Getty Realty Corporation

Good morning and welcome to Getty Realty's Earnings Conference Call for the first quarter 2022. 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 first quarter earnings conference call. Yesterday afternoon, the company released its financial results for the quarter ended March 31, 2022. The form 8K and earnings release 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 2022 guidance and may also include statements made by management in their remarks and in response to questions, including regarding the company's future operations, future 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, 2021, And there are 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 day hereof. The company undertakes no duty to update any forward-looking statements made that may be made in the course of this call. Also, please refer to our earnings release for discussion of our use of non-GAAP financial measures, including our updated 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 earnings call for the first quarter of 2022. Joining us on the call today are Mark O'Lear, our Chief Operating Officer, and Brian Dickman, our Chief Financial Officer. I will lead off today's call by providing commentary on the quarter, highlight the company's investment and capital markets activities, and discuss our outlook for the remainder of the year. As usual, Mark and Brian will take you through the portfolio and financial results in detail. Our solid first quarter results again demonstrated the successful execution of our strategy, which delivers durable cash flows from our operating portfolio combined with attractive growth from external opportunities. Our strong 2021 acquisition activity combined with contractual rent escalations and contributions from our completed redevelopment projects resulted in base rental income growth of 8.8% for the three months Our adjusted funds from operations, or AFFO, increased 12.5%, and our AFFO per share of 52 cents represented a 6.1% increase over the prior year's quarter. Year-to-date, the company has invested approximately $53 million, including the acquisition of two convenience stores for $7 million during the first quarter, the acquisition of 10 car washes and one convenience store for $43 million subsequent to quarter end, and approximately $3 million of total development funding year-to-date across four projects, including both new to industry convenience stores and car washes. We ended the year with a robust investment pipeline across a number of our target asset classes. We are remaining disciplined in our approach as we work through these and other opportunities. Our strategy is to acquire high-quality real estate across the convenience and automotive retail and service sectors, and to partner with strong and growing regional and national operators. Considering these factors, we are optimistic about our ability to continue executing on our investment strategy as the year progresses. I am also pleased with our recent capital markets execution, including our credit facility refinancing and ATM equity issuance in the fourth quarter of 2021, and the two tranche $225 million debt private placement we completed in the position us well to fund our growth pipeline. Turning to the convenience store sector, which continues to represent approximately three-quarters of our ABR, the National Association of Convenience Stores, or NACS, recently published its annual State of the Industry Report, reaffirming the resilience and consumer demand for the overall convenience store sector. Based on the NACS annual survey data for convenience stores across every region of the United States, 2021 was another strong year for inside store sales, which grew more than 8% and reached a record $280 billion. Similar to last year, the next survey highlighted a 6% increase in the average basket size or dollar spent per transaction in the store, which is impressive as the prior year's increase was up 15% due to pandemic-related shopping. Customer visits also rebounded during the year, as consumers returned to normal in-store shopping patterns. Perhaps most important for the overall convenience store sector was the return of strong food service sales, which were up 24% year-over-year after declining during 2020. For 2021, the NAACS data indicated that food service represented 22.5% of total inside sales and 35.5% of overall store gross profits, both record levels for the overall industry. On the fuel side of the business, the good news is that consumers and commuters drove a recovery of fuel volumes in 2021, which saw total fuel gallons sold increase 4.4% and close the gap to pre-pandemic levels as 2021 fuel volumes nationally were only 7.2% below the 2019 levels. For this year, despite the recent volatility in the oil market and rise in retail prices, Industry reports suggest that fuel volumes are continuing to recover and that the average fuel gross profit continues to be healthy and generally in line with recent years' performance. In general, despite the inflationary pressures impacting the broader U.S. economy, including our tenants' businesses, I am pleased that Getty and our tenants continue to operate successfully and without material adverse effects to date. However, we will continue to monitor our business and proactively communicate with it tenants in our portfolio to better understand any changes to industry fundamentals as the year progresses. Our team remains as focused as ever on the growth of this company, and we are working diligently to source and underwrite new opportunities in strong metropolitan markets across the country, as well as to unlock embedded value through selective redevelopments. We believe our success year-to-date and our current pipeline demonstrates our ability to source opportunities that align with our investment strategy. and that we are in position to continue driving additional shareholder value as we move through 2022 and beyond. With that, I'll turn the call over to Mark to discuss our portfolio and investment activities.