the proceeds from the sale of shares until a later date. To account for the forward sale agreements,
we considered the accounting guidance governing financial instruments and derivatives. To date, we have concluded that our forward
sale agreements are not liabilities as they do not embody obligations to repurchase our shares nor do they embody obligations to issue a
variable number of shares for which the monetary value are predominantly fixed, varying with something other than the fair value of
the shares, or varying inversely in relation to our shares.
We also evaluated whether the agreements meet the derivatives and hedging guidance scope exception to be accounted for as
equity instruments. We concluded that the agreements are classifiable as equity contracts based on the following assessments: (i) none
of the agreements’ exercise contingencies are based on observable markets or indices besides those related to the market for the
Company’s own stock price and operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to
its own stock.
We consider the potential dilution resulting from the forward sale agreements on the earnings per share calculations and use the
treasury stock method to determine the dilution resulting from the forward sale agreements during the period of time prior to settlement.
39
ATM Direct Issuances
During the year ended December 31, 2022, no shares of common stock were issued under the ATM Program.
During the year ended December 31, 2021, we issued a total of 3.0 million shares of common stock and received net proceeds of
$92.3 million under the ATM Program and the 2018 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.
ATM Forward Agreements
During the year ended December 31, 2022, we entered into forward sale agreements to sell an aggregate of 3.7 million shares of
common stock at an average gross offering price of $31.61 per share. No shares were settled during the year ended December 31, 2022.
We expect to settle the forward sale agreements in full within 12 months of the respective agreement dates via physical delivery
of the outstanding shares of common stock in exchange for cash proceeds, although we may elect cash settlement or net share settlement
for all or a portion of our obligations under the forward sale agreements, subject to certain conditions.
During the year ended December 31, 2021, we did not enter into any forward sale agreements under the ATM Program.
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.
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 $78.3 million, $70.8 million and $62.6 million for the years ended
December 31, 2022, 2021 and 2020, respectively. There can be no assurance that we will continue to pay dividends at historical rates.
Contractual Obligations
Our significant contractual obligations and commitments, excluding extension options and unamortized debt issuance costs, as of
December 31, 2022, 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.
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.
40
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.
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.
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 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
41
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. Under applicable law, 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.
42
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 is mainly the responsibility of our tenant but in certain
cases partially paid for by us) and remediation of any environmental contamination that arises during the term of their tenancy. In
addition, for substantially all of our triple-net leases, our tenants are contractually responsible for known environmental contamination
that existed at the commencement of the lease and for preexisting unknown environmental contamination that is discovered during the
term of the lease.
For the subset of our triple-net leases which cover properties previously leased to Marketing (substantially all of which commenced
in 2012), the allocation of responsibility differs from our other triple-net leases as it relates to preexisting known and unknown
contamination. Under the terms of our leases covering properties previously leased to Marketing, we agreed to be responsible for
environmental contamination that was known at the time the lease commenced, and for unknown environmental contamination which
existed prior to commencement of the lease and which 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) (a “Lookback Period”). Similarly, for certain properties
previously leased to Marketing which we have sold, we have agreed to be responsible for environmental contamination that was known
at the time of the sale and for unknown environmental contamination which existed prior to the sale and which is discovered (other than
as a result of a voluntary site investigation) within 5 years of the closing (also, a “Lookback Period”). Substantially all of these Lookback
Periods have now expired, therefore responsibility for all newly discovered contamination at these properties, even if it relates to periods
prior to commencement of the lease or sale, is the contractual responsibility of our tenant or buyer as the case may be.
In the course of UST removals and replacements at certain properties previously leased to Marketing where we retained
responsibility for preexisting unknown environmental contamination until expiration of the applicable Lookback Period, environmental
contamination has been and continues to be discovered. As a result, we developed an estimate of fair value for the prospective future
environmental liability resulting from preexisting unknown environmental contamination and 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 anticipated removal and replacement of USTs. Our accrual of this liability
represents our estimate of the fair value of the cost for each component of the liability, net of estimated recoveries from state UST
remediation funds considering estimated recovery rates developed from prior experience. In arriving at our accrual, we analyzed the
ages and expected useful lives of USTs at properties where we would be responsible for preexisting unknown environmental
contamination and we projected a cost to closure for remediation of such contamination.
During the twelve months ended December 31, 2022, the Lookback Periods for most of the properties we previously leased to
Marketing expired. Based on the expiration of the Lookback Periods, together with other factors which have significantly mitigated our
potential liability for preexisting environmental obligations, including the absence of any contractual obligations relating to properties
which have been sold, quantifiable trends associated with types and ages of USTs at issue, expectations regarding future UST
replacements, and historical trends and expectations regarding discovery of preexisting unknown environmental contamination and/or
attempted pursuit of the Company therefor, we concluded that there is no material continued risk of having to satisfy contractual
obligations relating to preexisting unknown environmental contamination at certain properties. Accordingly, we removed $23.5 million
of unknown reserve liabilities which had previously been accrued for these properties. This resulted in a net credit of $22.2 million being
recorded to environmental expense for the twelve months ended December 31, 2022.
We continue to anticipate that our tenants under leases where the Lookback Periods have expired will replace USTs in the years
ahead as these USTs near the end of their expected useful lives. At many of these properties the USTs in use are fabricated with older
generation materials and technologies and we believe it is prudent to expect that upon their removal preexisting unknown environmental
contamination will be identified. Although contractually these tenants are now responsible for preexisting unknown environmental
contamination that is discovered during UST replacements, because the applicable Lookback Periods have expired before the end of the
initial term of these leases, together with other relevant factors, we believe there remains continued risk that we will be responsible for
remediation of preexisting environmental contamination associated with future UST removals at certain properties. Accordingly, we
believe it is appropriate at this time to maintain $11.1 million of unknown reserve liabilities for certain properties with respect to which
the Lookback Periods have expired as of December 31, 2022.
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, 2022, we had
accrued a total of $23.2 million for our prospective environmental remediation obligations. This accrual consisted of (a) $10.8 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) $12.4 million for future environmental liabilities related to preexisting unknown
contamination. 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.
43
Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $1.3 million,
$1.7 million and $1.8 million of net accretion expense was recorded for the years ended December 31, 2022, 2021 and 2020, respectively,
which is included in environmental expenses. In addition, during the years ended December 31, 2022, 2021 and 2020, we recorded
credits to environmental expenses aggregating $23.8 million, $1.8 million and $3.1 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.
During the years ended December 31, 2022 and 2021, we increased the carrying values of certain of our properties by $3.3 million
and $3.0 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, 2022, 2021 and 2020, were $3.7 million,
$4.0 million and $4.0 million, respectively. Capitalized asset retirement costs were $33.2 million (consisting of $24.7 million of known
environmental liabilities and $8.5 million of reserves for future environmental liabilities) as of December 31, 2022, and $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. We recorded impairment charges aggregating $2.5 million and $3.1 million for the years ended December 31, 2022
and 2021, respectively, for capitalized asset retirement costs.
For additional information regarding risks related to our potential environmental exposure, see “Item 1A. Risk Factors – 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” in this Form 10-K.
In July 2012, we purchased a 10-year pollution legal liability insurance policy covering substantially all of our properties at that
time for discovery of preexisting unknown environmental liabilities and for new environmental events. The policy had a $50.0 million
aggregate limit and was subject to various self-insured retentions and other conditions and limitations. This policy expired in July 2022,
although claims made prior to such expiration remain subject to coverage. In September 2022, we purchased a 5-year pollution legal
liability insurance policy to cover a subset of our properties which we believe present the greatest risk for discovery of preexisting
unknown environmental liabilities and for new environmental events. The policy has a $25.0 million in 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 for
certain properties which we believe have the greatest risk of significant environmental events.
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,
2022 and 2021, we had accrued $0.3 million and $1.9 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.
44
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. Borrowings
under the Revolving Facility bear interest at a rate equal to (i) the sum of a SOFR rate plus a SOFR adjustment of 0.10% plus a margin
of 1.30% to 1.90% or (ii) the sum of a base rate plus a margin of 0.30% to 0.90% based on our consolidated total indebtedness to total
asset value ratio at the end of each quarterly reporting period. We use borrowings under the Revolving Facility to finance acquisitions
and for general corporate purposes. Borrowings outstanding at variable interest rates under the Revolving Facility as of December 31,
2022, were $70.0 million.
Based on our outstanding borrowings under the Revolving Facility of $70.0 million for the year ended December 31, 2022, an
increase in market interest rates of 1.0% for 2023 would decrease our 2023 net income and cash flows by approximately $0.7 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 $70.0 million outstanding borrowings under the Revolving Facility is indicative of our future average floating
interest rate borrowings for 2023 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.
See “Part I. Item. 1A. Risk Factors” in this Annual Report on Form 10-K for additional information.
45
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, 2022 and 2021
Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Page
47
48
49
50
71
46
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
December 31,
2022
2021
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; 46,734,790 and
46,715,734 shares issued and outstanding, respectively
Additional paid-in capital
Dividends paid in excess of earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
$
$
$
802,010
707,352
66,185
578
1,576,125
(232,812)
1,343,313
3,757
1,347,070
34,313
8,713
2,536
50,391
4,247
18,193
277
96,555
1,562,295
70,000
623,492
23,155
20,576
19,959
1,518
43,745
802,445
—
—
467
822,340
(62,957)
759,850
1,562,295
$
$
$
$
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
—
—
467
818,209
(73,568)
745,108
1,466,948
The accompanying notes are an integral part of these consolidated financial statements.
47
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
Gains on dispositions of real estate
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
2022
Year ended December 31,
2021
2020
$
$
163,889
1,699
165,588
$
153,886
1,522
155,408
144,601
2,745
147,346
21,553
3,545
(20,902)
20,621
39,902
64,719
16,423
117,292
413
(27,662)
—
90,043
1.88
1.88
$
$
$
22,048
4,404
3,548
20,151
35,518
85,669
16,718
86,457
1,075
(24,672)
—
62,860
1.37
1.37
$
$
$
23,520
4,258
1,054
17,294
30,191
76,317
4,548
75,577
21,129
(26,085)
(1,233)
69,388
1.62
1.62
46,730
46,838
44,782
44,819
42,040
42,070
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
48
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 Program
Net cash flow provided by 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
2022
Year ended December 31,
2021
2020
$
90,043
$
62,860
$
69,388
39,902
3,545
(16,423)
—
(3,458)
50
14
5,392
946
1,259
4,775
(784)
(1,965)
(28,088)
(2,122)
93,086
(137,275)
—
(56)
24,204
(8,265)
(19,312)
1,648
(139,056)
90,000
(80,000)
100,000
—
—
(487)
(78,264)
(611)
823
(496)
(207)
30,758
(15,212)
26,461
11,249
$
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
2022
Year ended December 31,
2021
26,526
557
4,252
20,576
1,050
$
$
23,690
355
4,568
19,467
428
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
2020
25,651
350
6,355
17,332
792
$
$
$
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
49
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 12 –
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.
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
50
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. For additional information regarding our senior secured notes, see Note 2 in “Item
8. Financial Statements and Supplementary Data” in this Form 10-K.
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. At December 31, 2022 and 2021 the
allowance for credit losses on notes and mortgages receivable was $278,000 and $297,000, respectively.
From time to time, we may originate construction loans for the construction of income-producing properties. During the year
ended December 31, 2022, we funded construction loans in the amount of $20,193,000 and, as of December 31, 2022 construction loans
totaling $25,898,000 were outstanding. 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.
