GTY - Earnings call transcript Q1 2021

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Operator

Good morning, and welcome to Getty Realty’s Earnings Conference Call for the First Quarter of 2021. [Operator Instructions] After the presentation, there will be an opportunity to ask questions. Prior to starting the call, Joshua Dicker, Executive Vice President, General Counsel and Secretary of the company, will read a safe harbor statement and provide information about non-GAAP financial measures. Please go ahead, Mr. Dicker.

Joshua Dicker

operator. you, Thank to Getty like all joining for I First thank Quarter for Realty’s Earnings us would you Conference Call. company XX, Yesterday quarter the released results financial afternoon, for ended March XXXX. its the release The Form section our at website available the Investor of are gettyrealty.com. X-K Relations in earnings and statements the this course Certain call on based not made statements. and information in historical may of are constitute forward-looking to to could management’s These expectations and results subject based cause are that uncertainties on statements. current materially described trends, are those and statements and events forward-looking from in differ actual beliefs the and forward-looking also in of company’s the statements and response the Examples include and redevelopment COVID-XX or our to acquisition remarks statements management to operations XXXX and financial guidance pandemic, by performance opportunities. response including company regarding company’s may and made questions, plans in include their the future our We judgment and actual caution results best could to based on statements that materially. us such currently known that you differ reflect factors for on forward-looking materially to you made with for refer I discussion differ today. other a could filings and factors expressed cause more to XXXX, implied of the or that XX-K the ended results actual made SEC other detailed those annual any report December XX, risks and the from Form in the company’s year statements

be earnings on measures no to to Executive the Constant, duty in funds use You refer call view our should AFFO, statements from me reliance With our discussion measures, of a reconciliation update date to our adjusted Officer. Christopher please call. including over undertakes that, made earnings. company not and this our the any place of let reflect forward-looking financial may or our Chief non-GAAP which that the net turn for statements, to our The release of those of operation, undue course definition only as Also, hereof. forward-looking of of

Christopher Constant

the year. We call XXXX. agreed Officer. recent will today morning, Officer; an Dickman, of With first strategic and portfolio Chief and our and are quarter the to call objectives the Operating our portfolio of Good Chief the our more I’ll today’s XXXX year, by welcome call remainder solid Brian Mark rent, of saw stability AFFO display and to results of and as issues per the business then everyone, Josh including I of tenants' businesses Josh. Financial the me begin was you, view performance quarter total of Call. from providing collecting all our Earnings operating our the Mark throughout quarter, on Olear, continuation amounts strategies collections and year. in continued net strength share. which the we as strength that in an throughout execution in no a small of our prior increase to performance our our defer X.X% quite with we to operations portfolio collections continued our was We quarter’s rent another Thank in as and delivered pass our increase adjusted had lease and Brian The a discuss results a this touch strong for our of X.X% last stable-in-place increase for of and first result funds to overview of detail. financial XXXX, on X.X% the and our net investment quarter our revenues, of in We our

locations. new we strategy of quarter construction on the during a We sale-leasebacks combination a as invested for million $XX.X industry first to also funding of our growth continued execute and total in

Our quarter investment on was focused again activity the wash convenience both the store car businesses. for and

and convenience opportunities we auto-related of by we reviewing pipelines. our underwrite opportunities sectors, numerous team and the addition, attractive in continues are the investment our and In encouraged to are source in number

focused remain we ahead, look we three As areas. on primary

and portfolio rent healthy is high first maintaining collections. a The

in continue pleased be We and The our have strong impact with resilient pandemic. classes of the coverage COVID-XX and rent on our included growing to by as of despite portfolio health ratios. will continued said, to asset steady we and auto-related tenants, are our the With our the C-store evidenced proven the and tenant monitor of impact the pandemic economy. the portfolio that and performance

Our portfolio redevelopments value as of making our second automotive-related by other our in-place assets, year maximizing to and by we of active the priority through by management. acquisitions accretive grow, enhance stores and this and convenience on asset unlocking through embedded initiatives through selective move is executing retail portfolio continued quality evolve our

estate and asset believe We classes real in markets additional drive targeted shareholder confident value. across will continue high-quality that metropolitan to acquiring our in are investment country the

capital sheet. Finally, provide With both of structure. access our believe balance to to We availability over the call stable ATM And turn our with ended during well-laddered we discuss maintaining portfolio quarter, we a million to a us we maintaining revolving significant with remain our our Mark new filed I’ll program, credit which that, flexible and quarter to activities. the company capital line. grow to flexible investment the $XXX and on and committed while

