Getty Realty Corporation

Good morning and welcome to Getty Realty First Quarter 2025 Earnings Call. 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 and operating results for the quarter ended March 31, 2025. The form 8K and earnings release are available in the investor relations section of our website at gettyrealty.com. Certain statements made during this call are not based on historical information and may constitute forward-looking statements. These statements reflect 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 2025 guidance and may include statements made by management, including those regarding the conference's future operations, future financial performance, or investment 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, 2024 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 today. The company undertakes no duty to update any forward-looking statements that may be made during 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 ASFO 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 2025. 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 summarizing our financial results and investment activities, and we'll provide commentary on how to continue to execute our strategy in a thoughtful and disciplined manner despite the latest macroeconomic uncertainties. Mark will then discuss our portfolio, and Brian will address our financial results and guidance. For the quarter, Getty grew its annualized base rent by 11.2% over the prior year to approximately $199 million. And we reported AFFO per share of $0.59, an increase of 3.5% compared to the prior year's quarterly result. The growth in base rent in AFFO was driven by rental increases in our in-place portfolio and the impact of our prior year's investment activity. Importantly, our convenience and automotive retail tenants continue to perform well despite the challenging operating environment. Our tenants' businesses are largely recession resistant and provide non-discretionary goods and services to consumers, particularly mobile consumers that prioritize convenience, speed, and service. Let me now take a moment to elaborate a bit more on how we track performance for our tenants. Between the site-level financials we receive on 72 percent of our annualized base rent and publicly available financial data for our listed tenants, we're able to actively monitor the performance of nearly 95 percent of our ABR. And what we're currently seeing is the same stability the same resilience that we've consistently seen from these businesses throughout prior market cycles. Within the convenience store sector, rent coverage for our assets was consistent with prior quarters. Within the car wash sector, rent coverage increased at varying levels for each of our car wash portfolios. In fact, the reports we received from our car wash tenants revealed a strong quarter overall as profitability grew, New to industry sites continue to ramp at or ahead of expected pace, customer visits increased, and subscriptions remained a source of strength. With regard to Zips Car Wash, our tenant that filed bankruptcy in February, we have made material progress towards a resolution, which Mark will discuss further in his remarks. As a reminder, Zips represented 12 sites or 1.8% of our ABR and is our first tenant credit issue since 2011. Moving on to investment activity, the pace of closed transactions to start 2025 was more modest than prior quarters, but in line with our expectations. Approximately 85 percent of the pipeline we disclosed at year end was for development funding transactions, which typically have a 9- to 12-month spending horizon and sales effects that can be variable from quarter to quarter in terms of investment volumes. With that said, we are pleased that we were able to increase our committed investment pipeline to more than $110 million. This pipeline represents a solid distribution of opportunities across our four target sectors, with approximately 50% of the pipeline being in auto service and the balance across convenience stores, drive-through QSRs, and express telecar washes. Approximately two-thirds of the pipeline is development funding transaction, and the balance is predominantly sale-leaseback. Importantly, our pipeline remains fully funded and we have capital to fund additional transactions as we move through 2025. The economic and political uncertainty that has dominated the news for the last several weeks has, broadly speaking, created significant volatility in the transaction and capital markets and has translated into headwinds for closing deals in our target retail sectors. Regardless of market conditions, our job remains to source opportunities that fit our investment thesis and underwriting criteria and which can be financed accretively. Our acquisitions team continues to do an excellent job of identifying transactions with a mix of large and established tenants and emerging high-growth tenants who are building strong platforms across the U.S. Importantly, we remain committed to our disciplined approach to acquisitions, which prioritizes owning real estate in high-density or growing metro areas, with excellent access and visibility in retail markets, and which has leased to credit-worthy operators under a long-term triple net leases. We are confident that our relationship-based sale-leaseback strategy will generate continued opportunities for getting to acquire assets in our targeted convenience and automotive retail sectors as we move through 2025. With that, I'll let Mark discuss our portfolio and investment activities.