A NNUA L R E P OR T
2024
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, 2024, the
Company’s portfolio included 1,118 properties in 42 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 TA I L
60%
Top 50 MSA
68%
Corner Locations
10.2
Years WALT
99.7%
Occupied
$198M
ABR
2.6X
Tenant Rent Coverage
GETTY REALTY 2024 Annual Report
1
Financial Highlights
(for the years ended December 31)
2024
2023
2022
Number of Properties
1,118
1,093
1,039
Total Revenues
$
203,391
$
185,846
$
165,588
Adjusted Funds from Operations
$
130,793
$
115,808
$
102,487
Adjusted Funds from Operations Per Share
$
2.34
$
2.25
$
2.14
Dividends Per Share
$
1.82
$
1.74
$
1.66
2
We invested approximately $210 million at compelling
yields, raised approximately $290 million of
attractively priced permanent capital, and continued
to strengthen our organization to make us better
investors. We accomplished all of this even as the
year presented a unique set of challenges for real
estate investors and retailers alike. Broad issues in
the U.S., including the path of the economy, the
outcome of the Presidential Election and the health of
the consumer, dominated the headlines throughout
the year. For net lease real estate transactions in
our convenience and automotive retail sectors,
these broader concerns, coupled with declines in
industry M&A and new store development pipelines,
led to a noticeable slowdown in sector transaction
activity. Despite these headwinds, the combination
of our healthy in-place portfolio and the successful
transaction and capital markets activities mentioned
above, produced strong adjusted fund from
operations (“AFFO”) per share growth and a sector
leading dividend increase in 2024. This excellent
performance was the direct result of the hard
work and talent of the Getty team who continue to
execute at a high level. As we look ahead, we remain
intensely committed to achieving our long-term
goals of scaling and diversifying our portfolio, while
providing a steady stream of reliable cash flows from
our national portfolio of convenience and automotive
retail real estate.
Consistent Execution of our
Accretive Growth Strategy
As a capital provider to convenience and automotive
retailers across the U.S., it is incumbent upon us to
identify sale leaseback and development funding
opportunities that support operators’ growth
plans and fit our business model, undeterred by
external market factors. To accomplish our strategic
objectives, we lean heavily on our core principles,
including being experts in our target industries,
having deep knowledge of the underlying sectors
we invest in, and continuing to build on our long-
standing track record of completing transactions with
new or existing tenants who utilize our financing to
grow their businesses. As a continued demonstration
of the successful execution of our differentiated
strategy, more than 90% of our closed transactions
in 2024 were negotiated directly with tenants (vs.
acquiring existing, in-places leases from a third party).
For the year 2024, our thoughtful and proactive
approach resulted in the acquisition of 71 convenience
and automotive retail properties with an initial
weighted average lease term of 16.3 years, as well as
development funding for numerous projects that we
expect to complete in 2025. Equally as important, as a
result of the attractively priced equity and debt capital
we raised over the past 18 months and the strong yields
we achieved on our 2024 investments, we were able to
generate investment spreads at the higher end of the
100-150 basis points range that we typically target.
Christopher J. Constant President and Chief Executive Officer
Dear Shareholders,
In 2024, our patient, consistent and
disciplined approach to our investment
strategy and capital markets activities
led to another strong year of portfolio
growth and diversification.
GETTY REALTY 2024 Annual Report
3
Successfully Pursuing Our Diversification Strategy
We are now approximately five years into executing
our broadened convenience and automotive retail
investment strategy, which has resulted in growing
our annualized base rent (ABR) by approximately
70%, or 11.1% average annual growth. At the same
time, we have diversified our rental streams, with
28% of ABR coming from non-convenience and gas
properties, compared to only 3% before we began
executing on this strategy; and we have added 35
new tenants to our portfolio as we cultivate new
relationships to support our growth and mitigate risks
associated with tenant concentration. It is important
to note that our decision to diversify was not a pivot
away from our commitment to the convenience store
sector. Rather, our broader strategy is driven by a
desire to scale our business by acquiring real estate
with similar property attributes while expanding
to additional sectors that share similar operating
fundamentals. Our investment thesis continues
to be supported by the strong performance of the
industries in which we invest where our tenants are
(i) growing their branded retail networks in the U.S.;
(ii) benefiting from favorable consumer spending
trends; (iii) providing essential and internet resistant
goods and services; and (iv) maintaining their track
record of performing across economic cycles. Long
term, our objective remains to build a balanced
portfolio of attractive convenience and automotive
retail assets.
Our growth in 2024 once again prioritized
diversification as we acquired 31 express tunnel car
washes, 19 auto service centers, 17 convenience
stores, and four drive-thru quick service restaurants,
making 2024 one of the most balanced years of
growth in our history. We also diversified our tenant
roster by adding seven new tenants to the portfolio
and expanding into more meaningful relationships
with nine existing tenants. Finally, we diversified our
geographic footprint by expanding our presence in a
Convenience Stores
Express Tunnel Car Wash
Auto Service Centers
Drive Thru QSRs
Auto Parts & Other
Legacy Gas & Repair
$190 ABR
12/31/24
$117 ABR
Portfolio Composition
64%
82%
21%
6%
15%
8%
1%
<1%
1%
<1%
<1%
<1%
+ Car Wash in 2019
+ Auto Service in 2021
+ Drive Thru QSR in 2023
12/31/19
4
number of high growth markets, including those in
Texas, Florida, North Carolina and Virginia.
Continued Portfolio Health and Optimization
Our growth and performance is supported by
the stability of our in-place portfolio comprised
of long-term triple-net leases with operators of
resilient businesses that provide essential goods
and services to the mobile American consumer.
Our roster of established and emerging tenants
is committed to operational excellence and
increasingly focused on utilizing technology to
address evolving consumer trends centered around
convenience, speed and service.
I am pleased with the portfolio optimization efforts
of our asset management team during 2024. Given
the breadth of our portfolio, we continually seek out
opportunities to create value from: (i) lease extensions
– leases representing 12.6% of ABR were extended
during the year, (ii) opportunistic divestitures – we sold
31 assets during the year, and (iii) redeveloping select
properties – we completed a new Chipotle fast casual
restaurant in the Providence, RI market. We are seeing
renewed interest in the assets we have available for
redevelopment and will continue to prioritize this value-
add program to strategically invest in select assets,
generate attractive risk-adjusted returns, improve the
credit quality of our portfolio, and further diversify our
retail tenant base.
National Footprint with
Concentrations in High Density
Metropolitan Areas
16%
% of ABR
0%
17%
New York
5%
Boston
7%
Washington, D.C.
4%
Columbia, SC
3%
Las Vegas
GETTY REALTY 2024 Annual Report
5
As of year-end, we had a healthy portfolio of 1,118
freestanding retail properties located in 42 states
across the U.S. Our rent coverage remained stable,
ending the year in line with our five-year average of
2.6x, and occupancy remained near record highs
at 99.7%.
Opportunistic Capital Markets Execution
Access to long-term permanent capital is critical to
our ability to execute our growth strategy. Following
the first half of 2024 in which markets were less
constructive for capital raising, we were pleased
that during the second half of the year, as market
conditions improved, we acted decisively and
ultimately raised $289 million of new equity and debt
capital to fund our investment activities.
In late July, we completed a successful follow-on
equity offering and sold 4 million shares of common
stock on a forward basis, raising gross proceeds of
approximately $121 million. We also selectively used
our at-the-market (ATM) equity program throughout
the year and raised $43 million in aggregate. In total,
we have 5.4 million shares subject to outstanding
forward equity agreements at year end, which will
provide approximately $164 million of gross proceeds
for investments.
In September, we were strategic in locking in $125
million of new unsecured notes in advance of
significant upward moves in treasury yields. This
transaction allowed us to address our only near-term
debt maturity – $50 million of notes maturing in
February 2025 – while providing incremental capital
to fund our growing investment pipeline.
Our balance sheet continues to be conservatively
leveraged – we ended the year in the middle of our
target range of 4.5x to 5.5x net debt to EBITDA – and
we have no debt maturities until June 2028 (taking
into account the refinancing of our revolving credit
and term loan facilities in January 2025). Importantly,
we enter 2025 with nearly $240 million of committed
equity and debt capital for acquisitions, plus ample
availability on our new $450 revolving credit facility.
Strong Financial Performance
The net result of our strong transaction and capital
markets execution combined with opportunistic
divestitures and completed redevelopment projects,
was a 14.3% increase in our ABR to $197.8 million
and a 4.0% increase in our AFFO/share to $2.34.
Based on the Company’s financial performance
and outlook, the Board increased our dividend by a
sector leading 4.4% to an annualized rate of $1.88
per share – making 2024 the tenth consecutive year
that the Company has rewarded shareholders with a
significant dividend increase. The dividend remains
well covered and is supported by the stability of our
in-place portfolio and our expectation of continued
growth in AFFO.
Steady Execution Across
All Facets of the Business
Investment Activity
Earnings Growth
Capital Markets
Portfolio Management
AFFO Per Share
Dividends Per Share
5.4% CAGR
5.1% CAGR
$1.80
2019
$1.42
2019
$2.08
2021
$1.58
2021
$1.94
2020
$1.50
2020
$2.14
2022
$1.66
2022
$2.25
2023
$1.74
2023
$2.34
2024
$1.82
2024
6
Building Our Company for Future Success
Last year, we realigned certain resources to support
an enhanced focus on sourcing and underwriting
investment opportunities, as well as to upgrade our
platform to manage and optimize our in-place portfolio.
I can say with confidence that these changes
have made Getty a stronger and more robust
organization. The addition of new professionals,
stronger processes and a software platform that
helps us underwrite, process and close transactions
are critical enhancements to our ability to execute
our focused investment strategy. We plan to
continue to leverage investments in technology to
complement the knowledge and judgement we
bring to acquiring well located retail real estate,
support a larger, data-driven platform, and make us
a better and more efficient organization.
Our runway for growth is driven by the large,
fragmented and consolidating convenience and
automotive retail sectors we invest in. We believe
our unique knowledge of these sectors, our expertise
in underwriting convenience and automotive retail
real estate, and our ability to provide flexible capital
to established and emerging tenants represents a
differentiated strategy. Ultimately, our success will be
driven by our ability to source direct transactions to
acquire high quality real estate and help our growing
tenant roster expand their businesses and enter new
markets across the U.S.
Thank You!
As always, I want to thank the dedicated team at
Getty for prioritizing collaboration and efficiency,
thinking strategically and striving for excellence.
Amid a challenging backdrop, 2024 represented an
outstanding year as we not only achieved our goals
and provided attractive returns to shareholders, but
positioned the Company for continued success. I
also want to thank the Board of Directors for their
continued support. I am proud of our successful
evolution and excited for the future. I look forward to
another year of growth and success for Getty!
Best Regards,
Christopher J. Constant
President and Chief Executive Officer
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, 2024
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
11-3412575
(State or other jurisdiction of
incorporation or organization)
(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
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
GTY
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
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
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). ☐
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 49,219,371 shares of common stock at a closing price per share of the registrant’s common
stock on the New York Stock Exchange at $26.66) of the Company was $1,312,200,000 as of June 30, 2024.
The registrant had outstanding 55,027,697 shares of common stock as of February 13, 2025.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT
PART OF
FORM 10-K
Selected Portions of Definitive Proxy Statement for the 2025 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, 2024, pursuant to Regulation 14A.
III
Auditor’s PCAOB ID Number:
238
Auditor’s Name: PricewaterhouseCoopers LLP
Auditor’s Location New York, New York
TABLE OF CONTENTS
Item Description
Page
Cautionary Note Regarding Forward-Looking Statements
3
PART I
1
Business
5
1A
Risk Factors
9
1B
Unresolved Staff Comments
23
1C
Cybersecurity
23
2
Properties
24
3
Legal Proceedings
26
4
Mine Safety Disclosures
29
PART II
5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
30
6
Reserved
31
7
Management’s Discussion and Analysis of Financial Condition and Results of Operations
32
7A
Quantitative and Qualitative Disclosures About Market Risk
45
8
Financial Statements and Supplementary Data
46
9
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
78
9A
Controls and Procedures
78
9B
Other Information
78
9C
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
78
PART III
10
Directors, Executive Officers and Corporate Governance
79
11
Executive Compensation
79
12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
79
13
Certain Relationships and Related Transactions, and Director Independence
79
14
Principal Accountant Fees and Services
79
PART IV
15
Exhibits and Financial Statement Schedules
80
16
Form 10-K Summary
80
Exhibit Index
101
Signatures
105
3
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 that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995 and other
safe harbors under the Securities Act of 1933, as amended (the “Securities Act”) and 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, and certain other freestanding retail
properties, including drive-thru quick service restaurants and automotive parts retailers;
•
our investment strategy and its impact on our financial performance;
•
changes in market conditions affecting our tenants and their financial stability and creditworthiness, which would impact their
compliance with lease obligations;
•
concentration of certain tenants in similar industries or concentration of our owned and leased properties in certain geographic
locations;
•
the amount of revenue we expect to realize from our properties, including renewal of existing leases, sale, acquisition or
redevelopment opportunities;
•
our belief that our real estate assets are not carried at amounts in excess of their estimated net realizable fair value amounts;
•
compliance of our properties with federal, state, and local provisions enacted or adopted pertaining to environmental matters;
•
our ability to maintain our federal tax status as a REIT, effects of U.S. federal tax reform and other legislative, regulatory,
and administrative developments;
•
our competitive position in our industry, including the impact of existing legislation and regulations;
•
the cost and potential outcomes of current and future environmental and litigation matters, including those resulting from
preexisting unknown environmental contamination and 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, and related
accruals, estimates, and assumptions regarding our liabilities, remediation costs and expected recoveries;
•
impact of global political and economic uncertainties, including public health crises, geopolitical conflicts and inflation;
•
our ability to adequately secure our information technology systems and the regulated data stored therein, as required by law;
•
the adequacy of our insurance coverage and that of our tenants on our owned and leased properties;
•
our ability to attract and retain key management personnel;
•
our workplace demographics, recruiting efforts, and employee compensation program;
•
our use of 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 ability to maintain an effective system of internal control over financial reporting;
•
our indemnification obligations and the indemnification obligations of others;
•
the adequacy of our current and anticipated cash flows from operations, borrowings under our Credit Facility, and available
cash and cash equivalents to fund our future operating expenses and capital expenditure requirements;
•
our continued compliance with the covenants in our credit and notes agreements;
4
•
our ability to pay dividends and changes to our dividend policy; and
•
our dependence on external sources of capital, timing of and need for additional financing and dilution as a result of future
issuances of equity securities.
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 including, but 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. Such risks and uncertainties were
derived based on numerous important assumptions, which may not be realized, and 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. Most of these factors are difficult to predict accurately and are generally beyond our control. New risk factors and
uncertainties may also emerge from time to time, and there can be no assurance that we have identified all risks and uncertainties that
may affect it.
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.
5
PART I
Item 1. Business
Company Profile
Getty Realty Corp. (“Getty Realty,” “we,” “us,” “our” and the “Company”) (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, express tunnel car washes, automotive service centers (gasoline and repair, oil and
maintenance, tire and battery, and collision), and certain other freestanding retail properties, including drive-thru quick service
restaurants and automotive parts retailers. Our 1,118 properties as of December 31, 2024 are located in 42 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 13, 2025, we had 29 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, 2024, we continued to grow and diversify our portfolio of convenience, automotive and other freestanding retail properties
through acquisitions of existing properties and development funding advances for the construction of new-to-industry assets. We were
able to accretively fund this investment activity through thoughtful capital markets execution that included a follow-on public equity
offering, active use of our ATM Program, and the issuance of new senior unsecured notes.
Portfolio Activities
During the year ended December 31, 2024, we invested $209.0 million in convenience and automotive retail properties, including
the acquisition of 31 express tunnel car washes, 17 convenience stores, 19 automotive service centers, and four drive-thru quick service
restaurants. As a result of this investment activity, we added eight 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 (TX), Charlotte (NC),
Houston (TX), and Richmond (VA).
During the year ended December 31, 2024, we also sold 31 properties that generated gross proceeds of $13.1 million and reduced
our exposure to certain properties, tenants, and/or geographies that no longer met our long-term investment criteria, and completed the
redevelopment of a legacy gasoline and repair station into a new fast casual restaurant.
For additional information regarding our property acquisitions and dispositions, see Note 12 and Note 13 in “Item 8. Financial
Statements and Supplementary Data” in this Annual Report on Form 10-K.
Capital Markets Activities
During the year ended December 31, 2024, we raised $164.8 million of gross equity proceeds through the sale of 5.4 million
common shares subject to forward sales agreements, including 4.0 million shares ($121.2 million of gross proceeds) in a follow-on
public offering and 1.4 million shares ($43.6 million of gross proceeds) through our ATM Program.
We also closed the private placement of $125.0 million of new senior unsecured notes, including (i) $50.0 million of 5.52% senior
notes due September 2029 and (ii) $75.0 million of 5.70% senior notes due February 2032. The new senior unsecured notes will be
issued on February 25, 2025 and proceeds will be used to repay $50.0 million of senior unsecured notes that mature on February 25,
2025 and for general corporate purposes, including to fund investment activity.
6
For additional information regarding our equity issuance and notes private placement, see “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 8 and Note 9 in “Item 8.
Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
Our Properties
As of December 31, 2024, our portfolio included 1,118 properties, of which we owned 1,085 properties and leased 33 properties
from third-party landlords. Our properties are located in 42 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, or certain other freestanding retail uses, including drive thru quick service restaurants and
automotive parts retailers. Many of our properties are located at highly trafficked urban intersections or conveniently close to highway
entrances or exit ramps.
As of December 31, 2024, we leased 1,114 of our properties to tenants under triple-net leases, including 921 properties leased
under 50 separate unitary or master triple-net leases, and 193 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, 2024, our weighted average remaining lease term, excluding renewal options, was 10.2 years.
Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, express
tunnel car wash operators, and other automotive-related and retail tenants. Our tenants either operate their businesses 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
who operate the businesses. For additional information regarding risks related to our tenants’ dependence on the performance of these
industries, see “Item 1A. Risk Factors—Risks Related to Our Business and Operations—Significant number of our tenants depend on
the same industry for their revenues” in this Annual Report on 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.
Substantially all of our tenants are also responsible for pre-existing environmental contamination that is discovered during their lease
term, except contamination that was known at lease commencement, as to which we have established reserves. For additional
information regarding our environmental obligations, see Note 6 in “Item 8. Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K.
As of December 31, 2024, we also had one property under redevelopment and three properties were vacant.
Human Capital Resources
As of December 31, 2024, we had 29 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. We maintain a permanent hybrid work schedule,
allowing team members to work from home two days per week and maintain other 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
provide team members with work schedule flexibility and opportunities to support causes and organizations that are meaningful to them.
We actively promote our Getty Gives program to facilitate volunteerism and charitable contributions in support of our communities and
other causes meaningful to our team members. In 2024, our team participated in our second company-wide community service event
with Rethink Food where we worked alongside the Rethink Food team to transform surplus food into meals for distribution to
underserved communities. In addition, we made corporate donations to the Lawyers Alliance, a leading provider of legal services for
charities and nonprofit organizations working to improve life in New York City, and the Springpoint Foundation, a nonprofit
organization dedicated to enriching the lives of seniors by providing services and opportunities to stay connected, healthy and vibrant,
and to age with deserved dignity. We also matched individual contributions made by our team members to more than 20 different
charitable organizations serving a wide range of causes.
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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 external education
classes and seminars requested by our employees, as well as higher-education tuition reimbursement if doing so advances 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 9 “Employee Benefit Plan” included in Part II, Item 8 in 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 us, frequently express satisfaction with management and, in the opinion of our management, we have positive relations with
our employees.
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 also provide forward commitments to acquire new-to-industry construction and acquire assets
with in-place leases. 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 or other financing for the development of new-to-industry
properties. 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.
Over the last five years, we have acquired 296 properties for an aggregate purchase price of more than $1.0 billion, including
single property and portfolio transactions located in various geographies and leased to a diverse set of tenants who operate across the
convenience and automotive retail sectors.
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 convenience and automotive retail uses, such as automotive parts retailers,
quick service restaurants, auto service centers, and bank branches. We believe that the redeveloped properties can be leased or sold at
higher values than their prior use.
Since the inception of our redevelopment program in 2015, we have completed 32 redevelopment and revenue-enhancing capital
expenditure projects.
Competition
The single tenant net lease retail real estate sector in which we operate is highly competitive and we expect major investors with
significant capital will continue to compete with us for attractive acquisition opportunities. These competitors include publicly-traded
and non-traded REITs, public and private investment funds, petroleum manufacturing, distributing and marketing companies, and other
institutional and individual investors.
Trademarks
We own the Getty® name and trademark in connection with our real estate and the petroleum marketing business in the United
States and we permit certain of our tenants to use the Getty® trademark at properties that they lease from us.
Regulation
Our properties are subject to numerous federal, state and local laws and regulations including matters related to the protection of
the environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived
assets including buildings containing hazardous materials, USTs and other equipment. These laws include: (i) requirements to report to
governmental authorities discharges of petroleum products into the environment and, under certain circumstances, to remediate soil and
groundwater contamination, including pursuant to governmental order and directive, (ii) requirements to remove and replace USTs that
have exceeded governmental-mandated age limitations and (iii) the requirement to provide a certificate of financial responsibility with
respect to potential claims relating to UST failures. Our triple-net lease tenants are directly responsible for compliance with
environmental laws and regulations with respect to their operations at our properties.
8
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 Annual Report on 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. Our tenants are also responsible for pre-existing
environmental contamination that is discovered during their lease term, except contamination that was known at lease commencement,
as to which we have established reserves.
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 6 in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on 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 7 in “Item 8. Financial Statements and
Supplementary Data” in this Annual Report on 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 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. We are 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 attempt to construct a full picture of our environmental footprint, maximize diversion of recyclable waste in
accordance with local regulations, and implement energy conservation measures as appropriate and feasible. A comparison of actual
energy consumption data at our corporate headquarters indicates we were able to decrease our electric and natural gas consumption on
a year-over-year basis.
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. Additionally,
starting 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 other single tenant retail uses, such as automotive parts,
quick service restaurants, bank branches, and specialty retail, among others. We continue to look for opportunities within 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 Annual Report on 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”).
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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 as required by rules of the SEC or NYSE.
Item 1A. Risk Factors
We are subject to various risks, many of which are beyond our control. As a result of these and other factors, we may experience
material fluctuations in our future operating results on a quarterly or annual basis, which could materially and adversely affect our
business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. An investment in our stock involves
various risks, including those mentioned below and elsewhere in this Annual Report on Form 10-K and those that are described from
time to time in our other filings with the SEC.
Summary of Risk Factors
Our business is subject to risks and uncertainties, including those risks and uncertainties discussed at-length below, that could
cause our actual results to differ materially from those projected. These risks and uncertainties include, but are not limited to, the
following:
Risks Related to Our Business and Operations
•
The risks inherent in owning or leasing real estate.
•
The real estate industry is highly competitive.
•
Our future cash flow is dependent on the performance of our tenants of their lease obligations, renewal of existing leases and
either re-leasing or selling our properties.
•
Significant number of our tenants depend on the same industry for their revenues.
•
It may be difficult for our investors to determine the creditworthiness of most 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 relative concentration of a material 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.
•
Global political and economic uncertainties, including public health crises and geopolitical conflicts, and their related impact
on macroeconomic conditions may adversely impact the market on which our common stock trades, our tenants’ businesses
and the markets in which we operate, our operations and our results of operations.
•
Our exposure to counterparty risk.
•
Inflation may adversely affect our financial condition and results of operations.
•
Our assets may be subject to impairment charges.
•
Our accounting policies and methods require management to make estimates, judgments and assumptions about matters that
are inherently uncertain.
•
Amendments to the Accounting Standards Codification made by the Financial Accounting Standards Board (the “FASB”) or
changes in accounting standards may adversely affect our reported revenues, profitability, or financial position.
•
If we fail to maintain effective internal controls over financial reporting, we may not be able to accurately and timely report
our financial results.
•
Our reliance on certain members of our management team or Board of Directors, the loss of any one of which could adversely
affect our business or the market price of our common stock.
10
•
Our reliance on information technology in our operations, and any material failure, inadequacy, interruption or security failure
of that technology could harm our business.
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.
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 sales agreement related to follow-on public equity offerings or 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 change.
•
Forward sales agreements related to follow-on public equity offerings or 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 sales agreement that is in effect related to follow-on public equity offerings
or our ATM Program will automatically terminate, and we would not receive the expected proceeds.
•
Future issuances of equity securities could dilute the interest of holders of our equity securities.
•
Maryland law may discourage a third-party from acquiring us.
Risks Related to Our Business and Operations
We are subject to risks inherent in owning and leasing real estate.
We are subject to varying degrees of risk generally related to leasing and owning real estate, many of which are beyond our
control. In addition to general risks applicable to us, our risks include, among others: our liability as a lessee for long-term lease
obligations regardless of our revenues; deterioration in national, regional and local economic and real estate market conditions; potential
changes in supply of, or demand for, rental properties similar to ours; competition for tenants and declining rental rates; difficulty in
selling or re-leasing properties on favorable terms or at all; impairments in our ability to collect rent or other payments due to us when
they are due; high 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; natural disasters or other catastrophes; public health crises, such as pandemics and
epidemics; 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. Such risks
11
may result, under certain market conditions, in variable revenue and 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.
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
12
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
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.
13
For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws and
regulations, removal of USTs at the end of their lease term (the cost of which in certain cases is partially borne by us) and remediation
of any environmental contamination that arises during the term of their tenancy. Under the terms of our leases covering properties
previously leased to Getty Petroleum Marketing Inc. (“Marketing”) (substantially all of which commenced in 2012), we 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). 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.
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 6 in “Item 8. Financial Statements and Supplementary Data” in this Annual
Report on Form 10-K.
Environmental exposures are difficult to assess and estimate for numerous reasons, including the amount of data available upon
initial assessment of contamination, alternative treatment methods that may be applied, location of the property which subjects it to
differing local laws and regulations and their interpretations, changes in costs associated with environmental remediation services and
equipment, the availability of state UST remediation funds and the possibility of existing legal claims giving rise to allocation of
responsibilities to others, as well as the time it takes to remediate contamination and receive regulatory approval. In developing our
liability for estimated environmental remediation obligations on a property-by-property basis, we consider, among other things, laws
and regulations, assessments of contamination and surrounding geology, quality of information available, currently available
technologies for treatment, alternative methods of remediation and prior experience. Environmental accruals are based on estimates
derived upon facts known to us at this time, which are subject to significant change as circumstances change, and as environmental
contingencies become more clearly defined and reasonably estimable.
