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JERICHO, N.Y. — Getty Realty Corp.'s acquisition pipeline "is full with potential opportunities," but the real estate investment trust (REIT) will "remain thoughtful and deliberate" in its approach, President and CEO David B. Driscoll stated late Monday afternoon during the company's 2015 fiscal first-quarter earnings call.
For Getty Realty to consider a purchase, it must meet five criteria. This means acquisitions that offer the following:
- Accretive to the company's earnings within the first full year after the deal is completed;
- High-density markets with high barriers to entry and strong traffic counts;
- Corporate level credit quality;
- Geographic diversity, as the REIT will consider expanding beyond its Northeast operating region; and
- Assets in growth markets that have the fastest population growth long term.
Although it may seem difficult to find acquisitions possessing all five tenets, Getty Realty is seeing better opportunities today than it has in the past 14 months, and the company expects to strike some deals in 2015, Driscoll relayed.
"We remain energized by organic and growth opportunities we will pursue," he said.
Conversely, the REIT is simultaneously selling assets that do not fit into its plans long term. When questioned by an analyst during Monday's conference call, Driscoll responded that Getty Realty has less than 100 convenience stores and gas stations left to sell, several of which are currently on the market.
SMALL Q1 EARNINGS LOSS
Companywide, Getty Realty lost $1.1 million for its 2015 fiscal first quarter ended March 31, compared to a profit of $9.6 million in the year-ago period. Non-cash impairment charges of $7.9 million were cited as the main reason the REIT swung to a loss.
Total revenues from continuing operations were $24.7 million for Getty Realty's latest quarter, a $200,000 increase compared to 2014's first quarter.
In addition, the REIT announced it will benefit in its fiscal second quarter from its March 3 settlement agreement with the liquidating trustee of the Getty Petroleum Marketing Trust. On April 22, Getty Realty received an interim distribution from the trust in the amount of $6.8 million. It expects to receive future payments from the trust in 2015, but stressed that it cannot provide any assurance regarding the timing or amount of such distributions.
Jericho-based Getty Realty currently owns and/or leases approximately 860 convenience store and gas station properties.