Mark Olear

Thank you, Chris.

quarter, net lease As six of portfolio redevelopment includes the properties. properties, active end five vacant XXX our of sites the and

active lease approximately our weighted term redevelopments, X.X Our increased average years, overall is to excluding and occupancy, XX.X%.

rents, ratio D.C. our XX to XX% be coverage continue the in plus times. spread over our rent covered Washington, XX-month which MSAs annualized increased top trailing XX of X.X U.S., the come tenant from Our remains base well portfolio And states, as

we the our investment to active activities, an In terms of start year. had

we in nine $XX.X During million the quarter properties. invested

three in Wash in with GO acquired We separate Our completed business. tunnel for million; $X.X with express site stemmed and one during MSA for Wash San million. from wash car site Zips acquisitions a first Car operating one transactions the quarter MSA Louisville, Kentucky the $X.X Car Antonio the leaseback acquisition tenants with

are with terms. a the the properties to with completed was than Getty In and southeastern Ohio initial acquired million. c-store cash first properties subject with Kentucky four we net XX industry sale-leaseback an unit funded across price loan acquired initial U.S. acquired X%. the where Express, more locations leases for WhiteWater purchase slightly sites we million $XX.X new addition, And aggregate convenience our aggregate of for triple with also in All operator Refuel, three $X.X six construction yield stores our on XX-year

accrue on of we this construction during project. our investment part phase transaction, interest will the As of the

grow We highly store expect terms to remain sale-leaseback of at the retail portfolio acquire end of to period. the assets. transaction the ended pipeline both continuing strong the the investment with properties in other industry We via a and construction and automotive-related to convenience our committed quarter

for construction. we pursue industry of that acquisitions expect and net sale-leasebacks, will direct We funding lease properties new

our of asset high-quality in acquiring and classes. estate principles partnering committed remain with strong to core real we tenants underwriting Finally, our target

Moving redevelopment to platform. our

not this pipeline. our or quarter, During the we four are subject from one which leases, property. net in approximately on a been of signed leases have sites time, yet which six currently which current XX are properties triple of the tenants, have and we vacant XXX,XXX letters but projects, to intent, on signed which invested in leases recaptured At signed letter active include intent

have during to rent at XXXX. expect We several sites commencements

project will the investment the we our excess returns funds acquisition redevelopments redevelopment these in invested will $X.X a can that invest We in by million total market of and Getty spending today. in generate million. pipeline, approximately On where the side, incremental to these projects $X.X these have estimate projects company the require XX capital we in

the XX please redevelopment can presentation, our to information of detailed investor For more be pipeline, on our pages on which refer XX found and website.

a developer, sold, million. a to representing previously remaining of of local two proceeds dispositions. We sold $X.X the the properties Three the and during Turning realized of sites five vast to vacant. properties proceeds were were quarter, realizing majority leased

expect will minimal. the impact these of We be financial net dispositions

selectively call properties longer I we the look competitive redevelopment determination With results. that made property to we the is have store and discuss have As as does dispose we the continue potential. ahead, will our Brian that, no convenience will to over a financial turn not where location of to

Brian Dickman

Hopefully, chance performance which per release. was the all had reflects Mark. Good representing recap see quarter, X.X%. for everyone. $X.XX of best the earnings. I’ll company’s share a year-over-year to start Thanks, you’ve morning, increase a operating yesterday’s core a of believe we AFFO, first with

for was FFO per $X.XX addition, In share the quarter.

in quarter growth on X.X% and which to and in income. projects excludes million, our interest $XX.X reimbursements notes grew of increase revenues rent million. rental Acquisition X.X%. leases year-over-year the the and were Rental $XX.X tenant redevelopment first receivables income, total mortgages the of escalators to a representing completion contributed in Our activity, all our

lower of reimbursable expenses flowed in changes fees AFFO side, increased due increases On this Environmental down also a through remediation and quarter taxes. the a The as of expenses, were non-cash portion our property as of related real expenses. to the estimates. quarter-over-quarter expense and environmental costs in estate quarter, in environmental result result primarily which to costs increased professional

a expenses non-cash variable. and number are As estimates of highly quarter, each be we to note continue environmental and adjustments to subject will