We cannot predict if state UST fund programs will be administered and funded in the future in a manner that is consistent with
past practices and if future environmental spending will continue to be eligible for reimbursement at historical recovery rates under these
programs. As a result, our estimates in respect of recoveries from state UST remediation funds could change, which could adversely
affect our accruals for environmental remediation liabilities.
Any changes to our estimates or our assumptions that form the basis of our estimates may result in our providing an accrual, or
adjustments to the amounts recorded, for environmental remediation liabilities. Additional environmental liabilities could cause a
material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price.
We are defending pending lawsuits and claims and are subject to material losses.
We are subject to various lawsuits and claims, including litigation related to environmental matters, such as those arising from
leaking USTs, contamination of groundwater with methyl tertiary butyl ether (a fuel derived from methanol, commonly referred to as
“MTBE”) and releases of motor fuel into the environment, and toxic tort claims. The ultimate resolution of certain matters cannot be
predicted because considerable uncertainty exists both in terms of the probability of loss and the estimate of such loss. Our ultimate
liabilities resulting from the lawsuits and claims we face could cause a material adverse effect on our business, financial condition,
results of operations, liquidity, ability to pay dividends or stock price. For additional information with respect to certain pending lawsuits
and claims, see “Item 3. Legal Proceedings” and Note 3 in “Item 8. Financial Statements and Supplementary Data” in this Annual Report
on Form 10-K.
Business disruptions could have serious adverse consequences on our future revenue and financial condition and result in losses
that may not be covered by insurance.
Our and our tenants’ operations could be subject to the impact of natural or man-made disasters or other business disruptions,
which include, but are not limited to, earthquakes, hurricanes, typhoons, floods, water shortages, wildfires and fires, blizzards and other
extreme weather conditions as well as power outages, telecommunications, transportation or infrastructure failure, cybersecurity
incidents or physical security breaches related to such catastrophes, public health crises, such as pandemics and epidemics, and
geopolitical conflicts, including acts of terrorism, war and civil disorder. 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, including losses resulting from such natural and man-made disasters or
environmental liabilities 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 that are generally not insured because they are either
uninsurable or not economically insurable. Moreover, the cost of insurance has increased significantly, including as a result of the impact
of climate change and inflation, and we may not be able to obtain sufficient coverage at a reasonable cost to protect us against losses on
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our properties. There is no assurance that our 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 material 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, 2024, 28.5% of our annual base rent is derived from four states (New York, Massachusetts, Maryland, and
Connecticut). Because of the relative 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 relative 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.
Global political and economic uncertainties, including public health crises, geopolitical conflicts, and their related impact on
macroeconomic conditions may adversely impact the market on which our common stock trades, our tenants’ businesses and the
markets in which we operate, our operations and our results of operations.
We, and our tenants’ businesses may be disrupted by global political and economic uncertainties, including public health crises,
geopolitical conflicts and inflation resulting in adverse macroeconomic conditions. The extent to which public health crises such as
pandemics or epidemics impact our business, operations and financial results is uncertain, and will depend on numerous factors that we
may not be able to accurately predict, including governmental, business, and individual actions taken in response to any such outbreak
and the extent and duration of the adverse impact on the global economy. Such outbreaks may disrupt the supply of products or services
from third-party vendors or result in shortages of raw materials necessary to operate our tenants’ businesses or prolonged closure, which
may adversely impact their 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. Moreover, general decline in business
activity and demand for real estate transactions could adversely affect our ability or desire to grow our portfolio of properties and the
financial impact of any such outbreak could negatively impact our future compliance with the financial covenants of our various
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borrowings, resulting in a default and potentially an acceleration of indebtedness, which non-compliance could negatively impact our
ability to make additional borrowings under our Credit Facility and pay dividends.
Additionally, geopolitical conflicts, such as terrorist attacks or other acts of violence or war (including the conflicts in Russia and
Ukraine and the Middle East) and the related adverse impact on macroeconomic conditions as a result of such conflicts could negatively
affect our business or the businesses of our tenants. Such geopolitical conflicts may also 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 such 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, result in an economic recession or increase volatility of the financial markets and economy of the United States
and worldwide. 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.
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.
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.
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 credit agreements, the lenders that are the counterparties to our note purchase
agreements, 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, 2024, we leased:
•
148 properties in four separate unitary leases to subsidiaries of ARKO Corp. which represented, in the aggregate, 13% of our
total revenues for the year ended December 31, 2024.
•
128 properties in three separate unitary leases and two stand-alone leases to subsidiaries of Global Partners LP which
represented, in the aggregate, 12% of our total revenues for the year ended December 31, 2024.
•
77 properties in three separate unitary leases and one stand-alone lease to Apro, LLC (d/b/a United Oil) which, in the aggregate,
represented 9% of our total revenues for the year ended December 31, 2024.
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.
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 U.S. 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, 2024 and 2023, we incurred $4.0
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million and $5.2 million, respectively, of impairment charges. We may be required to take similar impairment charges, which could
affect the implementation of our current business strategy and have a material adverse effect on our financial condition and results of
operations.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations,
and they require management to make estimates, judgments and assumptions about matters that are inherently uncertain.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations.
We have identified several accounting policies as being critical to the presentation of our financial position and results of operations
because they require management to make particularly subjective or complex judgments about matters that are inherently uncertain and
because of the likelihood that materially different amounts would be recorded under different conditions or using different assumptions.
We cannot provide any assurance that we will not make subsequent significant adjustments to our consolidated financial statements.
Estimates, judgments and assumptions underlying our consolidated financial statements include, but are not limited to, receivables and
related reserves, deferred rent receivable, income under direct financing leases, asset retirement obligations (including environmental
remediation obligations and future environmental liabilities for pre-existing unknown environmental contamination), real estate,
depreciation and amortization, carrying value of our properties, impairment of long-lived assets, litigation, 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 expenses, 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. For additional information regarding internal controls over financial reporting, see “Report of Independent Registered Public
Accounting Firm” in “Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
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 of December 31, 2024, we only employ 29 employees given our status as a REIT 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 attract, timely hire and retain key personnel 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
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the outstanding shares of our common stock. If any of these directors cease to be a director of the Company and they or their estate sell
a significant portion of such holdings into the public market, it could adversely affect the market price of our common stock.
We rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that
technology could harm our business. Additionally, our failure to comply with applicable privacy, data security or protection or cyber
security laws could adversely affect our business.
We rely on information technology networks and systems, 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.
In the future, we, directly or through our third-party service providers, may develop or use information technology systems or
software that incorporate artificial intelligence (“AI”) capabilities into our business. As with many innovations, AI presents risks,
challenges, and unintended consequences that could affect its adoption, and therefore our business. AI algorithms and training
methodologies may be flawed, ineffective or inadequate. The rapid evolution of AI, particularly the anticipated government regulation
of AI, could require significant resources for compliance, whether in the development, testing or maintenance of such systems or
software. AI development or deployment practices by us or third-party providers could increase vulnerability to cybersecurity risks and
require additional resources to implement heightened cybersecurity measures to protect the security of our data. These deficiencies and
other failures of any potential AI systems could subject us to competitive harm, regulatory action, legal liability, and brand or reputational
harm.
Governments are continuing to focus on privacy, cybersecurity, data protection, data security, and AI 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.
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 include cash flows from operations, funds available under our Credit Facility, proceeds from
the offering of new debt or equity securities, including the sale of our common stock under our ATM Program, and available cash and
cash equivalents.
The credit and note purchase agreements governing our borrowings 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. These agreements also contain customary events of default, including cross defaults to each other,
change of control and failure to maintain REIT status. 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 Annual
Report on 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 these agreements, 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.
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We have filed a registration statement with the SEC allowing us to offer, from time to time, an indefinite amount of equity and
debt securities on an as-needed basis, including shares of our common stock under our ATM Program. The offering of new debt and
equity securities will depend on a variety of factors to be determined by us, including among others, market conditions, prevailing
interest rates, and the trading price of our common stock.
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 credit and note purchase agreements, 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 borrowings under our Credit Facility. Borrowings under our Credit
Facility bear interest at a variable rate and, accordingly, an increase in interest rates will increase the amount of interest we must pay
under our Credit Facility. During inflationary periods, interest rates have historically increased, which would have a direct effect on the
interest expense of our borrowings. Our interest rate risk may materially change in the future if we increase our borrowings under the
Credit Facility, amend the credit and note purchase agreements governing our borrowings, 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 Annual Report on Form 10-K.
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
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and economic conditions and the development by competitors of competing properties. We could experience increased and unexpected
costs or significant delays or abandonment of some or all of these redevelopment opportunities. For any of the above-described reasons,
and others, we may determine to abandon opportunities that we have already begun to explore or with respect to which we have
commenced redevelopment efforts and, as a result, we may fail to recover expenses already incurred. We cannot assure you that we will
be able to successfully redevelop and lease any of our identified opportunities or that our overall 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 sales agreement related
to follow-on public equity offerings or 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 sales agreement for cash and the settlement price is below the applicable forward
sales 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 sales
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 sales 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.
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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.
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 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 change.
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, the credit and note purchase agreements governing our
borrowings 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 change 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. The credit and
note purchase agreements governing our borrowings 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.
21
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 sales agreement related to follow-on public equity offerings or our ATM Program could result in
substantial dilution to our earnings per share and return on equity or result in substantial cash payment obligations.
We have previously entered into forward sales agreements and may in the future enter into additional forward sales agreements
related to follow-on public equity offerings or our ATM Program, that subject us to certain risks. If we enter into one or more forward
sales agreements in connection with follow-on public equity offerings or our ATM Program, the relevant forward purchaser will have
the right to accelerate its forward sales agreement (with respect to all or any portion of the transaction under such forward sales 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 sales 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 sales 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 sales agreement; or
•
certain other events of default or termination events occur, including, among others, any material misrepresentation made in
connection with such forward sales agreement (each as more fully described in each forward sales agreement).
A forward purchaser’s decision to exercise its right to accelerate the physical settlement of any forward sales 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
settlement provisions of the applicable forward sales 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 sales agreement will generally occur no later than the date specified in the particular
forward sales 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 sales 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 sales agreement. We
intend to physically settle each forward sales agreement by delivery of shares of our common stock. However, we may elect to cash
settle or net share settle such forward sales agreement. Delivery of shares of our common stock upon physical settlement (or, if we elect
net share settlement of a particular forward sales 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 sales 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 sales agreement.
22
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 sales 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 sales agreement.
The forward sales price that we expect to receive upon physical settlement of a particular forward sales 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 sales
agreement. If the overnight bank rate is less than the spread for a particular forward sales agreement on any day, the interest factor will
result in a daily reduction of the applicable forward sales 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 sales agreement is above the relevant forward sales price, in the case of cash settlement, we would pay the relevant
forward purchaser under such forward sales 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 sales agreement is below the relevant forward sales price, in the case of cash settlement, we
would be paid the difference in cash by the relevant forward purchaser under that particular forward sales 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 sales agreement related to follow-on public equity offerings or 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 sales agreement that is then in effect will automatically terminate. If any such forward sales 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 sales price per share
in respect of any shares of common stock not previously settled under the applicable forward sales agreement. Therefore, to the extent
that there are any shares of common stock with respect to which any forward sales 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 sales 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
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.
23
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk Management and Strategy
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity,
and availability of our critical systems and information. Our cybersecurity risk management program includes the implementation of a
cybersecurity incident response plan. This plan was developed with support from our Audit Committee and in consultation with key
stakeholders across our organization to ensure it accurately reflects their respective roles and responsibilities. The plan has been
selectively disseminated throughout our organization to ensure appropriate coverage and to foster a cohesive and informed response to
cybersecurity incidents.
We design and assess our program based on industry standards to align closely with information security frameworks and
guidelines. This does not imply that we meet or are in compliance with any particular technical standards, specifications, or requirements,
only that we use the frameworks as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares
common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to
other legal, compliance, strategic, operational, and financial risk areas.
We utilize a commercially available third-party hosted cloud network environment with commercially available systems, software,
tools and monitoring to provide security to protect our information and data and alert us to potential information security breaches. The
third party engaged by us to oversee and host our network was engaged, in part, because of its experience with information security and
data protection and products designed to manage against information and data security breaches. We conduct mandatory annual
cybersecurity training for employees and have information security and data privacy policies and procedures in place applicable to our
directors, officers, and employees.
We previously engaged an outside consultant to conduct a comprehensive cybersecurity assessment, the methodology for which
was based on information security frameworks and guidelines such as the National Institute of Standards and Technology (NIST), Center
for Information Security (CIS), and ISO27001. Management reviewed the results of the assessment with the Audit Committee and
worked with consultants, auditors, and other third parties to prevent, detect, mitigate, and remediate cybersecurity risks and incidents
through various means.
While we have not experienced any cybersecurity incidents to date, the scope and impact of any future incidents cannot be
predicted and there can be no assurance that our cybersecurity risk management program will be effective in preventing material
cybersecurity incidents in the future. For additional information, see “Item 1A. Risk Factors—Risks Related to Our Business and
Operations—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” in this Annual Report on Form 10-K.
Management and Board Oversight
Our Board of Directors actively considers cybersecurity risk as part of its risk oversight function and has delegated oversight of
cybersecurity and other information technology risk to the Audit Committee. The Audit Committee is instrumental in overseeing the
implementation of our cybersecurity risk management program by management.
The Audit Committee receives detailed quarterly reports from management about our cybersecurity risks, and management
provides timely updates to the Audit Committee about any significant cybersecurity incidents, as well as those with lesser impact
potential if deemed appropriate to do so.
The Audit Committee informs the full Board of Directors about its activities, including those related to cybersecurity. The full
Board of Directors also receives briefings from management on our cybersecurity risk management program. Members of the Board of
Directors are kept abreast of cybersecurity developments through presentations by our Chief Financial Officer or external experts as
part of their ongoing education on issues impacting public companies.
Our management team, including our Chief Financial Officer, and members of the Audit Committee play a pivotal role in assessing
and managing material risks stemming from cybersecurity threats. The management team is primarily responsible for the oversight of
our overall cybersecurity risk management program, and coordinates with our external cybersecurity consultants.
24
Efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents are supervised by our management team. These
efforts include briefings from internal security personnel, leveraging threat intelligence and information from governmental, public, and
private sources, engagement with external consultants, and utilizing alerts and reports generated by our security tools within the IT
environment.
Item 2. Properties
Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum distributors, express
tunnel car wash operators and other automotive-related and retail tenants. Our tenants are responsible for the operations conducted at
our properties, including the payment of all taxes, maintenance, repair, insurance and other operating expenses. We manage and evaluate
our operations as a single segment.
We independently obtain and maintain a program of insurance which we believe adequately covers our owned and leased
properties for casualty and liability risks. Our insurance program is underwritten in view of primary insurance coverages which we
require to be provided by most of our tenants for properties they lease from us, including in respect to casualty, liability, pollution legal
liability, fire and extended coverage risks.
25
The following table summarizes the geographic distribution of our properties as of December 31, 2024. 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
161
20
181
18.5%
Massachusetts
99
4
103
9.2
Texas
100
—
100
8.9
Connecticut
61
4
65
5.8
Virginia
55
1
56
5.0
South Carolina
55
—
55
4.9
North Carolina
50
—
50
4.5
New Hampshire
44
—
44
3.9
New Jersey
41
2
43
3.8
Maryland
40
2
42
3.8
Michigan
41
—
41
3.6
California
35
—
35
3.1
Washington State
30
—
30
2.7
Arizona
27
—
27
2.4
Ohio
25
—
25
2.2
Colorado
23
—
23
2.1
Pennsylvania
22
—
22
2.0
Nevada
19
—
19
1.7
Florida
18
—
18
1.6
Georgia
13
—
13
1.2
Oregon
13
—
13
1.2
Arkansas
12
—
12
1.1
Kentucky
12
—
12
1.1
Missouri
11
—
11
1.0
Hawaii
10
—
10
0.9
Kansas
9
—
9
0.8
Maine
7
—
7
0.6
Louisiana
6
—
6
0.5
Minnesota
6
—
6
0.5
New Mexico
5
—
5
0.4
Alabama
4
—
4
0.4
North Dakota
4
—
4
0.4
Oklahoma
4
—
4
0.4
Tennessee
4
—
4
0.4
Illinois
3
—
3
0.3
Mississippi
3
—
3
0.3
Vermont
3
—
3
0.3
Indiana
2
—
2
0.2
Rhode Island
2
—
2
0.2
Washington, D.C.
2
—
2
0.2
West Virginia
2
—
2
0.2
South Dakota
1
—
1
0.1
Wisconsin
1
—
1
0.1
Total
1,085
33
1,118
100.0%
26
The properties that we lease from third parties have a remaining lease term, including renewal and extension option terms,
averaging approximately 7.9 years. The following table sets forth information regarding lease expirations, including renewal and
extension option terms, for properties that we lease from third parties:
Number of
Leases
Expiring
Percent of
Total Leased
Properties
Percent
of Total
Properties
2025
2
6.1%
0.2%
2026
4
12.1
0.4
2027
4
12.1
0.4
2028
1
3.0
0.0
2029
2
6.1
0.2
Subtotal
13
39.4
1.2
Thereafter
20
60.6
1.8
Total
33
100.0%
3.0%
For the year ended December 31, 2024, revenues from rental properties, which includes base rental income, additional rental
income, if any, and certain GAAP revenue recognition adjustments, were $198.7 million, an average of approximately $178 thousand
per property given the 1,115 average rental properties held during the year. For the year ended December 31, 2023, revenues from rental
properties were $180.5 million, an average of $169 thousand per property given the 1,068 average rental properties held during the year.
Rental property lease expirations and annualized base rent (“ABR”) as of December 31, 2024 are as follows (dollars in thousands):
Number of
Properties (a)
ABR (b)
Percentage
of Total ABR
2025
9
$
1,391
0.7%
2026
22
2,986
1.5
2027
156
12,280
6.2
2028
49
8,674
4.4
2029
78
12,809
6.5
2030
48
5,663
2.9
2031
65
10,549
5.3
2032
138
18,207
9.2
2033
50
8,119
4.1
2034
90
14,593
7.4
Thereafter
409
102,569
51.8
Subtotal
1,114
$
197,840
100.0%
Redevelopment
1
—
—
Vacant
3
—
—
Total
1,118
$
197,840
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, 2024, 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, 2024, we
had $0.1 million accrued, and as of December 31, 2023, we had no amounts accrued 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, 2024, 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.
27
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, Atlantic Richfield Company, BP, Buckeye Refining Company, Chevron, Citgo, ConocoPhillips, Cumberland Farms,
Energy Transfer Partners L.P., Gulf, Lukoil Americas, Getty Petroleum Marketing Inc., Marathon Oil, Hess, Pennzoil Company, Shell
Oil, Sunoco, Texaco, Valero, as well as other petroleum manufacturers, refiners, transporters, distributors and retailers of MTBE or
gasoline containing MTBE who are alleged to have manufactured, 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.
The discovery phase of the litigation has concluded, and the parties are engaged in summary judgment motion practice before the
United States District Court for the Southern District of New York, following which additional pretrial motion practice is anticipated.
Once all pretrial motions are concluded, the case is expected to be remanded to the Eastern District of Pennsylvania for trial. Multiple
defendants in the case have settled with the plaintiff. We continue to vigorously defend the claims made against us. Our ultimate liability
in this proceeding is uncertain and subject to numerous contingencies, 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 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
28
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 the 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 the 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. 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 polychlorinated biphenyls at an estimated cost of $441. 0 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. The 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, 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 on June 30, 2018, filed a complaint in the United States District
Court for the District of New Jersey listing over 120 defendants, including us, 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 January 5, 2024,
the Court entered an Order to Stay the Occidental Lawsuit pending the Court’s adjudication of a Motion to Enter the Modified Consent
Decree filed by the United States on January 31, 2024, as discussed below
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 $150.0 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 to an escrow account agreed upon shares of the settlement amount, which are subject to a
confidentiality agreement. Our settlement contribution was in line with legal reserves we had previously established. 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 (the “CD Action”). 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
29
and subsequently filed voluminous comments objecting to the entry of the proposed CD. On January 17, 2024, the United States
informed the Court that it completed reviewing public comments, including those from Occidental, and found no reasons to consider
the proposed CD as inappropriate, improper, or inadequate. Nevertheless, the United States decided that certain limited changes to the
CD should be made prior to moving for approval thereof. These changes involved removing three parties and a modification to the
United States' reservation of rights. The remaining 82 Settling Parties, including us, concurred with these changes, leading to the United
States filing a Modified Consent Decree (“Modified CD”) with the Court on the same day, January 17, 2024. On January 31, 2024, the
United States filed a copy of all public comments received on the proposed CD, its Response to the public comments and a Motion to
Enter the Modified CD. The Motion to Enter the Modified CD and accompanying memorandum of law states that the United States has
determined that the proposed settlement is reasonable, fair and consistent with the statutory purpose of CERCLA.
On December 18, 2024, the Court issued an Order and Opinion granting the United States’ Motion to Enter the Modified CD
finding the settlement procedurally sound, substantively fair and reasonable, and in furtherance of CERCLA’s goals.
On January 9, 2025, Nokia of America Corporation, an intervening party, filed a Notice of Appeal of the Order to the United
States Court of Appeals for the Third Circuit. It is anticipated that Occidental will also file an appeal. The timeline for resolving all
appeals to the Third Circuit remains inherently uncertain. Depending on the number of appeals and the time required for briefing and
deliberation, a decision by the Court of Appeals for the Third Circuit may extend into late 2025 or beyond.
If the Modified CD remains in its currently approved form after the appeals process is exhausted, our alleged liability to the EPA
and to any non-settling parties, including Occidental, for the remediation of the entire 17-mile Lower Passaic River and its tributaries
will be resolved. If the District Court’s Order is overturned on appeal, then, 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 District
Court’s Order is overturned or is not ultimately approved 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 proceedings pertaining to the LPRSA remains uncertain and subject to contingencies which cannot be predicted and an outcome
which is not yet known. We previously transferred funds to an escrow account based on our share of the settlement contemplated by the
Modified CD, however it is possible that circumstances may change and losses related to the Lower Passaic River proceedings could
exceed the amounts we have funded.
For additional information see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”
in this Annual Report on Form 10-K.
Item 4. Mine Safety Disclosures
None.
30
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 49,482 beneficial
holders of our common stock as of January 31, 2025, of which approximately 776 were holders of record.
For a discussion of potential limitations on our ability to pay future dividends see “Item 1A. Risk Factors—Risks Related to
Ownership of Our Securities—We may change our dividend policy and the dividends we pay may be subject to significant change” and
“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”
in this Annual Report on Form 10-K.
Issuer Purchases of Equity Securities
None.
Sales of Unregistered Securities
None.
Stock Performance Graph
Comparison of Five-Year Cumulative Total Return*
12/31/2019
12/31/2020
12/31/2021
12/30/2022
12/29/2023
12/31/2024
Getty Realty Corp.
$
100.00
$
88.78
$
108.99
$
121.71
$
111.13
$
122.07
Standard & Poor's 500
100.00
116.26
147.52
118.84
147.64
182.05
Peer Group
100.00
90.53
119.33
101.64
109.09
123.10
Assumes $100 invested at the close of the last day of trading on the New York Stock Exchange on December 31, 2019, in Getty
Realty Corp. common stock, Standard & Poor’s 500 and Peer Group.
* Cumulative total return assumes reinvestment of dividends. Source: SNL Financial.
31
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 to own and lease 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
32
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” in this Annual Report on Form 10-K. 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 Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between
2024 and 2023. Discussions of 2023 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual
Report on 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, 2023.
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, express tunnel car washes, automotive service centers (gasoline
and repair, oil and maintenance, tire and battery, and collision) and certain other freestanding retail properties, including drive-thru quick
service restaurants and automotive parts retailers. As of December 31, 2024, our portfolio included 1,118 properties, including 1,085
properties owned by us and 33 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 1,118 properties are located in 42 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, or certain other freestanding retail uses, including drive thru quick service restaurants and automotive parts
retailers. Many of our properties are located at highly trafficked urban intersections or conveniently close to highway entrances or exit
ramps.
As of December 31, 2024, we leased 1,114 of our properties to tenants under triple-net leases, including 921 properties leased
under 50 separate unitary or master triple-net leases, and 193 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, 2024, our weighted average remaining lease term, excluding renewal options, was 10.2 years.
Substantially all of our properties are leased on triple-net basis to convenience store operators, petroleum distributors, express
tunnel 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—Risks Related to Our Business and Operations—Significant number of our tenants depend on the
same industry for their revenues” in this Annual Report on 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.
Substantially all of our tenants are also responsible for pre-existing environmental contamination that is discovered during their lease
term, except contamination that was known at lease commencement, as to which we have established reserves. For additional
information regarding our environmental obligations, see Note 6 in “Item 8. Financial Statements and Supplementary Data” in this
Annual Report on Form 10-K.
As of December 31, 2024, we also had one property under redevelopment and three 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 also provide forward commitments to acquire new-to-industry construction and acquire assets
with in-place leases. 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 or other financing for the development of new-to-industry
33
properties. 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, 2024, we invested approximately $209.0 million in convenience and automotive retail
properties, including the acquisition of 31 express tunnel car washes, 19 automotive service centers, 17 convenience stores, and four
drive-thru quick service restaurants.
During the year ended December 31, 2023, we invested approximately $325.0 million in convenience and automotive retail
properties, including the acquisition of 26 express tunnel car washes, 12 convenience stores, 13 auto service centers, and three drive-
thru quick service restaurants.
For additional information regarding our property acquisitions, see Note 13 in “Item 8. Financial Statements and Supplementary
Data” in this Annual Report on 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 modern convenience stores or other single tenant convenience and automotive retail uses, such as automotive parts
retailers, quick service restaurants, auto service centers, and bank branches. We believe that the redeveloped properties can be leased or
sold at higher values than their prior use.
During the year ended December 31, 2024, rent commenced on one completed redevelopment that was placed back into service
in our net lease portfolio. During the year ended December 31, 2023, rent commenced on three completed redevelopments and increased
rent commenced on two revenue-enhancing capital expenditure projects for expanded convenience stores. Since the inception of our
redevelopment program in 2015, we have completed 32 redevelopment and revenue-enhancing capital expenditure projects.
