Getty Realty Corporation

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 they're 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 company 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 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 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. Christopher Constant

Thank you, Josh. Good morning, everyone, and welcome to our earnings call for the second 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's financial results and investment activities and offer some observations and perspective on the operating environment for the convenience store sector. As usual, Mark will then take you through our portfolio, and Brian will Our second quarter results again demonstrated the successful execution of our strategy, which produces both stable cash flows from our existing portfolio and growth from our investments in the convenience and automotive retail sectors. For the quarter, our base rental income grew 8.1%, our adjusted funds from operations, or AFFO, increased 8.3%, and our AFFO per share grew to 53%. In the first half of the year, the company invested approximately $59 million, including more than $50 million in the second quarter. We also ended the quarter with more than $125 million of commitments for the development and acquisition of primarily new to industry properties in the convenience store and car wash sectors, which we expect to fund and close over the next year or so. We are well positioned to fund this investment activity with cash and debt January of 2023. We continue to build our pipeline across all of our target asset classes and remain disciplined in our approach as we navigate an evolving marketplace. Our strategy continues to emphasize owning high-quality real estate and partnering with growing regional and national operators across the convenience and automotive retail sectors. With our relationships, underwriting expertise, and opportunity set, we are confident in our ability to continue executing on our investment strategy as the year progresses. With regard to the convenience store sector, as we highlighted last quarter when discussing the National Association of Convenience Stores State of the Industry Report, the overall industry had a record year in 2021. Now that we've seen the full report, a few themes stand out. First, larger multi-store operators continue to grow and take market share, primarily through expanded product offerings and a focus on customer engagement and store experience. Second, the use of loyalty programs in the C4 sector has more than doubled to almost 70% over the last two years, which is one of the leading factors in driving customer visits and larger basket sizes per visit. Third, 2021 saw a significant rebound in food service sales and gross profits, which both grew approximately 18% for the year. And finally, despite continued volatility in the oil market fuel volumes continue to recover and average fuel gross profits continue to be healthy and generally in line with recent years' performance. Focusing on our portfolio, our tenants continue to produce strong results as evidenced by the slight increase in our rent coverage ratio to 2.7 times this quarter. And in the course of our discussions with our tenants, we are receiving information that supports the themes I just highlighted. Their businesses continue to thrive as they offer customers quick and easy access to food and beverages, car washes, and fuel, all of which cannot be replicated by grocers, big box retailers, or online purchases. The vast majority of our tenants are top 100 T-store operators or top 20 car wash operators based on U.S. store counts, and they continue to demonstrate that they have the scale to compete in the ability to perform in various market environments. In general, we believe Getty is very well positioned for the current environment with a portfolio of institutional tenants providing essential consumer goods and services and a strong balance sheet with low leverage and ample liquidity. We remain as focused as ever on growing the company as we diligently source and underwrite new investment opportunities in strong metropolitan markets and look to unlock embedded value through active asset management and selective redevelopment. 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 positioned to continue creating shareholder value through earnings growth, portfolio diversification, as we move through 2022 and beyond. With that, I will turn the call over to Mark to discuss our portfolio and investment activities.

Thank you, Chris. As of the end of the second quarter, our portfolio includes 1,013 net lease properties five active redevelopment sites, and six vacant properties. Our weighted average lease term was 8.6 years, and our overall occupancy, excluding active redevelopments, was 99.4%. Our portfolio spans 38 states across the country, plus Washington, D.C., and our annualized base rents, 65% of which come from the top 50 MSAs in the U.S., are well covered by our trailing 12-month tenant rent coverage ratio, which increased marginally to 2.7 times this quarter. In terms of our investment activities, we completed 59.3 million of investments in the first half of 2022, which reflects 50.5 million of acquisitions or development funding on 17 properties in the second quarter. Highlights of this quarter's investments include closing on the acquisition and leaseback of eight express tunnel car wash properties in the Austin, Texas MSA with Go Car Wash for $36.4 million, acquiring one additional car wash property from Go Car Wash in San Antonio MSA for $3.6 million, acquiring two properties from Splash Car Wash, which are located in New York, for $6.1 million, acquiring one convenience store in the New York City MSA for $1.1 million, and providing approximately $3.3 million of construction funding for the development of five new-to-industry properties, including two convenience stores in the Charleston, South Carolina metropolitan area, and three car wash properties, including our initial transaction with Magnolia Car Wash. These properties are located in the Jacksonville, Florida, New Haven, Connecticut, and Newburgh, New York metropolitan areas. As part of these funding transactions, we will create interest on our investment during the construction phase of the project. We expect to acquire the property via sale leaseback transaction upon completion of final funding. Our aggregate initial cash yield on our second quarter investments was approximately 6.6%. Year-to-date, the weighted average lease term of the properties acquired was 14.8 years, and the aggregate initial cash yield on our year-to-date investments was approximately 6.6%. Looking ahead regarding the commitments to fund the acquisitions and developments that Chris referenced, while we have fully executed agreements for each transaction, the timing and amount of each investment is ultimately dependent on our counterparties and the schedules under which they are able to complete development projects and close certain business acquisitions. It is our expectation that we will be funding these transactions throughout the next 12 months or so. and that the average yields will be in excess when we have closed acquisitions year to date. We continue to underwrite a variety of potential investment opportunities during the quarter, with convenience stores representing 30% of underwritten volume and our other convenience automotive retail sectors representing the balance of 70%. We did not see a material expansion of the asking cap rates for the potential transactions we underwrote in the quarter, We are starting to see movement in favor of the buy side and expect the transition to continue as we continue through 2022 and into 2023. While the timing of direct sale leaseback transactions can be difficult to predict, based on our current visibility, we're confident that we can continue partnering with institutional operators and our target asset classes to acquire high-quality real estate in major metropolitan markets. Moving to our redevelopment platform, during the quarter, we invested approximately $300,000 in projects which are in various stages in our pipeline. We have seven signed leases or letters of intent, which includes five active projects, one project set of property which is currently subject to a triple net lease and has not yet been recaptured from the current tenant, and one signed LOI on a vacant property. The company expects rent to commence at these and other projects over the next several years, including later in 2022. Turning to our asset management activities for the second quarter, we sold one property realizing $1.5 million gross proceeds and exited one lease property. We will continue to pursue dispositions of properties that we have determined are either no longer competitive in their current format, do not have compelling redevelopment potential, or which we believe have compelling valuations that may allow us to recycle capital and manage our balance sheet. With that, I'll turn to Chris over to Brian to discuss our financial results.