51
Restricted Cash
Restricted cash consists of cash that is contractually restricted or held in escrow pursuant to various agreements with
counterparties. At December 31, 2022 and 2021, restricted cash of $2,536,000 and $1,723,000, 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, 2022, 2021 and 2020.
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, 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.
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 $3,545,000, $4,404,000 and $4,258,000 for the years ended December 31, 2022,
2021 and 2020, 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 $1,079,000 of the $3,545,000 in impairments
recognized during the year ended December 31, 2022). During the year ended December 31, 2022, we recorded the remaining
impairments of $2,466,000 of the $3,545,000 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, 2022, 2021 and 2020, impairment charges aggregating $1,089,000, $919,000 and $932,000,
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
52
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.
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 2019, 2020
and 2021, and tax returns which will be filed for the year ended 2022, 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 adopted ASU 2020-04 during 2022 and the adoption of ASU 2020-04 did not have a material impact on our
consolidated financial statements.
53
NOTE 2. — LEASES
As Lessor
As of December 31, 2022, we owned 997 properties and leased 42 properties from third-party landlords. These 1,039 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 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.
The majority 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.
Pursuant to ASU 2016-02, for leases in which we are the lessor, we are (i) retaining classification of our historical leases as we
were 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, 2022, 2021 and 2020, were $163,889,000, $153,886,000 and
$144,601,000, respectively. Base rental income included in revenues from rental properties was $149,098,000, $138,691,000 and
$128,246,000 for the years ended December 31, 2022, 2021 and 2020, 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 $1,948,000, $1,964,000, and $895,000 for the year ended December 31, 2022, 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 were reimbursed by our tenants pursuant to the terms of triple-net lease agreements, were
$16,739,000, $17,159,000 and $17,250,000 for the years ended December 31, 2022, 2021 and 2020, respectively.
Direct Financing Leases
The components of the investment in direct financing leases as of December 31, 2022 are as follows (in thousands):
Lease payments receivable
Unguaranteed residual value
Unearned Income
Allowance for credit losses
Total
2022
2021
$
$
85,336
13,928
(32,184)
(895)
66,185
$
$
98,539
13,928
(39,994)
(826)
71,647
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, 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. During the year ended December 31, 2022 and 2021, we recorded an
additional allowance and a reduction for credit losses of $69,000 and $92,000, 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. At December 31, 2022 and 2021, we recorded an allowance for credit losses of $895,000 and $826,000, respectively on
investment in direct financing leases.
54
Future contractual annual rentals receivable from our tenants, which have terms in excess of one year as of December 31, 2022,
are as follows (in thousands):
2023
2024
2025
2026
2027
Thereafter
Total
As Lessee
Operating
Leases
Direct
Financing Leases
$
$
141,619
141,812
141,924
133,653
126,476
733,871
1,419,355
$
$
13,237
13,380
13,412
10,386
10,319
24,602
85,336
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 carry forward 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,
2022
18,193
277
18,470
19,959
1,518
21,477
7.3
5.8
4.70%
16.70%
(a) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.
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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, 2022, scheduled lease liabilities mature as follows (in thousands):
$
$
$
December 31,
2022
December 31,
2022
3,655
487
352
-
4,494
3,776
352
487
2023
2024
2025
2026
2027
Thereafter
Total lease payments
Less: amount representing interest
Present value of lease payments
Operating
Leases
Direct
Financing Leases
$
$
3,638
3,492
3,115
3,283
2,469
8,686
24,683
(4,724)
19,959
$
$
586
515
362
338
237
213
2,251
(733)
1,518
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:
2023 – $4,285,000, 2024 – $3,641,000, 2025 – $2,851,000, 2026 – $2,495,000, 2027 – $1,829,000 and $5,708,000 thereafter.
Rent expense, substantially all of which consists of minimum rentals on non-cancelable operating leases, amounted to $2,877,000,
$3,393,000 and $3,769,000 for the years ended December 31, 2022, 2021 and 2020, respectively, and is included in property costs. Rent
received under subleases for the years ended December 31, 2022, 2021 and 2020, was $6,400,000, $7,333,000 and $7,892,000,
respectively, and is included in rental revenue discussed above.
Major Tenants
As of December 31, 2022, we had three significant tenants by revenue:
Global Partners LP (NYSE: GLP)
ARKO Corp. (NASDAQ: ARKO)
APRO, LLC (d/b/a United Oil)
Getty Petroleum Marketing Inc.
Number of properties
150
128
78
2022
2021
16.0%
14.0%
11.0%
16.0%
14.0%
11.0%
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, 2022, 329 of the properties we own or lease were previously leased to Marketing, of which 302 properties are
subject to long-term triple-net leases with petroleum distributors in 12 separate property portfolios and 24 properties are leased as single
unit triple-net leases, (an additional two properties are under redevelopment and one property is vacant). The leases covering properties
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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, 2022, we have a remaining commitment to fund up to $6,541,000 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, 2022, 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
$894,000 (net of accumulated amortization of $2,111,000) 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,
2022 and 2021, we had accrued $285,000 and $1,925,000, 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.
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 potentially responsible parties (“PRPs”) with respect to 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”). The LPRSA is part of the
Diamond Alkali Superfund Site (“Superfund Site”) that includes the former Diamond Shamrock Corporation manufacturing facility
located at 80-120 Lister Ave. in Newark, New Jersey (the “Diamond Shamrock Facility"), the LPRSA, and the Newark Bay Study Area
(i.e, Newark Bay and portions of surrounding rivers and channels). One of the GNL recipients is Occidental Chemical Corporation
(“Occidental”), the predecessor to the former owner/operator of the Diamond Shamrock Facility responsible for the discharge of 2,3,8,8-
TCDD (“dioxin”) and other hazardous substances. 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 to address investigation and evaluation of alternative remedial actions with respect to alleged damages to the
entire 17-mile LPRSA, which EPA has designated Operable Unit 4 or “OU4”. Many of the parties to the AOC, including us, are also
members of a Cooperating Parties Group (“CPG”). In 2015, the CPG submitted a draft RI/FS to EPA setting forth various alternatives
for remediating 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 identified various targeted dredge and cap
alternatives for the upper 9-miles of the LPRSA. On September 28, 2021, the EPA issued a Record of Decision (“ROD”) for the upper
9-mile IR/FS (“Upper 9-mile IR ROD”) consisting of dredging and capping to control sediment sources of dioxin and PCBs at an
estimated cost of $441,000,000.
In addition to the RI/FS activities, 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, which remedial work has been completed. Concurrent with the CPG’s work on the RI/FS,
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on April 11, 2014, the EPA issued a draft Focused Feasibility Study (“FFS”) with proposed remedial alternatives to remediate the lower
8.3-miles of the LPRSA. On March 4, 2016, the EPA issued a ROD for the lower 8.3-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, the EPA issued a “Notice of Potential Liability and Commencement of Negotiations for Remedial Design”
(“Notice”) to more than 100 PRPs, including us, 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 Facility and a discharger of other contaminants of concern
(“COCs”) to the Superfund Site) requiring Occidental to prepare the remedial design of the remedy selected in the Lower 8-mile ROD.
The EPA has designated the lower 8.3 miles of the LPRSA as Operable Unit 2 or “OU2”, which is geographically subsumed within
OU4. On September 30, 2016, Occidental entered into an agreement with the EPA to perform the remedial design for OU2.
By letter dated March 30, 2017, the EPA advised the recipients of the Notice that it would be entering into cash out settlements
with certain PRPs who the EPA stated did not discharge any of the eight hazardous substances identified as a COC in the Lower 8-mile
ROD to resolve their alleged liability for OU2. Cash out settlements were finalized in 2018 and 2021 with a total of 21 PRPs. EPA’s
March 30, 2017 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 such other PRPs for negotiation of future cash out settlements and to initiate negotiations with Occidental and
other major PRPs for the implementation and funding of the OU2 remedy. In August 2017, the EPA appointed an independent third-
party allocation expert to conduct a confidential allocation proceeding that would assign non-binding shares of responsibility to PRPs
identified by EPA for cash out settlements. Most of the PRPs identified by EPA, including the Company, participated in the allocation
process. Occidental did not participate in the allocation proceedings, but filed a complaint on June 30, 2018, listing over 120 defendants,
including us, 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 response costs incurred and to be incurred relating to the
LPRSA, including the investigation, design, and anticipated implementation of the OU2 remedy (the “Occidental Lawsuit”). We
continue to defend the claims asserted in the Occidental Lawsuit individually and in coordination with a group of several other named
defendants known as the “Small Parties Group” or “SPG” consistent with our defenses in the related proceedings. On December 20,
2022, the parties filed an uncontested motion to stay the Occidental Lawsuit proceedings for six months while the court considers a
proposed consent decree, discussed below, which, if approved, would bar the claims asserted against us for past and/or future response
costs relating to the LPRSA, including the OU2 remedy.
The allocator issued a final Allocation Recommendation Report in December 2020, which was based upon an allocation
methodology approved by EPA that contains associated allocation shares for each of the parties invited to participate in the allocation,
including Occidental - who the allocator concluded was responsible for more than 99% of the costs to implement the OU2 remedy. As
a result of the allocation process, the EPA and 85 parties (the “Settling Parties”), including us, began settlement negotiations and reached
an agreement on a cash-out settlement to resolve their alleged liability for the remediation of the entire LPRSA. The EPA concluded
that the Settling Parties, individually and collectively, were responsible for only a minor share of the response costs incurred and to be
incurred at or in connection with implementing the OU2 and OU4 remedies for the entire 17-mile Lower Passaic River.
In December 2022, the EPA and the Settling Parties finalized their agreement in a proposed consent decree (“CD”), pursuant to
which and without admitting liability, the Settling Parties agree to pay EPA the collective sum of $150,000,000 in exchange for
contribution protection from claims by non-settling PRPs (including Occidental) for the matters addressed in the CD and the issuance
of a notice of completion by EPA of both the 2007 RI/FS AOC and the 10.9 AOC, upon completion of certain defined tasks in the CD.
All 85 Settling Parties contributed an agreed upon share of the settlement amount, which are subject to a confidentiality agreement. Our
settlement contribution is in line with our legal reserves previously established and transferred to an escrow account based on likelihoods
reasonably known to us at this time. On December 16, 2022, the United States filed an action in the New Jersey District Court against
the Settling Defendants which included lodging of the proposed CD to resolve claims against the Settling Parties for costs associated
with cleaning up the LPRSA. This action (the “CD Action”) is subject to public comment and court approval. On December 22, 2022,
the EPA published a notice of lodging of the proposed CD in the Federal Register, opening a 45-day public comment period, which was
subsequently extended to 90-days. On December 23, 2022, Occidental filed a motion to intervene in the CD Action contending that it
intends to challenge the proposed CD and seek to preserve its contribution claims against the Settling Parties in the pending Occidental
Lawsuit.
If the CD Action is approved in its current form, our alleged liability to the EPA as well as any non-settling parties, including
Occidental, for the remediation of the entire 17-mile Lower Passaic River and its tributaries will be resolved. In the event the District
Court does not approve the proposed CD, based on currently known facts and circumstances, including, among other factors, the EPA’s
conclusion that we are individually and collectively with numerous other parties only responsible for a minor share of the response costs
incurred or to be incurred in connection with the LPRSA, our relative participation in the costs related to the 2007 AOC and 10.9 AOC,
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 that there are numerous other parties who will likely bear the costs
of remediation and/or damages, we do not believe that resolution of the Lower Passaic River proceedings as relates to us is reasonably
58
likely to have a material impact on our results of operations. Nevertheless, if the proposed CD is not approved by the District Court in
its current form, performance of the EPA’s selected remedies for the LPRSA may be subject to future negotiation, potential enforcement
proceedings and/or possible litigation and, on this basis, our ultimate liability in the pending and possible future proceedings pertaining
to the LPRSA remains uncertain and subject to contingencies which cannot be predicted and the outcome of which are not yet known.