For the year ended December 31, 2024, we incurred $1.1 million (net of write-offs) of construction-in-progress costs related to
our redevelopment activities and transferred $1.4 million of construction-in-progress to buildings and improvements on our consolidated
balance sheets. For the year ended December 31, 2023, we incurred $0.2 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 sheets.
As of December 31, 2024, we had one property under active redevelopment and others in various stages of feasibility planning
for potential recapture from our net lease portfolio.
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.
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.
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
34
(straight-line rent), the net amortization of intangible market lease assets and liabilities, 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
our 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):
Year ended December 31,
2024
2023
2022
Net earnings
$
71,064
$
60,151
$
90,043
Depreciation and amortization of real estate assets
54,984
45,296
39,902
Gains on dispositions of real estate
(6,038)
(4,625)
(16,423)
Impairments
3,966
5,243
3,545
Funds from operations (FFO)
123,976
106,065
117,067
Revenue recognition adjustments
Deferred rental revenue (straight-line rent)
(7,129)
(4,033)
(3,458)
Amortization of above and below market leases, net
(427)
(1,057)
(1,184)
Amortization of investments in direct financing leases
5,580
6,004
5,392
Amortization of lease incentives
284
1,098
1,198
Total revenue recognition adjustments
(1,692)
2,012
1,948
Environmental Adjustments
Accretion expense
407
585
1,259
Changes in environmental estimates
(933)
(302)
(23,837)
Environmental litigation accruals
125
—
279
Insurance reimbursements
(95)
(138)
(85)
Legal settlements and judgments
(41)
—
—
Total environmental adjustments
(537)
145
(22,384)
Other Adjustments
Stock-based compensation expense
5,934
5,582
4,775
Amortization of debt issuance costs
2,253
1,211
946
(Recovery) allowance for credit loss on notes and mortgages
receivable and direct financing leases
(177)
(189)
50
Loss on extinguishment of debt
—
43
—
Retirement and severance costs
1,036
939
85
Total other adjustments
9,046
7,586
5,856
Adjusted funds from operations (AFFO)
$
130,793
$
115,808
$
102,487
Basic per share amounts:
Net earnings
$
1.26
$
1.16
$
1.88
FFO (a)
2.22
2.07
2.45
AFFO (a)
2.35
2.26
2.14
Diluted per share amounts:
Net earnings
$
1.25
$
1.15
$
1.88
FFO (a)
2.21
2.06
2.44
AFFO (a)
2.34
2.25
2.14
Weighted average common shares outstanding:
Basic
54,305
50,020
46,730
Diluted
54,552
50,216
46,838
(a) 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:
35
Year ended December 31,
2024
2023
2022
FFO
$
3,208
$
2,624
$
2,734
AFFO
3,384
2,865
2,394
Results of Operations
Year ended December 31, 2024, compared to year ended December 31, 2023
The following table presents select data and comparative results from our consolidated statements of operations for the year ended
December 31, 2024, as compared to the year ended December 31, 2023 (in thousands):
Year ended December 31,
2024
2023
$ Change
Revenues:
Revenues from rental properties
$
198,669
$
180,488
$
18,181
Interest on notes and mortgages receivable
4,722
5,358
(636)
Operating expenses:
Property costs
14,859
23,789
(8,930)
Impairments
3,966
5,243
(1,277)
Environmental
585
1,261
(676)
General and administrative
25,265
23,735
1,530
Depreciation and amortization
54,984
45,296
9,688
Other items:
Gains on dispositions of real estate
6,038
4,625
1,413
Interest expense
39,272
31,527
7,745
Revenues from Rental Properties
The following table presents the results for revenues from rental properties for the year ended December 31, 2024, as compared
to the year ended December 31, 2023 (in thousands):
Year ended December 31,
2024
2023
$ Change
Rental income
$
186,124
$
162,978
$
23,146
Revenue recognition adjustments
1,692
(2,012)
3,704
Tenant reimbursement income
10,853
19,522
(8,669)
Total revenues from rental properties
198,669
180,488
18,181
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, 2024 and 2023, 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 intangible market lease assets and liabilities, (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. The decrease in tenant reimbursement income was driven by a decrease in
reimbursable real estate taxes due from our tenants.
Interest on Notes and Mortgages Receivable
The decrease in interest on notes and mortgages receivable was primarily due to a net decrease in the average notes and mortgages
receivable outstanding during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
36
Property Costs
The following table presents the results for property costs for the year ended December 31, 2024, as compared to the year ended
December 31, 2023 (in thousands):
Year ended December 31,
2024
2023
$ Change
Property operating expenses
$
14,217
$
23,112
$
(8,895)
Leasing and redevelopment expenses
642
677
(35)
Total property costs
14,859
23,789
(8,930)
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 decrease in property costs was
primarily due to a decrease in reimbursable real estate taxes and lower rent expense.
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, 2024 and 2023 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, 2024 was primarily due to a decrease in net
environmental remediation costs and estimates.
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 $1.3 million increase in employee-related expenses,
including $0.1 million of non-recurring retirement and severance costs and a $0.3 million increase in stock-based compensation, and a
$0.2 million increase 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, 2024 and 2023, 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 31 and nine properties during the years ended
December 31, 2024 and 2023, respectively.
Interest Expense
The increase in interest expense was due to higher average borrowings for the year ended December 31, 2024, as compared to the
year ended December 31, 2023.
Liquidity and Capital Resources
General
Our primary uses of liquidity include payments of operating expenses, interest on our outstanding debt, 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.”
37
We expect to meet our short-term liquidity requirements through cash flow from operations, funds available under our Credit
Facility, proceeds from unfunded Senior Unsecured Notes, proceeds from the settlement of shares of common stock subject to forward
sales agreements related to follow-on public equity offerings or our ATM Program, and available cash and cash equivalents.
As of December 31, 2024, we had $217.5 million of availability under our Credit Facility, $125.0 million of unfunded Senior
Unsecured Notes, 5.4 million shares of common stock subject to forward sales agreements which are anticipated to generate
approximately $164.8 million of gross proceeds upon settlement, and available cash and cash equivalents of $9.5 million.
We anticipate meeting our longer-term capital needs through cash flow from operations, funds available under our Credit Facility,
available cash and cash equivalents, the future issuance of shares of common stock or debt securities, and proceeds from future real
estate asset sales.
Our cash flow activities for the years ended December 31, 2024 and 2023 are summarized as follows (in thousands):
Year ended December 31,
2024
2023
$ Change
Net cash flow provided by operating activities
$
130,504
$
105,298
$
25,206
Net cash flow used in investing activities
(200,469)
(310,705)
110,236
Net cash flow provided by financing activities
78,296
199,444
(121,148)
Operating Activities
The change in net cash flow provided by operating activities for the years ended December 31, 2024 and 2023 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, 2024, was primarily due to a decrease
of $96.2 million in issuance of notes and mortgages receivable, an increase of $62.5 million in collection of notes and mortgages
receivable, a decrease of $42.0 million in property acquisitions and a $6.9 million decrease in deposits for property acquisitions.
Financing Activities
The change in net cash flow provided by financing activities for the year ended December 31, 2024, was primarily due to a
decrease in proceeds from the issuance of common stock of $195.6 million and an increase in dividends paid of $13.2 million, an
increase in net debt borrowings of $82.5 million, a decrease of $2.8 million of debt issuance costs and an increase of $2.6 million of
security deposits received.
Credit Facility
In October 2021, we 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 “Credit 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, 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 Credit Facility.
The Credit Facility matures on 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 and our compliance with certain conditions, including
the payment of extension fees to the lenders under the Credit Facility.
Borrowings under the Credit Facility bear interest at a rate equal to the greater of (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%, in each case with
the margin 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 Credit Facility is 0.15% to 0.25% based on our daily
unused portion of the available Credit Facility.
For additional information regarding our Credit Facility, see Note 16 in “Item 8. Financial Statements and Supplementary Data”
in this Annual Report on Form 10-K.
Term Loan
In October 2023, we entered into a term loan credit agreement (the “Term Loan Agreement”) that provides for a senior unsecured
term loan (the “Term Loan”) in an aggregate principal amount of $150.0 million. The Term Loan matures on October 17, 2025, subject
38
to one twelve-month extension exercisable at our option. Our exercise of the extension option is subject to the absence of any default
and our compliance with certain conditions, including the payment of extension fees to the lenders under the Term Loan.
Borrowings under the Term Loan bear interest at a rate equal to the greater of (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%, in each case with the margin
based on our consolidated total indebtedness to total asset value ratio at the end of each quarterly reporting period. In connection with
the Term Loan, we entered into interest rate swaps for a notional amount of $150.0 million to fix SOFR at 4.73% until maturity. Including
the impact of the swaps, the effective interest rate on the Term Loan is 6.13% based on our consolidated total indebtedness to total asset
value ratio as of December 31, 2024.
For additional information regarding our Term Loan, see Note 16 in “Item 8. Financial Statements and Supplementary Data” in
this Annual Report on Form 10-K.
Senior Unsecured Notes
In November 2024, we entered into a seventh amended and restated note purchase and guarantee agreement with The Prudential
Insurance Company of America and certain of its affiliates (collectively, “Prudential”) (the "Seventh Amended and Restated Prudential
Agreement") pursuant to which, in February 2025, we will issue $50.0 million of 5.70% Series T Guaranteed Senior Notes due February
22, 2032 (the “Series T Notes”) to Prudential and will use the proceeds to repay the $50.0 million of 4.75% Series C Guaranteed Senior
Notes due February 25, 2025 (the “Series C Notes”) outstanding under our sixth amended and restated note purchase and guarantee
agreement with Prudential (the "Sixth Amended and Restated Prudential Agreement"). The other senior unsecured notes outstanding as
of December 31, 2024 under the Sixth Amended and Restated Prudential Agreement, including (i) $50.0 million of 5.47% Series D
Guaranteed Senior Notes due June 21, 2028 (the “Series D Notes”), (ii) $50.0 million of 3.52% Series F Guaranteed Senior Notes due
September 12, 2029 (the “Series F Notes”), (iii) $100.0 million of 3.43% Series I Guaranteed Senior Notes due November 25, 2030 (the
“Series I Notes”) and (iv) $80.0 million of 3.765% Series Q Guaranteed Senior Notes due January 20, 2033 (the “Series Q Notes”),
remain outstanding under the Seventh Amended and Restated Prudential Agreement.
In November 2024, we entered into an amended and restated note purchase and guarantee agreement with New York Life
Insurance Company and certain of its affiliates (collectively, “New York Life”) (the “Amended and Restated New York Life
Agreement”) pursuant to which, in February 2025, we will issue $50.0 million of 5.52% Series R Guaranteed Senior Notes due
September 12, 2029 (the “Series R Notes”) and $25.0 million of 5.70% Series S Guaranteed Senior Notes due February 22, 2032 (the
“Series S Notes”) to New York Life. The other senior unsecured notes outstanding as of December 31, 2024 under our note purchase
and guarantee agreement with New York Life (the “New York Life Agreement”), including (i) $25.0 million of 3.45% Series N
Guaranteed Senior Notes due February 22, 2032 (the “Series N Notes”) and (ii) $25.0 million of 3.65% Series P Guaranteed Senior
Notes due January 20, 2033 (the “Series P Notes”), remain outstanding under the New York Life 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 as of December 31, 2024 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 as of December 31, 2024 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 June 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.
The funded and outstanding 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, Series N Notes, Series O Notes, Series P Notes, Series Q Notes,
Series R Notes, Series S Notes and Series T Notes are collectively referred to as the "Senior Unsecured Notes".
39
Debt Maturities
The amounts outstanding under our Credit Facility, Term Loan, and Senior Unsecured Notes, exclusive of extension options, are
as follows (in thousands):
Year ended December 31,
Maturity
Date
Interest
Rate
2024
2023
Credit Facility
October 2025
5.71%
$
82,500
$
10,000
Term Loan
October 2025
6.13%
150,000
75,000
Series C Notes
February 2025
4.75%
50,000
50,000
Series D-E Notes
June 2028
5.47%
100,000
100,000
Series F-H Notes
September 2029
3.52%
125,000
125,000
Series I-K Notes
November 2030
3.43%
175,000
175,000
Series L-N Notes
February 2032
3.45%
100,000
100,000
Series O-Q Notes
January 2033
3.65%
125,000
125,000
Total debt
907,500
760,000
Unamortized debt issuance costs, net (a)
(3,158)
(5,266)
Total debt, net
$
904,342
$
754,734
(a) Unamortized debt issuance costs related to the Credit Facility were $0.6 million and $1.4 million as of December 31, 2024 and
2023, respectively, and are included in prepaid expenses and other assets on our consolidated balance sheets.
Equity Offering
In July 2024, we completed a follow-on public offering of 4.0 million shares of common stock in connection with forward sales
agreements. We expect to settle the forward sales agreements in full within 12 months via physical delivery of the outstanding shares
of common stock in exchange for gross cash proceeds of approximately $121.2 million.
In February 2023, we completed a follow-on public offering of 3.5 million shares of common stock in connection with forward
sales agreements. During the year ended December 31, 2023, we settled all 3.5 million shares and realized net proceeds of $112.1
million.
ATM Program
In February 2023, we established and, in February 2024, we amended, 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 $350.0
million through a consortium of banks acting as our sales agents or acting as forward sellers on behalf of any forward purchasers pursuant
to forward sales agreements. 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 forward sales agreements allow us to lock in a share price on the sale of shares at the time the forward sales agreements
become effective, but defer receiving the proceeds from the sale of shares until a later date. To account for the forward sales agreements,
we considered the accounting guidance governing financial instruments and derivatives. To date, we have concluded that our forward
sales 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 forward sales agreements meet the derivatives and hedging guidance scope exception to be
accounted for as equity instruments. We concluded that the forward sales 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 our own stock price and operations, and (ii) none of the settlement provisions precluded the agreements from
being indexed to our own stock.
We also consider the potential dilution resulting from the forward sales agreements on our earnings per share calculations. We
use the treasury stock method to determine the dilution resulting from the forward sales agreements during the period of time prior to
settlement.
40
ATM Direct Issuances
During the years ended December 31, 2024 and 2023, no shares of common stock were issued under the ATM Program. Future
sales, if any, will depend on a variety of factors to be determined by us from time to time, including among others, market conditions,
the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding
available to us.
ATM Forward Agreements
The following table summarizes activity under our ATM Program in connection with forwards sales agreements for the years
ended December 31, 2024 and 2023 ($ in thousands):
2024
Period Entered Into Forward Sales Agreements
Shares Sold
Shares
Settled
Shares
Remaining
Net Proceeds
Received
Anticipated
Gross
Proceeds
Remaining
Three Months Ended June 30, 2023
—
217,561
—
$
7,205
$
—
Three Months Ended December 31, 2023
—
831,489
—
23,753
—
Three Months Ended June 30, 2024
406,727
—
406,727
—
11,382
Three Months Ended December 31, 2024
992,696
—
992,696
—
32,277
Total
1,399,423
1,049,050
1,399,423
$
30,958
$
43,659
2023
Period Entered Into Forward Sales Agreements
Shares Sold
Shares
Settled
Shares
Remaining
Net Proceeds
Received
Anticipated
Gross
Proceeds
Remaining
Three Months Ended September 30, 2022
—
714,136
—
$
21,897
$
—
Three Months Ended December 31, 2022
—
3,007,230
—
92,206
—
Three Months Ended June 30, 2023
217,561
—
217,561
—
7,609
Three Months Ended December 31, 2023
831,489
—
831,489
—
24,561
Total
1,049,050
3,721,366
1,049,050
$
114,103
$
32,170
We expect to settle outstanding forward sales 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 sales agreements, subject to certain conditions.
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, the Term Loan Agreement, our Senior Unsecured Notes and other factors, and therefore is not assured. In
particular, the Second Restated Credit Agreement, the Term Loan Agreement, and our Senior Unsecured Notes prohibit the payment of
dividends during certain events of default.
Regular quarterly dividends paid to our stockholders aggregated $100.2 million, $87.0 million and $78.3 million for the years
ended December 31, 2024, 2023 and 2022, 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, 2024, were comprised of borrowings under the Credit Facility, the Term Loan, 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.
41
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 Annual Report on 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 on our consolidated
financial statements. Although we have made estimates, judgments and assumptions regarding future uncertainties relating to the
information included on 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 on our consolidated financial statements
that is based on estimates, judgments and assumptions is subject to significant change and is adjusted as circumstances change and as
the uncertainties become more clearly defined.
Our accounting policies are described in Note 1 in “Item 8. Financial Statements and Supplementary Data” in this Annual Report
on Form 10-K. 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 intangible market lease assets and
liabilities 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.
42
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 net 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 underground storage tanks
("UST") remediation funds, with respect to past and future spending based on estimated recovery rates developed from our experience
with the funds when such recoveries are considered probable. A critical assumption in accruing for these recoveries is that the state UST
fund programs will be administered and funded in the future in a manner that is consistent with past practices and that future
environmental spending will be eligible for reimbursement at historical rates under these programs. We accrue environmental liabilities
based on our share of responsibility as defined in our lease contracts with our tenants and under various other agreements with others or
if circumstances indicate that our counterparty may not have the financial resources to pay its share of the costs. It is possible that our
assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may
change, which may result in material adjustments to the amounts recorded for environmental litigation accruals and environmental
remediation liabilities. We may ultimately be responsible to pay for environmental liabilities as the property owner if our tenants or
other counterparties fail to pay them. In certain environmental matters the effect on future financial results is not subject to reasonable
estimation because considerable uncertainty exists both in terms of the probability of loss and the estimate of such loss. The ultimate
liabilities resulting from such lawsuits and claims, if any, may be material to our results of operations in the period in which they are
recognized.
Litigation
Legal fees related to litigation are expensed as legal services are performed. We provide for litigation accruals, including certain
litigation related to environmental matters (see “Environmental Matters—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, , intangible
market lease assets and liabilities, 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, discount rates, EBITDA to rent coverage ratios and land comparables.
43
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.
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. Our
tenants are also responsible for pre-existing environmental contamination that is discovered during their lease term, except
contamination that was known at lease commencement, as to which we have established reserves.
For the subset of our triple-net leases which cover properties previously leased to Getty Petroleum Marketing Inc. (“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”). After expiration of the applicable Lookback Period, 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.
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 us 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, as of December 31, 2024, we had removed $24.2 million of
unknown reserve liabilities which had previously been accrued for these properties. There were no additional removals of unknown
reserve liabilities for the year ended December 31, 2024.
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 $11.8 million of unknown reserve liabilities for certain properties with respect to which
the Lookback Periods have expired as of December 31, 2024.
44
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.
We measure our environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for inflation
and then discount them to present value. We adjust our environmental remediation liabilities quarterly to reflect changes in projected
expenditures, changes in present value due to the passage of time and reductions in estimated liabilities as a result of actual expenditures
incurred during each quarter. As of December 31, 2024, we had accrued a total of $20.9 million for our prospective environmental
remediation obligations. This accrual consisted of (a) $9.1 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) $11.8
million for future environmental liabilities related to preexisting unknown contamination. As of December 31, 2023, we had accrued a
total of $22.4 million for our prospective environmental remediation obligations. This accrual consisted of (a) $9.9 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) $12.5 million for future environmental liabilities related to preexisting unknown
contamination.
Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $0.4 million,
$0.6 million and $1.3 million of net accretion expense was recorded for the years ended December 31, 2024, 2023 and 2022, respectively,
which is included in environmental expenses. In addition, during the years ended December 31, 2024, 2023 and 2022, we recorded
credits to environmental expenses aggregating $0.9 million, $0.3 million and $23.8 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, 2024 and 2023, we increased the carrying values of certain of our properties by $2.7 million
and $5.0 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 on our consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022, were $2.8 million,
$3.0 million, and $3.7 million, respectively. Capitalized asset retirement costs were $33.2 million (consisting of $25.0 million of known
environmental liabilities and $8.2 million of reserves for future environmental liabilities) as of December 31, 2024, and $34.3 million
(consisting of $25.8 million of known environmental liabilities and $8.5 million of reserves for future environmental liabilities) as of
December 31, 2023. We recorded impairment charges aggregating $2.4 million and $3.6 million for the years ended December 31, 2024
and 2023, respectively, for capitalized asset retirement costs.
For additional information regarding risks related to our potential environmental exposure, see “Item 1A. Risk Factors —Risks
Related to Our Business and Operations—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 Annual Report on 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
45
could be substantially higher than amounts currently recorded by us. Adjustments to accrued liabilities for environmental remediation
obligations will be reflected on 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,
2024 we had $0.1 million accrued, and as of December 31, 2023, we had no amounts accrued, 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 Annual Report on Form 10-
K.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to interest rate risk, primarily as a result of borrowings under our (A) Credit Facility, which 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%, in each case with the margin based on our consolidated total indebtedness to total asset value ratio at
the end of each quarterly reporting period, and (B) Term loan, which 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%, in each
case with the margin based on our consolidated total indebtedness to total asset value ratio at the end of each quarterly reporting period.
In connection with the Term Loan, we entered into interest rate swaps for a notional amount of $150.0 million to fix SOFR at weighted
average of 4.73% until maturity. Including the impact of the swaps, the effective interest rate on the Term Loan is 6.13% based on our
consolidated total indebtedness to total asset value ratio as of December 31, 2024.
Based on our outstanding borrowings under the Credit Facility of $82.5 million as of December 31, 2024, an increase in market
interest rates of 1.0% for 2025 would decrease our 2025 net income and cash flows by approximately $0.8 million. Our exposure to
fluctuations in interest rates will increase or decrease in the future with increases or decreases in the outstanding amount under our
Credit Facility 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.
46
6Item 8. Financial Statements and Supplementary Data
GETTY REALTY CORP. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
Page
Consolidated Balance Sheets as of December 31, 2024 and 2023
47
Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2024, 2023 and
2022
48
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
49
Notes to Consolidated Financial Statements
50
Report of Independent Registered Public Accounting Firm
75
47
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
December 31,
2024
2023
ASSETS:
Real Estate:
Land
$
943,800
$
867,884
Buildings and improvements
1,028,799
847,339
Lease intangible assets
171,129
142,345
Investment in direct financing leases, net
43,416
59,964
Construction in progress
96
426
Real estate held for use
2,187,240
1,917,958
Less accumulated depreciation and amortization
(350,626)
(307,623)
Real estate held for use, net
1,836,614
1,610,335
Real estate held for sale, net
243
2,429
Real estate, net
1,836,857
1,612,764
Notes and mortgages receivable
29,454
112,008
Cash and cash equivalents
9,484
3,307
Restricted cash
4,133
1,979
Deferred rent receivable
61,553
54,424
Accounts receivable
2,509
5,012
Right-of-use assets - operating
12,368
14,571
Right-of-use assets - finance
107
174
Prepaid expenses and other assets
17,215
18,066
Total assets
$
1,973,680
$
1,822,305
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Credit Facility
$
82,500
$
10,000
Term Loan, net
148,951
72,692
Senior Unsecured Notes, net
673,511
673,406
Environmental remediation obligations
20,942
22,369
Dividends payable
26,541
24,850
Lease liability - operating
13,612
16,051
Lease liability - finance
330
595
Accounts payable and accrued liabilities
45,210
46,790
Total liabilities
1,011,597
866,753
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;
55,027,144 and 53,952,539 shares issued and outstanding, respectively
550
540
Accumulated other comprehensive income (loss)
(1,864)
(4,021)
Additional paid-in capital
1,088,390
1,053,129
Dividends paid in excess of earnings
(124,993)
(94,096)
Total stockholders’ equity
962,083
955,552
Total liabilities and stockholders’ equity
$
1,973,680
$
1,822,305
The accompanying notes are an integral part of these consolidated financial statements.
48
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in thousands, except per share amounts)
Year ended December 31,
2024
2023
2022
Revenues:
Revenues from rental properties
$
198,669
$
180,488
$
163,889
Interest on notes and mortgages receivable
4,722
5,358
1,699
Total revenues
203,391
185,846
165,588
Operating expenses:
Property costs
14,859
23,789
21,553
Impairments
3,966
5,243
3,545
Environmental
585
1,261
(20,902)
General and administrative
25,265
23,735
20,621
Depreciation and amortization
54,984
45,296
39,902
Total operating expenses
99,659
99,324
64,719
Gains on dispositions of real estate
6,038
4,625
16,423
Operating income
109,770
91,147
117,292
Other income, net
566
574
413
Interest expense
(39,272)
(31,527)
(27,662)
Loss on extinguishment of debt
—
(43)
—
Net earnings
$
71,064
$
60,151
$
90,043
Basic earnings per common share:
Net Earnings
$
1.26
$
1.16
$
1.88
Diluted earnings per common share:
Net Earnings
$
1.25
$
1.15
$
1.88
Weighted average common shares outstanding:
Basic
54,305
50,020
46,730
Diluted
54,552
50,216
46,838
Net earnings
71,064
60,151
90,043
Other comprehensive loss:
Unrealized gain (loss) on cash flow hedges
2,688
(3,938)
—
Cash flow hedge income reclassified to interest expense
(531)
(83)
—
Total other comprehensive income (loss)
2,157
(4,021)
—
Comprehensive income
$
73,221
$
56,130
$
90,043
The accompanying notes are an integral part of these consolidated financial statements.
