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JERICHO, N.Y. — Getty Realty Corp. added five new properties to its portfolio during the first quarter of 2017 as the real estate investment trust (REIT) continues its acquisition hunt.
"We had a good start to the year in 2017. We acquired five high-quality, well-located properties for $6.2 million for the quarter, and have a pipeline of opportunities which includes both single-unit and portfolio acquisition opportunities," Christopher Constant, president and CEO of Getty Realty, said during the company's first-quarter earnings call held May 5.
The assets acquired and those in Getty Realty's pipeline are located in geographic regions that both overlap with the company's existing sites where it would like to increase its presence, and new markets Getty finds attractive such as the Southeast and Southwest regions of the United States.
According to Mark Olear, executive vice president and chief operating officer, the five properties are located in New York, Connecticut, Arizona and Ohio for a total purchase price of approximately $6.2 million. The deals included the purchase of previously leased properties and the purchase of triple net-lease properties that meet the company's underwriting standards for real estate attributes, tenant credit, and operational quality.
"While the acquisition market continues to be very competitive in the convenience and gas sector, we remain disciplined in our underwriting criteria," Olear said. "Our pipeline of actionable opportunities continues to grow and we are in the process of reviewing and pursuing several additional acquisition opportunities."
Getty Realty also disposed of six sites during the first quarter, which were no longer core to its business. The sites were sold for $1.4 million in the aggregate.
Moving to its redevelopment platform, Getty Realty ended the quarter with 15 signed leases and letters of intent, which include seven active projects and eight properties that are currently included in its net-leased portfolio, according to Olear.
"All of these projects are continuing to advance through the redevelopment process. We expect substantially all of these projects will be completed over the next two years," he said.
In total, Getty Realty has invested approximately $1.8 million in redevelopment projects to date, and it expects to begin rent collection at several projects in late 2017 and 2018.
On the capital spending side, the company estimates these 15 projects will require an $11.2-million investment by Getty Realty to complete, Olear added.
In addition, Getty Realty entered into new triple-net leases or added sites through existing leases on five gas and convenience properties during the quarter. As a result of this activity, the Jericho-based REIT ended the quarter with 806 net-leased properties, seven active redevelopment sites, and 10 vacant properties.
"Through years of hard work, we have stabilized the earnings potential of our core portfolio and as we look ahead, we can now focus on growth. Our balance sheet is in excellent shape and we are actively seeking to leverage our net-lease platform by growing our portfolio both in terms of adding new assets and redeveloping existing sites to higher and better uses," Constant said.
According to the CEO, Getty Realty produced another steady quarter that displayed both modest growth over the prior year's quarter and continued stability of its portfolio of net-leased convenience store and gas station assets.
"As we move forward, we will look to build upon our stable growth and continue to enhance the quality of our net-lease portfolio," he said. "We remain excited about our business prospects and are focused on executing on our stated growth strategies which we believe will drive further shareholder value as we move through 2017 and beyond."