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GETTY REALTY CORP /MD/ (GTY)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered steady growth: AFFO/share $0.60 (+5.3% YoY), FFO/share $0.57, diluted EPS $0.39; total revenues were $53.016M, up 11.3% YoY, supported by acquisitions and contractual rent escalators .
  • Management tightened 2025 AFFO/share guidance to $2.38–$2.41 (from $2.40–$2.42) to reflect potential impacts from Zips Car Wash’s bankruptcy; the team expects to re-lease affected sites and recapture a “significant majority” of rent during 2025 .
  • Balance sheet/liquidity strengthened: $125M unsecured notes to fund 2/25/25 and revolver upsized to $450M; pro forma weighted avg debt maturity 5.6 years, cost 4.4%, with no maturities until June 2028 .
  • Pipeline accelerated after the release: press release cited >$35M of commitments, while the call disclosed >$85M under contract including a >$50M auto service portfolio signed post-release; expected initial yields in the “high 7% area” (modest compression vs 2024’s 8.3%) .

What Went Well and What Went Wrong

  • What Went Well

    • Accretive growth and execution: “AFFO per share of $2.34, which exceeded the high end of our guidance range” for FY24; annualized base rent (ABR) +14.5% to $197.8M, reflecting acquisition momentum and portfolio stability .
    • Strong portfolio quality: Occupancy 99.7%, WALT 10.2 years, tenant rent coverage 2.6x; 60% of ABR in top-50 MSAs underpins durable cash flows .
    • Capital markets readiness: $125M notes locked ahead of rate moves; revolver upsized to $450M; unsettled forward equity (~$164.8M) and >$280M revolver capacity provide “significant dry powder” for 2025 .

  • What Went Wrong

    • Tenant-specific stress: Zips Car Wash bankruptcy affects 12 sites (1.8% of ABR); motion seeks rejection of 7 leases, prompting a guidance trim while management works toward re-tenanting/restructuring .
    • Lower tenant reimbursements: Tenant reimbursement income fell YoY in Q4 (to $2.114M from $4.475M) due to lower reimbursable real estate taxes and rent expense, reducing reported rental property revenues vs potential pass-through levels .
    • Higher G&A: Q4 and FY saw elevated G&A from employee-related costs (including non-recurring retirement/severance) and professional fees, partially offset by operating discipline (full-year G&A ratio improved) .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenues from Rental Properties ($M)$45.615 $50.494 $52.239
Total Revenues ($M)$47.642 $51.467 $53.016
Diluted EPS ($)$0.30 $0.27 $0.39
FFO/share ($)$0.51 $0.56 $0.57
AFFO/share ($)$0.57 $0.59 $0.60
  • YoY (Q4’24 vs Q4’23): Total revenues +11.3% ($53.016M vs $47.642M); AFFO/share +5.3% ($0.60 vs $0.57); EPS +30.0% ($0.39 vs $0.30) .
  • QoQ (Q4’24 vs Q3’24): Total revenues +3.0% ($53.016M vs $51.467M); AFFO/share +1.7% ($0.60 vs $0.59); EPS +44.4% ($0.39 vs $0.27) .

KPIs and Operating/Balance Sheet Metrics

KPIQ4 2024
Occupancy99.7%
Weighted Avg Lease Term10.2 years
Tenant Rent Coverage (TTM)2.6x
Annualized Base Rent (ABR)$197.8M
Net Debt / EBITDA5.2x (4.2x incl. unsettled forward equity)
Fixed Charge Coverage3.8x
Initial Cash Yield on Q4 Investments8.9%
2024 Initial Cash Yield (full-year)8.3%
Weighted Avg Debt Maturity / Cost (pro forma)5.6 years / 4.4%

Investments and Capital Allocation (Q4 and FY)

ItemQ4 2024FY 2024
Investment Volume$76.4M across 21 properties $209.0M across 78 properties
Mix (FY 2024)—41% c-stores; 33% express tunnel car washes; 21% auto service; 5% drive-thru QSR
Dispositions7 properties; $7.5M gross; $6.3M net gain 31 properties; $13.1M gross; $5.9M net gain
Pipeline (at release / post-call)>$35M committed >$85M under contract including >$50M auto service portfolio signed post-release

Consensus vs. Results

  • S&P Global consensus (FFO/share, EPS, revenue) for Q4 2024 was unavailable due to API rate limits at time of analysis; therefore, we cannot determine beats/misses vs consensus at this time (S&P Global data unavailable).

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
AFFO/share (diluted)FY 2025$2.40–$2.42 $2.38–$2.41 Lowered (tenant bankruptcy impact)

Notes: Guidance incorporates completed transactions and the notes issuance/repayment; excludes prospective acquisitions/dispositions/capital markets (including forward settlements) .