49
GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year ended December 31,
2024
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
$
71,064
$
60,151
$
90,043
Adjustments to reconcile net earnings to net cash flow provided by
operating activities:
Depreciation and amortization expense
54,984
45,296
39,902
Impairment charges
3,966
5,243
3,545
Gains on dispositions of real estate
(6,038)
(4,625)
(16,423)
Loss on extinguishment of debt
—
43
—
Deferred rent receivable
(7,129)
(4,033)
(3,458)
(Recovery) allowance for credit loss on notes and mortgages receivable
and direct financing leases
(177)
(189)
50
Amortization of intangible market lease assets and liabilities
(143)
41
14
Amortization of investment in direct financing leases
5,580
6,004
5,392
Amortization of debt issuance costs
2,253
1,211
946
Accretion expense
407
585
1,259
Stock-based compensation expense
5,934
5,582
4,775
Changes in assets and liabilities:
Accounts receivable
2,503
(1,098)
(784)
Prepaid expenses and other assets
1,493
(2,285)
(1,965)
Environmental remediation obligations
(4,756)
(6,157)
(28,088)
Accounts payable and accrued liabilities
563
(471)
(2,122)
Net cash flow provided by operating activities
130,504
105,298
93,086
CASH FLOWS FROM INVESTING ACTIVITIES:
Property acquisitions
(290,070)
(248,072)
(137,275)
Capital expenditures
(878)
(309)
—
Addition to construction in progress
(1,090)
(349)
(56)
Proceeds from dispositions of real estate
12,986
11,201
24,204
Deposits for property acquisitions
(3,023)
3,930
(8,265)
Issuance of notes and mortgages receivable
(23,137)
(119,268)
(19,312)
Collection of notes and mortgages receivable
104,743
42,162
1,648
Net cash flow used in investing activities
(200,469)
(310,705)
(139,056)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from Credit Facility
236,000
230,500
90,000
Repayments of Credit Facility
(163,500)
(290,500)
(80,000)
Proceeds from Senior Unsecured Notes
—
125,000
100,000
Proceeds from Term Loan
75,000
75,000
—
Repayments of Senior Unsecured Notes
—
(75,043)
—
Payments of finance lease liability
(265)
(297)
(487)
Payments of cash dividends
(100,209)
(86,964)
(78,264)
Payments of debt issuance costs
(145)
(2,932)
(611)
Security deposits received (refunded)
2,138
(547)
823
Payments in settlement of restricted stock units
(1,282)
(1,004)
(496)
Proceeds from issuance of common stock, net - equity offering
(399)
112,128
—
Proceeds from issuance of common stock, net - ATM Program
30,958
114,103
(207)
Net cash flow provided by financing activities
78,296
199,444
30,758
Change in cash, cash equivalents and restricted cash
8,331
(5,963)
(15,212)
Cash, cash equivalents and restricted cash at beginning of year
5,286
11,249
26,461
Cash, cash equivalents and restricted cash at end of year
$
13,617
$
5,286
$
11,249
Year ended December 31,
2024
2023
2022
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest
$
38,161
$
29,379
$
26,526
Income taxes
352
677
557
Environmental remediation obligations
3,823
5,856
4,252
Non-cash transactions
Dividends declared but not yet paid
$
26,541
$
24,850
$
20,576
Issuance of notes and mortgages receivable related to property dispositions
—
—
1,050
The accompanying notes are an integral part of these consolidated financial statements.
50
GETTY REALTY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements include the accounts of Getty Realty Corp. and its wholly-owned subsidiaries. The
accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the
United States of America (“GAAP”). We do not distinguish our principal business or our operations on a geographical basis for purposes
of measuring performance. We manage and evaluate our operations as a single segment. All significant intercompany accounts and
transactions have been eliminated.
Use of Estimates, Judgments and Assumptions
The consolidated financial statements have been prepared in conformity with GAAP, which requires management to make
estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and revenues and expenses during the period reported. Estimates, judgments
and assumptions underlying the accompanying consolidated financial statements include, but are not limited to, real estate, receivables,
deferred rent receivable, direct financing leases, depreciation and amortization, impairment of long-lived assets, environmental
remediation costs, environmental remediation obligations, litigation, accrued liabilities, income taxes and the allocation of the purchase
price of properties acquired to the assets acquired and liabilities assumed. Application of these estimates and assumptions requires
exercise of judgment as to future uncertainties and, as a result, actual results could differ materially from these estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform to current year presentation. Such reclassifications had no impact
on previously reported net earnings.
Real Estate
Real estate assets are stated at cost less accumulated depreciation and amortization. For acquisitions of real estate we estimate the
fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant” and identified intangible assets and
liabilities (consisting of leasehold interests, intangible market lease assets and liabilities, 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, EBITDA to rent
coverage ratios, and land comparables.
We expense transaction costs associated with business combinations in the period incurred. Acquisitions of real estate which do
not meet the definition of a business are accounted for as asset acquisitions. The accounting model for asset acquisitions is similar to
the accounting model for business combinations except that the acquisition costs are capitalized and allocated to the individual assets
acquired and liabilities assumed on a relative fair value basis. For additional information regarding property acquisitions, see Note 13 –
Property Acquisitions.
We capitalize direct costs, including costs such as construction costs and professional services, and indirect costs associated with
the development and construction of real estate assets while substantive activities are ongoing to prepare the assets for their intended
use. The capitalization period begins when development activities are underway and ends when it is determined that the asset is
substantially complete and ready for its intended use.
We evaluate the held for sale classification of our real estate as of the end of each quarter. Assets that are classified as held for
sale are recorded at the lower of their carrying amount or fair value less costs to sell.
When real estate assets are sold or retired, the cost and related accumulated depreciation and amortization is eliminated from the
respective accounts and any gain or loss is credited or charged to income. We evaluate real estate sale transactions where we provide
seller financing to determine sale and gain recognition in accordance with GAAP. Expenditures for maintenance and repairs are charged
to income when incurred.
Depreciation and Amortization
Depreciation of real estate is computed on the straight-line method based upon the estimated useful lives of the assets, which
generally range from 16 to 25 years for buildings and improvements, or the term of the lease if shorter. Asset retirement costs are
depreciated over the shorter of the remaining useful lives of USTs or 10 years for asset retirement costs related to environmental
51
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 Annual Report on 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.
During the year ended December 31, 2024, one of our direct financing leases was modified. Upon modification, we reassessed
the lease classification and determined that the lease meets the definition of an operating lease under ASC 842. Accordingly, we
reclassified the amounts recorded as investment in direct financing leases immediately prior to the modification of $11.2 million to
building and improvements on our consolidated balance sheets.
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, in part, 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 accordance with ASU 2016-13, 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. As of December 31, 2024 and 2023, the allowance for credit losses on notes and mortgages receivable was
$0.3 million and $0.2 million, respectively.
We also originate construction loans and provide development financing for the construction of income-producing properties
which we generally expect to purchase via sale-leaseback transactions at the end of the construction period. We have the option to
purchase the properties at the end of such period. During the year ended December 31, 2024, we funded $10.6 million and, as of
December 31, 2024, had outstanding $9.3 million of such construction loans and development financing. Our construction loans and
development financing generally provide for funding only during the construction period, which is typically nine to twelve 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 projects. We also review and inspect each property before disbursement of
funds during the term of the construction loan. At the end of the construction period, the construction loans will be repaid with the
proceeds from the sale of the properties.
In addition, we may acquire real estate assets under construction from the tenant and commit to provide additional funding to our
tenants during the construction period to complete the properties. These transactions do not meet the criteria for sale-leaseback
accounting and are accounted for as finance receivables. Accordingly, initial investments and all subsequent fundings made during the
construction period are recorded within notes and mortgages receivable on our consolidated balance sheets, and rental payments resulting
from these investments are recorded within interest on notes and mortgages receivable on our consolidated statements of operations. At
52
the end of construction period, we will recognize the purchase of the assets, remove the finance receivables from our consolidated
balance sheets, and begin to record rental income from the operating leases. During the year ended December 31, 2024, we funded $12.5
million of such investments and, as of December 31, 2024, had a total of $14.2 million of such investments outstanding and recorded in
notes and mortgages receivable.
Cash and Cash Equivalents
We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Our
cash and cash equivalents are held in the custody of financial institutions, and these balances, at times, may exceed federally insurable
limits.
Restricted Cash
Restricted cash consists of cash that is contractually restricted or held in escrow pursuant to various agreements with
counterparties. As of December 31, 2024 and 2023, restricted cash of $4.1 million and $2.0 million, respectively, consisted of security
deposits received from our tenants.
Revenue Recognition and Deferred Rent Receivable
We determine the proper amount of revenue to be recognized in accordance with ASU 2014-09, Revenue from Contracts with
Customers (Topic 606). 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, 2024, 2023 and 2022.
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 intangible market lease assets and
liabilities 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.
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 assessments have a direct impact on our net income because recording an impairment loss results in
an immediate negative adjustment to net income. The evaluation of anticipated cash flows is highly subjective and is based in part on
assumptions regarding future rental rates and operating expenses that could differ materially from actual results in future periods. Where
properties held for use have been identified as having a potential for sale, additional judgments are required related to the determination
as to the appropriate period over which the projected undiscounted cash flows should include the operating cash flows and the amount
53
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.
We recorded impairment charges aggregating $4.0 million, $5.2 million, and $3.5 million for the years ended December 31, 2024,
2023 and 2022, respectively. Our estimated fair values, as they relate to property carrying values, were primarily based upon 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 and resulted in $1.6 million of impairments charges recognized during the year ended
December 31, 2024. During the year ended December 31, 2024, the remaining impairments of $2.4 million were 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, 2024, 2023 and 2022, impairment
charges aggregating $0.8 million, $2.3 million and $1.1 million, respectively, were related to properties that were previously disposed
of by us.
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 underground storage tanks (“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 net 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 filed for the years ended
54
December 31, 2021, 2022 and 2023, and tax returns which will be filed for the year ended December 31, 2024, remain open to
examination by federal and state tax jurisdictions under the respective statutes of limitations.
New Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment
Disclosures (“ASU 2023-07”). ASU 2023-07 is intended to improve reportable segment disclosure by requiring disclosure of
incremental segment information on an annual and interim basis such as, annual and interim disclosure of significant segment expenses
that are regularly provided to the chief operating decision maker, interim disclosure of a reportable segment’s profit or loss and assets
and require that a public entity that has a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing
segment disclosures in Topic 280. The amendments in ASU 2023-07 do not change how a public entity identifies its operating segments,
aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in
ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after
December 15, 2024. The disclosures are applied retrospectively to all periods presented and early adoption was permitted. We
have one reportable segment and we adopted ASU 2023-07 for the year ended December 31, 2024. The adoption of ASU 2023-07 did
not have a material impact on our consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (“ASU
2023-09”). ASU 2023-09 requires annual disclosure of specific categories in the income tax rate reconciliation and provides additional
information for reconciling items that meet a quantitative threshold within the rate reconciliation. In addition, the amendments require
annual disclosure of income taxes paid disaggregated by federal, state and foreign jurisdictions as well as individual jurisdictions in
which income taxes paid is equal to or greater than 5 percent of total income taxes paid. ASU 2023-09 is effective for annual periods
beginning after December 15, 2024 on a prospective basis, however early adoption and retrospective adoption is permitted. We are
currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures.
NOTE 2. — LEASES
As Lessor
As of December 31, 2024, we owned 1,085 properties and leased 33 properties from third-party landlords. These 1,118 properties
are located in 42 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, express tunnel 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 6 –
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, 2024, 2023 and 2022, were $198.7 million, $180.5 million,
and $163.9 million, respectively. Base rental income included in revenues from rental properties was $186.1 million, $163.0 million,
and $149.1 million for the years ended December 31, 2024, 2023, and 2022, 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 intangible market
lease assets and liabilities, 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. Non-
cash adjustments included in revenues from rental properties resulted in an increase in revenue of $1.7 million for the year ended
55
December 31, 2024 and reductions in revenue of $2.0 million and $1.9 million for the years ended December 31, 2023, and 2022,
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 $10.9
million, $19.5 million, and $16.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Direct Financing Leases
The components of the investment in direct financing leases as of December 31, 2024 and 2023 are as follows (in thousands):
2024
2023
Lease payments receivable
$
53,897
$
71,834
Unguaranteed residual value
7,568
13,928
Unearned Income
(17,494)
(24,995)
Allowance for credit losses
(555)
(803)
Total
$
43,416
$
59,964
In accordance with ASU 2016-13, during the years ended December 31, 2024, 2023 and 2022, we recorded allowances
(reductions) for credit losses of ($42 thousand), ($92 thousand) and $69 thousand, respectively, on our net investments in direct financing
leases due to changes in expected economic conditions, which was included within other income on our consolidated statements of
operations. As of December 31, 2024 and 2023, we had recorded an allowance for credit losses of $0.6 million and $0.8 million,
respectively, on investment in direct financing leases.
We evaluate the credit quality of our investment in direct financing leases utilizing our internal underwriting and credit analysis.
Substantially all of our tenants are required to provide us with specified unit-level financial information and/or with corporate-level
financial information. At both December 31, 2024 and 2023 no material balances of our investment in direct financing leases were past
due.
During the year ended December 31, 2024, one of our direct financing leases was modified. Upon modification, we reassessed
the lease classification and determined the lease meets the definition of an operating lease under ASC 842. Accordingly, we reclassified
the amounts recorded as investment in direct financing leases immediately prior to the modification to building and improvements.
Future contractual annual rentals receivable from our tenants, which have terms in excess of one year as of December 31, 2024,
are as follows (in thousands):
Operating
Leases
Direct
Financing Leases
2025
$
189,597
$
9,654
2026
191,267
9,868
2027
185,978
10,089
2028
177,463
9,799
2029
174,635
8,425
Thereafter
1,270,847
6,062
Total
$
2,189,787
$
53,897
As Lessee
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 $25.6 million (net of deferred rent expense) and
operating lease liabilities of $26.1 million, 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.
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The following presents the lease-related assets and liabilities (in thousands):
December 31,
2024
Assets
Right-of-use assets - operating
$
12,368
Right-of-use assets - finance
107
Total lease assets
$
12,475
Liabilities
Lease liability - operating
$
13,612
Lease liability - finance
330
Total lease liabilities
$
13,942
The following presents the weighted average lease terms and discount rates of our leases:
Weighted-average remaining lease term (years):
Operating leases
7.1
Finance leases
3.2
Weighted-average discount rate:
Operating leases (a)
4.70%
Finance leases
14.00%
(a) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.
The following presents our total lease costs (in thousands):
December 31,
2024
Operating lease cost
$
2,930
Finance lease cost
Amortization of leased assets
265
Interest on lease liabilities
77
Short-term lease cost
—
Total lease cost
$
3,272
The following presents supplemental cash flow information related to our leases (in thousands):
December 31,
2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$
3,248
Operating cash flows for finance leases
77
Financing cash flows for finance leases
265
As of December 31, 2024, scheduled lease liabilities mature as follows (in thousands):
Operating
Leases
Direct
Financing Leases
2025
$
2,804
$
179
2026
2,661
147
2027
2,241
37
2028
2,110
—
2029
1,851
—
Thereafter
4,577
—
Total lease payments
16,244
363
Less: amount representing interest
(2,632)
(33)
Present value of lease payments
$
13,612
$
330
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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 7.9 years,
including renewal options. Future minimum annual rentals payable under such leases, excluding renewal options, are as follows: 2025
– $3.1 million, 2026 – $2.9 million, 2027 – $2.3 million, 2028 – $1.9 million, 2029 – $1.6 million and $3.2 million thereafter.
Rent expense, substantially all of which consists of minimum rentals on non-cancelable operating leases, amounted to $2.3 million,
$2.4 million and $2.9 million for the years ended December 31, 2024, 2023 and 2022, respectively, and is included in property costs.
Rent received under subleases for the years ended December 31, 2024, 2023 and 2022, was $5.3 million, $5.8 million and $6.4 million,
respectively, and is included in rental revenue discussed above.
Major Tenants
As of December 31, 2024 and 2023, we had three significant tenants by revenue:
2024
2023
Number of
properties
% of Total
Revenues
Number of
properties
% of Total
Revenues
ARKO Corp. (NASDAQ: ARKO)
148
13%
150
15%
Global Partners LP (NYSE: GLP)
128
12%
150
14%
Apro, LLC (d/b/a United Oil)
77
9%
77
10%
During the year ended December 31, 2024, we amended one of our unitary leases with Global Partners LP ("Global"). Pursuant
to the amendment, the term of the lease was extended by seven years to August 31, 2034, contractual base rent due under the lease
increased by $0.3 million to $9.2 million, and the number of properties subject to the lease was decreased by 23 properties. The 23
properties removed from the lease were sold to Global for $4.4 million. All other material terms of the lease remained substantially
unchanged.
Getty Petroleum Marketing Inc.
Getty Petroleum Marketing Inc. (“Marketing”) was our largest tenant from 1997 until 2012 under a unitary triple-net master lease
that was terminated in April 2012 as a consequence of Marketing’s bankruptcy, at which time we either sold or released these properties.
As of December 31, 2024, 292 of the properties we own or lease were previously leased to Marketing, of which 268 properties are
subject to long-term triple-net leases with petroleum distributors in 11 separate property portfolios and 23 properties are leased as single
unit triple-net leases (one additional property is vacant). The leases covering properties previously leased to Marketing are unitary triple-
net lease agreements generally with an initial term of 15 years and options for successive renewal terms of up to 20 years. As of
December 31, 2024, our weighted average remaining lease term, excluding renewal options, for the properties previously leased to
Marketing was 6.9 years. Rent is scheduled to increase at varying intervals during both the initial and renewal terms of the leases. 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, 2024, we have a remaining commitment to fund up to $4.5
million 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 on 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, 2024, we removed $13.8 million of asset
retirement obligations and $10.8 million of net asset retirement costs related to USTs from our balance sheet. The cumulative change of
$0.5 million (net of accumulated amortization of $2.5 million) 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.
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Legal Proceedings
We are involved in various legal proceedings and claims which arise in the ordinary course of our business. As of December 31,
2024, we had $0.1 million accrued, and as of December 31, 2023, we had no amounts accrued, 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, and our methyl tertiary butyl ether (a fuel derived from methanol, commonly referred to as “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.
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 the 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 the 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. 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 polychlorinated biphenyls at an estimated cost of $441.0 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. The 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 the EPA for cash out settlements. Most of the PRPs identified by the EPA, including the Company, participated in the
allocation process. Occidental did not participate in the allocation proceedings, but on June 30, 2018, filed a complaint in the United
States District Court for the District of New Jersey listing over 120 defendants, including us, 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
59
other named defendants known as the “Small Parties Group” or “SPG” consistent with our defenses in the related proceedings. On
January 5, 2024, the Court entered an Order to Stay the Occidental Lawsuit pending the Court’s adjudication of a Motion to Enter the
Modified Consent Decree filed by the United States on January 31, 2024, as discussed below.
The allocator issued a final Allocation Recommendation Report in December 2020, which was based upon an allocation
methodology approved by the 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 the EPA the collective sum of $150.0 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 the 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 to an escrow account agreed upon shares of the settlement amount, which are subject to a
confidentiality agreement. Our settlement contribution was in line with legal reserves we had previously established. 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 (the “CD Action”). 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
and subsequently filed voluminous comments objecting to the entry of the proposed CD. On January 17, 2024, the United States
informed the Court that it completed reviewing public comments, including those from Occidental, and found no reasons to consider
the proposed CD as inappropriate, improper, or inadequate. Nevertheless, the United States decided that certain limited changes to the
CD should be made prior to moving for approval thereof. These changes involved removing three parties and a modification to the
United States' reservation of rights. The remaining 82 Settling Parties, including us, concurred with these changes, leading to the United
States filing a Modified Consent Decree (“Modified CD”) with the Court on the same day, January 17, 2024. On January 31, 2024, the
United States filed a copy of all public comments received on the proposed CD, its Response to the public comments and a Motion to
Enter the Modified CD. The Motion to Enter the Modified CD and accompanying memorandum of law states that the United States has
determined that the proposed settlement is reasonable, fair and consistent with the statutory purpose of CERCLA.
On December 18, 2024, the Court issued an Order and Opinion granting the United States’ Motion to Enter the Modified CD
finding the settlement procedurally sound, substantively fair and reasonable, and in furtherance of CERCLA’s goals.
On January 9, 2025, Nokia of America Corporation, an intervening party, filed a Notice of Appeal of the Order to the United
States Court of Appeals for the Third Circuit. It is anticipated that Occidental will also file an appeal. The timeline for resolving all
appeals to the Third Circuit remains inherently uncertain. Depending on the number of appeals and the time required for briefing and
deliberation, a decision by the Court of Appeals for the Third Circuit may extend into late 2025 or beyond.
If the Modified CD remains in its currently approved form after the appeals process is exhausted, our alleged liability to the EPA
and to any non-settling parties, including Occidental, for the remediation of the entire 17-mile Lower Passaic River and its tributaries
will be resolved. If the District Court’s Order is overturned on appeal, then, 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 District
Court’s Order is overturned or is not ultimately approved 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 proceedings pertaining to the LPRSA remains uncertain and subject to contingencies which cannot be predicted and an outcome
which is not yet known. We previously transferred funds to an escrow account based on our share of the settlement contemplated by the
Modified CD, however it is possible that circumstances may change and losses related to the Lower Passaic River proceedings could
exceed the amounts we have funded.
60
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, transporters, distributors and retailers of MTBE or gasoline containing MTBE who are alleged to have manufactured,
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.
The discovery phase of the litigation has concluded, and the parties are engaged in summary judgment motion practice before the
United States District Court for the Southern District of New York, following which additional pretrial motion practice is anticipated.
Once all pretrial motions are concluded, the case is expected to be remanded to the Eastern District of Pennsylvania for trial. Multiple
defendants in the case have settled with plaintiff. We continue to vigorously defend the claims made against us. Our ultimate liability in
this proceeding is uncertain and subject to numerous contingencies, 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 the outcome of which are not yet known.
61
NOTE 4. — DEBT
The amounts outstanding under our Credit Facility, Term Loan, and Senior Unsecured Notes, exclusive of extension options, are
as follows (in thousands):
Year ended December 31,
Maturity
Date
Interest
Rate
2024
2023
Credit Facility
October 2025
5.71%
$
82,500
$
10,000
Term Loan
October 2025
6.13%
150,000
75,000
Series C Notes
February 2025
4.75%
50,000
50,000
Series D-E Notes
June 2028
5.47%
100,000
100,000
Series F-H Notes
September 2029
3.52%
125,000
125,000
Series I-K Notes
November 2030
3.43%
175,000
175,000
Series L-N Notes
February 2032
3.45%
100,000
100,000
Series O-Q Notes
January 2033
3.65%
125,000
125,000
Total debt
907,500
760,000
Unamortized debt issuance costs, net (a)
(3,158)
(5,266)
Total debt, net
$
904,342
$
754,734
(a) Unamortized debt issuance costs related to the Credit Facility were $0.6 million and $1.4 million, respectively, as of December 31,
2024 and 2023, and are included in prepaid expenses and other assets on our consolidated balance sheets.
Credit Facility
In October 2021, we 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 “Credit 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, 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 Credit Facility.
The Credit Facility matures on 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 and our compliance with certain conditions, including
the payment of extension fees to the lenders under the Credit Facility.
Borrowings under the Credit Facility bear interest at a rate equal to the greater of (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%, in each case with
the margin 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 Credit Facility is 0.15% to 0.25% based on our daily
unused portion of the available Credit Facility.
For additional information regarding our Credit Facility, see Note 16 – Subsequent Events in this Annual Report on Form 10-K.
Term Loan
In October 2023, we entered into a term loan credit agreement (the "Term Loan Agreement") that provides for a senior unsecured
term loan (the "Term Loan") in an aggregate principal amount of $150.0 million. The Term Loan matures on October 17, 2025, subject
to one twelve-month extension exercisable at our option. Our exercise of the extension option is subject to the absence of any default
and our compliance with certain conditions, including the payment of extension fees to the lenders under the Term Loan.
The Term Loan is comprised of (i) an initial principal amount of $75.0 million that was funded in a single draw at closing and
used to repay amounts outstanding under our Credit Facility, and (ii) an additional principal amount of $75.0 million that was funded in
a single draw in April, 2024.
Borrowings under the Term Loan bear interest at a rate equal to the greater of (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%, in each case with the margin
based on our consolidated total indebtedness to total asset value ratio at the end of each quarterly reporting period. In connection with
the Term Loan, we entered into interest rate swaps for a notional amount of $150.0 million to fix SOFR at weighted average of 4.73%
until maturity. Including the impact of the swaps, the effective interest rate on the Term Loan is 6.13% based on our consolidated total
indebtedness to total asset value ratio as of December 31, 2024. As of December 31, 2024, $150.0 million was outstanding under our
Term Loan.
62
For additional information regarding our Term Loan, see Note 16 – Subsequent Events in this Annual Report on Form 10-K.
Senior Unsecured Notes
In November 2024, we entered into a seventh amended and restated note purchase and guarantee agreement with The Prudential
Insurance Company of America and certain of its affiliates (collectively, “Prudential”) (the "Seventh Amended and Restated Prudential
Agreement") pursuant to which, in February 2025, we will issue $50.0 million of 5.70% Series T Guaranteed Senior Notes due February
22, 2032 (the “Series T Notes”) to Prudential and will use the proceeds to repay the $50.0 million of 4.75% Series C Guaranteed Senior
Notes due February 25, 2025 (the “Series C Notes”) outstanding under our sixth amended and restated note purchase and guarantee
agreement with Prudential (the "Sixth Amended and Restated Prudential Agreement"). The other senior unsecured notes outstanding as
of December 31, 2024 under the Sixth Amended and Restated Prudential Agreement, including (i) $50.0 million of 5.47% Series D
Guaranteed Senior Notes due June 21, 2028 (the “Series D Notes”), (ii) $50.0 million of 3.52% Series F Guaranteed Senior Notes due
September 12, 2029 (the “Series F Notes”), (iii) $100.0 million of 3.43% Series I Guaranteed Senior Notes due November 25, 2030 (the
“Series I Notes”) and (iv) $80.0 million of 3.765% Series Q Guaranteed Senior Notes due January 20, 2033 (the “Series Q Notes”),
remain outstanding under the Seventh Amended and Restated Prudential Agreement.
In November 2024, we entered into an amended and restated note purchase and guarantee agreement with New York Life
Insurance Company and certain of its affiliates (collectively, “New York Life”) (the “Amended and Restated New York Life
Agreement”) pursuant to which, in February 2025, we will issue $50.0 million of 5.52% Series R Guaranteed Senior Notes due
September 12, 2029 (the “Series R Notes”) and $25.0 million of 5.70% Series S Guaranteed Senior Notes due February 22, 2032 (the
“Series S Notes”) to New York Life. The other senior unsecured notes outstanding as of December 31, 2024 under our note purchase
and guarantee agreement with New York Life (the “New York Life Agreement”), including (i) $25.0 million of 3.45% Series N
Guaranteed Senior Notes due February 22, 2032 (the “Series N Notes”) and (ii) $25.0 million of 3.65% Series P Guaranteed Senior
Notes due January 20, 2033 (the “Series P Notes”), remain outstanding under the New York Life 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 it 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 as of December 31, 2024 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 it 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 as of December 31, 2024 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.
