Getty Realty (NYSE:GTY) reported higher second-quarter adjusted funds from operations and raised its full-year 2026 AFFO per-share guidance, citing continued investment activity, stable tenant performance and a strong capital position.
Chief Executive Officer Christopher Constant said on the company’s second-quarter earnings call that Getty “continues to differentiate itself through its focused investment strategy and relationship-driven sale-leaseback approach to deal origination.” He said the company increased annualized base rent by 15%, grew AFFO per share by 5.1% and raised full-year earnings guidance for the second time this year.
Investment Activity Drives Growth
Chief Investment Officer RJ Ryan said Getty invested $128.3 million during the quarter, including $117.7 million to acquire 35 properties and $10.6 million of incremental development funding. The initial cash yield on the quarter’s investments was 7.4%, and acquired assets had a weighted average lease term of 18.3 years.
Ryan highlighted the company’s continued expansion into automotive service and drive-through quick-service restaurant assets. He said 28 of the acquired properties, representing about 60% of acquired annualized base rent, were either automotive service or drive-through QSR assets. The company also added six new tenants during the quarter.
After quarter-end, Getty invested an additional $13.5 million, bringing year-to-date total investments to $172.1 million at a 7.6% initial cash yield. Constant said the company also had about $95 million of investments under contract and a “robust pipeline” of transactions under signed non-binding letters of intent.
Ryan said most of the assets currently under contract are in the auto service sector, followed by drive-through QSRs and convenience stores. He described those as predominantly development funding transactions with initial cash yields in the high 7% range. The pipeline under executed letters of intent includes opportunities across Getty’s convenience and automotive retail sectors, with the majority representing traditional relationship sale-leaseback transactions in the convenience store space.
Portfolio Remains Nearly Fully Occupied
At quarter-end, Getty’s lease portfolio included 1,220 net lease properties and one active redevelopment site. Excluding the redevelopment site, occupancy was 99.8%, and the weighted average lease term was 10.3 years, Ryan said. The portfolio spans 46 states and Washington, D.C., with 59% of annualized base rent coming from top 50 metropolitan statistical areas and 75% from top 100 MSAs.
Ryan said trailing 12-month rent coverage was 2.5 times. In response to an analyst question about a higher share of properties with coverage below 1 times, Dickman said there was “certainly no softening” and that coverage remained stable across tenants, leases and sectors. He said the sub-1-times bucket continued to consist of new-to-industry car washes that are still ramping, with average operating histories of just over two years.
Constant said site-level reporting from convenience store tenants showed fuel margins averaged $0.46 per gallon in the first quarter of 2026, up more than 10% from the first quarter of 2025. He said macroeconomic conditions had not caused a material deterioration in consumer demand across the company’s core categories.
“Our tenants and their businesses have once again proven their resilience and ability to perform during rapidly changing operating conditions,” Constant said.
Guidance Raised Again
Getty raised its full-year 2026 AFFO per-share guidance to a range of $2.52 to $2.54, up from its prior range of $2.50 to $2.52. Dickman said the increase reflected year-to-date investment activity.
He noted that guidance reflects the current run rate from the in-place portfolio, along with certain expense and credit loss variability, but does not include prospective investment or capital activity. Dickman said the company has not realized any credit losses year to date and continues to use a 25-basis-point assumption in its models, adjusted for the remaining portion of the year.
Getty also continued to reduce its general and administrative expense ratio. Dickman said G&A expense, excluding stock-based compensation and non-recurring retirement costs, was 9.3% of cash rental and interest income in the second quarter and 9.2% for the first half of the year. He said the company still expects full-year G&A growth of less than 2% and expects the G&A ratio to fall below 9%.
Balance Sheet and Capital Position
Dickman said Getty ended the quarter with net debt to EBITDA of 5.3 times, or 4.3 times when including unsettled forward equity, within the company’s stated target leverage range of 4.5 times to 5.5 times. Fixed charge coverage for the quarter was 4 times.
The company had about $1.1 billion of total debt outstanding at June 30, including $1 billion of senior unsecured notes with a weighted average interest rate of 4.6% and a weighted average maturity of 5.5 years. Getty had $73 million drawn on its $450 million revolver and no debt maturities until June 2028.
During the quarter, Getty settled about 1.5 million shares of common stock under forward sale agreements for net proceeds of approximately $39.8 million. It also entered into new forward agreements to sell about 1.8 million shares for anticipated gross proceeds of $60.6 million. In total, Dickman said the company has 5.8 million shares subject to outstanding forward sale agreements, expected to raise gross proceeds of about $190.5 million upon settlement.
“We continue to be in a very strong capital position with more than $570 million of total liquidity at quarter end,” Dickman said.
Management Sees Continued Deal Momentum
During the question-and-answer portion of the call, analysts asked about the company’s investment pipeline, cap rates and funding plans. Constant said Getty continues to see cap rates around the mid-7% range, with some deals touching 8%. Dickman added that an improving cost of capital has allowed the company to compete for a wider range of transactions while maintaining spreads.
Asked about visibility into the second half of the year, Constant said the company was already in July with visibility into investment volume roughly in line with what it completed last year, while still having several months left in 2026. He said recent annual investment levels should be viewed as a “floor,” with upside from the company’s team, systems, underwriting activity and cost of capital.
Constant said Getty remains focused on convenience and automotive retail sectors, including convenience stores, automotive service, car washes and drive-through QSRs. While he said the company is always evaluating potential extensions into new asset classes, he emphasized that there is “a lot to work on” in the four areas where Getty currently focuses.
About Getty Realty (NYSE:GTY)
Getty Realty Corp is a publicly traded real estate investment trust (REIT) that specializes in the acquisition, ownership and leasing of service station and convenience retail properties. The company’s portfolio consists primarily of fee-simple and ground-leased sites, which are leased to major national and regional fuel and convenience store operators under long-term, triple-net leases. This structure provides Getty Realty with a stable stream of contractual rental income and limited operational responsibilities.
Founded in 1981, Getty Realty became a publicly listed company in 2005 and trades on the New York Stock Exchange under the ticker symbol GTY.