The Company has established an estimated legal reserve and transferred funds to an escrow account based on likelihoods reasonably
known to us at this time, however it is possible that circumstances may change and losses related to the Lower Passaic River proceedings
could exceed the amounts we have accrued.
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.
59
NOTE 4. — DEBT
The amounts outstanding under our credit agreement and our senior unsecured notes are as follows (in thousands):
Revolving Facility
Series B Notes (a)
Series C Notes
Series D-E Notes
Series F-H Notes
Series I-K Notes
Series L-N Notes
Total debt
Unamortized debt issuance costs, net (b)
Total debt, net
Maturity
Date
October 2025
June 2023
February 2025
June 2028
September 2029
November 2030
February 2032
Interest
Rate
5.60%
5.35%
4.75%
5.47%
3.52%
3.43%
3.45%
Year ended December 31,
2022
2021
70,000
75,000
50,000
100,000
125,000
175,000
100,000
695,000
(3,545)
691,455
$
$
60,000
75,000
50,000
100,000
125,000
175,000
—
585,000
(3,880)
581,120
$
$
(a) Pursuant to the Sixth Amended and Restated Prudential Agreement, we issued $80,000 of 3.65% Series Q Notes due January 20,
2033 to Prudential in January 2023 and used a portion of the proceeds to repay in full the $75,000 of 5.35% Series B Notes due
June 2, 2023.
(b) Unamortized debt issuance costs, related to the Revolving Facility, at December 31, 2022 and 2021, of $2,036 and $2,730,
respectively, are included in prepaid expenses and other assets on our consolidated balance sheets.
Credit Agreement
In October 2021, the Company entered into a second amended and restated credit agreement (as amended, the “Second Restated
Credit Agreement”). The Second Restated Credit Agreement provides for an unsecured revolving credit facility (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 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.
In December 2022, the Company entered into the First Amendment to the Second Restated Credit Agreement to transition the
applicable interest rates and default rate thereunder from LIBOR-based rates to SOFR-based rates. Borrowings under the Revolving
Facility bear interest at a rate equal to the sum of a SOFR rate plus a margin of 1.30% to 1.90% or the sum of a base rate plus a margin
of 0.30% to 0.90% based on the Company’s consolidated total indebtedness to total asset value ratio at the end of each quarterly reporting
period.
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.
Senior Unsecured Notes
In February 2022, the Company entered into a sixth amended and restated note purchase and guarantee agreement with The
Prudential Insurance Company of America and certain of its affiliates (collectively, “Prudential”) (the "Sixth Amended and Restated
Prudential Agreement") pursuant to which, in January 2023, the Company issued $80,000,000 of 3.65% Series Q Guaranteed Senior
Notes due January 20, 2033 (the “Series Q Notes”) to Prudential and used the proceeds to repay the $75,000,000 of 5.35% Series B
Guaranteed Senior Notes due June 2, 2023 (the “Series B Notes”) outstanding under its fifth amended and restated note purchase and
guarantee agreement with Prudential (the "Fifth Amended and Restated Prudential Agreement"). The other senior unsecured notes
outstanding under the Fifth Amended and Restated Prudential Agreement, including (i) $50,000,000 of 4.75% Series C Guaranteed
Senior Notes due February 25, 2025 (the “Series C Notes”), (ii) $50,000,000 of 5.47% Series D Guaranteed Senior Notes due June 21,
2028 (the “Series D Notes”), (iii) $50,000,000 of 3.52% Series F Guaranteed Senior Notes due September 12, 2029 (the “Series F
Notes”) and (iv) $100,000,000 of 3.43% Series I Guaranteed Senior Notes due November 25, 2030 (the “Series I Notes”), remain
outstanding under the Sixth Amended and Restated Prudential Agreement.
60
In February 2022, the Company entered into a second amended and restated note purchase and guarantee agreement with American
General Life Insurance Company and certain of its affiliates (collectively, “AIG”) (the “Second Amended and Restated AIG
Agreement”) pursuant to which it issued $55,000,000 of 3.45% Series L Guaranteed Senior Notes due February 22, 2032 (the “Series
L Notes”) to AIG. The other senior unsecured notes outstanding under the Company's first amended and restated note purchase and
guarantee agreement with AIG (the “First Amended and Restated AIG Agreement”), including (i) $50,000,000 of 3.52% Series G
Guaranteed Senior Notes due September 12, 2029 (the “Series G Notes”) and (ii) $50,000,000 of 3.43% Series J Guaranteed Senior
Notes due November 25, 2030 (the “Series J Notes”), remain outstanding under the Second Amended and Restated AIG Agreement.
In February 2022, the Company entered into a second amended and restated note purchase and guarantee agreement with
Massachusetts Mutual Life Insurance Company and certain of its affiliates (collectively, “MassMutual”) (the “Second Amended and
Restated MassMutual Agreement”) pursuant to which it issued $20,000,000 of 3.45% Series M Guaranteed Senior Notes due February
22, 2032 (the “Series M Notes”) and, in January 2023, $20,000,000 of 3.65% Series O Guaranteed Senior Notes due January 20, 2033
(the “Series O Notes”) to MassMutual. The other senior unsecured notes outstanding under the Company's first amended and restated
note purchase and guarantee agreement with MassMutual (the “First Amended and Restated MassMutual Agreement”), including (i)
$25,000,000 of 3.52% Series H Guaranteed Senior Notes due September 12, 2029 (the “Series H Notes”) and (ii) $25,000,000 of 3.43%
Series K Guaranteed Senior Notes due November 25, 2030 (the “Series K Notes”), remain outstanding under the Second Amended and
Restated MassMutual Agreement.
In February 2022, the Company entered into a note purchase and guarantee agreement with New York Life Insurance Company
and certain of its affiliates (collectively, “New York Life”) (the “New York Life Agreement”) pursuant to which it issued $25,000,000
of 3.45% Series N Guaranteed Senior Notes due February 22, 2032 (the “Series N Notes”) and, in January 2023, $25,000,000 of 3.65%
Series P Guaranteed Senior Notes due January 20, 2033 (the “Series P Notes”) to New York Life.
On June 21, 2018, the Company entered into a note purchase and guarantee agreement with MetLife and certain of its affiliates
(collectively, "MetLife") (the “MetLife Agreement”) pursuant to which it issued $50.0 million of 5.47% Series E Guaranteed Senior
Notes due June 21, 2028 (the “Series E Notes”) to MetLife.
The funded and outstanding 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, Series K Notes, Series L Notes, Series M Notes and Series N Notes are collectively referred to
the "senior unsecured notes".
Covenants
The Second Restated Credit Agreement and 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
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, 2022, 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, 2022, scheduled debt maturities, including balloon payments, are as follows (in thousands):
2022
2023 (a)
2024
2025 (b)
2026
Thereafter
Total
Revolving
Facility
Senior
Unsecured Notes
Total
$
$
— $
—
—
70,000
—
—
70,000
$
— $
75,000
—
50,000
—
500,000
625,000
$
—
75,000
—
120,000
—
500,000
695,000
(a) Pursuant to the Sixth Amended and Restated Prudential Agreement, the Company issued $80,000,000 of 3.65% Series Q Notes due
January 20, 2033 to Prudential in January 2023 and used a portion of the proceeds to repay in full the $75,000,000 of 5.35% Series
B Notes due June 2, 2023.
61
(b) 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. Under applicable law, 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 is mainly the responsibility of our tenant, but in certain
cases partially paid for by us) and remediation of any environmental contamination that arises during the term of their tenancy. In
addition, for substantially all of our triple-net leases, our tenants are contractually responsible for known environmental contamination
that existed at the commencement of the lease and for preexisting unknown environmental contamination that is discovered during the
term of the lease.
For the subset of our triple-net leases which cover properties previously leased to Marketing (substantially all of which commenced
in 2012), the allocation of responsibility differs from our other triple-net leases as it relates to preexisting known and unknown
contamination. Under the terms of our leases covering properties previously leased to Marketing, we agreed to be responsible for
environmental contamination that was known at the time the lease commenced, and for unknown environmental contamination which
existed prior to commencement of the lease and which 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) (a “Lookback Period”). Similarly, for certain properties
previously leased to Marketing which we have sold, we have agreed to be responsible for environmental contamination that was known
at the time of the sale and for unknown environmental contamination which existed prior to the sale and which is discovered (other than
as a result of a voluntary site investigation) within 5 years of the closing (also, a “Lookback Period”). Substantially all of these Lookback
Periods have now expired, therefore responsibility for all newly discovered contamination at these properties, even if it relates to periods
prior to commencement of the lease or sale, is the contractual responsibility of our tenant or buyer, as the case may be.
In the course of UST removals and replacements at certain properties previously leased to Marketing where we retained
responsibility for preexisting unknown environmental contamination until expiration of the applicable Lookback Period, environmental
contamination has been and continues to be discovered. As a result, we developed an estimate of fair value for the prospective future
environmental liability resulting from preexisting unknown environmental contamination and 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 anticipated removal and replacement of USTs. Our accrual of this liability
represents our estimate of the fair value of the cost for each component of the liability, net of estimated recoveries from state UST
remediation funds considering estimated recovery rates developed from prior experience. In arriving at our accrual, we analyzed the
ages and expected useful lives of USTs at properties where we would be responsible for preexisting unknown environmental
contamination and we projected a cost to closure for remediation of such contamination.
During the twelve months ended December 31, 2022, the Lookback Periods for most of the properties we previously leased to
Marketing expired. Based on the expiration of the Lookback Periods, together with other factors which have significantly mitigated our
62
potential liability for preexisting environmental obligations, including the absence of any contractual obligations relating to properties
which have been sold, quantifiable trends associated with types and ages of USTs at issue, expectations regarding future UST
replacements, and historical trends and expectations regarding discovery of preexisting unknown environmental contamination and/or
attempted pursuit of the Company therefor, we concluded that there is no material continued risk of having to satisfy contractual
obligations relating to preexisting unknown environmental contamination at certain properties. Accordingly, we removed $23,543,000
of unknown reserve liabilities which had previously been accrued for these properties. This resulted in a net credit of $22,193,000 being
recorded to environmental expense for the twelve months ended December 31, 2022.
We continue to anticipate that our tenants under leases where the Lookback Periods have expired will replace USTs in the years
ahead as these USTs near the end of their expected useful lives. At many of these properties the USTs in use are fabricated with older
generation materials and technologies and we believe it is prudent to expect that upon their removal preexisting unknown environmental
contamination will be identified. Although contractually these tenants are now responsible for preexisting unknown environmental
contamination that is discovered during UST replacements, because the applicable Lookback Periods have expired before the end of the
initial term of these leases, together with other relevant factors, we believe there remains continued risk that we will be responsible for
remediation of preexisting environmental contamination associated with future UST removals at certain properties. Accordingly, we
believe it is appropriate at this time to maintain $11,133,000 of unknown reserve liabilities for certain properties with respect to which
the Lookback Periods have expired as of December 31, 2022.
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, 2022, we had
accrued a total of $23,155,000 for our prospective environmental remediation obligations. This accrual consisted of (a) $10,797,000,
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) $12,358,000 for future environmental liabilities related to preexisting unknown
contamination. 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.
Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $1,259,000,
$1,705,000 and $1,841,000 of net accretion expense was recorded for the years ended December 31, 2022, 2021 and 2020, respectively,
which is included in environmental expenses. In addition, during the years ended December 31, 2022, 2021 and 2020, we recorded
credits to environmental expenses aggregating $23,837,000, $1,768,000 and $3,136,000, 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, 2022, 2021 and
2020, changes in environmental estimates aggregating, $1,983,000, $147,000 and $154,000, respectively, were related to properties that
were previously disposed of by us.
During the years ended December 31, 2022 and 2021, we increased the carrying values of certain of our properties by $3,269,000
and $3,004,000, 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, 2022, 2021 and 2020, were $3,672,000,
$4,004,000 and $4,020,000, respectively. Capitalized asset retirement costs were $33,213,000 (consisting of $24,742,000 of known
environmental liabilities and $8,471,000 of reserves for future environmental liabilities) as of December 31, 2022, and $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. We recorded impairment charges aggregating $2,480,000 and $3,074,000 for the years ended December 31, 2022
and 2021, 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
63
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 discovery of preexisting unknown environmental liabilities and for new environmental events. The policy had a $50,000,000
aggregate limit and was subject to various self-insured retentions and other conditions and limitations. This policy expired in July 2022,
although claims made prior to such expiration remain subject to coverage. In September 2022, we purchased a 5-year pollution legal
liability insurance policy to cover a subset of our properties which we believe present the greatest risk for discovery of preexisting
unknown environmental liabilities and for new environmental events. The policy has a $25,000,000 in 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 for
certain properties which we believe have the greatest risk of significant environmental events.
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, 2022, 2021 and 2020, of $557,000, $355,000 and $350,000,
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, 2022, 2021 and 2020, were:
Ordinary income
Capital gain distributions
Non-taxable distributions
2022
2021
2020
77.00%
3.00%
20.00%
100.00%
73.00%
5.50%
21.50%
100.00%
88.70%
3.40%
7.90%
100.00%
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 2019, 2020 and 2021, and tax returns which will be filed for the year ended 2022, 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, 2022 or 2021. However, uncertain tax
matters may have a significant impact on the results of operations for any single fiscal year or interim period.
64
NOTE 7. — STOCKHOLDERS’ EQUITY
A summary of the changes in stockholders’ equity for the years ended December 31, 2022, 2021 and 2020, is as follows (in
thousands):
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
Net earnings
Dividends declared — $1.66 per share
Shares issued pursuant to ATM Program, net
Shares issued pursuant to dividend reinvestment
Stock-based compensation and settlements
BALANCE, DECEMBER 31, 2022
Common Stock
Shares
Amount
41,368
$
414
$
Additional
Paid-in
Capital
656,127
Dividends
Paid in
Excess
of Earnings
$
(67,102) $
2,208
14
16
43,606
3,043
3
64
46,716
—
2
17
46,735
$
$
$
22
—
—
436
30
—
1
467
—
—
—
467
63,165
443
2,873
722,608
92,255
80
3,266
818,209
(207)
59
4,279
822,340
$
$
$
$
$
$
(886)
69,388
(64,843)
—
—
—
(63,443) $
62,860
(72,985)
—
—
—
(73,568) $
90,043
(79,432)
—
—
—
(62,957) $
Total
589,439
(886)
69,388
(64,843)
63,187
443
2,873
659,601
62,860
(72,985)
92,285
80
3,267
745,108
90,043
(79,432)
(207)
59
4,279
759,850
On March 1, 2022, March 1, 2021, and July 19, 2021, our Board of Directors granted 238,850, 192,550, and 3,500 restricted stock
units (“RSU” or “RSUs”), respectively, under our Amended and Restated 2004 Omnibus Incentive Compensation Plan.
ATM Program
In March 2018, the Company established an at-the-market equity offering program (the “2018 ATM Program”), pursuant to
which it was able to issue and sell shares of its 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, the Company established an at-the-market equity offering program (the “ATM Program”), pursuant to which
it is able to issue and sell shares of its common stock with an aggregate sales price of up to $250,000,000 through a consortium of banks
acting as sales agents or acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. 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.
The use of a forward sale agreement allows the Company to lock in a share price on the sale of shares at the time the forward sales
agreement becomes effective but defer receiving the proceeds from the sale of shares until a later date. To account for the forward sale
agreements, the Company considered the accounting guidance governing financial instruments and derivatives. To date, we have
concluded that our forward sale agreements are not liabilities as they do not embody obligations to repurchase our shares nor do they
embody obligations to issue a variable number of shares for which the monetary value are predominantly fixed, varying with something
other than the fair value of the shares, or varying inversely in relation to our shares.
The Company also evaluated whether the agreements meet the derivatives and hedging guidance scope exception to be accounted
for as equity instruments. We concluded that the agreements are classifiable as equity contracts based on the following assessments: (i)
none of the agreements’ exercise contingencies are based on observable markets or indices besides those related to the market for the
Company’s own stock price and operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to
its own stock.
65
The Company considers the potential dilution resulting from the forward sale agreements on the earnings per share calculations
and uses the treasury stock method to determine the dilution resulting from the forward sale agreements during the period of time prior
to settlement.
ATM Direct Issuances
During the year ended December 31, 2022, no shares of common stock were issued under the ATM Program.
During the year ended December 31, 2021, the Company issued a total of 3,043,000 shares of common stock and received net
proceeds of $92,300,000 under the ATM Program and the 2018 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.
ATM Forward Agreements
During the year ended December 31, 2022, the Company entered into forward sale agreements to sell an aggregate of 3,721,000
shares of common stock at an average gross offering price of $31.61 per share. No shares were settled during the year ended
December 31, 2022.
The Company expects to settle the forward sale agreements in full within 12 months of the respective agreement dates via physical
delivery of the outstanding shares of common stock in exchange for cash proceeds, although it may elect cash settlement or net share
settlement for all or a portion of its obligations under the forward sale agreements, subject to certain conditions.
During the year ended December 31, 2021, the Company did not enter into any forward sale agreements under the ATM Program.
Dividends
For the year ended December 31, 2022, we paid regular quarterly dividends of $78,323,000 or $1.64 per share. For the year ended
December 31, 2021, we paid regular quarterly dividends of $70,770,000 or $1.56 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,
2022 and 2021, we issued 2,053 and 2,681 shares of common stock, respectively, under the dividend reinvestment plan and received
proceeds of $59,000 and $80,000, respectively.
Stock-Based Compensation
Compensation cost for our stock-based compensation plans using the fair value method was $4,775,000, $3,997,000 and
$3,130,000 for the years ended December 31, 2022, 2021 and 2020, 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 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 grant awards
to a total of 4,000,000 shares; (ii) remove the limit on the maximum number of shares that may be subject to awards made in a calendar
year to all participants; (iii) include a minimum restriction period of one year for all awards (subject to certain exceptions); (iv) extend
the term until February 22, 2031. RSUs awarded under the Incentive Compensation 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 238,850, 196,050 and 191,050 RSUs and dividend equivalents in 2022, 2021 and 2020,
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 RSUs 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, 2022, 2021 and 2020, dividend equivalents aggregating approximately $1,855,000, $1,485,000 and $1,279,000,
respectively, were charged against retained earnings when common stock dividends were declared.
66
The following is a schedule of the activity relating to RSUs outstanding:
RSUs OUTSTANDING AT DECEMBER 31, 2019
Granted
Settled
Cancelled
RSUs OUTSTANDING AT DECEMBER 31, 2020
Granted
Settled
Cancelled
RSUs OUTSTANDING AT DECEMBER 31, 2021
Granted
Settled
Cancelled
RSUs OUTSTANDING AT DECEMBER 31, 2022
Number of
RSUs
Outstanding
Fair Value
Amount
Average
Per RSU
$
$
$
702,025
191,050
(24,250)
(31,350)
837,475
196,050
(112,125)
—
921,400
238,850
(35,830)
(7,170)
1,117,250
$
5,534,000
701,500
904,552
5,594,000
3,293,000
$
—
$
6,539,700
996,500
202,700
28.97
28.93
28.85
28.53
29.37
—
27.38
27.81
28.27
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, 2022, 2021 and 2020, was $4,745,000, $3,976,000 and $3,109,000, respectively, and
is included in general and administrative expense in our consolidated statements of operations. As of December 31, 2022, there was
$12,278,000 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 1,117,250 outstanding RSUs and the
554,556 vested RSUs as of December 31, 2022, was $37,819,000 and $18,772,000, respectively.
The following is a schedule of the vesting activity relating to RSUs outstanding:
RSUs VESTED AT DECEMBER 31, 2019
Vested
Settled
RSUs VESTED AT DECEMBER 31, 2020
Vested
Settled
RSUs VESTED AT DECEMBER 31, 2021
Vested
Settled
RSUs VESTED AT DECEMBER 31, 2022
Number of
RSUs Vested
Fair
Value
349,135
95,750
(24,250)
420,635
147,680
(112,125)
456,190
134,196
(35,830)
554,556
$
$
$
2,637,000
701,500
4,739,000
3,293,000
4,543,000
996,500
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 $382,000, $379,000 and $353,000 for the years ended December 31, 2022, 2021 and 2020, respectively. These amounts
are included in general and administrative expense in our consolidated statements of operations. For the year ended December 31, 2021
we distributed $95,000 from the Supplemental Plan to former officers of the Company. There were no distributions from the
Supplemental Plan for the year ended December 31, 2022.
67
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.
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):
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
Incremental shares from ATM Program forward agreements
Diluted
Basic earnings per common share
Diluted earnings per common share
$
$
$
2022
Year ended December 31,
2021
2020
90,043
(2,103)
87,940
46,730
106
2
46,838
1.88
1.88
$
$
$
62,860
(1,437)
61,423
44,782
37
—
44,819
1.37
1.37
$
$
$
69,388
(1,355)
68,033
42,040
30
—
42,070
1.62
1.62
NOTE 10. — FAIR VALUE MEASUREMENTS
Debt Instruments
As of December 31, 2022 and 2021, the carrying value of the borrowings under the Second Restated Credit Agreement
approximated fair value. As of December 31, 2022 and 2021, the fair value of the borrowings under senior unsecured notes was
$541,000,000 and $561,600,000, respectively. The fair value of the borrowings outstanding as of December 31, 2022 and 2021, 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, 2022, 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
$
$
1,208
$
— $
— $
1,208
— $
1,208
$
— $
1,208
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
$
$
68
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,
2022 and 2021, of $1,833,000 and $1,102,000, 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, 2022 and 2021, there were
three and 13 properties, respectively, that met criteria to be classified as held for sale.
Real estate held for sale consisted of the following at December 31, 2022 and 2021 (in thousands):
Land
Buildings and improvements
Accumulated depreciation and amortization
Real estate held for sale, net
Year ended December 31,
2022
2021
$
$
2,707
2,103
4,810
(1,053)
3,757
$
$
2,949
2,247
5,196
(1,575)
3,621
During the year ended December 31, 2022, we sold a total of 24 properties in multiple transactions which resulted in an aggregate
gain of $16,285,000 included in gain on dispositions of real estate on our consolidated statements of operations. We also received funds
from a property condemnation resulting in a gain of $138,000 included in gain on dispositions of real estate on our consolidated
statements of operations.
During the year ended December 31, 2021, we sold a total of 16 properties in multiple 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.