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 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 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, Series N Notes, Series O Notes, Series P Notes, Series Q Notes,
Series R Notes, Series S Notes and Series T Notes are collectively referred to as the "Senior Unsecured Notes".
Covenants
The Second Restated Credit Agreement, Term Loan 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, Term Loan Agreement and 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, Term Loan Agreement and Senior Unsecured
Notes, and could result in the acceleration of our indebtedness outstanding under the Credit Facility, Term Loan and Senior Unsecured
Notes. We may be prohibited from drawing funds under the Credit 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.
63
As of December 31, 2024, we are in compliance with all of the material terms of the Second Restated Credit Agreement, Term
Loan Agreement and Senior Unsecured Notes, including the various financial covenants described herein.
On January 23, 2025, the Second Restated Credit Agreement was amended and restated in its entirety by the third amended and
restated credit agreement (as amended, the “Third Restated Credit Agreement”). For additional information regarding the Third Restated
Credit Agreement, see Note 16 – Subsequent Events in this Annual Report on Form 10-K.
Debt Maturities
As of December 31, 2024, scheduled debt maturities, including balloon payments, are as follows (in thousands):
Revolving
Credit Facility
Term Loan
Senior
Unsecured
Notes
Total
2025 (a) (b)
$
82,500
$
150,000
$
50,000
$
282,500
2026
—
—
—
—
2027
—
—
—
—
2028
—
—
100,000
100,000
2029
—
—
125,000
125,000
Thereafter
—
—
400,000
400,000
Total
$
82,500
$
150,000
$
675,000
$
907,500
(a) The Credit 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 for two six month periods to October 2026. On January 23,
2025, the Second Restated Credit Agreement was amended and restated in its entirety by the Third Restated Credit Agreement. For
additional information regarding the Third Restated Credit Agreement, see Note 16 – Subsequent Events in this Annual Report on
Form 10-K.
(b) The Term Loan matures in October 2025. Subject to the terms of the Term Loan Agreement and our continued compliance with its
provisions, we have the option to extend the term for one twelve month period to October 2026.
NOTE 5. — DERIVATIVE INSTRUMENTS
We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments
as required by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. Our use of derivative instruments
is currently limited to interest rate hedges. We do not enter into derivative instruments for trading or speculative purposes, where changes
in the cash flows of the derivative are not expected to offset changes in cash flows of the hedged item. All derivatives are recognized on
our consolidated balance sheets at fair value. For those derivative instruments for which we intend to elect hedge accounting, at the time
the derivative contract is entered into, we document all relationships between hedging instruments and hedged items, as well as our risk-
management objective and strategy for undertaking the various hedge transactions. This process includes linking all derivatives
designated as cash flow hedges to specific assets and liabilities on our consolidated balance sheets or to specific forecasted transactions.
We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions
are highly effective in offsetting changes in cash flows of hedged items.
To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow
hedge accounting criteria in accordance with GAAP, changes in the derivatives’ fair value are not included in current earnings, but are
included in accumulated other comprehensive income (loss). These changes in fair value will be reclassified into earnings at the time of
the forecasted transaction. Ineffectiveness measured in the hedging relationship is recorded in earnings in the period in which it occurs.
In October 2023, we entered into interest rate swap agreements to hedge against changes in future cash flows resulting from
changes in interest rates on $75.0 million of outstanding variable-rate borrowings over a maximum period ending October 2026. Also,
in October 2023, we entered into forward-starting interest rate swap agreements to hedge against changes in interest rates from the trade
date through the projected issuance date of $75.0 million of additional variable-rate borrowings, and to hedge against changes in future
cash flows resulting from changes in interest rates on the additional $75.0 million of variable-rate borrowings over a maximum period
ending October 2026. During the next twelve months, we estimate that $0.9 million will be reclassified from accumulated other
comprehensive income as an increase in interest expense on our consolidated statements of operations.
64
The following table summarizes the notional amount at inception and fair value of these instruments on our consolidated balance
sheets as of December 31, 2024 and 2023 (in thousands):
Fair Value of Liability
December 31,
Product
Fixed Rate
Notional
Index
Effective Date
Maturity Date
2024
2023
Swap
4.80% $
75,000
Daily Simple SOFR
+ 10 bps
10/17/2023
10/19/2026 $
(1,024)
$
(2,083)
Swap
4.66%
75,000
Daily Simple SOFR
+ 10 bps
4/10/2024
10/19/2026
(840)
(1,937)
The following table presents amounts recorded to accumulated other comprehensive loss related to derivative and hedging
activities for the periods presented (in thousands):
Year ended December 31,
2024
2023
2022
Accumulated other comprehensive loss
$
(1,864)
$
(4,021)
$
—
NOTE 6. — 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. Our
tenants are also responsible for pre-existing environmental contamination that is discovered during their lease term, except
contamination that was known at lease commencement, as to which we have established reserves.
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”). After expiration of the applicable
Lookback Period, 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.
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
65
historical trends and expectations regarding discovery of preexisting unknown environmental contamination and/or attempted pursuit
of us therefore, 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, as of December 31, 2024, we had removed $24.2 million of
unknown reserve liabilities which had previously been accrued for these properties.
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 $11.8 million of unknown reserve liabilities for certain properties with respect to which
the Lookback Periods have expired as of December 31, 2024.
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.
We measure our environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for inflation
and then discount them to present value. We adjust our environmental remediation liabilities quarterly to reflect changes in projected
expenditures, changes in present value due to the passage of time and reductions in estimated liabilities as a result of actual expenditures
incurred during each quarter. As of December 31, 2024, we had accrued a total of $20.9 million for our prospective environmental
remediation obligations. This accrual consisted of (a) $9.1 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) $11.8
million for future environmental liabilities related to preexisting unknown contamination. As of December 31, 2023, we had accrued a
total of $22.4 million for our prospective environmental remediation obligations. This accrual consisted of (a) $9.9 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) $12.5 million for future environmental liabilities related to preexisting unknown
contamination.
Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $0.4 million,
$0.6 million and $1.3 million of net accretion expense was recorded for the years ended December 31, 2024, 2023 and 2022, respectively,
which is included in environmental expenses. In addition, during the years ended December 31, 2024, 2023 and 2022, we recorded
credits to environmental expenses aggregating $0.9 million, $0.3 million and $23.8 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. For the years ended December 31, 2024, 2023 and
2022, changes in environmental estimates aggregating $0.1 million, $0.1 million and $2.0 million, respectively, were related to
properties that were previously disposed of by us.
During the years ended December 31, 2024 and 2023, we increased the carrying values of certain of our properties by $2.7 million
and $5.0 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 on our consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022, were $2.8 million,
$3.0 million and $3.7 million, respectively. Capitalized asset retirement costs were $33.2 million (consisting of $25.0 million of known
environmental liabilities and $8.2 million of reserves for future environmental liabilities) as of December 31, 2024, and $34.3 million
(consisting of $25.8 million of known environmental liabilities and $8.5 million of reserves for future environmental liabilities) as of
December 31, 2023. We recorded impairment charges aggregating $2.4 million and $3.6 million for the years ended December 31, 2024
and 2023, respectively, for capitalized asset retirement costs.
66
Environmental exposures are difficult to assess and estimate for numerous reasons, including the amount of data available upon
initial assessment of contamination, alternative treatment methods that may be applied, location of the property which subjects it to
differing local laws and regulations and their interpretations, changes in costs associated with environmental remediation services and
equipment, the availability of state UST remediation funds and the possibility of existing legal claims giving rise to allocation of
responsibilities to others, as well as the time it takes to remediate contamination and receive regulatory approval. In developing our
liability for estimated environmental remediation obligations on a property by property basis, we consider, among other things, laws
and regulations, assessments of contamination and surrounding geology, quality of information available, currently available
technologies for treatment, alternative methods of remediation and prior experience. Environmental accruals are based on estimates
derived upon facts known to us at this time, which are subject to significant change as circumstances change, and as environmental
contingencies become more clearly defined and reasonably estimable.
Any changes to our estimates or our assumptions that form the basis of our estimates may result in our providing an accrual, or
adjustments to the amounts recorded, for environmental remediation liabilities.
In July 2012, we purchased a 10-year pollution legal liability insurance policy covering substantially all of our properties at that
time for 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 on our consolidated financial statements as they become probable and a reasonable estimate of fair value
can be made.
NOTE 7. — INCOME TAXES
Net cash paid for income taxes for the years ended December 31, 2024, 2023 and 2022, of $0.4 million, $0.7 million and $0.6
million, 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 on 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, 2024, 2023 and 2022, were:
2024
2023
2022
Ordinary income
68%
73%
77%
Capital gain distributions
—
—
3%
Non-taxable distributions
32%
27%
20%
100%
100%
100%
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
filed for the years ended December 31, 2021, 2022 and 2023, and tax returns which will be filed for the year ended December 31, 2024,
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, 2024 or 2023. However, uncertain tax matters may have a significant impact on the results of operations for any single fiscal year
or interim period.
67
NOTE 8. — STOCKHOLDERS’ EQUITY
A summary of the changes in stockholders’ equity for the years ended December 31, 2024, 2023 and 2022, is as follows (in
thousands):
Common Stock
Accumulated
Other
Comprehensive
Additional
Paid-in
Dividends
Paid in Excess
Shares
Amount
Income
Capital
of Earnings
Total
Balance, December 31, 2021
46,716
$
467
$
—
$
818,209
$
(73,568 )
$
745,108
Net earnings
—
—
—
—
90,043
90,043
Dividends declared — $1.66 per share
—
—
—
—
(79,432 )
(79,432 )
Shares issued pursuant to ATM Program, net
—
—
—
(207 )
—
(207 )
Shares issued pursuant to dividend reinvestment
2
—
—
59
—
59
Stock-based compensation and settlements
17
—
—
4,279
—
4,279
Balance, December 31, 2022
46,735
$
467
—
$
822,340
$
(62,957 )
$
759,850
Net earnings
60,151
60,151
Accumulated other comprehensive loss
—
—
(4,021 )
—
—
(4,021 )
Dividends declared — $1.74 per share
—
—
—
—
(91,290 )
(91,290 )
Shares issued pursuant to equity offering, net
3,450
35
—
112,093
—
112,128
Shares issued pursuant to ATM Program, net
3,721
37
—
114,066
—
114,103
Shares issued pursuant to dividend reinvestment
2
—
—
53
—
53
Stock-based compensation and settlements
45
1
—
4,577
—
4,578
Balance, December 31, 2023
53,953
$
540
(4,021 )
$ 1,053,129
$
(94,096 )
$
955,552
Net earnings
71,064
71,064
Accumulated other comprehensive income
—
—
2,157
—
—
2,157
Dividends declared — $1.82 per share
—
—
—
—
(101,961 )
(101,961 )
Shares issued pursuant to equity offering, net
—
—
—
(400 )
—
(400 )
Shares issued pursuant to ATM Program, net
1,049
10
—
30,948
—
30,958
Shares issued pursuant to dividend reinvestment
2
—
—
61
—
61
Stock-based compensation and settlements
23
—
—
4,652
—
4,652
Balance, December 31, 2024
55,027
$
550
$
(1,864 )
$ 1,088,390
$
(124,993 )
$
962,083
In March 2024, March 2023, and March 2022, our Board of Directors granted 271,250, 253,075 and 238,850 restricted stock units
(“RSU” or “RSUs”), respectively, under our Amended and Restated 2004 Omnibus Incentive Compensation Plan.
Equity Offering
In July 2024, we completed a follow-on public offering of 4.0 million shares of common stock in connection with forward sales
agreements. We expect to settle the forward sales agreements in full within 12 months via physical delivery of the outstanding shares
of common stock in exchange for gross cash proceeds of approximately $121.2 million.
In February 2023, we completed a follow-on public offering of 3.5 million shares of common stock in connection with forward
sales agreements. During the year ended December 31, 2023, we settled all 3.5 million shares and realized net proceeds of $112.1
million.
ATM Program
In February 2023, we established and, in February 2024, we amended, 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 $350.0
million through a consortium of banks acting as our sales agents or acting as forward sellers on behalf of any forward purchasers pursuant
to forward sales agreements. 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 forward sales agreements allow us to lock in a share price on the sale of shares at the time the forward sales agreements
become effective, but defer receiving the proceeds from the sale of shares until a later date. To account for the forward sales agreements,
we considered the accounting guidance governing financial instruments and derivatives. To date, we have concluded that our forward
sales 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 forward sales agreements meet the derivatives and hedging guidance scope exception to be
accounted for as equity instruments. We concluded that the forward sales agreements are classifiable as equity contracts based on the
following assessments: (i) none of the agreements’ exercise contingencies that are based on observable markets or indices besides those
68
related to the market for our own stock price and operations, and (ii) none of the settlement provisions precluded the agreements from
being indexed to our own stock.
We also consider the potential dilution resulting from the forward sales agreements on our earnings per share calculations. We
use the treasury stock method to determine the dilution resulting from the forward sales agreements during the period of time prior to
settlement.
ATM Direct Issuances
During the years ended December 31, 2024 and 2023, no shares of common stock were issued under the ATM Program. Future
sales, if any, will depend on a variety of factors to be determined by us from time to time, including among others, market conditions,
the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding
available to us.
ATM Forward Agreements
The following table summarizes activity under our ATM Program in connection with forwards sales agreements for the years
ended December 31, 2024 and 2023 ($ in thousands):
2024
Period Entered Into Forward Sales Agreements
Shares Sold
Shares
Settled
Shares
Remaining
Net Proceeds
Received
Anticipated
Gross
Proceeds
Remaining
Three Months Ended June 30, 2023
—
217,561
—
$
7,205
$
—
Three Months Ended December 31, 2023
—
831,489
—
23,753
—
Three Months Ended June 30, 2024
406,727
—
406,727
—
11,382
Three Months Ended December 31, 2024
992,696
—
992,696
—
32,277
Total
1,399,423
1,049,050
1,399,423
$
30,958
$
43,659
2023
Period Entered Into Forward Sales Agreements
Shares Sold
Shares
Settled
Shares
Remaining
Net Proceeds
Received
Anticipated
Gross
Proceeds
Remaining
Three Months Ended September 30, 2022
—
714,136
—
$
21,897
$
—
Three Months Ended December 31, 2022
—
3,007,230
—
92,206
—
Three Months Ended June 30, 2023
217,561
—
217,561
—
7,609
Three Months Ended December 31, 2023
831,489
—
831,489
—
24,561
Total
1,049,050
3,721,366
1,049,050
$
114,103
$
32,170
We expect to settle outstanding forward sales 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 sales agreements, subject to certain conditions.
Dividends
For the year ended December 31, 2024, we paid regular quarterly dividends of $100.3 million, or $1.80 per share. For the year
ended December 31, 2023, we paid regular quarterly dividends of $87.0 million, or $1.72 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,
2024 and 2023, we issued 2,139 and 1,627 shares of common stock, respectively, under the dividend reinvestment plan and received
proceeds of $61 thousand and $53 thousand, respectively.
Stock-Based Compensation
Compensation cost for our stock-based compensation plans using the fair value method was $5.9 million, $5.6 million, and
$4.8 million for the years ended December 31, 2024, 2023, and 2022, respectively, and is included in general and administrative expense
on our consolidated statements of operations.
69
NOTE 9. — 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 Third Restated Plan vest on a cumulative basis ratably over a five-year period
with the first 20% vesting occurring on the first anniversary of the date of the grant. It is our policy to account for forfeitures as they
occur.
We awarded to employees and directors 271,250, 253,075 and 238,850 RSUs and dividend equivalents in 2024, 2023 and 2022,
respectively. RSUs granted before 2009 provide for settlement upon termination of employment with us 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 us. 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, 2024,
2023 and 2022, dividend equivalents aggregating approximately $2.7 million, $2.2 million and $1.9 million, respectively, were charged
against retained earnings when common stock dividends were declared.
The following is a schedule of the activity relating to RSUs outstanding:
Number of
Fair Value
RSUs
Outstanding
Amount
(in thousands)
Average
Per RSU
RSUs outstanding as of December 31, 2021
921,400
Granted
238,850
$
6,540
$
27.38
Settled
(35,830)
997
27.81
Cancelled
(7,170)
203
28.27
RSUs outstanding as of December 31, 2022
1,117,250
Granted
253,075
$
8,605
$
34.00
Settled
(100,000)
3,405
34.05
Cancelled
(1,600)
45
28.19
RSUs outstanding as of December 31, 2023
1,268,725
Granted
271,250
$
7,202
$
26.55
Settled
(96,000)
2,767
28.82
Cancelled
(1,650)
46
27.95
RSUs outstanding as of December 31, 2024
1,442,325
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, 2024, 2023 and 2022, was $5.9 million, $5.6 million and $4.7 million, respectively,
and is included in general and administrative expense on our consolidated statements of operations. As of December 31, 2024, there
was $15.0 million of unrecognized compensation cost related to RSUs granted under the 2004 Plan and Third Restated Plan, which cost
is expected to be recognized over a weighted average period of approximately three years. The aggregate intrinsic value of the 1,442,325
outstanding RSUs and the 927,748 vested RSUs as of December 31, 2024, was $43.5 million and $28.0 million, respectively.
70
The following is a schedule of the vesting activity relating to RSUs outstanding:
Number of
RSUs Vested
Fair Value
(in thousands)
RSUs vested as of December 31, 2021
456,190
Vested
134,196
$
4,543
Settled
(35,830)
997
RSUs vested as of December 31, 2022
554,556
Vested
340,118
$
9,938
Settled
(100,000)
3,405
RSUs vested as of December 31, 2023
794,674
Vested
229,074
$
6,902
Settled
(96,000)
2,767
RSUs vested as of December 31, 2024
927,748
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 $0.4 million for each of the years ended December 31, 2024, 2023 and 2022. These amounts are included in general and
administrative expense on our consolidated statements of operations. There were no distributions from the Supplemental Plan for the
year ended December 31, 2024, 2023 or 2022.
NOTE 10. — 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):
Year ended December 31,
2024
2023
2022
Net earnings
$
71,064
$
60,151
$
90,043
Less dividend equivalents attributable to RSUs outstanding
(2,625)
(2,208)
(2,103)
Net earnings attributable to common stockholders used in basic
and diluted earnings per share calculation
$
68,439
$
57,943
$
87,940
Weighted average common shares outstanding:
Basic
54,305
50,020
46,730
Incremental shares from stock-based compensation
75
72
106
Incremental shares from the equity offering forward agreements
146
—
—
Incremental shares from ATM Program forward agreements
26
124
2
Diluted
54,552
50,216
46,838
Basic earnings per common share
$
1.26
$
1.16
$
1.88
Diluted earnings per common share
1.25
1.15
1.88
NOTE 11. — FAIR VALUE MEASUREMENTS
Debt Instruments
As of December 31, 2024 and 2023, the carrying values of borrowings under the Credit Facility and the Term Loan approximated
fair value. As of December 31, 2024 and 2023, the fair values of borrowings under our Senior Unsecured Notes were $601.6 million
and $590.9 million, respectively. The fair values of borrowings outstanding as of December 31, 2024 and 2023, were determined using
71
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.
Derivative Instruments
We use interest rate swap agreements to manage our interest rate risk. The valuation of these instruments is determined using
widely accepted valuation techniques including discounted cash flow analysis of the expected cash flows of each derivative. This
analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs,
including interest rate curves. As of December 31, 2024 and 2023, we had assessed the overall valuation of our derivative positions and
determined that derivative valuations in their entirety are classified in Level 2 of the Fair Value Hierarchy. The fair value of these
instruments on our consolidated balance sheets as of December 31, 2024 and 2023 was a credit balance of $1.9 million and $4.0 million,
respectively.
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, 2024, our assets and liabilities measured at fair value on a recurring basis by level
within the Fair Value Hierarchy (in thousands):
Level 1
Level 2
Level 3
Total
Assets:
Mutual funds
$
1,853
$
—
$
—
$
1,853
Liabilities:
Deferred compensation
$
—
$
1,853
$
—
$
1,853
The following summarizes as of December 31, 2023, our assets and liabilities measured at fair value on a recurring basis by level
within the Fair Value Hierarchy (in thousands):
Level 1
Level 2
Level 3
Total
Assets:
Mutual funds
$
1,504
$
—
$
—
$
1,504
Liabilities:
Deferred compensation
$
—
$
1,504
$
—
$
1,504
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,
2024 and 2023, of $2.0 million and 0.6 million, 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 12. —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, 2024 and 2023, there were
two and 14 properties, respectively, that met criteria to be classified as held for sale.
Real estate held for sale consisted of the following as of December 31, 2024 and 2023 (in thousands):
Year ended December 31,
2024
2023
Land
$
133
$
2,235
Buildings and improvements
164
3,520
297
5,755
Accumulated depreciation and amortization
(54)
(3,326)
Real estate held for sale, net
$
243
$
2,429
72
During the year ended December 31, 2024, we sold 31 properties in multiple transactions which resulted in an aggregate gain of
$5.9 million 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 $0.1 million included in gain on dispositions of real estate on our consolidated statements
of operations.
During the year ended December 31, 2023, we sold nine properties in multiple transactions which resulted in an aggregate gain
of $4.3 million 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 $10 thousand included in gain on dispositions of real estate on our consolidated statements
of operations. In addition, during the year ended December 31, 2023, we realized a gain of $0.3 million related to the termination of one
of our leases at a property where we were both the lessee and lessor. As such, we have derecognized the assets and liabilities associated
with this lease. There were no payments received upon the termination of the lease.
NOTE 13. — PROPERTY ACQUISITIONS
2024
During the year ended December 31, 2024, we acquired 71 properties with an aggregate purchase price of $290.1 million and
allocated the purchase price as follows (in thousands):
Purchase Price Allocation
Asset Type
Properties
Purchase
Price
Land
Buildings &
Improve-
ments
In-Place
Leases
Intangible
Market
Lease
Assets
Intangible
Market
Lease
Liabilities
Express tunnel car washes (a)
31
$
146,292
$
34,077
$
96,213
$
16,074
$
434
$
(506)
Auto service centers
19
45,086
12,666
21,082
5,447
5,891
—
Convenience stores
17
87,888
31,469
48,099
9,350
—
(1,030)
Drive-thru QSRs
4
10,804
3,008
6,574
1,222
—
—
Total
71
$
290,070
$
81,220
$
171,968
$
32,093
$
6,325
$
(1,536)
(a) Includes 11 properties that were acquired during the year ended December 31, 2023 while under construction and accounted for as
finance receivables as they did not meet the criteria for sale-leaseback accounting. Accordingly, the initial investment and all
subsequent fundings made during the construction periods were recorded within notes and mortgages receivable on our consolidated
balance sheets, and rental payments resulting from these investments were recorded within interest on notes and mortgages
receivable on our consolidated statements of operations. At the end of the construction periods during the year ended December 31,
2024, we recognized the purchase of the assets, removed the finance receivables from our consolidated balance sheets, and began
to record rental income from the operating leases. These acquisitions also included provisions that require us, upon the achievement
by the tenant of certain financial performance targets within a defined period, to pay additional amounts to the tenant. Whether we
will have to make any payments under these provisions is not probable or reasonably estimable at this time.
2023
During the year ended December 31, 2023, we acquired 54 properties for an aggregate purchase price of $248.1 million and
allocated the purchase price as follows (in thousands):
Purchase Price Allocation
Asset Type
Properties
Purchase
Price
Land
Buildings &
Improve-
ments
In-Place
Leases
Intangible
Market
Lease
Assets
Intangible
Market
Lease
Liabilities
Express tunnel car washes (a)
26
$
137,827
$
37,198
$
87,113
$
14,540
$
637
$
(1,661)
Convenience stores (b)
12
74,244
25,283
42,437
6,524
—
—
Auto service centers
13
29,908
6,277
12,498
3,242
8,311
(420)
Drive-thru QSRs
3
6,093
2,625
2,737
582
149
—
Total
54
$
248,072
$
71,383
$
144,785
$
24,888
$
9,097
$
(2,081)
(a) Includes one property that was acquired during the year ended December 31, 2023 while under construction and accounted for as a
finance receivable as it did not meet the criteria for sale-leaseback accounting. Accordingly, the initial investment and all subsequent
fundings made during the construction period was recorded within notes and mortgages receivable on our consolidated balance
sheets, and rental payments resulting from this investment was recorded within interest on notes and mortgages receivable on our
consolidated statements of operations. At the end of the construction period during the year ended December 31, 2023, we
recognized the purchase of the asset, removed the finance receivable from our consolidated balance sheets, and began to record
73
rental income from the operating lease. These acquisitions also included a provision that requires us, upon the achievement by the
tenant of certain financial performance targets within a defined period, to pay additional amounts to the tenant. Whether we will
have to make any payments under these provisions is not probable or reasonably estimable at this time.
(b) Purchase price and land allocation include $0.9 million related to the acquisition of a land parcel adjacent to an existing site which
was subsequently combined with the existing site into a single property upon redevelopment of the existing site.
NOTE 14. — ACQUIRED INTANGIBLE ASSETS AND LIABILITIES
Intangible assets and liabilities consisted of the following as of the dates presented (in thousands):
December 31, 2024
December 31, 2023
Gross
Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Lease intangible assets:
In-place leases
$
148,145
$
38,711
$
109,434
$
120,109
$
34,125
$
85,984
Intangible market lease assets
22,984
3,907
19,077
22,236
7,905
14,331
Total lease intangible assets
$
171,129
$
42,618
$
128,511
$
142,345
$
42,030
$
100,315
Intangible market lease liabilities (a)
$
33,468
$
14,538
$
18,930
$
46,330
$
26,929
$
19,401
(a) Acquired intangible market lease liabilities are included in accounts payable and accrued liabilities on our consolidated balance
sheets.
Intangible market lease assets and liabilities are amortized and recorded as either an increase (in the case of intangible market
lease liabilities) or a decrease (in the case of intangible market lease assets) to revenues from rental properties over the remaining term
of the associated lease in place at the time of purchase. Amortization of acquired leases resulted in a net increase to revenues from rental
properties of $0.4 million, $1.1 million, and $1.2 million for the years ended December 31, 2024, 2023, and 2022, respectively.
In-place leases 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 $8.6 million, $7.0 million, and $5.7 million for the years ended
December 31, 2024, 2023, and 2022, respectively.
