Getty Realty Corporation

Good morning and welcome to Getty Realty's earning conference call for fourth quarter 2020. This call is being recorded. 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.

Thank you, Operator. I would like to thank you all for joining us for Getty Realty's fourth quarter and year-end earnings conference call. Yesterday afternoon, the company released its financial results for the quarter and year-ended December 31, 2020. The Form 8K and earnings released are available in the Investor Relations section of our website at gettyrealty.com. Certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to trends, events, and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Examples of forward-looking statements include our 2021 guidance and may also include statements made by management in their remarks and in response to questions, including regarding the company's response to the COVID-19 pandemic, future company operations, and financial performance and the company's acquisition or redevelopment plans and opportunities. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. I refer you to the company's annual report on Form 10-K for the year ended December 31, 2019, our subsequent quarterly reports filed on Form 10-Q, and our other filings made with the SEC for a more detailed discussion of the risks, and other factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. You should not place undue reliance on forward-looking statements, which reflect our view only as of the date hereof. The company undertakes no duty to update any forward-looking statements that may be made in the course of this call. Also, please refer to our earnings release for a discussion of our use of non-GAAP financial measures including our definition of adjusted funds from operations, or AFFO, and our reconciliation of those measures to net earnings. With that, let me turn the call over to Christopher Constant, our Chief Executive Officer.

Thank you, Josh. Good morning, everyone, and welcome to our fourth quarter and full year 2020 earnings call. With Josh and me on the phone today are Marco Lear, our Chief Operating Officer, and Brian Dickman, our new Chief Financial Officer. Brian officially joined Getty in December, but I'd like to formally welcome him to the company on the call this morning. I've known Brian for many years, and we are all enjoying working with him and look forward to his contributions at Getty for years to come. I'll begin today's call by providing an overview of our fourth quarter and full year 2020 performance, update everyone on our business in the context of the ongoing COVID-19 pandemic, touch on our 2021 strategic objectives, and then we'll pass the call to Mark and Brian to discuss our portfolio and financial results in more detail. We closed out 2020 with a highly productive quarter, which saw each aspect of our business pose significant accomplishments. During the year, we maintained high monthly rent collections and stable occupancy in our portfolio, acquired 34 properties, and completed six redevelopment projects. The net result was the continued growth of both our revenues from rental properties, which increased by 3.5% for the quarter and 5% for the year, and our adjusted funds from operations per share, which grew by 12% for the quarter and 7% for the year. In a normal year, we'd be proud to report on this growth. When you consider the countless challenges brought upon us by COVID-19, I can say with great satisfaction that these results were only possible due to the extraordinary efforts put forth by the entire Getty team this year. I believe these results reflect the value of our portfolio, and combined with our strong and flexible balance sheet and growing pipeline of investment prospects, position the company well for success as we look towards 2021 and beyond. I'm pleased to report that our fourth quarter results continue to demonstrate the stability of our triple net lease rents and growth platforms. Our portfolio of convenience stores, gas stations, and other automotive assets produced another strong quarter of rent collections, operating performance, and growth at Getty. We saw our rent collection rate increase to 98.7%, and we collected substantially all of the deferred rent and mortgage payments that were due to us in the morning quarter. We entered 2021 with a small balance of COVID-related deferrals, which we expect to collect throughout this year. In addition, Getty completed several leasing and disposition transactions in the core, which will serve to stabilize the small number of assets where we were experiencing difficulties with rent collections. Looking ahead, although uncertainty remains regarding the forward impact of COVID-19 to the broader economy, we are encouraged by the strength exhibited by our tenants and assets since the beginning of the pandemic. We will continue to be vigilant in monitoring the health of our tenants as we believe the severity of the COVID-19 pandemic on the U.S. economy will continue to impact the consumer and retail activity through at least the first half of 2021 and therefore could negatively affect Getty's rate collections and financial results. The execution of the company's acquisition strategy was an important driver of Q4 and full year 2020 performance. For the quarter, 10 properties for $45.1 million, and for the year we acquired 34 properties for $150 million, which represents significant growth over the company's acquisition activity in the prior year. These high-quality assets are located in numerous markets across the country and include portfolios both in community stores, which offer consumers food, traditional merchandise, and fuel, as well as car washes. We also continue the momentum of our redevelopment program completed our third project with AutoZone, bringing our total of completed projects for the year to six. We are closing in on completing 20 projects since the inception of our redevelopment strategy, further demonstrating the value of the real estate we hold in our portfolio. Our balance sheet also ended 2020 in excellent condition, as we successfully issued a $175.3.4 debt private placement in December, we issued approximately $65 million of equity under our ATM program during the year. Our leverage continues to be less than five times, and with a revolver that is almost completely undrawn, Getty has significant capacity to fund its growth plans. As we enter 2021, we feel encouraged to value our portfolio of nearly 1,000 properties. The convenience store industry and other automotive businesses are essential and largely internet resistant. Our rents 65% of which come from the top 50 MSAs in the U.S., continue to be well covered. In fact, despite COVID-related challenges, our rent coverage ratio remains stable throughout the year and ended 2020 at a healthy 2.6%. Our portfolio is built around serving the needs of the car-driving individual, and it's continuing to do so, whether it's stopping for convenience store items, fuel, getting snacks, meals, or getting your car washed or serviced. These are needs that continue to be in high demand today and which we believe will be staples for the mobile consumer for years to come. Our team is more focused than ever on executing our growth initiatives, including maximizing the quality of our in-place portfolios for continued active asset management, enhancing our portfolios for creative acquisitions in stores and other automotive assets which serve the mobile consumer, and unlocking embedded value for our selective redevelopment. We are confident in our targeted investment strategy, which focuses on acquiring high-quality real estate in metropolitan markets across the country, and in our ability to continually successfully execute on these strategic objectives. Our approach and focus on driving growth should result in driving additional shareholder value as we move through the remainder of 2021 and beyond. With that, I will turn the call over to Marco Lear to discuss our portfolio and investment activities. Thank you, Chris.