Getty Realty’s Earnings Call: Strong Growth Amid Challenges

Getty Realty ((GTY)) has held its Q1 earnings call. Read on for the main highlights of the call.

Getty Realty’s recent earnings call revealed a generally positive sentiment, highlighting strong growth in base rent and AFFO, stable portfolio occupancy, and a robust investment pipeline. Despite challenges such as the Zips Car Wash bankruptcy and market volatility, the company expressed confidence in its strategic approach and capital position.

Annualized Base Rent Growth

Getty Realty reported an impressive 11.2% growth in annualized base rent over the prior year, reaching approximately $199 million. This growth underscores the company’s ability to enhance its revenue streams and capitalize on its real estate assets.

Increased AFFO Per Share

The company saw a 3.5% increase in Adjusted Funds From Operations (AFFO) per share, reaching $0.59 compared to the previous year’s quarterly result. This increase reflects Getty Realty’s operational efficiency and its capacity to generate higher returns for shareholders.

Portfolio Stability and Occupancy

Getty Realty maintained a remarkable portfolio occupancy rate of 99.7%, with a weighted average lease term of 10 years. This stability highlights the company’s effective management and the strong demand for its properties.

Expanded Investment Pipeline

The company’s committed investment pipeline expanded to over $110 million, with investments spread across various sectors including auto service, convenience stores, drive-through QSRs, and express tunnel car washes. This diversification strategy positions Getty Realty for future growth.

Strong Capital Position

Getty Realty ended the quarter with a robust capital position, boasting more than $450 million in total liquidity. This financial strength ensures the company can continue to fund future investments and navigate market challenges.

Zips Car Wash Bankruptcy

The bankruptcy of Zips Car Wash, which accounted for 1.8% of Getty’s annualized base rent, posed a challenge. However, Getty expects to recover approximately 70% of the ABR previously generated by Zips, demonstrating resilience in the face of setbacks.

Macroeconomic and Market Challenges

Getty Realty faced significant volatility in the transaction and capital markets due to economic and political uncertainties. These challenges have impacted the pace of closed transactions, yet the company remains optimistic about its strategic direction.

Forward-Looking Guidance

Looking ahead, Getty Realty provided guidance for 2025, projecting an AFFO per share range of $2.38 to $2.41. The company anticipates continued growth in annualized base rent and remains committed to monitoring its convenience and automotive retail tenants. With a strong capital position and a growing investment pipeline, Getty Realty is well-positioned to weather macroeconomic challenges.

In summary, Getty Realty’s earnings call conveyed a positive outlook, marked by strong financial performance and strategic growth initiatives. Despite facing some challenges, the company remains confident in its ability to deliver value to shareholders and sustain its growth trajectory.