Earnings Call Themes & Trends

TopicQ-2 (Q2 2024)Q-1 (Q3 2024)Current (Q4 2024)Trend
Portfolio diversificationDeployed $61.7M; mix included auto service, car wash, QSR; raised FY guidance Continued diversification; WALT >10 years via unitary lease extensions; pipeline >$70M Non-c-store ABR 28%; ABR +14.5%; 8 new tenants; diversification core to scaling Broadening mix and tenant roster
Capital markets/liquidityDrew delayed-draw term loan; active ATM; guidance raised Announced $125M private notes; follow-on equity with forward sales Notes funding 2/25; revolver upsized to $450M; pro forma WAM 5.6y, cost 4.4% Improved flexibility, termed-out risk
Transaction market & cap ratesInitial yields ~8.1% Initial yields ~8.0% Expect “modest” cap rate compression; new pipeline high-7% yields Slight compression from 2024 levels
Tenant credit (car wash)——Zips bankruptcy: assuming 7 re-leases in 2025; expect majority rent recapture Isolated issue; proactive re-tenanting
RedevelopmentSigned 3 projects; Chipotle RI progress Chipotle RI rent commenced; 5 signed projects 4 signed projects; active pipeline; continuous completions expected Ongoing small-scale value-add
Lease term management—Extended two unitary leases; WALT 10.1y Extended four unitary leases in 2024; WALT 10.2y Longer duration, lower near-term expiries

Management Commentary

  • “AFFO per share of $2.34, which exceeded the high end of our guidance range and represented a 4% increase over the prior year’s result.” — CEO, affirming disciplined execution in a challenging year .
  • “At year-end, our leased portfolio included 1,114 net lease properties… Occupancy was 99.7%, and our weighted average lease term was 10.2 years. Our rents continue to be well covered with a trailing 12-month tenant rent coverage ratio of 2.6x.” — COO, highlighting portfolio strength .
  • “We are revising our AFFO guidance to a range of $2.38 to $2.41 per share… we do expect that these [7 Zips] sites get re-leased this year and that we recapture a significant majority of the rent.” — CFO, on guidance and Zips mitigation .
  • “We signed a contract for a more than $50 million portfolio transaction in the automotive service sector.” — CEO, post-release pipeline acceleration .

Q&A Highlights

  • Zips Car Wash bankruptcy: Company assuming 7 of 12 leases are returned; active discussions with alternative operators; sites are relatively new (~5 years old) and can be turned quickly; guidance embeds a range of downtime/rent recovery scenarios, with expectation of “significant majority” rent recapture in 2025 .
  • Capital deployment funding cadence: Use new notes to pay down revolver, then pair forward equity and revolver capacity to prefund the pipeline; maintain visibility on cost of capital .
  • Pipeline mix and yields: >$85M under contract (post-release), largely development funding (~80%), with anticipated initial yields in the high-7% area (modest compression from 2024) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
AFFO/share (diluted)FY 2025$2.40–$2.42 $2.38–$2.41 Lowered (Zips bankruptcy)

Additional context: Guidance includes completed transactions and the notes issuance/repayment, excludes potential acquisitions/dispositions/forward settlements .

Estimates Context

  • We attempted to retrieve Wall Street consensus (S&P Global) for Q4 2024 FFO/share, EPS, and revenue; retrieval failed due to daily request limits. As a result, we cannot state beats/misses vs consensus for this quarter (S&P Global data unavailable at time of analysis).

Key Takeaways for Investors

  • Core operating metrics remain strong (99.7% occupancy, 10.2-year WALT, 2.6x coverage), supporting steady AFFO/share growth despite sector headwinds .
  • Zips is a contained idiosyncratic issue (1.8% ABR); guidance prudently trimmed, but management expects re-tenanting and majority rent recapture during 2025, limiting earnings drag .
  • Capital structure de-risked: no maturities until June 2028; revolver upsized to $450M; pro forma WAM 5.6 years and 4.4% cost enhance flexibility to pursue accretive deals through 2025 .
  • External growth pipeline accelerating (>$85M under contract post-release), with high-7% initial yields likely sustaining spread even if rates remain “higher for longer” .
  • Dividend momentum intact: board lifted the quarterly dividend to $0.47 (Oct 2024) and maintained it in Feb 2025, aligning with AFFO trajectory and balance sheet strength .
  • Watch items: pace of Zips re-leasing, tenant reimbursement variability (property tax timing), and cap rate trends relative to funding costs; management’s direct sale-leaseback focus and relationships are key differentiators .

Supporting Detail (select additional data points)

  • Q4 rental income $50.125M; tenant reimbursement income $2.114M; property costs $3.245M; D&A $15.000M; net gain on dispositions $6.324M .
  • Balance sheet at 12/31/24: total debt $907.5M (notes $675.0M at 3.9% WA rate; term loan $150.0M at 6.1%; revolver $82.5M), cash $9.5M .
  • Q4 investments: 21 properties for $76.4M (14 c-stores; 2 car washes; 2 auto service; 1 drive-thru QSR) at 8.9% initial cash yield .

All figures are sourced from Getty Realty’s Q4 2024 8-K/press release and earnings call unless otherwise noted: .