NOTE 12. — PROPERTY ACQUISITIONS
2022
During the twelve months ended December 31, 2022, the Company acquired fee simple interests in 40 properties for an aggregate
purchase price of $137,275,000 and allocated the purchase price as follows (in thousands):
Asset Type
Car wash properties
Convenience stores
Auto service centers
Drive thrus
Properties
16
9
14
1
40
$
Purchase
Price
67,528
43,874
22,912
2,961
$ 137,275
Land
12,727
20,573
2,621
702
36,623
$
$
Purchase Price Allocation
Buildings &
Improve-
ments
In-Place
Leases
Above
Market
Leases
Below
Market
Leases
$
$
49,871
18,888
17,516
2,182
88,457
$
$
5,545
4,413
2,823
77
12,858
$
$
403
—
—
—
403
$
$
(1,018)
—
(48)
—
(1,066)
69
2021
During the twelve months ended December 31, 2021, the Company acquired fee simple interests in 97 properties for an aggregate
purchase price of $194,292,000 and allocated the purchase price as follows (in thousands):
Asset Type
Convenience stores
Car wash properties
Auto service centers
Drive thrus
Properties
25
17
54
1
97
$
Purchase
Price
82,955
63,887
45,586
1,864
$ 194,292
Land
50,371
14,401
7,569
192
72,533
$
$
Purchase Price Allocation
Buildings &
Improve-
ments
$
26,836
44,069
32,668
1,568
$ 105,141
In-Place
Leases
$
$
6,843
5,417
4,179
104
16,543
$
$
Above
Market
Leases
Below
Market
Leases
— $
—
2,830
—
2,830
$
(1,095)
—
(1,660)
—
(2,755)
NOTE 13. — 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 $5,950,000 and $6,164,000 (net of accumulated amortization of $7,189,000 and $6,572,000,
respectively) at December 31, 2022 and 2021, 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 $19,092,000 and $19,827,000 (net of
accumulated amortization of $25,156,000 and $23,356,000, respectively) at December 31, 2022 and 2021, 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 $1,184,000, $1,221,000 and $1,438,000
for the years ended December 31, 2022, 2021 and 2020, respectively. Rent expense included amortization from acquired leases of $0,
$31,000 and $97,000 for the years ended December 31, 2022, 2021 and 2020, respectively.
In-place leases are included in prepaid expenses and other assets and had a balance of $68,064,000 and $60,928,000 (net of
accumulated amortization of $27,155,000 and $21,435,000, respectively) at December 31, 2022 and 2021, 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 $5,721,000, $4,647,000 and
$3,745,000 for the years ended December 31, 2022, 2021 and 2020, respectively.
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,
2023
2024
2025
2026
2027
Thereafter
Above-Market
Leases
Below-Market
Leases
In-Place
Leases
$
$
624,000
610,000
551,000
551,000
551,000
3,063,000
5,950,000
$
$
1,692,000
1,692,000
1,669,000
1,581,000
1,533,000
10,925,000
19,092,000
$
$
4,904,000
4,836,000
4,784,000
4,713,000
4,614,000
44,213,000
68,064,000
NOTE 14. — SUBSEQUENT EVENTS
In preparing our consolidated financial statements, we have evaluated events and transactions occurring after December 31, 2022,
for recognition or disclosure purposes. Based on this evaluation, there were no significant subsequent events, other than as described
below, from December 31, 2022, through the date the financial statements were issued.
On January 20, 2023, the Company issued $125,000,000 of senior unsecured notes priced at a fixed rate of 3.65% and maturing
January 20, 2033 pursuant to note purchase and guarantee agreements entered into in February 2022 and previously announced. Proceeds
from the senior unsecured notes were used to prepay the Company's $75,000,000 5.35% Series B senior unsecured notes due June 2,
2023, including related transaction expenses, and to fund investment activity.
The foregoing descriptions of the note purchase and guarantee 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 were filed as Exhibits to the Company’s
Quarterly Report on Form 10-Q for the quarter ending on March 31, 2022.
70
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, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2022 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,
2022, 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.
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
71
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 12 to the consolidated financial statements, during the year ended December 31, 2022, the Company
acquired fee simple interests in 40 properties which were accounted for as asset acquisitions for an aggregate purchase price of
$137,275,000. 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.
Environmental Remediation Obligations
As described in Notes 1 and 5 to the consolidated financial statements, as of December 31, 2022 management has accrued a total
of $23,155,000 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.
72
/s/ PricewaterhouseCoopers LLP
New York, New York
February 23, 2023
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.
73
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, 2022, 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, 2022.
The effectiveness of our internal control over financial reporting as of December 31, 2022, 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
74
PART III
Item 10. Directors, Executive Officers and Corporate Governance
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, 2022.
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.
75
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 III — Real Estate and Accumulated Depreciation and Amortization as of December 31, 2022
Schedule IV — Mortgage Loans on Real Estate as of December 31, 2022
(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.
76
GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION
As of December 31, 2022
(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
2022
2021
2020
1,410,051
128,349
(3,852)
(12,992)
(6,806)
1,514,750
210,615
33,700
(307)
(4,161)
(5,982)
233,865
$
$
$
$
1,246,588
182,110
(5,409)
(12,595)
(643)
1,410,051
187,061
30,126
(1,382)
(4,256)
(934)
210,615
$
$
$
$
1,113,651
141,240
(5,324)
(2,603)
(376)
1,246,588
165,892
25,869
(1,066)
(929)
(2,705)
187,061
$
$
$
$
77
Phenix City, AL
Troy, AL
Fayetteville, AR
Fayetteville, AR
Hope, AR
Jacksonville, AR
Jonesboro, 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
Cotati, CA
Fillmore, CA
Grass Valley, CA
Harbor City, CA
Hercules, CA
Gross Amount at Which Carried
at Close of Period
$
Building and
Improvements
728
$
1,918
629
896
473
796
1,521
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
2,064
404
632
845
882
Total
Cost
1,670
2,595
2,266
2,867
1,472
1,526
2,737
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
6,072
1,354
1,485
4,442
6,900
Accumulated
Depreciation
155
$
128
148
210
112
53
640
1,701
112
109
118
409
42
188
105
112
132
463
200
159
271
473
425
179
218
191
350
122
158
212
495
512
475
410
726
194
240
234
209
237
111
329
851
862
289
272
204
61
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2019
2021
2018
2018
2018
2021
2014
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
2015
2007
2015
2019
2021
$
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
1,670
$
2,595
2,266
2,867
1,472
1,526
2,737
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
6,072
1,354
1,485
4,442
6,900
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Land
942
677
1,637
1,971
999
730
1,216
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
4,008
950
853
3,597
6,018
78
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
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
Thornton, CO
Westminster, CO
Gross Amount at Which Carried
at Close of Period
$
Building and
Improvements
794
$
1,563
948
1,241
582
1,210
1,020
808
1,606
1,311
2,090
1,335
823
431
511
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
2,281
705
Total
Cost
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
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
5,003
1,457
Accumulated
Depreciation
547
$
793
425
584
413
597
478
170
785
632
1,021
667
170
100
298
491
725
806
792
628
465
614
279
692
256
196
453
146
266
944
198
145
201
116
639
941
521
673
360
873
727
638
661
374
999
594
1,069
322
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2007
2015
2015
2015
2007
2015
2015
2019
2015
2015
2015
2015
2019
2019
2015
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
2015
2015
$
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
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
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
5,003
1,457
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(128)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Land
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
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
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
2,722
752
79
Avon, CT
Bridgeport, CT
Bridgeport, CT
Bridgeport, CT
Bristol, CT
Brookfield, CT
Darien, CT
Durham, CT
Ellington, CT
Hamden, CT
Hartford, CT
Meriden, CT
Middletown, CT
Milford, 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
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
Yulee, FL
Augusta, GA
Augusta, GA
Gross Amount at Which Carried
at Close of Period
$
Building and
Improvements
378
$
407
452
522
558
520
498
994
453
118
233
543
429
1,170
373
397
647
334
342
218
291
599
326
2,034
1,444
208
193
313
626
639
216
180
288
358
425
223
251
388
361
1,779
430
277
838
921
500
1,393
766
2,864
Total
Cost
781
611
680
768
1,594
540
932
994
1,295
645
665
1,532
560
3,388
514
748
1,216
954
707
550
693
1,219
931
3,679
2,042
545
523
706
956
840
551
515
804
925
1,215
616
717
726
1,031
2,834
848
941
2,894
2,064
901
1,963
1,843
3,150
Accumulated
Depreciation
329
$
352
397
467
405
478
497
994
329
23
169
397
375
51
318
377
443
243
222
217
202
444
237
122
895
159
192
291
553
553
166
131
212
274
309
222
182
378
262
1,544
207
154
283
167
467
410
156
776
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2002
1985
1985
1985
2004
1985
1985
2004
2004
2018
2004
2004
1987
2022
1985
1985
1985
2004
1982
1985
1988
1969
2004
2021
2004
2004
1985
1985
1985
2004
2004
2004
2004
2004
2004
1985
2004
1985
2004
2004
2013
2013
2017
2019
2000
2017
2019
2017
$
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
731
$
313
350
377
1,594
58
667
994
1,295
645
665
1,532
133
3,388
217
539
1,413
954
90
511
-
-
931
3,679
644
545
507
603
507
237
551
515
804
925
1,215
604
717
519
1,031
1,434
848
941
2,894
2,064
868
1,963
1,843
3,150
Cost
Capitalized
Subsequent
to Initial
Investment
50
$
298
330
391
-
482
265
-
-
-
-
-
427
-
297
209
(197)
-
617
39
693
1,219
-
-
1,398
-
16
103
449
603
-
-
-
-
-
12
-
207
-
1,400
-
-
-
-
33
-
-
-
Land
403
204
228
246
1,036
20
434
-
842
527
432
989
131
2,218
141
351
569
620
365
332
402
620
605
1,645
598
337
330
393
330
201
335
335
516
567
790
393
466
338
670
1,055
418
664
2,056
1,143
401
570
1,077
286
80
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
Peoria, 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
Bradford, MA
Burlington, MA
Burlington, MA
Falmouth, MA
Foxborough, MA
Gardner, MA
Gardner, MA
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2019
2019
2017
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2021
2022
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
2011
2011
2011
1988
1990
2011
2014
Accumulated
Depreciation
138
$
105
146
367
99
225
391
700
394