The amortization of acquired intangible assets and liabilities during the next five years and thereafter, assuming no early lease
terminations, is as follows (in thousands):
As Lessor:
Above-Market
Leases
Below-Market
Leases
In-Place
Leases
Year ending December 31,
2025
$
1,591
$
1,894
$
8,693
2026
1,591
1,806
9,339
2027
1,591
1,739
9,234
2028
1,591
1,722
8,977
2029
1,591
1,722
8,726
Thereafter
11,122
10,047
64,465
$
19,077
$
18,930
$
109,434
NOTE 15. — SEGMENT REPORTING
We are a net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single
tenant retail real estate. Substantially all of our properties are leased on a triple-net basis to convenience store operators, petroleum
distributors, express tunnel car wash operators, and other automotive-related and retail tenants. Our Chief Operating Decision Maker
("CODM"), which is our Chief Executive Officer, does not distinguish or group operations based on geography, size, type or other basis
when assessing the financial performance of our properties. Our operating properties have similar economic characteristics and provide
similar products and services to consumers. Accordingly, we manage and evaluate our operations as a single reportable segment based
on our consolidated financial statements for financial reporting and disclosure purposes.
The CODM is responsible for overseeing our operations and making key strategic decisions, including the allocation of resources,
evaluating financial performance, and determining the overall direction of our Company. The CODM receives consolidated financial
and operational data to assess performance and make these decisions. Our measure of segment profit or loss is net earnings. The CODM
also reviews significant expenses associated with the Company’s single reportable segment which are presented in the Consolidated
Statements of Operations.
74
The CODM reviews net earnings and the relevant components thereof that are directly reflected on our Consolidated Statements
of Operations. The CODM is also regularly provided the reportable segment level asset information, real estate held for use, which is
directly reflected on the Consolidated Balance Sheets. Refer to the descriptions below for further details:
•
Net earnings: this metric represents the total profit after accounting for all revenues, expenses and other costs. It reflects our
overall financial performance and profitability. Net earnings used by our CODM to identify underlying trends in the
performance of our business and make comparisons with the financial performance of our competitors. Net earnings are
reported in the Consolidated Statement of Operations and Comprehensive Income.
•
Revenue from Rental Properties: a component of net earnings, this balance represents the total income derived from long-
term, triple-net leases with tenants. It is the primary source of revenue for us and reflects the effectiveness of our real estate
portfolio in generating rental income. Revenue from rental properties is reported in the Revenue section of the Consolidated
Statement of Operations and Comprehensive Income.
•
Total Operating Expenses: a component of net earnings, operating expenses include all costs related to the maintenance and
management of the properties, including property costs and general and administrative expenses. These expenses are critical
to maintaining the portfolio’s long-term profitability and are disclosed under the Operating Expenses section of the
Consolidated Statement of Operations and Comprehensive Income.
•
Real Estate Held For Use: this total represents the value of properties that we actively use to generate rental income. It is a
core asset-based metric and a key driver of our long-term growth. Managing real estate held for use is essential for value
appreciation and strategic portfolio management, which enables us to make informed decisions regarding acquisitions,
divestitures, and overall asset allocation to support sustainable growth and are disclosed under the Real Estate section of the
Consolidated Balance Sheets.
NOTE 16. — SUBSEQUENT EVENTS
In preparing our consolidated financial statements, we have evaluated events and transactions occurring after December 31, 2024,
for recognition or disclosure purposes. Based on this evaluation, there were no significant subsequent events, other than as described
below, from December 31, 2024, through the date the financial statements were issued.
On January 23, 2025, we entered into the Third Restated Credit Agreement, which amends and restates in its entirety the
Second Restated Credit Agreement.
The Third Restated Credit Agreement increases the Credit Facility to an aggregate principal amount of $450.0 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
The Third Restated Credit Agreement also extends the maturity of the Credit Facility to January 23, 2029, subject to two six-
month extensions (for a total of 12 months) exercisable at our option. The exercise of an extension option is subject to the absence of
any default under the Third Restated Credit Agreement and our compliance with certain conditions, including the payment of extension
fees to the Lenders under the Credit Facility and that no default or event of default shall have occurred and be continuing under the
terms of the Credit Facility.
All other material terms and conditions of the Third Restated Credit Agreement are consistent with the Second Restated Credit
Agreement.
As part of the transaction, we used borrowings under the Credit Facility to repay, in full, the Term Loan. The $150.0 million of
borrowings used to repay the Term Loan will remain drawn on the Credit Facility and continue to be subject to interest rate swaps that
fixed SOFR at 4.73% until the earlier of October 2026 or the amount is repaid.
75
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, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2024 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, 2024, 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.
76
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures
that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on
the accounts or disclosures to which they relate.
Purchase Price Allocation for Asset Acquisitions
As described in Notes 1 and 13 to the consolidated financial statements, during the year ended December 31, 2024, the Company
acquired fee simple interests in 71 properties which were accounted for as asset acquisitions for an aggregate purchase price of
$290,070,000. 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, EBITDA-to-rent coverage ratios,
and land comparables, as applicable.
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, EBITDA-to-
rent coverage ratios, and land comparables, as applicable, 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, EBITDA-to-rent coverage ratios, and land comparables, as applicable. 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 6 to the consolidated financial statements, as of December 31, 2024, management has accrued a total
of $20,942,000 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 expected future cash flows, 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
77
completeness and accuracy of the data provided by management. Evaluating the reasonableness of the estimated remediation costs
assumptions included considering whether the assumptions were consistent with external market data and evidence obtained in other areas
of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the significant
assumptions related to estimated remediation costs.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 13, 2025
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.
78
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, 2024, 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, 2024.
The effectiveness of our internal control over financial reporting as of December 31, 2024, 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” in this Annual Report on Form 10-K.
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
79
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 “Security Ownership of Certain Beneficial Owners And Management of Shares” 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 “ Committees” in the Proxy Statement.
Information with respect to our Code of Ethics is incorporated herein by reference to information under the headings “Corporate
Responsibility” and “Corporate Governance and Related Matters” in the Proxy Statement.
We have insider trading policies and procedures that govern the purchase, sale and other dispositions of our securities by our
directors, officers and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules and
regulations, and any applicable listing standards.
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, 2024.
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.
80
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) (1) Financial Statements
Information in response to this Item is included in “Item 8. Financial Statements and Supplementary Data” in this Annual Report
on Form 10-K.
(a) (2) Financial Statement Schedules
The following Financial Statement Schedules are included beginning on page 81 of this Annual Report on Form 10-K.
Schedule III — Real Estate and Accumulated Depreciation and Amortization as of December 31, 2024
Schedule IV — Mortgage Loans on Real Estate as of December 31, 2024
(a) (3) Exhibits
Information in response to this Item is incorporated herein by reference to the Exhibit Index on page 101 in this Annual Report
on Form 10-K.
Item 16. Form 10-K Summary
None.s
81
GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION
As of December 31, 2024
(in thousands)
The summarized changes in real estate assets and accumulated depreciation are as follows:
2024
2023
2022
Investment in real estate:
Balance at beginning of year
$
1,721,404
$
1,514,750
$
1,410,051
Acquisitions and capital expenditures
269,063
221,737
128,349
Impairments
(4,809)
(5,328)
(3,852)
Sales and condemnations
(12,348)
(9,153)
(12,992)
Lease expirations/settlements
(314)
(602)
(6,806)
Balance at end of year
$
1,972,996
$
1,721,404
$
1,514,750
Accumulated depreciation and amortization:
Balance at beginning of year
$
268,919
$
233,865
$
210,615
Depreciation and amortization
45,979
37,875
33,700
Impairments
(889)
(85)
(307)
Sales and condemnations
(5,400)
(2,260)
(4,161)
Lease expirations/settlements
(550)
(476)
(5,982)
Balance at end of year
$
308,059
$
268,919
$
233,865
82
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment (b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Gunterville, AL
$
1,621
$
-
$
597
$
1,024
$
1,621
$
66
2023
Mobile, AL
4,226
-
1,996
2,230
4,226
154
2023
Phenix City, AL
1,670
-
942
728
1,670
242
2019
Troy, AL
2,594
-
676
1,918
2,594
321
2021
Fayetteville, AR
2,266
-
1,637
629
2,266
210
2018
Fayetteville, AR
2,867
-
1,971
896
2,867
298
2018
Hope, AR
1,472
-
999
473
1,472
159
2018
Hot Springs, AR
3,872
-
1,683
2,189
3,872
58
2024
Jacksonville, AR
1,526
-
730
796
1,526
134
2021
Jonesboro, AR
2,985
-
330
2,655
2,985
1,909
2007
Lake Charles, AR
1,069
-
620
449
1,069
159
2018
Lake Charles, AR
1,468
-
1,002
466
1,468
155
2018
Little Rock, AR
978
-
535
443
978
168
2018
Little Rock, AR
2,763
-
497
2,266
2,763
661
2019
Marion, AR
1,990
-
1,406
584
1,990
105
2021
Pine Bluff, AR
2,985
-
2,166
819
2,985
267
2018
Rogers, AR
928
-
534
394
928
149
2018
Sulphur, AR
777
-
375
402
777
160
2018
Texarkana, AR
1,592
-
1,058
534
1,592
188
2018
Buckeye, AZ
3,928
-
2,334
1,594
3,928
637
2017
Buckeye, AZ
6,257
-
2,483
3,774
6,257
262
2023
Chandler, AZ
1,837
-
1,260
577
1,837
276
2017
Gilbert, AZ
1,448
-
983
465
1,448
218
2017
Gilbert, AZ
1,602
-
796
806
1,602
372
2017
Gilbert, AZ
3,112
-
1,593
1,519
3,112
651
2017
Gilbert, AZ
3,205
-
1,840
1,365
3,205
585
2017
Glendale, AZ
1,722
-
1,178
544
1,722
247
2017
Goodyear, AZ
6,930
-
1,296
5,634
6,930
351
2023
Maricopa, AZ
5,506
-
1,290
4,216
5,506
266
2023
Mesa, AZ
1,503
-
839
664
1,503
300
2017
Mesa, AZ
2,185
-
1,612
573
2,185
262
2017
Mesa, AZ
3,169
-
2,005
1,164
3,169
481
2017
Peoria, AZ
1,331
-
992
339
1,331
167
2017
Phoenix, AZ
1,943
-
1,311
632
1,943
228
2018
Phoenix, AZ
2,176
-
1,531
645
2,176
291
2017
Phoenix, AZ
2,415
-
433
1,982
2,415
672
2017
Queen Creek, AZ
2,868
-
1,255
1,613
2,868
705
2017
San Tan Valley, AZ
4,021
-
2,548
1,473
4,021
653
2017
Sierra Vista, AZ
1,765
-
269
1,496
1,765
548
2017
Sierra Vista, AZ
4,440
-
1,849
2,591
4,440
999
2017
Surprise, AZ
5,111
-
1,240
3,871
5,111
268
2023
Tucson, AZ
1,261
-
664
597
1,261
267
2017
Tucson, AZ
1,301
-
557
744
1,301
330
2017
Tucson, AZ
1,303
-
590
713
1,303
322
2017
Tucson, AZ
2,085
-
1,487
598
2,085
287
2017
Tucson, AZ
3,652
-
2,924
728
3,652
326
2017
Alhambra, CA
6,590
-
6,077
513
6,590
173
2019
Bellflower, CA
1,370
-
911
459
1,370
357
2007
83
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Benicia, CA
$
2,223
$
-
$
1,057
$
1,166
$
2,223
$
920
2007
Cotati, CA
6,071
-
4,007
2,064
6,071
1,089
2015
Elsinore, CA
2,541
-
2,541
-
2,541
-
2023
Fillmore, CA
1,354
-
950
404
1,354
314
2007
Grass Valley, CA
1,485
-
853
632
1,485
343
2015
Harbor City, CA
4,442
-
3,597
845
4,442
318
2019
Hemet, CA
1,940
-
1,940
-
1,940
-
2023
Hemet, CA
1,942
-
1,942
-
1,942
-
2023
Hercules, CA
6,900
-
6,018
882
6,900
174
2021
Hesperia, CA
1,643
-
849
794
1,643
601
2007
Hesperia, CA
2,055
-
492
1,563
2,055
1,002
2015
Indio, CA
1,250
-
302
948
1,250
538
2015
Indio, CA
2,727
-
1,486
1,241
2,727
738
2015
La Puente, CA
7,615
-
6,405
1,210
7,615
755
2015
Lakeside, CA
3,716
-
2,696
1,020
3,716
604
2015
Lakewood, CA
2,613
-
1,805
808
2,613
265
2019
Los Angeles, CA
6,613
-
5,007
1,606
6,613
992
2015
Oakland, CA
5,434
-
4,123
1,311
5,434
798
2015
Ontario, CA
6,614
-
4,524
2,090
6,614
1,291
2015
Phelan, CA
4,611
-
3,276
1,335
4,611
843
2015
Pomona, CA
2,347
(1,759 )
505
83
588
21
2019
Pomona, CA
1,497
-
674
823
1,497
264
2019
Riverside, CA
2,130
-
1,619
511
2,130
375
2015
Sacramento, CA
3,194
-
2,208
986
3,194
621
2015
Sacramento, CA
4,247
-
2,604
1,643
4,247
916
2015
Sacramento, CA
5,942
-
4,233
1,709
5,942
1,018
2015
San Dimas, CA
1,941
-
749
1,192
1,941
879
2007
San Jose, CA
5,412
-
4,219
1,193
5,412
794
2015
San Leandro, CA
5,978
-
5,078
900
5,978
588
2015
Shingle Springs, CA
4,751
-
3,489
1,262
4,751
776
2015
Stockton, CA
1,188
-
628
560
1,188
353
2015
Stockton, CA
3,001
-
1,460
1,541
3,001
875
2015
Torrance, CA
5,386
-
4,017
1,369
5,386
399
2019
Aurora, CO
2,874
-
2,284
590
2,874
270
2017
Boulder, CO
3,900
-
2,875
1,025
3,900
573
2015
Broomfield, CO
1,785
-
1,388
397
1,785
200
2017
Broomfield, CO
2,379
-
1,495
884
2,379
366
2017
Castle Rock, CO
5,269
(128 )
3,141
2,000
5,141
1,193
2015
Colorado Springs, CO
1,382
-
756
626
1,382
272
2017
Colorado Springs, CO
3,274
-
2,865
409
3,274
200
2017
Denver, CO
2,157
-
1,579
578
2,157
277
2017
Englewood, CO
2,495
-
2,207
288
2,495
160
2017
Golden, CO
4,641
-
3,247
1,394
4,641
808
2015
Golden, CO
6,151
-
4,201
1,950
6,151
1,190
2015
Greenwood Village, CO
4,076
-
2,888
1,188
4,076
658
2015
Highlands Ranch, CO
4,357
-
2,922
1,435
4,357
850
2015
Lakewood, CO
2,350
-
1,542
808
2,350
455
2015
Littleton, CO
4,139
-
2,272
1,867
4,139
1,104
2015
Lone Tree, CO
6,613
-
5,126
1,487
6,613
919
2015
84
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Longmont, CO
$
3,620
$
-
$
2,316
$
1,304
$
3,620
$
807
2015
Louisville, CO
6,605
-
5,228
1,377
6,605
836
2015
Monument, CO
3,828
(14 )
2,784
1,030
3,814
515
2017
Morrison, CO
5,081
-
3,018
2,063
5,081
1,263
2015
Superior, CO
3,748
-
2,477
1,271
3,748
751
2015
Thornton, CO
5,003
-
2,722
2,281
5,003
1,351
2015
Westminster, CO
1,457
-
752
705
1,457
407
2015
Bridgeport, CT
313
298
204
407
611
407
1985
Bridgeport, CT
350
330
228
452
680
452
1985
Bridgeport, CT
377
391
246
522
768
522
1985
Bristol, CT
1,594
-
1,036
558
1,594
450
2004
Darien, CT
667
274
434
507
941
507
1985
Durham, CT
994
-
-
994
994
994
2004
East Haven, CT
4,411
-
1,315
3,096
4,411
289
2023
Ellington, CT
1,295
-
842
453
1,295
366
2004
Hartford, CT
665
-
432
233
665
188
2004
Meriden, CT
1,532
-
989
543
1,532
440
2004
Milford, CT
3,387
-
2,217
1,170
3,387
162
2022
Milford, CT
5,301
-
2,192
3,109
5,301
175
2023
New Haven, CT
538
210
351
397
748
385
1985
New Haven, CT
1,413
(161 )
569
683
1,252
553
1985
Newington, CT
954
-
620
334
954
269
2004
Norwalk, CT
-
693
402
291
693
229
1988
Old Greenwich, CT
-
1,219
620
599
1,219
520
1969
Plymouth, CT
931
-
605
326
931
263
2004
Shelton, CT
3,679
-
1,645
2,034
3,679
305
2021
South Windham, CT
644
1,398
598
1,444
2,042
1,010
2004
Stamford, CT
603
103
393
313
706
305
1985
Stamford, CT
507
468
330
645
975
640
1985
Suffield, CT
237
603
201
639
840
577
2004
Waterbury, CT
804
-
516
288
804
234
2004
Watertown, CT
925
-
567
358
925
299
2004
West Haven, CT
1,215
-
790
425
1,215
343
2004
West Haven, CT
3,099
-
2,246
853
3,099
119
2022
Westport, CT
603
12
392
223
615
223
1985
Willimantic, CT
717
-
466
251
717
202
2004
Wilton, CT
519
201
338
382
720
379
1985
Windsor Locks, CT
1,030
-
669
361
1,030
291
2004
Windsor Locks, CT
1,433
1,400
1,054
1,779
2,833
1,574
2004
Washington, DC
848
-
418
430
848
238
2013
Washington, DC
940
-
663
277
940
172
2013
Atlantic Beach, FL
4,856
-
1,301
3,555
4,856
204
2023
Callahan, FL
2,894
-
2,056
838
2,894
389
2017
Crestview, FL
920
-
645
275
920
15
2024
Defuniak Springs, FL
6,522
-
2,846
3,676
6,522
283
2023
Jacksonville, FL
4,623
-
1,438
3,185
4,623
198
2023
Largo, FL
2,064
-
1,143
921
2,064
275
2019
Longwood, FL
1,033
-
219
814
1,033
34
2024
85
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Orlando, FL
$
868
$
33
$
401
$
500
$
901
$
500
2000
Pensacola, FL
5,777
-
1,375
4,402
5,777
356
2023
Pensacola, FL
6,890
-
2,496
4,394
6,890
232
2024
S Navarre, FL
6,168
-
1,649
4,519
6,168
364
2023
Tallahassee, FL
1,474
-
653
821
1,474
21
2024
Tallahassee, FL
1,802
-
984
818
1,802
22
2024
W Bradenton, FL
1,547
-
382
1,165
1,547
54
2023
Wauchula, FL
891
-
161
730
891
22
2024
Winter Park, FL
4,539
-
1,917
2,622
4,539
38
2024
Yulee, FL
1,962
-
569
1,393
1,962
563
2017
Augusta, GA
1,843
-
1,077
766
1,843
248
2019
Augusta, GA
3,150
-
286
2,864
3,150
1,046
2017
Bainbridge, GA
3,751
-
698
3,053
3,751
325
2023
Buford, GA
1,354
-
1,354
-
1,354
-
2023
Columbus, GA
1,618
-
985
633
1,618
215
2019
Conyers, GA
4,733
-
741
3,992
4,733
303
2023
Dalton, GA
1,307
-
510
797
1,307
37
2023
Fayetteville, GA
2,530
-
1,025
1,505
2,530
42
2024
Hinesville, GA
995
-
245
750
995
168
2019
Leesburg, GA
3,966
-
914
3,052
3,966
281
2023
Perry, GA
1,725
-
1,313
412
1,725
201
2017
Savannah, GA
4,250
-
1,889
2,361
4,250
59
2024
Tallapossa, GA
905
-
309
596
905
29
2023
Haleiwa, HI
1,522
-
1,058
464
1,522
388
2007
Honolulu, HI
1,070
30
980
120
1,100
107
2007
Honolulu, HI
1,539
-
1,219
320
1,539
246
2007
Honolulu, HI
1,769
-
1,192
577
1,769
432
2007
Honolulu, HI
9,211
-
8,194
1,017
9,211
769
2007
Kaneohe, HI
1,364
-
822
542
1,364
426
2007
Kaneohe, HI
1,978
234
1,473
739
2,212
579
2007
Waianae, HI
1,520
-
648
872
1,520
653
2007
Waianae, HI
1,997
-
871
1,126
1,997
844
2007
Waipahu, HI
2,459
-
946
1,513
2,459
1,119
2007
Bolingbrook, IL
3,814
-
955
2,859
3,814
451
2021
Peoria, IL
1,634
-
723
911
1,634
111
2022
Roselle, IL
2,852
(1,098 )
1,230
524
1,754
-
2019
Merrillville, IN
1,912
-
219
1,693
1,912
222
2021
Schererville, IN
1,519
-
269
1,250
1,519
174
2021
Kansas City, KS
4,666
-
331
4,335
4,666
914
2020
Leavenworth, KS
1,109
-
205
904
1,109
140
2021
Lenexa, KS
1,145
-
471
674
1,145
110
2021
Merriam, KS
4,659
-
743
3,916
4,659
800
2020
Olathe, KS
4,658
-
498
4,160
4,658
862
2020
Overland Park, KS
945
-
353
592
945
91
2021
Overland Park, KS
4,620
-
1,511
3,109
4,620
629
2020
Prairie Village, KS
5,947
-
2,533
3,414
5,947
297
2023
Topeka, KS
1,200
-
195
1,005
1,200
148
2021
Bowling Green, KY
3,153
-
499
2,654
3,153
834
2020
Campbellsville, KY
5,104
-
693
4,411
5,104
162
2024
86
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Hopkinsville, KY
$
5,366
$
-
$
1,425
$
3,941
$
5,366
$
326
2023
Lexington, KY
3,195
-
676
2,519
3,195
409
2021
Lexington, KY
3,195
-
803
2,392
3,195
390
2021
Louisville, KY
1,489
-
514
975
1,489
54
2023
Louisville, KY
1,640
-
467
1,173
1,640
61
2024
Louisville, KY
3,356
-
818
2,538
3,356
755
2019
Louisville, KY
4,450
-
1,354
3,096
4,450
772
2021
Owensboro, KY
3,811
-
1,012
2,799
3,811
1,154
2019
Richmond, KY
2,034
-
851
1,183
2,034
32
2024
Somerset, KY
4,522
-
1,259
3,263
4,522
134
2024
Baton Rouge, LA
2,355
-
1,320
1,035
2,355
9
2024
Bossier City, LA
2,182
-
1,334
848
2,182
390
2017
W. Monroe, LA
2,387
-
674
1,713
2,387
128
2023
Auburn, MA
600
-
600
-
600
-
2011
Auburn, MA
625
-
625
-
625
-
2011
Auburn, MA
725
-
725
-
725
-
2011
Bedford, MA
1,350
-
1,350
-
1,350
-
2011
Bellingham, MA
734
73
476
331
807
331
1985
Bradford, MA
650
-
650
-
650
-
2011
Burlington, MA
600
-
600
-
600
-
2011
Burlington, MA
1,250
-
1,250
-
1,250
-
2011
Falmouth, MA
415
2,288
459
2,244
2,703
893
1988
Gardner, MA
787
-
638
149
787
95
2014
Gardner, MA
1,008
554
656
906
1,562
700
1985
Hyde Park, MA
