Q1 2023 Getty Realty Corp. Earnings Call

Speaker 1: And.

Speaker 1: This I.

Speaker 2: Good morning ladies and gentlemen and welcome to Getty's Realty's earnings conference call for the first quarter 2023.

Speaker 2: This call is being recorded.

Speaker 2: After the presentation, it will be an opportunity to ask questions. Prior to the starting of the call, Joshua Dicke, Executive Vice President, General Council, and Secretary of the Company will read a safe harvest statement and provide information about the non-gov financial measures.

Speaker 2: Please go ahead Mr Dickert.

Speaker 3: 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, 2023. The form 8k and earnings release are available.

Speaker 3: in the investor relations section of our website at gettyrealty.com. Certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to trends, events, and uncertainties that could cause actual results that differ materially from those of the investors.

Speaker 3: 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, 2022 and our subsequent filings made with the FCC.

Speaker 3: 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 the day thereof. The company undertakes no duty to update any forward-looking statements that may be made.

Speaker 3: in the course of this call. Also, please refer to our earnings release for discussion of our needs of non- GAAP financial measures, including our definition of adjusted funds from operations or AFFO and our reconciliation of those measures and two net earnings. With that, let me turn the call over to Christopher Constant, our chief executive officer.

Speaker 4: Thank you, Josh. Good morning, everyone, and welcome to our earnings call for the first quarter of 2023.

Speaker 4: Joining us on the call today are Marco Lear, Archive Operating Officer and Brian Dickman, Archive Financial Officer.

Speaker 4: I will lead off today's call by providing commentary on our financial results and investment activities for the first quarter and provide perspective on my take you to our portfolio and Brian will further discuss our financial results and guidance.

Speaker 4: We are pleased to report a 7.2% increase in our base rental income and a 7.7% increase in our AFFO per share versus the prior year's first quarter.

My question was from the fortunate earnings holidays.

2023.

You can get some color.

[laughter].

Alright.

Apologies the the volume was very well can you repeat the question I think we can hear you now.

Sorry can you hear me.

Yes.

Alright, sorry about that.

For the 14th earnings calm and highlighted.

That would be back have waited in 2023, I'm just curious about yeah.

Mm alright, Keystone all of that yeah.

This is this is Brian Yeah, I think that's right. If you just look at the pipeline and in general activity.

Consistent development funding transactions, which have.

Yeah, typically nine to 15 months, but sometimes as long as 18 months of of a development timing over which we're deploying the capital and then you have acquisitions regularly acquisition activity, which may be user.

Two to four month timeframe from from origination to closing.

So as as we sit at any point in time investment pipeline because of those dynamics is often weighted towards development funding, which is the case in this quarter as well. So we do continue that say continue to.

Suggests that same type of deployment schedule a little bit.

Back and waited from the the 12 months arrange that at Chris articulated earlier.

Great. Thank you.

The next question comes with <unk>.

Yeah. Good morning, guys I don't want to go to the capital raised is this more of a function of a strong view backbone the pipeline or is it more of a view of uncertainty on capital markets.

Hey, Hey, Ross, It's Friday again.

I wanted to pay a little bit of all the above but I think it goes beyond that I think when you just look at the full set of facts and circumstances you look at our pipeline both the under contract pipeline, there will be disclosed as well as the visibility we have into opportunities beyond that when you look at the cost.

Cost of capital equity capital <unk> capital and then to your last point when you look at the the macro environment and certainly the uncertainty that exists out there. We just felt it was prudent across the board to go ahead and.

Fully fund the pipeline for the <unk> the balance sheet over advertise the balance sheet and put ourselves in a position to.

Not just work through but hopefully drive through through any economic environment.

Got it and then I guess, maybe looking forward over the next maybe 12 to 24 months you see if rates were to stay higher they'll potential for maybe some owners to be.

A little bit too much floating right too much leverage marijuana values go down so it may be a time to be opportunistic is it too soon for that.

I don't think it's too soon for that I think what we're seeing is a lot of operators in the sector, who maybe have not explored sale leaseback.

Dancing in the past or evaluate again.

As you pointed out those maturities, there's maybe a higher percentage of floating right that given that these folks are generally private operators as opposed to it to large public confidence.

So I would say, yes, and I think.

About your original question on the capital raise.

The balance sheets in great shape at Jedi too yeah position to be ready.

Ready to finance attractive opportunities <expletive>.

Romer way.

Fantastic and then just one question on the severance.

Can you maybe elaborate on what happened in the quarter will this lead to a lot of the.

Run rate going forward of DNA.

Yeah. So thanks West Yeah. Those are a retirement costs, we had a director retire.

The first quarter of those are just related to that.

Okay fantastic thanks, everyone.

Thank you, ladies and gentlemen, just to remind him he cannot qualification Yo welcome to <unk> style and did one on your telephone keypad.

The next question comes from <unk> <unk>.

N P securities. Thank you.

Hi, Good morning. This is Judy from match question on top of the Max The V. C that still comprises the smaller portion of the pie now and of course at the Madison Cardwell says Hi, Anna.

Then an idea.

That you and I Amy.

Yes.

Yeah, I think that's a great question, you know obviously the seats or businesses. The company's history that still represents 70 per cent of our AVR.

<unk> like the c-store sector or activate investing there.

Certainly as we wrap up our efforts Carwash, an auto service and drive through retail naturally you'd expect to see our revenue become more equally weighted across all the sectors, but just given the starting point Monday, she stores will continue to be.

Certainly the largest piece of a pie.

The foreseeable future.

Again, I I would just as I said in my script.

This quarter happen to be a car washes, what we're still evaluating.

All of the sectors and and and like the fundamentals of Edward hope to be able to invest across all the asset classes has been booked for this year.

Alright, so acquisition that happened.

After the first.

So is that.

Focus on car wash copy.

It's a it's a mixture of a couple of different asset classes.

Okay, perfect and thank you for that give me one quick.

Has the competitive landscape.

Okay, and what is the bidding.

Right now.

It remains competitive I mean, there's a lot of it there's a lot of interest as we keep saying that the.

The asset classes, and performing well the essential adorable goods and services improving out over the last few years are tenants and are both in our portfolio in tents for targeting continue to have a very strong performances.

You know so there's a lot of there's a lot of activity and interest in the in the vertical is that we are in our targeted asset classes pricing is moving a little bit as we mentioned it's.

And different vertical some really get different pieces, we experienced approximately.

Yeah. If you look at last year's pricing as a whole or maybe at the end of the year versus what we just announced you know maybe it's $30 basis point widening of pricing in our favor.

You know we continue to press the market to improve on that as we have new dialogues across all the new opportunities highway.

Okay perfect. Thank you so much.

Thank you, ladies and gentlemen, with notifications and the cute we have reached the end of our question and answer session.

Oh, well not tend to.

Constant okay, I'll keep my mouth.

[noise]. Thank you operator, and thank you all for joining us this morning.

Look forward to getting back on with everyone.

Report, our second quarter earnings and we appreciate your interest in January <unk>.

Thank you very much sir.

Ladies and gentlemen that does confuse today teleconference. Thank you for your participation.

Now disconnect.

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