500
592
766
1,009
193
4
13
224
78
61
542
49
39
475
511
32
333
52
495
196
186
467
378
734
284
207
261
-
-
-
160
-
330
-
-
-
610
184
-
80
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
1,617
$
995
1,724
1,522
1,071
1,539
1,769
9,211
1,364
1,977
1,520
1,997
2,458
3,814
1,635
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
650
600
1,250
415
427
550
787
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
-
-
30
-
-
-
-
236
-
-
-
-
-
(842)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28
164
-
-
-
12
-
73
-
-
-
2,372
98
-
-
Gross Amount at Which Carried
at Close of Period
Land
Building and
Improvements
Total
Cost
$
633
750
412
464
120
320
577
1,017
542
740
872
1,126
1,513
2,859
911
353
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
293
-
-
-
200
-
331
-
-
-
2,329
200
-
149
1,617
995
1,724
1,522
1,101
1,539
1,769
9,211
1,364
2,213
1,520
1,997
2,458
3,814
1,635
705
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
533
600
625
725
548
1,350
807
650
600
1,250
2,787
525
550
787
$
$
984
245
1,312
1,058
981
1,219
1,192
8,194
822
1,473
648
871
945
955
724
352
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
650
600
1,250
458
325
550
638
81
Gardner, MA
Hyde Park, MA
Leominster, MA
Littleton, MA
Lowell, 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
Sutton, MA
Tewksbury, MA
Tewksbury, MA
Wakefield, 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
Beltsville, MD
Bladensburg, MD
Bowie, MD
Capitol Heights,, MD
Clinton, MD
College Park, MD
District Heights, MD
Date of
Initial
Leasehold or
Acquisition
Investment (1)
1985
1985
2012
2017
1996
2019
2011
2011
1985
2011
1985
2011
1985
2011
2011
1985
2011
1985
2011
1985
1993
1986
2011
2011
1985
1985
1985
2011
2011
1985
2011
2011
1991
2017
1991
1985
2010
2007
2007
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
Accumulated
Depreciation
618
$
326
212
179
136
323
-
-
336
-
187
-
330
-
-
358
-
246
-
116
254
489
-
-
164
1,092
110
-
-
312
-
-
161
265
277
483
-
634
1,034
-
-
-
-
-
-
-
-
-
-
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
1,009
$
499
571
1,357
-
3,961
850
550
735
600
490
650
691
550
650
574
1,300
579
600
1,073
714
125
1,200
900
358
1,012
490
600
1,300
508
500
550
547
196
979
498
692
802
2,259
525
731
1,050
1,130
571
1,084
628
651
536
1,039
Cost
Capitalized
Subsequent
to Initial
Investment
412
$
188
-
-
636
-
-
-
99
-
16
-
89
-
-
245
-
45
-
(373)
57
596
-
-
129
1,164
159
-
-
314
-
-
11
790
7
530
-
-
-
-
-
-
-
-
-
-
-
-
-
Gross Amount at Which Carried
at Close of Period
Land
Building and
Improvements
Total
Cost
$
764
365
372
598
207
1,919
-
-
355
-
187
-
330
-
-
389
-
247
-
124
307
646
-
-
166
1,517
330
-
-
314
-
-
202
986
350
706
-
802
1,537
-
-
-
-
-
-
-
-
-
-
1,421
687
571
1,357
636
3,961
850
550
834
600
506
650
780
550
650
819
1,300
624
600
700
771
721
1,200
900
487
2,176
649
600
1,300
822
500
550
558
986
986
1,028
692
802
2,259
525
731
1,050
1,130
571
1,084
628
651
536
1,039
$
$
657
322
199
759
429
2,042
850
550
479
600
319
650
450
550
650
430
1,300
377
600
576
464
75
1,200
900
321
659
319
600
1,300
508
500
550
356
-
636
322
692
-
722
525
731
1,050
1,130
571
1,084
628
651
536
1,039
82
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
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
Jackson, MI
Jenison, MI
Lambertville, MI
Lansing, MI
Lansing, MI
Lansing, MI
Livonia, MI
Madison Heights, MI
Madison Heights, MI
Midland, MI
Date of
Initial
Leasehold or
Acquisition
Investment (1)
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
2021
2021
2021
2021
2021
2021
2021
2021
2021
Accumulated
Depreciation
745
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
391
287
176
155
30
29
27
35
38
34
31
37
77
33
44
36
37
63
37
29
27
41
25
36
56
140
32
72
36
37
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
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
559
491
557
552
563
554
556
562
1,174
506
818
562
562
1,043
559
508
558
615
617
488
916
3,230
526
1,760
562
518
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8
188
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Gross Amount at Which Carried
at Close of Period
Land
Building and
Improvements
Total
Cost
$
895
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
391
308
2,454
2,711
425
400
277
477
547
486
353
516
1,074
420
617
514
530
851
532
390
376
578
272
410
726
2,378
404
1,568
524
508
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
559
491
557
552
563
554
556
562
1,174
506
818
562
562
1,043
559
508
558
615
617
488
916
3,230
526
1,760
562
518
$
$
0
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
222
771
562
134
91
280
75
16
68
203
46
100
86
201
48
32
192
27
118
182
37
345
78
190
852
122
192
38
10
83
Midland, MI
Oak Park,, MI
Redford Township, MI
Saginaw, MI
Sterling Heights, MI
Trenton, MI
Warren, MI
Wyoming, MI
Zeeland, MI
Maple Grove, MIN
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
Angier, NC
Candler, NC
Cary, NC
Charlotte, NC
Charlotte, NC
Fayetteville, NC
Franklin, NC
Greensboro, NC
Henderson, NC
Henderson, NC
Hickory, NC
High Point, NC
Indian Trail, NC
Jacksonville, NC
Kannapolis, NC
Lexington, NC
Lexington, NC
Lexington, NC
Lincolnton, NC
Monroe, NC
Morganton, NC
Nashville, NC
Oxford, NC
Raleigh, NC
Raleigh, NC
Rockingham, NC
Gross Amount at Which Carried
at Close of Period
$
Building and
Improvements
620
$
455
516
399
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
1,297
1,208
647
510
1,524
477
1,213
2,888
582
762
2,182
787
1,088
1,004
3,175
1,162
1,173
1,475
1,186
654
1,236
1,647
1,220
452
472
2,802
Total
Cost
630
562
560
523
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
1,390
1,290
1,939
1,967
5,194
986
1,275
3,857
1,356
2,680
2,884
1,155
5,895
1,272
3,791
1,316
1,317
1,776
1,392
1,886
1,391
4,025
1,529
1,601
2,929
3,035
Accumulated
Depreciation
44
$
33
36
32
29
36
32
34
48
508
555
592
577
446
531
521
398
57
71
63
88
5
4
46
31
90
119
4
467
44
47
8
113
63
4
609
4
4
330
4
39
4
103
73
96
31
510
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2021
2021
2021
2021
2021
2021
2021
2021
2021
2019
2020
2020
2020
2020
2020
2020
2020
2021
2021
2021
2021
2022
2022
2021
2021
2021
2018
2022
2020
2021
2021
2022
2020
2021
2022
2019
2022
2022
2017
2022
2021
2022
2021
2021
2019
2021
2019
$
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
630
$
562
560
523
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
1,390
1,290
1,939
1,967
5,194
986
1,275
3,857
1,356
2,680
2,884
1,155
5,895
1,272
3,791
1,316
1,317
1,776
1,392
1,886
1,391
4,025
1,529
1,601
2,929
3,035
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Land
10
107
44
124
170
48
41
37
92
955
386
354
600
366
609
317
570
351
850
1,258
3,069
93
82
1,292
1,457
3,670
509
62
969
774
1,918
702
368
4,807
268
616
154
144
301
206
1,232
155
2,378
309
1,149
2,457
233
84
Rolesville, NC
Sylva, NC
Taylorsville, NC
Wake Forest, NC
Waynesville, NC
Wesley Chapel, NC
Wilson, NC
Winston-Salem, 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
Brick, NJ
Elizabeth, NJ
Flemington, NJ
Fort Lee, NJ
Freehold, NJ
Hasbrouck Heights, NJ
Lake Hopatcong, NJ
Lawrence Township, NJ
Livingston, NJ
Long Branch, NJ
Gross Amount at Which Carried
at Close of Period
$
Building and
Improvements
629
$
2,108
979
703
2,241
1,504
800
999
674
850
1,320
-
-
-
-
-
1,040
738
-
275
-
-
-
-
-
-
352
-
-
413
-
-
-
351
-
-
279
971
447
675
274
218
927
1,447
937
505
43
369
738
Total
Cost
1,329
2,170
1,082
1,114
2,323
7,158
1,076
1,210
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
1,675
501
564
1,738
1,542
1,353
1,305
846
937
1,073
Accumulated
Depreciation
45
$
7
3
48
8
84
3
4
49
782
930
-
-
-
-
-
679
691
-
275
-
-
-
-
-
-
126
-
-
224
-
-
-
350
-
-
278
277
391
526
245
217
757
644
737
485
-
353
543
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2021
2022
2022
2021
2022
2021
2022
2022
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
2000
1985
1985
1985
1978
1985
2000
2012
1985
1985
$
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
1,329
$
2,170
1,082
1,114
2,323
7,158
1,076
1,210
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
1,508
406
547
1,246
494
640
1,305
1,303
872
514
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
-
-
-
-
-
-
-
-
-
730
-
-
-
12
-
-
20
871
285
167
95
17
492
1,048
713
-
(457)
65
559
Land
700
62
103
411
82
5,654
276
211
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
525
550
700
600
1,400
1,600
484
350
200
1,000
227
346
811
95
416
800
803
568
335
85
$
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
201
$
630
227
382
418
620
703
683
671
912
450
800
1,829
2,308
2,322
3,682
1,842
1,665
4,697
5,411
2,814
3,094
3,472
3,722
3,752
4,181
5,054
5,402
5,641
5,757
1,684
470
789
652
877
884
953
1,049
46
1,910
2,408
1,232
237
477
627
1,158
2,543
1,872
Midland Park, NJ
North Bergen, NJ
North Plainfield, NJ
Paramus, NJ
Parlin, NJ
Paterson, NJ
Ridgewood, NJ
Somerset, NJ
Vernon, NJ
Washington Township, NJ
Watchung, NJ
West Orange, NJ
Albuquerque, NM
Albuquerque, NM
Albuquerque, NM
Albuquerque, NM
Las Cruces, NM
Fernley, NV
Henderson, NV
Henderson, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Astoria, 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
Chester, NY
Corona, NY
Cortlandt Manor, NY
Date of
Initial
Leasehold or
Acquisition
Investment (1)
1989
1985
1978
1985
1985
1985
1985
1985
1985
1985
1985
1985
2017
2017
2017
2017
2017
2015
2022
2022
2019
2019
2019
2021
2019
2022
2022
2022
2022
2022
2013
1985
2011
1976
2013
2013
2013
2013
1972
2013
2013
2011
1985
1985
1985
2011
2013
2011
Accumulated
Depreciation
323
$
358
569
351
325
233
598
438
561
587
305
676
148
170
182
192
159
774
15
30
306
330
375
195
428
13
36
29
9
13
321
338
-
702
-
-
-
314
379
327
365
-
393
441
480
-
341
-
Gross Amount at Which Carried
at Close of Period
Cost
Capitalized
Subsequent
to Initial
Investment
Land
Building and
Improvements
Total
Cost
$
389
367
594
878
461
233
712
439
729
748
481
725
447
478
526
541
468
1,444
1,439
3,053
2,251
2,264
2,817
3,091
3,137
3,106
4,022
3,133
1,890
2,989
579
418
-
702
-
-
-
564
1,280
561
696
-
485
490
532
-
640
-
539
777
769
1,127
664
636
1,170
884
1,166
1,342
707
1,246
1,829
2,308
2,322
3,682
1,842
1,665
4,697
5,411
2,814
3,094
3,472
3,722
3,752
4,181
5,054
5,402
5,641
5,757
1,684
724
789
1,204
877
884
953
1,049
1,364
1,910
2,408
1,232
639
796
940
1,158
2,543
1,872
$
338
147
542
745
246
16
467
201
495
430
257
446
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
254
-
552
-
-
-
-
1,318
-
-
-
402
319
313
-
-
-
$
150
410
175
249
203
403
458
445
437
594
226
521
1,382
1,830
1,796
3,141
1,374
221
3,258
2,358
563
830
655
631
615
1,075
1,032
2,269
3,751
2,768
1,105
306
789
502
877
884
953
485
84
1,349
1,712
1,232
154
306
408
1,158
1,903
1,872
86
Dobbs Ferry, NY
Dobbs Ferry, NY
East Hampton, NY
East Meadow, NY
Eastchester, NY
Elmsford, NY
Elmsford, NY
Fishkill, NY
Floral Park, NY
Flushing, NY
Flushing, NY
Flushing, NY
Flushing, NY
Forest Hills, 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
Middletown, NY
Middletown, NY
Middletown, NY
Millwood, NY
Mount Kisco, NY
Mount Vernon, NY
Nanuet, NY
New Paltz, NY
New Rochelle, NY
New Windsor, NY
New York, NY
New York,NY
Newburgh, NY
Newburgh, NY
Ossining, NY
Peekskill, NY
Pelham, NY
Plattsburgh, NY
Pleasant Valley, NY
Port Chester, NY
Port Jefferson, NY
Date of
Initial
Leasehold or
Acquisition
Investment (1)
1985