499
219
322
396
718
364
1985
Leominster, MA
571
-
199
372
571
234
2012
Littleton, MA
1,357
-
759
598
1,357
246
2017
Lowell, MA
-
636
429
207
636
167
1996
Lowell, MA
3,961
-
2,042
1,919
3,961
533
2019
Lynn, MA
850
-
850
-
850
-
2011
Maynard, MA
735
98
478
355
833
355
1985
Melrose, MA
600
-
600
-
600
-
2011
Methuen, MA
650
-
650
-
650
-
2011
Newton, MA
691
90
450
331
781
331
1985
Peabody, MA
650
-
650
-
650
-
2011
Randolph, MA
574
245
430
389
819
389
1985
Randolph, MA
5,039
-
1,350
3,689
5,039
133
2024
Revere, MA
1,300
-
1,300
-
1,300
-
2011
Rockland, MA
579
45
377
247
624
247
1985
Salem, MA
600
-
600
-
600
-
2011
Seekonk, MA
1,073
(373 )
576
124
700
121
1985
Sutton, MA
714
57
464
307
771
274
1993
Tewksbury, MA
125
596
75
646
721
602
1986
Tewksbury, MA
1,200
-
1,200
-
1,200
-
2011
Wakefield, MA
900
-
900
-
900
-
2011
Webster, MA
1,012
1,227
659
1,580
2,239
1,318
1985
West Roxbury, MA
490
185
319
356
675
184
1985
Wilmington, MA
600
-
600
-
600
-
2011
Wilmington, MA
1,300
-
1,300
-
1,300
-
2011
87
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Woburn, MA
$
508
$
314
$
508
$
314
$
822
$
314
1985
Worcester, MA
196
790
-
986
986
383
2017
Worcester, MA
979
8
637
350
987
305
1991
Worcester, MA
498
546
322
722
1,044
577
1985
Accokeek, MD
692
-
692
-
692
-
2010
Baltimore, MD
802
-
-
802
802
715
2007
Baltimore, MD
2,259
-
722
1,537
2,259
1,144
2007
Beltsville, MD
731
-
731
-
731
-
2009
Beltsville, MD
1,050
-
1,050
-
1,050
-
2009
Beltsville, MD
1,130
-
1,130
-
1,130
-
2009
Bladensburg, MD
571
-
571
-
571
-
2009
Bowie, MD
1,084
-
1,084
-
1,084
-
2009
Capitol Heights, MD
628
-
628
-
628
-
2009
Clinton, MD
651
-
651
-
651
-
2009
District Heights, MD
1,039
-
1,039
-
1,039
-
2009
Ellicott City, MD
895
-
-
895
895
840
2007
Greater Landover, MD
753
-
753
-
753
-
2009
Greenbelt, MD
1,153
-
1,153
-
1,153
-
2009
Hyattsville, MD
594
-
594
-
594
-
2009
Landover, MD
662
-
662
-
662
-
2009
Landover Hills, MD
1,358
-
1,358
-
1,358
-
2009
Lanham, MD
822
-
822
-
822
-
2009
Laurel, MD
696
-
696
-
696
-
2009
Laurel, MD
1,210
-
1,210
-
1,210
-
2009
Laurel, MD
1,267
-
1,267
-
1,267
-
2009
Laurel, MD
1,415
-
1,415
-
1,415
-
2009
Laurel, MD
1,530
-
1,530
-
1,530
-
2009
Laurel, MD
2,523
-
2,523
-
2,523
-
2009
Oxon Hill, MD
1,256
-
1,256
-
1,256
-
2009
Riverdale, MD
582
-
582
-
582
-
2009
Suitland, MD
673
-
673
-
673
-
2009
Upper Marlboro, MD
845
-
845
-
845
-
2009
Biddeford, ME
618
8
235
391
626
391
1985
Battle Creek, MI
3,225
-
771
2,454
3,225
410
2021
Battle Creek, MI
3,273
-
562
2,711
3,273
420
2021
Detroit, MI
563
-
16
547
563
84
2021
Grand Blanc, MI
562
-
46
516
562
81
2021
Grand Ledge, MI
1,174
-
100
1,074
1,174
169
2021
Grand Rapids, MI
562
-
48
514
562
78
2021
Grand Rapids, MI
562
-
32
530
562
81
2021
Grand Rapids, MI
818
-
201
617
818
98
2021
Grandville, MI
1,044
-
193
851
1,044
139
2021
Holland, MI
559
-
27
532
559
81
2021
Jackson, MI
559
-
183
376
559
60
2021
Jenison, MI
616
-
38
578
616
91
2021
Lambertville, MI
617
-
345
272
617
55
2021
Lansing, MI
916
-
190
726
916
124
2021
Lansing, MI
3,230
-
852
2,378
3,230
351
2021
88
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Madison Heights, MI
$
563
$
-
$
39
$
524
$
563
$
80
2021
Madison Heights, MI
1,759
-
191
1,568
1,759
206
2021
Midland, MI
631
-
11
620
631
97
2021
Oak Park, MI
562
-
107
455
562
72
2021
Redford Township, MI
561
-
45
516
561
79
2021
Trenton, MI
561
-
48
513
561
80
2021
Zeeland, MI
715
-
92
623
715
105
2021
Coon Rapids, MN
3,778
-
1,065
2,713
3,778
48
2024
Grove Heights, MN
3,583
-
910
2,673
3,583
45
2024
Lino Lakes, MN
4,436
-
958
3,478
4,436
169
2024
Maple Grove, MN
4,233
-
955
3,278
4,233
798
2019
Waconia, MN
4,153
-
730
3,423
4,153
54
2024
Winona, MN
5,574
-
405
5,169
5,574
420
2023
Blue Springs, MO
4,646
-
386
4,260
4,646
935
2020
Blue Springs, MO
5,065
-
354
4,711
5,065
998
2020
Carthage, MO
3,161
-
408
2,753
3,161
77
2024
Independence, MO
5,043
-
2,146
2,897
5,043
93
2024
Independence, MO
5,109
-
600
4,509
5,109
973
2020
Kansas City, MO
3,863
-
366
3,497
3,863
752
2020
Kansas City, MO
4,982
-
609
4,373
4,982
895
2020
Parkville, MO
4,636
-
317
4,319
4,636
878
2020
Raymore, MO
3,582
-
570
3,012
3,582
671
2020
St. Joseph, MO
4,654
-
1,166
3,488
4,654
110
2024
Summit, MO
1,503
-
351
1,152
1,503
162
2021
Hattiesburg, MS
1,759
-
849
910
1,759
177
2021
Hattiesburg, MS
2,143
-
1,258
885
2,143
158
2021
Meridan, MS
3,050
-
2,385
665
3,050
50
2023
Angier, NC
1,390
-
93
1,297
1,390
121
2022
Candler, NC
1,290
-
82
1,208
1,290
104
2022
Candler, NC
1,597
-
370
1,227
1,597
14
2024
Cary, NC
1,939
-
1,292
647
1,939
115
2021
Charlotte, NC
1,967
-
1,457
510
1,967
84
2021
Charlotte, NC
5,194
-
3,670
1,524
5,194
243
2021
Denver, NC
1,065
-
637
428
1,065
14
2024
Fayetteville, NC
980
-
460
520
980
25
2023
Fayetteville, NC
986
-
509
477
986
169
2018
Fayetteville, NC
1,180
-
400
780
1,180
36
2023
Fayetteville, NC
1,795
-
374
1,421
1,795
63
2023
Franklin, NC
1,275
-
62
1,213
1,275
107
2022
Gastonia, NC
1,278
-
257
1,021
1,278
44
2024
Greensboro, NC
1,513
-
304
1,209
1,513
54
2023
Greensboro, NC
3,857
-
969
2,888
3,857
840
2020
Henderson, NC
1,356
-
774
582
1,356
110
2021
Henderson, NC
2,680
-
1,918
762
2,680
118
2021
Hickory, NC
2,884
-
702
2,182
2,884
208
2022
High Point, NC
1,155
-
368
787
1,155
210
2020
Hildebran, NC
1,820
-
900
920
1,820
46
2023
Indian Trail, NC
4,582
-
3,069
1,513
4,582
239
2021
89
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Indian Trail, NC
$
5,895
$
-
$
4,807
$
1,088
$
5,895
$
170
2021
Jacksonville, NC
1,273
-
269
1,004
1,273
93
2022
Kannapolis, NC
3,790
-
615
3,175
3,790
1,004
2019
Kinston, NC
4,400
-
1,956
2,444
4,400
122
2024
Lexington, NC
1,316
-
154
1,162
1,316
103
2022
Lexington, NC
1,317
-
144
1,173
1,317
104
2022
Lexington, NC
1,776
-
301
1,475
1,776
455
2017
Lincolnton, NC
1,392
-
206
1,186
1,392
106
2022
Louisburg, NC
4,227
-
649
3,578
4,227
150
2024
Mebane, NC
1,721
-
583
1,138
1,721
76
2023
Monroe, NC
1,886
-
1,232
654
1,886
107
2021
Morganton, NC
1,391
-
155
1,236
1,391
108
2022
Nashville, NC
4,024
-
2,377
1,647
4,024
257
2021
Newland, NC
1,883
-
817
1,066
1,883
50
2024
Oxford, NC
1,528
-
308
1,220
1,528
183
2021
Raleigh, NC
2,930
-
2,458
472
2,930
77
2021
Raleigh, NC
1,601
-
1,149
452
1,601
149
2019
Rockingham, NC
3,036
-
234
2,802
3,036
824
2019
Rolesville, NC
1,328
-
699
629
1,328
112
2021
Sylva, NC
2,170
-
62
2,108
2,170
179
2022
Taylorsville, NC
1,082
-
103
979
1,082
85
2022
Wake Forest, NC
1,114
-
411
703
1,114
121
2021
Washington, NC
4,872
-
1,361
3,511
4,872
154
2024
Waynesville, NC
2,323
-
82
2,241
2,323
190
2022
Wesley Chapel, NC
7,158
-
5,654
1,504
7,158
229
2021
Wilson, NC
1,076
-
276
800
1,076
75
2022
Winston Salem, NC
1,462
-
418
1,044
1,462
40
2024
Winston-Salem, NC
1,210
-
211
999
1,210
88
2022
Youngsville, NC
4,702
-
4,028
674
4,702
124
2021
Belfield, ND
1,232
-
382
850
1,232
797
2007
Fargo, ND
3,360
-
840
2,520
3,360
38
2024
Fargo, ND
3,372
-
1,226
2,146
3,372
35
2024
Minot, ND
4,759
-
610
4,149
4,759
348
2023
Allenstown, NH
1,787
-
467
1,320
1,787
1,015
2007
Concord, NH
675
-
675
-
675
-
2011
Concord, NH
900
-
900
-
900
-
2011
Derry, NH
950
-
950
-
950
-
2011
Dover, NH
650
-
650
-
650
-
2011
Dover, NH
1,200
-
1,200
-
1,200
-
2011
Goffstown, NH
1,737
-
697
1,040
1,737
730
2012
Hooksett, NH
1,562
-
824
738
1,562
702
2007
Kingston, NH
1,500
-
1,500
-
1,500
-
2011
Londonderry, NH
703
30
458
275
733
275
1985
Londonderry, NH
1,100
-
1,100
-
1,100
-
2011
Nashua, NH
750
-
750
-
750
-
2011
Nashua, NH
825
-
825
-
825
-
2011
Nashua, NH
1,132
-
780
352
1,132
173
2017
Nashua, NH
1,750
-
1,750
-
1,750
-
2011
Pelham, NH
-
731
318
413
731
266
1996
90
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Rochester, NH
$
700
$
-
$
700
$
-
$
700
$
-
2011
Rochester, NH
939
12
600
351
951
351
1985
Rochester, NH
1,400
-
1,400
-
1,400
-
2011
Rochester, NH
1,600
-
1,600
-
1,600
-
2011
Salem, NH
743
20
484
279
763
279
1985
Basking Ridge, NJ
362
284
199
447
646
447
1986
Brick, NJ
1,508
192
1,000
700
1,700
589
2000
Flemington, NJ
547
17
346
218
564
218
1985
Fort Lee, NJ
1,246
494
811
929
1,740
849
1985
Freehold, NJ
494
1,149
95
1,548
1,643
936
1978
Hasbrouck Heights, NJ
640
742
416
966
1,382
877
1985
Lake Hopatcong, NJ
1,305
-
800
505
1,305
505
2000
Livingston, NJ
872
65
568
369
937
361
1985
Long Branch, NJ
514
618
335
797
1,132
656
1985
North Bergen, NJ
630
147
410
367
777
367
1985
North Plainfield, NJ
227
541
174
594
768
594
1978
Paramus, NJ
382
869
248
1,003
1,251
506
1985
Parlin, NJ
418
287
203
502
705
411
1985
Paterson, NJ
619
17
403
233
636
233
1985
Ridgewood, NJ
703
476
458
721
1,179
686
1985
Somerset, NJ
683
200
445
438
883
438
1985
Vernon, NJ
671
512
437
746
1,183
660
1985
Washington Township, NJ
912
485
594
803
1,397
675
1985
Watchung, NJ
450
306
227
529
756
399
1985
West Orange, NJ
800
515
521
794
1,315
768
1985
Albuquerque, NM
1,829
-
1,382
447
1,829
204
2017
Albuquerque, NM
2,308
-
1,830
478
2,308
234
2017
Albuquerque, NM
2,321
-
1,795
526
2,321
250
2017
Albuquerque, NM
3,682
-
3,141
541
3,682
265
2017
Las Cruces, NM
1,843
-
1,375
468
1,843
218
2017
Fernley, NV
1,666
-
222
1,444
1,666
979
2015
Henderson, NV
4,697
-
3,258
1,439
4,697
189
2022
Henderson, NV
5,411
-
2,358
3,053
5,411
393
2022
Las Vegas, NV
2,814
-
563
2,251
2,814
500
2019
Las Vegas, NV
3,094
-
830
2,264
3,094
539
2019
Las Vegas, NV
3,472
-
655
2,817
3,472
612
2019
Las Vegas, NV
3,722
-
631
3,091
3,722
471
2021
Las Vegas, NV
3,752
-
615
3,137
3,752
699
2019
Las Vegas, NV
4,181
-
1,075
3,106
4,181
314
2022
Las Vegas, NV
4,811
-
1,492
3,319
4,811
325
2023
Las Vegas, NV
5,001
-
2,257
2,744
5,001
215
2023
Las Vegas, NV
5,054
-
1,032
4,022
5,054
462
2022
Las Vegas, NV
5,402
-
2,269
3,133
5,402
380
2022
Las Vegas, NV
5,641
-
3,751
1,890
5,641
225
2022
Las Vegas, NV
5,757
-
2,768
2,989
5,757
336
2022
Las Vegas, NV
6,261
-
1,997
4,264
6,261
298
2023
Las Vegas, NV
6,760
-
1,971
4,789
6,760
337
2023
Las Vegas, NV
6,810
-
3,277
3,533
6,810
16
2024
Astoria, NY
1,684
-
1,105
579
1,684
359
2013
91
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Bayside, NY
$
470
$
254
$
306
$
418
$
724
$
381
1985
Brewster, NY
789
145
789
145
934
6
2011
Briarcliff Manor, NY
652
552
502
702
1,204
702
1976
Bronx, NY
877
-
877
-
877
-
2013
Bronx, NY
884
-
884
-
884
-
2013
Bronx, NY
953
-
953
-
953
-
2013
Bronx, NY
1,049
-
485
564
1,049
352
2013
Bronx, NY
46
1,318
84
1,280
1,364
632
1972
Bronx, NY
1,910
-
1,349
561
1,910
363
2013
Bronx, NY
2,407
-
1,711
696
2,407
413
2013
Bronxville, NY
1,232
213
1,232
213
1,445
9
2011
Brooklyn, NY
62
503
37
528
565
97
1978
Brooklyn, NY
237
460
154
543
697
476
1985
Brooklyn, NY
477
320
307
490
797
490
1985
Brooklyn, NY
627
313
408
532
940
532
1985
Chester, NY
1,158
385
1,158
385
1,543
16
2011
Clay, NY
3,969
-
1,375
2,594
3,969
57
2024
Corona, NY
2,543
-
1,903
640
2,543
385
2013
Cortlandt Manor, NY
1,872
122
1,872
122
1,994
5
2011
Dobbs Ferry, NY
671
34
435
270
705
270
1985
Dobbs Ferry, NY
1,345
249
1,345
249
1,594
10
2011
East Hampton, NY
659
39
427
271
698
271
1985
Eastchester, NY
1,724
1,344
2,302
766
3,068
197
2011
Elmsford, NY
-
948
581
367
948
318
1971
Elmsford, NY
1,453
217
1,453
217
1,670
9
2011
Fishkill, NY
1,793
381
1,793
381
2,174
16
2011
Floral Park, NY
616
170
356
430
786
422
1998
Flushing, NY
1,936
-
1,413
523
1,936
325
2013
Flushing, NY
1,947
-
1,405
542
1,947
315
2013
Flushing, NY
2,479
-
1,802
677
2,479
394
2013
Forest Hills, NY
1,273
-
1,273
-
1,273
-
2013
Garnerville, NY
1,508
280
1,508
280
1,788
12
2011
Hartsdale, NY
1,626
278
1,626
278
1,904
12
2011
Hawthorne, NY
2,084
216
2,084
216
2,300
9
2011
Hopewell Junction, NY
1,163
288
1,163
288
1,451
12
2011
Hyde Park, NY
990
166
990
166
1,156
7
2011
Katonah, NY
1,084
179
1,084
179
1,263
7
2011
Lakeville, NY
1,028
-
203
825
1,028
659
2008
Latham, NY
2,498
-
1,813
685
2,498
146
2020
Levittown, NY
546
86
356
276
632
274
1985
Long Island City, NY
2,717
-
1,183
1,534
2,717
823
2013
Mamaroneck, NY
1,429
167
1,429
167
1,596
7
2011
Middletown, NY
719
204
719
204
923
8
2011
Middletown, NY
751
274
489
536
1,025
536
1985
Middletown, NY
1,281
301
1,281
301
1,582
13
2011
Millwood, NY
1,448
116
1,448
116
1,564
5
2011
Mount Kisco, NY
1,907
198
1,907
198
2,105
8
2011
Mount Vernon, NY
985
223
985
223
1,208
9
2011
92
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Nanuet, NY
$
2,316
$
395
$
2,316
$
395
$
2,711
$
16
2011
New Paltz, NY
971
400
971
400
1,371
17
2011
New Rochelle, NY
1,887
285
1,887
285
2,172
12
2011
New Windsor, NY
1,084
441
1,084
441
1,525
18
2011
New York, NY
282
1,071
-
1,353
1,353
441
2020
Newburgh, NY
527
237
527
237
764
10
2011
Newburgh, NY
1,192
437
1,192
437
1,629
18
2011
Ossining, NY
231
342
117
456
573
388
1985
Peekskill, NY
2,207
155
2,207
155
2,362
6
2011
Pelham, NY
1,035
192
1,035
192
1,227
8
2011
Plattsburgh, NY
4,149
-
1,126
3,023
4,149
413
2021
Pleasant Valley, NY
398
168
240
326
566
283
1986
Port Chester, NY
1,015
234
1,015
234
1,249
10
2011
Port Jefferson, NY
185
3,084
246
3,023
3,269
1,064
1985
Poughkeepsie, NY
591
269
591
269
860
11
2011
Poughkeepsie, NY
1,020
304
1,020
304
1,324
13
2011
Poughkeepsie, NY
1,231
276
1,200
307
1,507
13
2011
Poughkeepsie, NY
1,306
330
1,306
330
1,636
14
2011
Poughkeepsie, NY
1,340
318
1,280
378
1,658
20
2011
Poughkeepsie, NY
1,355
342
1,355
342
1,697
14
2011
Rego Park, NY
2,784
-
2,105
679
2,784
409
2013
Riverhead, NY
723
-
431
292
723
292
1998
Rockaway Park, NY
1,605
-
1,605
-
1,605
-
2013
Rye, NY
872
137
872
137
1,009
6
2011
S Glen Falls, NY
5,044
-
517
4,527
5,044
363
2023
Sag Harbor, NY
704
35
458
281
739
281
1985
Scarsdale, NY
1,301
128
1,301
128
1,429
5
2011
Shrub Oak, NY
1,061
421
691
791
1,482
764
1985
Sleepy Hollow, NY
281
438
130
589
719
580
1969
Spring Valley, NY
749
203
749
203
952
8
2011
Staten Island, NY
301
323
196
428
624
428
1985
Staten Island, NY
350
290
228
412
640
412
1985
Tarrytown, NY
956
168
956
168
1,124
7
2011
Troy, NY
4,690
-
4,119
571
4,690
126
2020
Tuckahoe, NY
1,650
85
1,650
85
1,735
4
2011
Vestal, NY
2,700
-
568
2,132
2,700
241
2022
Wappingers Falls, NY
1,488
206
1,488
206
1,694
9
2011
Warwick, NY
1,049
171
1,049
171
1,220
7
2011
Watertown, NY
1,012
-
672
340
1,012
47
2022
Watertown, NY
2,867
-
303
2,564
2,867
295
2022
West Nyack, NY
936
222
936
222
1,158
9
2011
White Plains, NY
-
569
303
266
569
239
1972
White Plains, NY
1,458
213
1,458
213
1,671
9
2011
Yaphank, NY
-
575
375
200
575
173
1993
Yonkers, NY
-
833
685
148
833
102
1990
Yonkers, NY
1,020
63
665
418
1,083
419
1985
Yonkers, NY
291
1,050
216
1,125
1,341
1,076
1972
Yonkers, NY
1,907
96
1,907
96
2,003
4
2011
93
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Yorktown Heights, NY
$
1,700
$
-
$
-
$
1,700
$
1,700
$
954
2013
Yorktown Heights, NY
2,365
202
2,365
202
2,567
8
2011
Akron, OH
1,530
-
385
1,145
1,530
407
2017
Amelia, OH
3,195
-
637
2,558
3,195
442
2021
Cincinnati, OH
3,187
-
654
2,533
3,187
428
2021
Cincinnati, OH
3,188
-
274
2,914
3,188
447
2021
Cincinnati, OH
3,715
-
540
3,175
3,715
883
2020
Crestline, OH
1,202
-
285
917
1,202
649
2008
Fairfield, OH
3,769
-
581
3,188
3,769
777
2020
Hamilton, OH
3,188
-
371
2,817
3,188
452
2021
Lima, OH
637
-
53
584
637
93
2021
Loveland, OH
1,045
-
362
683
1,045
271
2017
Macedonia, OH
4,733
-
617
4,116
4,733
192
2023
Mansfield, OH
921
-
331
590
921
407
2008
Mansfield, OH
1,950
-
700
1,250
1,950
852
2009
Monroeville, OH
2,580
-
485
2,095
2,580
1,415
2009
Springdale, OH
3,379
-
381
2,998
3,379
897
2020
Toledo, OH
562
-
26
536
562
81
2021
Toledo, OH
603
-
204
399
603
65
2021
Toledo, OH
767
-
241
526
767
85
2021
Tylersville, OH
3,195
-
666
2,529
3,195
406
2021
Oklahoma City, OK
868
-
371
497
868
170
2018
Oklahoma City, OK
1,182
-
587
595
1,182
194
2018
Oklahoma City, OK
1,311
-
625
686
1,311
216
2018
Stillwater, OK
2,800
-
1,469
1,331
2,800
335
2019
Estacada, OR
646
-
84
562
646
293
2015
McMinnville, OR
2,867
-
394
2,473
2,867
884
2017
Pendleton, OR
765
-
121
644
765
370
2015
Portland, OR
4,416
-
3,368
1,048
4,416
571
2015
Salem, OR
1,071
-
399
672
1,071
466
2015
Salem, OR
1,350
-
521
829
1,350
459
2015
Salem, OR
1,408
-
524
884
1,408
507
2015
Salem, OR
4,214
-
3,181
1,033
4,214
605
2015
Salem, OR
4,614
-
3,517
1,097
4,614
601
2015
Silverton, OR
957
-
457
500
957
230
2017
Springfield, OR
1,398
-
796
602
1,398
406
2015
Allison Park, PA
1,500
-
850
650
1,500
549
2010
Harrisburg, PA
399
212
199
412
611
377
1989
Jenkintown, PA
1,884
-
894
990
1,884
57
2023
Lancaster, PA
642
56
300
398
698
382
1989
New Kensington, PA
1,375
-
675
700
1,375
431
2010
Philadelphia, PA
406
255
265
396
661
351
1985
Philadelphia, PA
1,252
(438 )
814
-
814
-
2009
Reading, PA
750
49
-
799
799
799
1989
Barrington, RI
490
2,003
319
2,174
2,493
117
1985
N. Providence, RI
542
62
353
251
604
251
1985
Beaufort, SC
5,081
-
921
4,160
5,081
230
2023
Blythewood, SC
3,217
-
2,405
812
3,217
378
2017
Chapin, SC
1,682
-
1,135
547
1,682
252
2017
Charleston, SC
4,996
-
1,981
3,015
4,996
488
2021
94
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Charleston, SC
$
7,080
$
-
$
3,048
$
4,032
$
7,080
$
187
2023
Clover, SC
4,134
-
1,146
2,988
4,134
12
2024
Columbia, SC
575
-
345
230
575
94
2017
Columbia, SC
792
-
463
329
792
142
2017
Columbia, SC
868
-
455
413
868
201
2017
Columbia, SC
926
-
494
432
926
154
2017
Columbia, SC
1,643
-
1,302
341
1,643
111
2017
Columbia, SC
1,995
-
1,130
865
1,995
331
2018
Columbia, SC
2,109
-
1,120
989
2,109
356
2018
Columbia, SC
2,459
-
1,568
891
2,459
413
2017
Columbia, SC
2,531
-
1,612
919
2,531
326
2018
Columbia, SC
2,637
-
1,254
1,383
2,637
563
2017
Columbia, SC
3,371
-
2,016
1,355
3,371
601
2017
Columbia, SC
4,989
-
2,226
2,763
4,989
276
2023
Elgin, SC
2,082
-
1,166
916
2,082
393
2017
Elgin, SC
2,177
-
974
1,203
2,177
488
2017
Gaston, SC
2,230
-
934
1,296
2,230
531
2017
Gilbert, SC
1,036
-
434
602
1,036
245
2017
Irmo, SC
1,113
-
666
447
1,113
184
2017
Irmo, SC
1,246
-
69
1,177
1,246
454
2017
Irmo, SC
1,338
-
866
472
1,338
199
2017
Irmo, SC
3,655
(178 )
1,564
1,913
3,477
772
2017
Irmo, SC
3,950
-
2,802
1,148
3,950
485
2017
Johns Island, SC
2,561
-
1,885
676
2,561
224
2018
Lexington, SC
633
-
309
324
633
139
2017
Lexington, SC
694
-
172
522
694
240
2017
Lexington, SC
720
-
219
501
720
206
2017
Lexington, SC
816
-
336
480
816
156
2017
Lexington, SC
973
-
582
391
973
173
2017
Lexington, SC
1,056
-
432
624
1,056
273
2017
Lexington, SC
1,623
-
998
625
1,623
261
2017
Lexington, SC
1,712
-
1,410
302
1,712
108
2017
Lexington, SC
1,728
-
1,267
461
1,728
224
2017
Lexington, SC
1,738
-
1,189
549
1,738
181
2017
Lexington, SC
2,180
-
1,477
703
2,180
292
2017
Lexington, SC
2,604
-
1,870
734
2,604
289
2018
Lexington, SC
3,231
-
2,001
1,230
3,231
463
2018
Lexington, SC
3,234
-
1,198
2,036
3,234
699
2018
Lexington, SC
4,414
-
3,419
995
4,414
468
2017
Mauldin, SC
1,841
-
773
1,068
1,841
31
2024
Myrtle Beach, SC
1,168
-
505
663
1,168
106
2021
Myrtle Beach, SC
5,473
-
2,016
3,457
5,473
85
2024
Pelion, SC
1,901
-
1,021
880
1,901
425
2017
Simpsonville, SC
1,713
-
1,355
358
1,713
66
2021
Summerville, SC
4,134
-
1,437
2,697
4,134
442
2021
West Columbia, SC
1,116
-
50
1,066
1,116
449
2017
West Columbia, SC
1,644
-
1,283
361
1,644
158
2017
West Columbia, SC
2,046
-
746
1,300
2,046
522
2017
95
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Aberdeen, SD
$
1,048
$
-
$
311
$
737
$
1,048
$
29
2024
Alcoa, TN
4,483
-
799
3,684
4,483
197
2023
Decherd, TN
2,115
-
319
1,796
2,115
83
2023
Knoxville, TN
1,664
-
382
1,282
1,664
54
2024
Arlington, TX
789
-
414
375
789
138
2018
Arlington, TX
1,352
-
887
465
1,352
160
2018
Arlington, TX
1,560
-
1,008
552
1,560
182
2018
Arlington, TX
1,795
-
1,188
607
1,795
203
2018
Austin, TX
1,711
-
1,364
347
1,711
171
2017
Austin, TX
2,312
-
1,011
1,301
2,312
162
2022
Austin, TX
2,368
-
738
1,630
2,368
1,206
2007
Austin, TX
3,510
66
1,594
1,982
3,576
1,441
2007
Belton, TX
3,825
-
882
2,943
3,825
47
2024
Cedar Park, TX
179
930
956
153
1,109
116
2007
Cedar Park, TX
3,671
-
794
2,877
3,671
79
2024
Cedar Park, TX
4,176
-
528
3,648
4,176
416
2022
Cedar Park, TX
5,618
-
609
5,009
5,618
579
2022
Center, TX
2,072
-
1,481
591
2,072
219
2018
Channelview, TX
3,295
-
1,697
1,598
3,295
12
2024
Childress, TX
3,335
-
1,959
1,376
3,335
319
2020
Cibolo, TX
3,228
-
1,004
2,224
3,228
469
2020
Corpus Christi, TX
1,527
-
1,057
470
1,527
197
2017
Corpus Christi, TX
2,162
-
1,729
433
2,162
205
2017
Corpus Christi, TX
2,400
-
1,110
1,290
2,400
543
2017
Cross Plains, TX
4,550
-
1,291
3,259
4,550
260
2023
El Paso, TX
1,277
-
824
453
1,277
212
2017
El Paso, TX
1,425
-
1,098
327
1,425
157
2017
El Paso, TX
1,679
-
1,085
594
1,679
247
2017
El Paso, TX
1,817
-
1,414
403
1,817
193
2017
El Paso, TX
2,369
-
1,766
603
2,369
260
2017
El Paso, TX
3,168
-
2,153
1,015
3,168
441
2017
Fort Worth, TX
2,115
171
866
1,420
2,286
1,015
2007
Fort Worth, TX
2,567
-
409
2,158
2,567
59
2024
Garland, TX
2,208
-
1,504
704
2,208
233
2018
Garland, TX
3,296
-
245
3,051
3,296
1,339
2014
Garland, TX
4,439
-
439
4,000
4,439
1,832
2014
Grand Prairie, TX
1,413
-
914
499
1,413
183
2018
Grand Prairie, TX
2,001
-
1,416
585
2,001
201
2018
Harker Heights, TX
2,051
96
579
1,568
2,147
1,343
2007
Houston, TX
1,689
-
224
1,465
1,689
1,068
2007