G&A expenses professional to Finally, and employee-related as as fees. expenses quarter certain well other non-recurring retirement costs this as increased due well

turn $XXX fixed debt long-term As with entirely rate million the of comprised the our capital notes. we we balance ended quarter sheet markets activities, to of and outstanding, unsecured

was million $XXX at revolver Our completely undrawn end. quarter

of borrowing debt and was Our weighted cost average years. maturity X.X average the our was weighted X.X%

our total market debt addition, XX%. In total to was capitalization

value total total net XX%, and was asset debt-to-EBITDA to was times. Our five debt our

at $XX.XX but our $XX.X matures maturity an no has XXXX, facility next one with selective other price of ultimately than until extension million issuance at quarter, June the average in respect were option our debt of of ATM our our during election. have share. to program, With which maturities – We year, credit year a no per March we raising

we to a million, an ended well-laddered at the about of quarter our end XXXX. we environmental capital As of the liability, we capital and flexible remain think needs, respect maintaining With structure. ahead was and which committed increase look $XX.X to from our $XXX,XXX conservative,

remediation the net For $XXX,XXX. environmental approximately spending was quarter,

range Finally, AFFO $X.XX share. a to reaffirmed of guidance at we’ve $X.XX per XXXX our per share

the that, continue increase, to acquisitions year guidance our of and generally assume potential pursuing activities, we With properties guidance but active and markets our expectation which date, does will not our for remain investment rent that when may in include XXXX costs expectation remainder impact back capital Chris. XXXX. capital raising first turn redevelopments deals forego of acquisitions the Our and recapture could we that our to will operating in activity or to transaction will I’ll impact ultimately result and activities redevelopment, for not factors, this it which otherwise XXXX any expectation Specific completed. quarter expenses our we includes additional that for

Christopher Constant

Thank remarks. you, Brian. That our concludes prepared

ask So the the for me let operator questions. call open to

Operator

[Operator Gorman Please from from go first is Michael BTIG. Instructions] question The ahead.

Michael Gorman

plays if into side consolidation? pipeline of terms that the environment what toward looks Are bit right you on now or I in Chris, of the continued a little tenant’s consolidating your how like talk about like you space acquisition was the seeing balance is what moves acquisition the wondering like your pipeline and could c-store year? looks the how over

Christopher Constant

part you on the sure. the quick add some coffee, evolving has as part of convenience with small Well, maybe and loyalty becoming will incredibly consolidate stores. programs the of then operators, serve the midsized that, is, I’ll when The as which [indiscernible] And with merchandise, are or the sophisticated. chain compete over that not c-store top something last willing to larger restaurant, years. think probably operations part add is are well, I comment to there continue several that Maybe on it right, are cannot to apps store and reality industry more been and

small continued see some player, last or seen to continue whether more that consolidation, years. to a national selling you’ve to transactions the going player even couple a the it’s over of you’re of regional So

think not well adjacent we capital, and in there for also other are that potential as probably source of also right, is that’s building frankly, transactions quite a or growth. thing would locations Mike, to target to are of, to add, Getty organic as we’re medium-to growing seeing looking are growth related which question their M&A call in their organically markets operators markets. as source these fund chains I And that what it, own is but a your larger-sized number also, The

Michael Gorman

you right during into about you my how you or more source just either I’m quarter. the underwrote great. time those, actually, ground-up maybe spend loans a kind about yes, are your redevelopment And you additional of next talking if bit new opportunities, Can lay you through skill of That’s loans could just there? kind funding little how field as the there the taking construction those. set construction of opportunity mentioned, what of development of feeds question And for maybe kind curious even into development. kind out

Christopher Constant

Yes.

moment with a have before, transactions new So they a do to was just where I’d we partner saying been of site program. I a to We’ve identified have development a tenant ago. what a couple effectively done dovetail prototype where this in build their right,

fund case, refuel of large in owner well. Again, way. at They’ve is of the become our for And completion. structured that And are Getty – in case, to program. this along the an across anticipate there’s for the to certainly fee others growth, organic an operator looking the right day But a So upon it’s we that’s their a operator are they end to new the a is we property. partner way capital as the us and help and if this us for we think with then but opportunity fund important location agreements U.S. the store way the southern help buying got them

Michael Gorman

me. what’s And on then between which transaction. and Great. the on of any on of updated your don’t And with store gas changing it’s c-store a all? your going tenants, strong? last kind In for what’s maybe that of pretty XX% be relationship with Is things sales, conversations think side at seem one thoughts to going whether then – kind maybe sales the convenience historically XX%, range been gas that been I involve just of

Christopher Constant

trend – XX% And in continue. that’s is customer our seen materials stat maybe visits that out, our more in with does visits area more and right? you’re a the it you’re spread XX% sometimes we suburban It Anecdotally, conversations if visiting non-gas-related investment visits. increasing, day. an it’s says tenants, customer have right? And I the more Certainly, a growing, seeing industry. same we are that maybe gradually per by or vary that times So have right, number approximately will multiple think of in

for your that’s your As is customer becomes afternoon when for driving destination your stop tenants – merchandise when destination, food morning main for cases gas. need destination, not convenient traditional our do certain visits store on, hub in what consumers and dinner, focused are to