2011
1985
1988
2011
1971
2011
2011
1998
1998
2013
2013
2013
2013
2011
1985
1985
2011
2011
2011
2011
2011
2008
2020
1985
1985
2013
2011
2011
1985
2011
2011
2011
2011
2011
2011
2011
2011
1972
2020
2011
2011
1985
2011
2011
2021
1986
2011
1985
Accumulated
Depreciation
270
$
-
270
79
136
306
-
-
386
194
291
277
346
-
-
206
74
-
-
-
-
-
618
82
217
272
710
-
-
487
-
-
-
-
-
-
-
-
402
154
-
-
308
-
-
159
260
-
714
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
671
$
1,345
659
-
1,724
-
1,453
1,793
617
516
1,936
1,947
2,478
1,273
1,508
462
500
1,626
2,084
1,163
990
1,084
1,028
2,498
503
546
2,717
1,429
719
751
1,281
1,448
1,907
985
2,316
971
1,887
1,084
126
282
527
1,192
231
2,207
1,035
4,150
399
1,015
185
Cost
Capitalized
Subsequent
to Initial
Investment
33
$
-
40
1,903
993
948
-
-
169
-
-
-
-
-
-
46
24
-
-
-
-
-
-
-
42
87
-
-
-
274
-
-
-
-
-
-
-
-
399
271
-
-
294
-
-
-
168
-
3,084
Gross Amount at Which Carried
at Close of Period
Land
Building and
Improvements
Total
Cost
$
270
-
271
233
415
367
-
-
430
196
523
542
677
-
-
207
74
-
-
-
-
-
825
685
218
277
1,534
-
-
536
-
-
-
-
-
-
-
-
447
553
-
-
408
-
-
3,023
327
-
3,023
704
1,345
699
1,903
2,717
948
1,453
1,793
786
516
1,936
1,947
2,478
1,273
1,508
508
524
1,626
2,084
1,163
990
1,084
1,028
2,498
545
633
2,717
1,429
719
1,025
1,281
1,448
1,907
985
2,316
971
1,887
1,084
525
553
527
1,192
525
2,207
1,035
4,150
567
1,015
3,269
$
$
434
1,345
428
1,670
2,302
581
1,453
1,793
356
320
1,413
1,405
1,801
1,273
1,508
301
450
1,626
2,084
1,163
990
1,084
203
1,813
327
356
1,183
1,429
719
489
1,281
1,448
1,907
985
2,316
971
1,887
1,084
78
-
527
1,192
117
2,207
1,035
1,127
240
1,015
246
87
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Poughkeepsie, NY
Rego Park, NY
Riverhead, NY
Rockaway Park, NY
Rye, NY
Sag Harbor, NY
Scarsdale, NY
Shrub Oak, NY
Sleepy Hollow, NY
Spring Valley, NY
Staten Island, NY
Staten Island, NY
Tarrytown, NY
Troy, NY
Tuckahoe, NY
Vestal, NY
Wantagh, NY
Wappingers Falls, NY
Warwick, NY
Watertown, NY
Watertown, 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
Cincinnati, OH
Cincinnati, OH
Cincinnati, OH
Crestline, OH
Fairfield, OH
Hamilton, OH
Lima, OH
Loveland, OH
Mansfield, OH
Mansfield, OH
Maumee, OH
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2011
2011
2011
2011
2011
2011
2013
1998
2013
2011
1985
2011
1985
1969
2011
1985
1985
2011
2020
2011
2022
1998
2011
2011
2022
2022
2011
2011
1972
1993
1990
1985
1972
2011
2013
2011
2017
2021
2021
2021
2020
2008
2020
2021
2021
2017
2008
2009
2021
Accumulated
Depreciation
0
$
-
-
-
-
-
363
290
-
-
280
-
694
510
-
379
362
-
71
-
66
261
-
-
13
80
-
-
233
340
91
418
898
-
727
-
303
212
195
203
498
587
397
211
42
202
364
764
36
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
591
$
1,020
1,232
1,340
1,306
1,355
2,783
724
1,605
872
704
1,301
1,061
281
749
301
350
956
4,690
1,650
2,700
640
1,488
1,049
1,012
2,867
936
1,458
-
-
-
1,020
291
1,907
1,700
2,365
1,530
3,195
3,188
3,188
3,716
1,202
3,770
3,188
637
1,045
922
1,950
557
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
(32)
(60)
-
-
-
-
-
-
35
-
421
429
-
323
290
-
-
-
-
-
-
-
-
-
-
-
569
798
832
64
1,050
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Gross Amount at Which Carried
at Close of Period
Land
Building and
Improvements
Total
Cost
$
0
-
-
-
-
-
679
292
-
-
281
-
791
580
-
428
412
-
571
-
2,132
270
-
-
340
2,564
-
-
266
423
148
419
1,125
-
1,700
-
1,145
2,558
2,533
2,914
3,175
917
3,188
2,817
584
683
590
1,250
490
591
1,020
1,200
1,280
1,306
1,355
2,783
724
1,605
872
739
1,301
1,482
710
749
624
640
956
4,690
1,650
2,700
640
1,488
1,049
1,012
2,867
936
1,458
569
798
832
1,084
1,341
1,907
1,700
2,365
1,530
3,195
3,188
3,188
3,716
1,202
3,770
3,188
637
1,045
922
1,950
557
$
$
591
1,020
1,200
1,280
1,306
1,355
2,104
432
1,605
872
458
1,301
691
130
749
196
228
956
4,119
1,650
568
370
1,488
1,049
672
303
936
1,458
303
375
684
665
216
1,907
-
2,365
385
637
655
274
541
285
582
371
53
362
332
700
67
88
Monroeville, 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
Reading, PA
Barrington, RI
N. Providence,, RI
Blythewood, SC
Chapin, SC
Charleston, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Columbia, SC
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2009
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
1989
1985
1985
2017
2017
2021
2017
2017
2017
2017
2017
2017
2018
2018
2017
2018
2017
2017
Accumulated
Depreciation
1,272
$
483
36
36
37
30
38
194
120
137
152
203
-
231
653
293
452
369
364
401
479
476
170
321
97
529
361
375
379
327
245
799
260
250
274
182
172
68
103
145
111
295
80
228
245
299
225
407
435
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
2,580
$
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
750
490
542
3,217
1,682
4,996
575
792
868
927
1,436
1,643
1,995
2,109
2,460
2,531
2,637
3,371
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
212
56
-
254
-
49
132
62
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Gross Amount at Which Carried
at Close of Period
Land
Building and
Improvements
Total
Cost
$
2,095
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
412
398
700
396
438
799
303
251
812
547
3,015
230
329
413
432
964
341
865
989
891
919
1,383
1,355
2,580
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
611
698
1,375
660
1,252
799
622
604
3,217
1,682
4,996
575
792
868
927
1,436
1,643
1,995
2,109
2,460
2,531
2,637
3,371
$
$
485
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
300
675
264
814
-
319
353
2,405
1,135
1,981
345
463
455
495
472
1,302
1,130
1,120
1,569
1,612
1,254
2,016
89
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
Austin, TX
Austin, TX
Austin, TX
Cedar Park, TX
Cedar Park, TX
Center, TX
Childress, TX
Cibolo, TX
Corpus Christi, TX
Corpus Christi, TX
Corpus Christi, TX
Gross Amount at Which Carried
at Close of Period
$
Building and
Improvements
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
1,301
1,630
1,982
3,648
5,009
591
1,376
2,224
470
433
1,290
Total
Cost
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
2,312
2,368
3,577
4,177
5,618
2,073
3,335
3,228
1,526
2,162
2,400
Accumulated
Depreciation
284
$
353
385
178
133
328
144
559
351
151
101
174
149
113
125
198
189
78
162
131
211
199
319
481
339
39
308
26
177
325
114
378
97
113
128
143
125
44
1,088
1,298
114
158
154
169
257
143
149
395
Date of
Initial
Leasehold or
Acquisition
Investment (1)
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
2022
2007
2007
2022
2022
2018
2020
2020
2017
2017
2017
$
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
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
2,312
2,368
3,510
4,177
5,618
2,073
3,335
3,228
1,526
2,162
2,400
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
-
-
-
-
-
(178)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
67
-
-
-
-
-
-
-
-
Land
1,166
974
934
434
667
69
867
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
1,011
738
1,595
529
609
1,482
1,959
1,004
1,056
1,729
1,110
90
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
Leander, TX
Leander, TX
Leander, TX
Lewisville, TX
Linden, TX
Longview, TX
Mathis, TX
Mesquite, TX
Panhandle, TX
Paris, TX
Paris, TX
Pflugerville, TX
Port Arthur, TX
Rockdale, TX
Round Rock, TX
Round Rock, 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 Antonio, TX
San Antonio, TX
San Antonio, TX
San Marcos, TX
Schertz, TX
Shamrock, TX
Gross Amount at Which Carried
at Close of Period
$
Building and
Improvements
453
$
327
594
403
603
1,015
1,420
704
3,051
4,000
499
585
1,568
1,465
2,268
1,568
2,718
4,014
3,989
420
646
421
451
594
2,431
1,187
1,343
4,051
2,143
2,763
3,368
3,075
444
2,300
2,799
2,981
3,124
2,610
2,301
2,986
2,361
2,824
2,511
3,400
3,769
1,703
1,981
1,823
Total
Cost
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
3,321
4,641
4,646
530
2,160
1,660
3,138
1,687
5,068
3,832
5,322
4,668
2,648
3,237
4,199
4,642
1,284
2,810
3,286
3,427
3,618
3,630
3,631
3,718
3,820
3,936
4,168
4,397
4,411
1,954
2,794
3,045
Accumulated
Depreciation
154
$
114
180
140
189
320
900
164
1,079
1,478
129
142
1,260
957
627
1,092
95
131
138
288
158
99
155
144
318
121
154
129
611
11
81
112
102
193
75
308
311
312
167
311
260
31
52
385
394
1,126
208
231
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2017
2017
2017
2017
2017
2017
2007
2018
2014
2014
2018
2018
2007
2007
2016
2007
2022
2022
2022
2008
2018
2018
2017
2018
2020
2020
2020
2022
2016
2022
2022
2022
2018
2021
2022
2020
2020
2020
2021
2020
2020
2022
2022
2020
2020
2007
2020
2020
$
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
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
3,321
4,641
4,646
494
2,160
1,660
3,138
1,687
5,068
3,832
5,322
4,668
2,648
3,237
4,199
4,642
1,284
2,810
3,286
3,427
3,618
3,630
3,631
3,718
3,820
3,936
4,168
4,397
4,411
1,954
2,794
3,045
Cost
Capitalized
Subsequent
to Initial
Investment
0
$
-
-
-
-
-
171
-
-
-
-
-
95
-
-
57
-
-
-
36
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Land
825
1,098
1,085
1,413
1,767
2,153
866
1,504
245
439
914
1,415
579
224
535
996
603
627
657
110
1,514
1,239
2,687
1,093
2,637
2,645
3,979
617
505
474
831
1,567
840
510
487
446
494
1,020
1,330
732
1,459
1,112
1,657
997
642
251
813
1,222
91
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
Gross Amount at Which Carried
at Close of Period
$
Building and
Improvements
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
Total
Cost
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
Accumulated
Depreciation
824
$
172
181
174
150
2,074
213
150
-
148
-
-
-
224
239
261
-
-
214
273
249
-
120
708
194
349
337
515
560
431
577
512
566
445
537
441
448
468
584
441
427
370
537
445
373
416
431
441
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
$
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
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
Cost
Capitalized
Subsequent
to Initial
Investment
-11
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(186)
110
-
-
-
-
-
-
-
-
-
-
-
-
(25)
14
-
-
-
-
(114)
-
34
(41)
-
-
Land
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
385
2,227
1,190
1,365
2,351
3,370
622
469
996
2,828
412
322
1,068
248
324
223
505
876
1,157
1,612
816
222
506
915
102
92
Initial Cost
of Leasehold
or Acquisition
Investment to
Company (1)
1,290
$
4,257
612
3,099
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
62,697
$ 1,456,333
$
$
Cost
Capitalized
Subsequent
to Initial
Investment
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,300
58,417
Gross Amount at Which Carried
at Close of Period
Land
$
490
2,969
355
2,246
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
34,729
$ 804,717
Building and
Improvements
800
$
1,288
257
853
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
43,268
710,033
$
Total
Cost
$
1,290
4,257
612
3,099
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
77,997
$ 1,514,750
Accumulated
Depreciation
569
$
658
41
38
134
474
377
424
535
601
373
406
568
714
343
692
911
324
225
285
466
-
268
-
-
305
404
225
35,508
233,865
$
Date of
Initial
Leasehold or
Acquisition
Investment (1)
2005
2013
2020
2022
2021
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
2015
various
Spotsylvania,VA
Springfield,VA
Woodstock,VA
West Haven,VT
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)
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 $1,568,000 at December 31, 2022.
