Getty Realty Q2 2025 presentation: AFFO growth and raised guidance

Introduction & Market Context

Getty Realty Corp (NYSE:GTY), a leading owner of convenience and automotive retail real estate, presented its Q2 2025 corporate profile and supplemental information on July 24, 2025. The company reported solid quarterly results, highlighted by AFFO growth and an increase to its full-year guidance, despite facing some headwinds in the previous quarter.

The REIT, which owns 1,137 properties across 44 states, demonstrated resilience in its core convenience and automotive retail segments, which management has previously described as "largely recession resistant." This performance comes after a challenging Q1 where Getty missed EPS expectations, causing a 3.23% stock drop in after-hours trading at that time.

Quarterly Performance Highlights

Getty Realty reported strong financial results for Q2 2025, with AFFO increasing 5.6% to $34.0 million and AFFO per share rising 1.7% to $0.59. Year-to-date AFFO grew 6.6% to $67.8 million, with AFFO per share up 3.5% to $1.19. Based on these results, management raised its full-year 2025 AFFO guidance to $2.40-$2.41 per share, up from the previous range of $2.38-$2.41.

As shown in the following business update summary, Getty maintained exceptional operational metrics with 99.7% occupancy, 10.0 years weighted average lease term, and 99.9% year-to-date rent collections:

The company’s portfolio fundamentals remain strong, with tenant rent coverage improving to 2.6x, up from 2.5x reported in Q1 2025. This improvement suggests Getty’s tenants are maintaining healthy operations despite broader economic uncertainties.

Investment Activity

Getty Realty has deployed $95.5 million in new investments year-to-date at an attractive 8.1% initial cash yield. These investments span multiple property types, including 12 drive-thru quick service restaurants, 7 auto service centers, 7 express tunnel car washes, and 6 convenience stores. The company also reported having more than $90 million of investments under contract.

The following chart illustrates Getty’s consistent capital deployment strategy, which has grown substantially since 2019:

The company’s investment approach focuses on high-quality, essential retail properties in strong locations. Getty’s expertise in originating, underwriting, and executing transactions has allowed it to maintain direct relationships with tenants, with over 90% of transactions conducted directly with retailers rather than through intermediaries.

Portfolio Strategy

Getty Realty continues to execute its portfolio diversification strategy across property types, geography, and tenants. Since 2019, the company has reduced its concentration in convenience stores from 82% to 63% of the portfolio, expanded its geographic footprint by adding 12 new states, and decreased its top 10 tenant concentration from 82% to 64%.

The following visualization demonstrates this diversification progress:

The current portfolio composition includes convenience stores (63.1%), express tunnel car washes (20.5%), legacy gas and repair (7.7%), auto service centers (6.0%), drive-thru QSRs (2.1%), and auto parts and other (0.7%). This diversification helps mitigate risk while maintaining focus on essential retail sectors.

Getty’s national footprint shows strategic concentration in high-growth markets, with 61% of properties located in Top 50 MSAs and 69% in valuable corner locations:

Balance Sheet Strength

Getty Realty maintains a strong balance sheet with ample liquidity and a flexible capital structure. The company reported more than $400 million in total liquidity, including $7 million in cash, $119 million in unsettled forward equity, and $275 million in available revolver capacity. Notably, Getty has no debt maturities until June 2028, providing significant financial flexibility.

Key financial metrics include a net debt to EBITDA ratio of 5.2x, debt to total asset value of 36%, and debt to total capitalization of 37%. The company maintains a Fitch rating of BBB-.

As illustrated in the following chart, Getty has a well-structured debt maturity schedule and balanced capital structure:

The company’s FFO and AFFO reconciliation provides a clear picture of its financial performance for the quarter:

Redevelopment Initiatives

Getty Realty continues to create value through strategic redevelopment of existing properties. The company has completed 33 redevelopment projects to date and currently has a pipeline of four projects totaling approximately $2.7 million with estimated completions scheduled for 2025-27.

The following before-and-after examples showcase Getty’s successful redevelopment approach:

These redevelopment initiatives allow Getty to maximize the value of its existing real estate while creating modern, attractive retail spaces that command higher rents.

Forward-Looking Statements

Based on its strong first-half performance, Getty Realty has raised its full-year 2025 AFFO guidance to $2.40-$2.41 per share. This represents continued growth from the $2.34 AFFO per share achieved in 2024.

The company’s long-term growth trajectory remains positive, with AFFO per share growing at a 5.4% CAGR from 2019 to 2024, while dividends per share have increased at a 5.1% CAGR over the same period:

Getty’s growth strategy focuses on continued investment in convenience and automotive retail properties, portfolio diversification, and value creation through redevelopment. The company’s stable occupancy, strong rent collections, and healthy tenant coverage ratios provide a solid foundation for future growth.

Conclusion

Getty Realty’s Q2 2025 presentation demonstrates the company’s resilience and strategic focus on essential retail real estate. After a challenging Q1 where the company missed EPS expectations, Getty has rebounded with solid AFFO growth and raised guidance. The company’s diversified portfolio, strong balance sheet, and disciplined investment approach position it well for continued growth in the convenience and automotive retail sectors.

With shares trading at $27.28 as of July 23, 2025, and an attractive dividend yield, Getty Realty offers investors exposure to a diversified portfolio of essential retail real estate with stable cash flows and growth potential.

Full presentation:

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