Houston, TX
2,803
-
535
2,268
2,803
830
2016
Houston, TX
3,850
-
810
3,040
3,850
26
2024
Houston, TX
4,340
-
2,826
1,514
4,340
18
2024
Houston, TX
4,708
-
2,705
2,003
4,708
15
2024
Houston, TX
4,719
-
1,707
3,012
4,719
23
2024
Houston, TX
4,758
-
2,126
2,632
4,758
21
2024
Houston, TX
4,764
-
298
4,466
4,764
34
2024
Houston, TX
5,911
-
2,383
3,528
5,911
27
2024
96
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Humble, TX
$
3,997
$
-
$
1,399
$
2,598
$
3,997
$
19
2024
Humble, TX
4,762
-
1,013
3,749
4,762
34
2024
Jarrell, TX
3,630
-
719
2,911
3,630
96
2024
Katy, TX
2,822
-
1,612
1,210
2,822
10
2024
Katy, TX
3,056
-
1,426
1,630
3,056
19
2024
Keller, TX
2,506
58
996
1,568
2,564
1,196
2007
Killeen, TX
3,923
-
1,569
2,354
3,923
47
2024
Leander, TX
3,321
-
603
2,718
3,321
350
2022
Leander, TX
4,640
-
626
4,014
4,640
480
2022
Leander, TX
4,646
-
657
3,989
4,646
504
2022
Leander, TX
6,473
-
2,091
4,382
6,473
97
2024
Linden, TX
2,159
-
1,513
646
2,159
225
2018
Longview, TX
1,660
-
1,239
421
1,660
141
2018
Longview, TX
3,521
-
720
2,801
3,521
137
2024
Mathis, TX
3,138
-
2,687
451
3,138
214
2017
Mesquite, TX
1,687
-
1,093
594
1,687
205
2018
Panhandle, TX
5,068
-
2,637
2,431
5,068
601
2020
Paris, TX
3,832
-
2,645
1,187
3,832
229
2020
Paris, TX
5,322
-
3,979
1,343
5,322
291
2020
Pflugerville, TX
4,668
-
617
4,051
4,668
474
2022
Port Arthur, TX
2,648
-
505
2,143
2,648
810
2016
Queen City, TX
5,958
-
1,474
4,484
5,958
373
2023
Rockdale, TX
3,238
-
475
2,763
3,238
276
2022
Round Rock, TX
4,198
-
830
3,368
4,198
406
2022
Round Rock, TX
4,641
-
1,566
3,075
4,641
409
2022
Rowlett, TX
1,284
-
840
444
1,284
145
2018
San Antonio, TX
2,811
-
511
2,300
2,811
394
2021
San Antonio, TX
3,286
-
487
2,799
3,286
334
2022
San Antonio, TX
3,427
-
446
2,981
3,427
562
2020
San Antonio, TX
3,618
-
494
3,124
3,618
568
2020
San Antonio, TX
3,630
-
1,020
2,610
3,630
571
2020
San Antonio, TX
3,631
-
1,330
2,301
3,631
402
2021
San Antonio, TX
3,719
-
733
2,986
3,719
568
2020
San Antonio, TX
3,820
-
1,459
2,361
3,820
510
2020
San Antonio, TX
3,936
-
1,112
2,824
3,936
281
2022
San Antonio, TX
4,168
-
1,657
2,511
4,168
303
2022
San Antonio, TX
4,397
-
997
3,400
4,397
704
2020
San Antonio, TX
4,411
-
642
3,769
4,411
719
2020
San Marcos, TX
1,954
-
251
1,703
1,954
1,252
2007
Schertz, TX
2,794
-
813
1,981
2,794
392
2020
Shamrock, TX
3,045
-
1,222
1,823
3,045
437
2020
Spring Branch, TX
3,257
-
790
2,467
3,257
194
2023
Temple, TX
2,406
(10 )
1,206
1,190
2,396
904
2007
Temple, TX
5,554
-
4,119
1,435
5,554
325
2020
Texarkana, TX
1,791
-
992
799
1,791
258
2018
Texarkana, TX
1,862
-
1,198
664
1,862
247
2018
Texarkana, TX
2,316
-
1,643
673
2,316
214
2018
Tyler, TX
8,582
-
3,635
4,947
8,582
377
2023
97
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Waco, TX
$
3,884
$
-
$
894
$
2,990
$
3,884
$
2,273
2007
Wake Village, TX
1,637
-
685
952
1,637
302
2018
Watauga, TX
1,771
-
1,139
632
1,771
213
2018
Alexandria, VA
649
-
649
-
649
-
2013
Alexandria, VA
656
-
409
247
656
164
2013
Alexandria, VA
712
-
712
-
712
-
2013
Alexandria, VA
735
-
735
-
735
-
2013
Alexandria, VA
1,327
-
1,327
-
1,327
-
2013
Alexandria, VA
1,388
-
1,020
368
1,388
247
2013
Alexandria, VA
1,582
-
1,150
432
1,582
268
2013
Alexandria, VA
1,757
-
1,313
444
1,757
289
2013
Annandale, VA
1,718
-
1,718
-
1,718
-
2013
Arlington, VA
1,083
-
1,083
-
1,083
-
2013
Arlington, VA
1,464
-
1,085
379
1,464
239
2013
Arlington, VA
2,013
-
1,515
498
2,013
306
2013
Arlington, VA
2,062
-
1,603
459
2,062
280
2013
Ashland, VA
840
-
840
-
840
-
2005
Charlottesville, VA
5,268
-
1,974
3,294
5,268
213
2023
Chesapeake, VA
779
(185 )
398
196
594
144
1990
Chesapeake, VA
1,004
110
385
729
1,114
729
1990
Chester, VA
1,514
-
762
752
1,514
3
2024
Chesterfield, VA
5,032
-
711
4,321
5,032
157
2024
Emporia, VA
3,364
-
2,227
1,137
3,364
320
2019
Fairfax, VA
1,825
-
1,190
635
1,825
391
2013
Fairfax, VA
2,077
-
1,364
713
2,077
389
2013
Fairfax, VA
3,348
-
2,351
997
3,348
584
2013
Fairfax, VA
4,454
-
3,370
1,084
4,454
636
2013
Farmville, VA
1,227
-
622
605
1,227
479
2005
Fredericksburg, VA
1,279
-
469
810
1,279
642
2005
Fredericksburg, VA
1,512
-
692
820
1,512
20
2024
Fredericksburg, VA
1,716
-
996
720
1,716
570
2005
Fredericksburg, VA
3,623
-
2,828
795
3,623
630
2005
Fredericksburg, VA
4,161
-
871
3,290
4,161
127
2024
Glen Allen, VA
1,037
-
412
625
1,037
495
2005
Glen Allen, VA
1,077
-
322
755
1,077
598
2005
Hanover, VA
5,105
-
1,514
3,591
5,105
143
2024
King William, VA
1,688
-
1,068
620
1,688
491
2005
Mechanicsville, VA
903
(25 )
248
630
878
499
2005
Mechanicsville, VA
957
31
324
664
988
517
2005
Mechanicsville, VA
1,043
-
223
820
1,043
650
2005
Mechanicsville, VA
1,125
-
505
620
1,125
491
2005
Mechanicsville, VA
1,476
-
876
600
1,476
475
2005
Mechanicsville, VA
1,677
-
1,157
520
1,677
412
2005
Montpelier, VA
2,481
(114 )
1,612
755
2,367
598
2005
Petersburg, VA
1,441
-
816
625
1,441
495
2005
Portsmouth, VA
562
33
221
374
595
374
1990
Powhatan, VA
4,712
-
1,221
3,491
4,712
143
2024
Richmond, VA
1,132
(41 )
506
585
1,091
463
2005
98
Gross Amount at Which Carried at Close of Period
Initial Cost
of Acquisition
or Leasehold
Investment (a)
Cost
Capitalized
Subsequent
to Initial
Investment
(b)
Land
Building and
Improvements
Total Cost
Accumulated
Depreciation
(c)
Date of Initial
Acquisition or
Leasehold
Investment
Salem, VA
$
3,337
$
-
$
915
$
2,422
$
3,337
$
735
2020
Sandston, VA
722
-
102
620
722
491
2005
Spotsylvania, VA
1,290
-
490
800
1,290
634
2005
Springfield, VA
4,257
-
2,969
1,288
4,257
749
2013
Stephens City, VA
2,918
-
515
2,403
2,918
83
2024
Woodstock, VA
611
-
354
257
611
76
2020
Rutland, VT
4,885
-
1,434
3,451
4,885
43
2024
Shelburne, VT
4,602
-
1,448
3,154
4,602
105
2024
Williston, VT
3,956
-
1,537
2,419
3,956
349
2021
Auburn, WA
3,023
-
1,966
1,057
3,023
598
2015
Bellevue, WA
1,724
-
885
839
1,724
476
2015
Chehalis, WA
1,176
-
313
863
1,176
536
2015
Colfax, WA
4,800
-
3,611
1,189
4,800
675
2015
Federal Way, WA
4,217
-
2,972
1,245
4,217
760
2015
Fife, WA
1,181
-
414
767
1,181
471
2015
Kent, WA
2,900
-
2,066
834
2,900
513
2015
Monroe, WA
2,791
-
1,555
1,236
2,791
718
2015
Port Orchard, WA
2,019
-
161
1,858
2,019
902
2015
Puyallup, WA
831
-
172
659
831
434
2015
Puyallup, WA
2,035
-
465
1,570
2,035
875
2015
Puyallup, WA
4,050
-
2,394
1,656
4,050
1,151
2015
Renton, WA
1,484
-
951
533
1,484
410
2015
Seattle, WA
717
-
193
524
717
285
2015
Seattle, WA
1,883
-
1,222
661
1,883
360
2015
Silverdale, WA
2,178
-
1,217
961
2,178
589
2015
Snohomish, WA
955
-
955
-
955
-
2015
South Bend, WA
760
-
121
639
760
339
2015
Tacoma, WA
671
-
671
-
671
-
2015
Tenino, WA
936
-
218
718
936
385
2015
Vancouver, WA
1,215
-
164
1,051
1,215
510
2015
Wilbur, WA
629
-
153
476
629
285
2015
Oshkosh, WI
1,525
-
212
1,313
1,525
59
2024
Inwood, WV
3,084
-
537
2,547
3,084
86
2024
Morgantown, WV
5,389
-
1,312
4,077
5,389
144
2024
Various
86,636
13,662
48,428
51,870
100,298
39,843
various
Total
$ 1,908,486
$
64,506
$
943,933
$ 1,029,059
$ 1,972,992
$
308,062
a)
Initial cost of acquisition or leasehold investment represents the aggregate costs incurred during the year in which we purchased the
property or leasehold interest.
b)
Cost capitalized subsequent to initial investment includes investments made in previously leased properties prior to their acquisition.
c)
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.
The aggregate cost for federal income tax purposes was approximately $2.1 billion as of December 31, 2024.
99
GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE IV—MORTGAGE LOANS ON REAL ESTATE
As of December 31, 2024
(in thousands)
Borrower
Description
Location(s)
Interest
Rate
Final
Maturity
Date
Periodic
Payment
Terms (a)
Face Value
at
Inception
Amount of
Principal
Unpaid at
Close of
Period
Mortgage Loans:
Borrower A
Seller financing
Brooklyn, NY
8.0 %
7/2025
IO
$
1,050
$
1,050
Borrower B
Seller financing
East Islip, NY
9.0 %
11/2024
(b)
P & I
743
611
Borrower C
Seller financing
Valley Cottage,
NY
9.0 %
10/2020
(b)
P & I
431
283
Borrower D
Seller financing
Norwalk, CT
9.0 %
4/2022
(b)
P & I
319
247
Borrower E
Seller financing
Waterbury, CT
9.0 %
2/2021
(b)
P & I
171
115
Borrower F
Seller financing
Bristol, CT
9.0 %
5/2026
P & I
76
66
Borrower G
Seller financing
Hartford, CT
9.5 %
2/2027
P & I
440
395
Borrower H
Seller financing
Middletown, CT
9.0 %
5/2026
P & I
308
268
Borrower I
Seller financing
Plainville, CT
9.5 %
3/2027
P & I
160
144
Borrower J
Seller financing
Simsbury, CT
9.0 %
5/2026
P & I
192
167
Borrower K
Seller financing
Milford, CT
9.0 %
3/2025
P & I
398
332
Borrower L
Seller financing
Fairfield, CT
9.0 %
3/2025
P & I
390
325
Borrower M
Seller financing
Hartford, CT
9.0 %
3/2024
(b)
P & I
70
56
Borrower N
Seller financing
Fairhaven, MA
9.0 %
9/2020
(b)
P & I
458
298
Borrower O
Seller financing
Colonia, NJ
9.5 %
7/2030
P & I
320
178
Borrower P
Seller financing
Glendale, NY
9.0 %
7/2025
P & I
525
57
Borrower Q
Seller financing
Bayside, NY
9.5 %
12/2029
P & I
320
301
Borrower R
Seller financing
Rochester, NY
9.0 %
1/2025
P & I
174
144
Borrower S
Seller financing
Savona, NY
9.0 %
2/2025
P & I
157
130
Borrower T
Seller financing
Rochester, NY
9.0 %
10/2025
P & I
230
196
Borrower U
Seller financing
Greigsville, NY
9.0 %
11/2025
P & I
200
171
Total Mortgage Loans
$
7,132
$
5,534
Notes Receivable:
Borrower A
Promissory Note
Various
8.1-8.5%
FL & NY (c)
$
-
$
9,963
Borrower B
Promissory Note
Various
8.0-8.3%
Various,
NY
(c)
-
8,633
Borrower C
Promissory Note
Various
7.2 %
Delaware,
OH
(c)
-
4,250
Borrower D
Promissory Note
CA
8.0 %
Various,
CA
(c)
-
699
Borrower E
Promissory Note
Various
9.0 %
Various,
CT
(c)
-
628
Total Notes Receivable
$
-
$
24,173
Allowance for credit losses
-
(253 )
Total Mortgage and Notes Receivable
$
7,132
$
29,454
(a) P & I = principal and interest paid monthly. IO = Interest only paid monthly with principal deferred.
(b) Note is in the process of being refinanced or repaid.
(c) Note for funding of capital improvements.
The aggregate cost for federal income tax purposes approximates the amount of principal unpaid.
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 $0.3 million. As of December 31, 2024, 2023 and 2022, we
had recorded an allowance for credit losses of $0.3 million, $0.2 million and $0.3 million, respectively, on these notes and mortgages
receivable. In addition, during the year ended December 31, 2024, we recorded an allowance of $72 thousand and for the years ended
December 31, 2023 and 2022, we recorded a credit of $97 thousand and $19 thousand, respectively, on these notes and mortgages
receivable due to changes in expected economic conditions.
100
The summarized changes in the carrying amount of mortgage loans are as follows:
2024
2023
2022
Balance at January 1,
$
112,009
$
34,313
$
14,699
Additions:
New mortgage loans
24,943
122,029
21,242
Deductions:
Loan repayments
(107,040)
(43,909)
(1,221)
Collection of principal
(386)
(521)
(426)
Allowance for credit losses
(72)
97
19
Balance as of December 31,
$
29,454
$
112,009
$
34,313
101
EXHIBIT INDEX
GETTY REALTY CORP.
Annual Report on Form 10-K
for the year ended December 31, 2024
Exhibit
Number
Description of Document
Location of Document
3.1
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 and incorporated herein by
reference.
3.2
Articles Supplementary to Articles of Incorporation of
Holdings, filed January 21, 1998.
Filed as Exhibit 3.2 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2008 and
incorporated herein by reference.
3.3
Amended and Restated By-Laws of Getty Realty Corp.
Filed as Exhibit 3.1 to the Company’s Current Report on
Form 8-K filed on January 31, 2024 and incorporated herein
by reference.
3.4
Articles of Amendment of Holdings, changing its name to
Getty Realty Corp., filed January 30, 1998.
Filed as Exhibit 3.4 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2008 and
incorporated herein by reference.
3.5
Articles of Amendment of Holdings, filed August 1, 2001.
Filed as Exhibit 3.5 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2008 and
incorporated herein by reference.
3.6
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 and incorporated herein
by reference.
3.7
Articles of Amendment to Articles of Incorporation of Getty
Realty Corp. filed May 17, 2018.
Filed as Exhibit 3.1 to the Company’s Current Report on
Form 8-K filed on May 18, 2018 and incorporated herein by
reference.
3.8
Articles Supplementary to Articles of Incorporation of
Holdings, filed February 24, 2022.
Filed as Exhibit 3.1 to the Company’s Quarterly Report on
Form 10-Q filed on April 28, 2022 and incorporated herein
by reference.
3.9
Articles of Amendment of Holdings, filed April 28, 2022.
Filed as Exhibit 3.1 to the Company’s Current Report on
Form 8-K filed on April 28, 2022 and incorporated herein by
reference.
4.1
Dividend Reinvestment/Stock Purchase Plan.
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 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).
Filed as Exhibit 10.1 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2012 and
incorporated herein by reference.
10.2*
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 and
incorporated herein by reference.
10.3*
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 and incorporated
herein by reference.
102
Exhibit
Number
Description of Document
Location of Document
10.4*
Getty Realty Corp. Third Amended and Restated 2004
Omnibus Incentive Compensation Plan.
Filed as Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed on April 28, 2021 and incorporated herein
by reference.
10.5*
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 and incorporated herein
by reference.
10.6
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 and incorporated
herein by reference.
10.7***
First Amendment to the Second Amended and Restated
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.
Filed as Exhibit 10.57 to the Company’s Annual Report on
form 10-K filed February 23, 2023 and incorporated herein
by reference.
10.8***
Third Amended and Restated Credit Agreement, dated as of
January 23, 2025, 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 herewith.
10.9
Term Loan Agreement, dated October 17, 2023, among
Getty Realty Corp. and Bank of America, N.A., as
Administrative Agent and BofA Securities, Inc., J.P.
Morgan Chase Bank, N.A., TD Bank, N.A., and Capital
One, N.A. as joint lead arrangers
Filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed on October 26, 2023 and incorporated
herein by reference.
10.10***
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 and incorporated
herein by reference.
10.11***
Seventh Amended and Restated Note Purchase and
Guarantee Agreement, dated as of November 21, 2024,
among Getty Realty Corp., Prudential and certain of its
affiliates.
Filed herewith.
10.12***
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.
Filed as Exhibit 10.2 to the Company’s Quarterly Report on
Form 10-Q filed on April 28, 2022 and incorporated herein
by reference.
10.13***
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 10.3 to the Company’s Quarterly Report on
Form 10-Q filed on April 28, 2022 and incorporated herein
by reference.
10.14***
Amended and Restated Note Purchase and Guarantee
Agreement dated as of November 21, 2024 among Getty
Realty Corp. and New York Life Insurance Company and
certain of its affiliates.
Filed herewith.
103
Exhibit
Number
Description of Document
Location of Document
10.15
Distribution Agreement, dated as of February 24, 2023, by
and among Getty Realty Corp. and each of J.P. Morgan
Securities LLC, JPMorgan Chase Bank, National
Association, BofA Securities, Inc., Bank of America, N.A.,
Goldman Sachs & Co. LLC, KeyBanc Capital Markets Inc.,
Robert W. Baird & Co. Incorporated, BTIG, LLC, Capital
One Securities, Inc., JMP Securities LLC, TD Securities
(USA) LLC, and The Toronto-Dominion Bank
Filed as Exhibit 1.1 to the Company’s Current Report on
Form 8-K filed on February 24, 2023 and incorporated
herein by reference.
10.16
Amendment No. 1 to the Distribution Agreement, dated as
of February 16, 2024, by and among Getty Realty Corp. and
each of J.P. Morgan Securities LLC, JPMorgan Chase Bank,
National Association, BofA Securities, Inc., Bank of
America, N.A., Goldman Sachs & Co. LLC, KeyBanc
Capital Markets Inc., Robert W. Baird & Co. Incorporated,
BTIG, LLC, Nomura Global Financial Products, Inc.,
Nomura Securities International, Inc., Capital One
Securities, Inc., Citizens JMP Securities, LLC, TD
Securities (USA) LLC and The Toronto-Dominion Bank
Filed as Exhibit 1.2 to the Company’s Current Report on
Form 8-K filed on February 16, 2024 and incorporated
herein by reference.
10.17
Form of Master Forward Confirmation
Filed as Exhibit 1.3 to the Company’s Current Report on
Form 8-K filed on February 16, 2024
and incorporated herein by reference.
10.18
Underwriting Agreement, dated July 29, 2024, by and among
Getty Realty Corp., BofA Securities, Inc., J.P. Morgan
Securities LLC, KeyBanc Capital Markets Inc., Goldman
Sachs & Co. LLC, TD Securities (USA) LLC, Robert W.
Baird & Co. Incorporated, Capital One Securities, Inc.,
Citizens JMP Securities, LLC, and BTIG, LLC, as
underwriters, the forward purchasers named therein and the
forward sellers named therein
Filed as Exhibit 1.1 to the Company’s Current Report on
Form 8-K filed on July 31, 2024 and incorporated herein by
reference.
10.19
Forward Confirmation, dated July 29, 2024, by and among
Getty Realty Corp. and Bank of America, N.A.
Filed as Exhibit 1.2 to the Company’s Current Report on
Form 8-K filed on July 31, 2024, and incorporated herein by
reference.
10.20
Forward Confirmation, dated February 28, 2023, by and
among Getty Realty Corp. and JPMorgan Chase Bank,
National Association
Filed as Exhibit 1.3 to the Company’s Current Report on
Form 8-K filed on July 31, 2024 and incorporated herein by
reference.
10.21
Forward Confirmation, dated July 29, 2024, by and among
Getty Realty Corp. and KeyBanc Capital Markets Inc.
Filed as Exhibit 1.4 to the Company’s Current Report on
Form 8-K filed on July 31, 2024 and incorporated herein by
reference.
10.22
Forward Confirmation, dated August 6, 2024, by and among
Getty Realty Corp. and Bank of America, N.A.
Filed as Exhibit 1.2 to the Company’s Current Report on
Form 8-K filed on August 9, 2024 and incorporated herein
by reference.
10.23
Forward Confirmation, dated August 6, 2024, by and among
Getty Realty Corp. and JPMorgan Chase Bank, National
Association
Filed as Exhibit 1.3 to the Company’s Current Report on
Form 8-K filed on August 9, 2024 and incorporated herein
by reference.
10.24
Forward Confirmation, dated August 6, 2024, by and among
Getty Realty Corp. and KeyBanc Capital Markets Inc.
Filed as Exhibit 1.4 to the Company’s Current Report on
Form 8-K filed on August 9, 2024 and incorporated herein
by reference.
104
Exhibit
Number
Description of Document
Location of Document
19
Insider trading policy.
Filed herewith.
21
Subsidiaries of the Company.
Filed herewith.
23
Consent of Independent Registered Public Accounting Firm. Filed herewith.
31.1
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.
31.2
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.
32.1
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.
32.2
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.
97
Policy Relating to Recovery of Erroneously Awarded
Compensation.
Filed herewith.
101.INS
Inline XBRL Instance Document.
Filed herewith.
101.SCH
Inline XBRL Taxonomy Extension Schema.
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 this 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 this Annual Report on Form 10-K.
105
SIGNATURES
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.
Getty Realty Corp.
(Registrant)
By:
/s/ Brian Dickman
Brian Dickman
Executive Vice President, Chief Financial Officer and
Treasurer
(Principal Financial Officer)
February 13, 2025
By:
/s/ Eugene Shnayderman
Eugene Shnayderman
Chief Accounting Officer and Controller
(Principal Accounting Officer)
February 13, 2025
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
By:
/S/ Milton Cooper
Christopher J. Constant
President, Chief Executive Officer and Director
(Principal Executive Officer)
February 13, 2025
Milton Cooper
Director
February 13, 2025
By:
/S/ Philip E. Coviello
By:
/S/ Howard Safenowitz
Philip E. Coviello
Director
February 13, 2025
Howard Safenowitz
Director and Chairman of the Board
February 13, 2025
By:
/S/ Mary Lou Malanoski
By:
/S/ Evelyn Infurna
Mary Lou Malanoski
Director
February 13, 2025
Evelyn Infurna
Director
February 13, 2025
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BOARD OF DIRECTORS
Christopher J. Constant
President and Chief Executive Officer
Getty Realty Corp.
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
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
CORPORATE INFORMATION
Annual Meeting of Shareholders
April 22, 2025
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
GETTY REALTY CORP.
292 Madison Avenue, 9th Floor
New York, NY 10017