93
GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE IV—MORTGAGE LOANS ON REAL ESTATE
As of December 31, 2022
(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
Brooklyn, NY
East Islip, NY
Valley Cottage, NY
Smithtown, NY
Norwalk, CT
Stafford Springs, CT
Bristol, CT
Hartford, CT
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing Waterbury, CT
Seller financing
Seller financing
Seller financing Middletown, CT
New Britain, CT
Seller financing
Plainville, CT
Seller financing
Simsbury, CT
Seller financing
Seller financing Milford, CT
Fairfield, CT
Seller financing
Seller financing
Hartford, CT
Seller financing Wilmington, DE
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing Malta, NY
Seller financing
Seller financing
Seller financing
Seller financing
Seller financing
Brewster, NY
Rochester, NY
Savona, NY
Rochester, NY
Greigsville, NY
Fairhaven, MA
Colonia, NJ
Glendale, NY
Bayside, NY
Elmont, NY
8.0%
7/2025
9.0% 11/2024
9.0% 10/2020(e)
1/2027
9.5%
4/2022(e)
9.0%
1/2021(e)
9.0%
2/2021(e)
9.0%
5/2026
9.0%
2/2027
9.5%
5/2026
9.0%
4/2027
9.5%
3/2027
9.5%
5/2026
9.0%
3/2025
9.0%
3/2025
9.0%
9.0%
3/2024
9.0% 11/2027
9/2020(e)
9.0%
7/2030
9.5%
9.0%
7/2025
9.5% 12/2029
9.0% 10/2021(e)
9.0%
9.0% 10/2022(e)
1/2025
9.0%
9.0%
2/2025
9.0% 10/2025
9.0% 11/2025
3/2023
I(b)
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
Promissory Note Various
6.8%
various(c)
Promissory Note Various-SC
Promissory Note Various-CT, NY
Promissory Note Various-CT
Allowance for
credit losses
6.75%-
6.9%
6.9%
9.0%
8/2022(c)
various(c)
various(c)
— $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
$
1,050
743
431
280
319
232
171
76
440
308
192
160
192
398
390
70
84
458
320
525
320
450
572
554
174
157
230
200
9,496
—
—
—
—
1,050
657
321
154
260
175
130
70
416
285
182
152
177
356
349
61
63
340
216
233
314
302
477
446
154
139
209
182
7,870
9,626
8,800
7,472
823
—
9,496
$
$
(278)
34,313
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
Note receivable
Total (d)
I = Interest only paid monthly with principal deferred.
(a) P & I = Principal and interest paid monthly.
(b)
(c) Note for funding of capital improvements.
(d) The aggregate cost for federal income tax purposes approximates the amount of principal unpaid.
(e) Note is in the process of being refinanced or repaid.
94
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. At December 31, 2022 and 2021, we recorded an
an allowance for credit losses of $278,000 and $297,000, respectively on these notes and mortgages receivable. In addition, during the
years ended December 31, 2022 and 2021, we recorded a credit of $19,000 and $40,000, 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
Allowance for credit losses
Balance at December 31,
2022
2021
2020
14,699
$
11,280
$
30,855
21,242
(1,221)
(426)
19
34,313
$
13,943
(9,893)
(671)
40
14,699
$
3,724
(22,260)
(702)
(337)
11,280
$
$
95
EXHIBIT INDEX
GETTY REALTY CORP.
Annual Report on Form 10-K
for the year ended December 31, 2022
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 for the year ended December 31, 2008 (File No.
001-13777) and incorporated herein by reference.
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
Form 10-K for the year ended December 31, 2008 (File No.
001-13777) and incorporated herein by reference.
Filed as Exhibit 3.5 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2008 (File No.
001-13777) and incorporated herein by reference.
Articles Supplementary to Articles of Incorporation of
Holdings, filed October 25, 2017.
Filed as Exhibit 3.1 to the Company’s Quarterly Report on
Form 10-Q filed on October 26, 2017 (File No. 001-13777)
and incorporated herein by reference.
Exhibit
Number
3.1
3.2
3.6
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.
3.9
Second Amendment to By-Laws of Getty Realty Corp.
3.10
Articles Supplementary to Articles of Incorporation of
Holdings, filed February 24, 2022.
3.11
Articles of Amendment of Holdings, filed April 28, 2022.
4.1
Dividend Reinvestment/Stock Purchase Plan.
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.
Filed as Exhibit 3.2 to the Company’s Quarterly Report on
Form 10-Q filed on April 28, 2022 (File No. 001-13777) and
incorporated herein by reference.
Filed as Exhibit 3.1 to the Company’s Quarterly Report on
Form 10-Q filed on April 28, 2022 (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 April 28, 2022 (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.
Filed as Exhibit 10.1 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2012 (File No.
001-13777) and incorporated herein by reference.
4.2
Description of Securities.
Filed herewith.
10.1*
Retirement and Profit Sharing Plan (restated as of December
1, 2012).
96
Exhibit
Number
10.4*
10.6*
10.7*
10.8*
Description of Document
Location of Document
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
Form 10-K for the year ended December 31, 2008 (File No.
001-13777) and incorporated herein by reference.
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
Form 10-K for the year ended December 31, 2008 (File No.
001-13777) and incorporated herein by reference.
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
Form 10-K for the year ended December 31, 2008 (File No.
001-13777) and incorporated herein by reference.
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.
97
Exhibit
Number
Description of Document
Location of Document
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.
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.
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 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*
Getty Realty Corp. Second Amended and Restated 2004
Filed as Exhibit 10.43 to the Company’s Annual Report on
Omnibus Incentive Compensation Plan.
Form 10-K filed on February 25, 2021 (File No. 001-13777)
and incorporated herein by reference.
10.44*
Getty Realty Corp. Third Amended and Restated 2004
Filed as Exhibit 10.1 to the Company’s Current Report on
Omnibus Incentive Compensation Plan.
Form 8-K filed on April 28, 2021 (File No. 001-13777) and
incorporated herein by reference.
98
Exhibit
Number
10.45*
10.46
Description of Document
Location of Document
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.
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
10.53*** Sixth Amended and Restated Note Purchase and Guarantee
Agreement, dated as of February 22, 2022, among Getty
Realty Corp., Prudential and certain of its affiliates.
10.54*** Second Amended and Restated Note Purchase and
Guarantee Agreement dated as of February 22, 2022 among
Getty Realty Corp. and American General Life Insurance
Company and certain of its affiliates.
10.55*** Second Amended and Restated Note Purchase and
Guarantee Agreement dated as of February 22, 2022 among
Getty Realty Corp. and Massachusetts Mutual Life
Insurance Company and certain of its affiliates.
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.
Filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on April 28, 2022 (File No. 001-13777)
and incorporated herein by reference.
Filed as Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed on April 28, 2022 (File No. 001-13777)
and incorporated herein by reference.
Filed as Exhibit 10.3 to the Company’s Quarterly Report on
Form 10-Q filed on April 28, 2022 (File No. 001-13777)
and incorporated herein by reference.
10.56*** Note Purchase and Guarantee Agreement dated as of
February 22, 2022 among Getty Realty Corp. and New
York Life Insurance Company and certain of its affiliates.
Filed as Exhibit 10.4 to the Company’s Quarterly Report on
Form 10-Q filed on April 28, 2022 (File No. 001-13777)
and incorporated herein by reference.
99
Exhibit
Number
Description of Document
Location of Document
10.57*** First Amendment to the Second Amended and Restated
Filed herewith.
Credit Agreement, dated as of December 22, 2022, 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.
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.
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 2022 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 2022 Annual Report on Form 10-
K.
100
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:
/s/ Brian Dickman
Brian Dickman
Executive Vice President, Chief Financial Officer and
Treasurer
(Principal Financial Officer)
February 23, 2023
By:
/s/ Eugene Shnayderman
Eugene Shnayderman
Chief Accounting Officer and Controller
(Principal Accounting Officer)
February 23, 2023
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:
/S/ CHRISTOPHER J. CONSTANT
Christopher J. Constant
President, Chief Executive Officer and Director
(Principal Executive Officer)
February 23, 2023
By:
/S/ MILTON COOPER
Milton Cooper
Director
February 23, 2023
By:
/S/ PHILIP E. COVIELLO
By:
/S/ Howard Safenowitz
Philip E. Coviello
Director
February 23, 2023
Howard Safenowitz
Director and Chairman of the Board
February 23, 2023
By:
/S/ Mary Lou Malanoski
By:
/S/ RICHARD E. MONTAG
Mary Lou Malanoski
Director
February 23, 2023
Richard E. Montag
Director
February 23, 2023
By:
/s/ Evelyn Infurna
Evelyn Infurna
Director
February 23, 2023
101
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BOARD OF DIRECTORS
CORPORATE INFORMATION
Christopher J. Constant
President and Chief Executive Officer
Getty Realty Corp.
Annual Meeting of Shareholders
April 25, 2023
Virtual Meeting
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
Milton Cooper
Executive Chairman of the
Board of Directors
Kimco Realty Corporation
Philip E. Coviello
Retired Partner
Latham & Watkins LLP
Evelyn León Infurna
Vice President,
Investor Relations
Northern Oil and Gas, Inc.
Mary Lou Malanoski
Chief Financial Officer
Colony S2k Holdings
Howard B. Safenowitz
President
Safenowitz Family Corp.
EXECUTIVE OFFICERS
Christopher J. Constant
President and Chief Executive Officer
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
GETTY REALTY CORP.
292 Madison Avenue, 9th Floor
New York, NY 10017