Operator

from next The go question ahead. KeyBanc. Todd is Please Thomas from

Todd Thomas

Just Brian. for first question

yield. million does terms include which X% In guidance, investments, of closed you initial a more than future at slightly not the $XX

what the You that the the some with firm extended financing. I construction being was the guidance investments curious were was was completed what to offset AFFO the offset just during quarter. range, the relative

Brian Dickman

did couple the the Todd. really as Good but morning, transact I some It’s were issuance. were made that can’t say question, opportunities we to the have us outwardly And in Yes. sense the Fair to felt quarter, obviously we investment we quarter. that were a in on. activity of brought ATM that active during market there

the was right do the on notwithstanding impact per AFFO was short-term short a that the you to over of your shares and long considerations that issuing the per sense acknowledging question the share As term, little bit felt for numbers. made it equity, different we number we thought us, per the and particularly share. does But equity put weigh to thing pressure that answer earnings the on issuance, of the

Todd Thomas

Okay. was the just investments. there’s comment just to And at interest those and Couche-Tard K portfolio I the and all then Circle if curious if update you Getty’s an process, back in regarding assets? can

Christopher Constant

There’s can Yes. provide this any time. or on really I not that any update at thoughts

Todd Thomas

near-term more how as Should term year? dispositions disposition the outlook? Okay. forward about the move What’s that expect think about asset – like? more we we should mean, I throughout And look what sales? we

Christopher Constant

Yes, sure.

were out it, some properties was recent, term of or coming some vacancies, the of look of, of XX a or those year. you our a properties to years, have certainly three If seller the lease of past some properties expiring. been our leases at maybe XX we’ve been two call Typically,

good for I run think Getty. significant see that’s activity a We rate the horizon. don’t disposition in

Operator

next question Bely Nikita JPMorgan. is from of ahead. The go Please

Nikita Bely

loans these on have you loan. yields provide advanced? you These Did that guys constructions

Just curious.

Christopher Constant

is where over yield can’t construction the say years. with rate But we exact last the Getty the consistent has investing Unfortunately during the I’d that. interest disclose period that several been on what is certainly

Nikita Bely

cap my be do properties? will consistent you the the the acquire what cap you eventually do rate line expected to down And it’s So think was, second those raise. then question when

Christopher Constant

specific Again, quoted would we’ve you really cap to can’t but of provide in numbers, I rates guide the past. I range the

Nikita Bely

Got it.

know bit Okay. a I talked pipeline, And that. the little on you deal about

quarter have over just that on to around time million, numbers of a In you in number per to $XX a little deals putting Do you basis? can consistent terms $XX that consistent of some that put it, with been million brackets you a forward think the bit and realistic and $XX more deal million aspire recent quarters volume. is think the you

Christopher Constant

I I’m not into number right, steady with at is right one certainly become we we’ve would resources the to have it’s but we’ve group, that several our more going shown to Mark’s a to that. in our to acquirer and say been consistent goals I results had think help number, of And last pace a specific provide continue. a that expect of years, been a over what of – acquiring

Nikita Bely

Right. mind. Last if question, don’t you

some did quarter. your percent a talk an deal you little a as about pipeline how Can the big bit total currently? opportunity car You in that of is washes just of

Mark Olear

Mark. Sure. This is

wash, a growing to investments set to as but – it’s grow near And a in in lot retail where I opportunity equal opportunities it’s right expand on and automotive the we’re not in be for verticals. for sectors opportunities or industry we’re space. it the all think of to attention stores. retail as for toward relationships develop stores, in as day. pie grow will highly think experience And those right It’s working big possible and to which acquisitions now, new other convenience Right for the every we all our we’re only the fragmented car it heavily it’s convenience probably not consolidation point is I the now. receiving weighted now – slightly still quite there, but but in working somewhat

Operator

would This remarks. concludes session. closing to question-and-answer like for turn to I the Constant back the Chris over call

Christopher Constant

We you, appreciate to at for with in for the Thank first Great. quarter forward second of everybody interest joining our And back morning end on getting look quarter. Getty. operator. Thank this us we you the call. everyone your

Operator

concludes conference. today’s This

lines your your disconnect participation. you for this may time. You Thank at

Getty Realty (GTY) 1 May 212021 Q1 Earnings call transcript