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    GTY
    Earnings call· Jun 2026(Q2 FY26)

    GETTY REALTY CORP /MD/ GTY

    Jul 23, 2026 Source

    Executive summary

    Getty Realty Q2 FY26 — Strong Investment Activity and Raised AFFO Guidance

    Getty Realty delivered a strong Q2 FY26, marked by robust investment activity and a second upward revision to its full-year AFFO per share guidance. The company leveraged its relationship-driven sale-leaseback platform to deploy over $172 million year-to-date, maintaining a healthy pipeline and strong liquidity. Despite some cap rate compression on recent acquisitions, management emphasized stable spreads and the resilience of its diversified convenience and automotive retail portfolio.

    Highlights

    5

    • Annualized base rent increased by 15%.

    • AFFO per share grew by 5.1% to $0.62 in Q2 2026.

    • Full-year 2026 AFFO per share guidance raised for the second time to $2.52-$2.54.

    • Deployed over $172 million year-to-date at a 7.6% initial cash yield.

    • Ended the quarter with over $570 million of total liquidity.

    Concerns

    2

    • Sub-1x rent coverage bucket rose by 70 bps, driven by ramping new-to-industry car washes.

    • Initial cash yield on Q2 investments was 7.4%, slightly lower than the mid-to-high 7% range seen recently.

    Guidance & targets

    4
    CategoryTargetConfidence
    Full-year 2026 AFFO per share
    $2.52 to $2.54
    high materiality
    High
    Full-year G&A growth
    less than 2%
    low materiality
    Medium
    Full-year G&A ratio
    below 9%
    low materiality
    Medium
    Credit loss assumption
    25 basis points
    low materiality
    High

    Operational metrics

    24
    AFFO per share
    $0.625.1% YoY growth
    Q2 2026

    Represents growth over the prior year period.

    AFFO per share
    $1.255% YoY growth
    H1 2026

    Represents growth over the prior year period.

    Annualized base rent
    15%increase
    Q2 2026

    Increase in annualized base rent.

    G&A ratio (excluding stock-based compensation and nonrecurring retirement costs)
    9.3%60 bps decrease YoY
    Q2 2026

    Compared to the prior year period.

    G&A ratio (excluding stock-based compensation and nonrecurring retirement costs)
    9.2%100 bps decrease YoY
    H1 2026

    Compared to the prior year period.

    Net debt to EBITDA
    5.3x
    Q2 2026

    Well within stated target leverage.

    Fixed charge coverage
    4x
    Q2 2026

    For the quarter.

    Total debt outstanding
    $1.1 billion
    Q2 2026

    As of June 30.

    Senior unsecured notes
    $1 billion
    Q2 2026

    No debt maturities until June 2028.

    Revolver drawn amount
    $73 million
    Q2 2026

    Sub-20% utilization.

    Total liquidity
    $570 million
    Q2 2026

    At quarter end, including revolver capacity and unsettled forward equity.

    Shares settled from forward sale agreements
    1.5 million shares
    Q2 2026

    Settled during the quarter.

    New forward sale agreements
    1.8 million shares
    Q2 2026

    Entered into during the quarter.

    Total unsettled forward sale agreements
    5.8 million shares
    Q2 2026

    As of quarter end.

    Occupancy rate
    99.8%
    Q2 2026

    Portfolio included 1,220 net lease properties and 1 active redevelopment site.

    Weighted average lease term
    10.3 years
    Q2 2026

    As of quarter end.

    Trailing 12-month rent coverage ratio
    2.5x
    Q2 2026

    Rents are well covered.

    Fuel margins
    $0.46>10% increase YoY
    Q1 2026

    Averaged based on site level reporting from tenants.

    Investments for the quarter
    $128.3 million
    Q2 2026

    Includes acquisitions and incremental development funding.

    Investments year-to-date
    $172.1 million
    YTD Q2 2026

    Includes investments subsequent to quarter end.

    Redevelopment project investment
    $0.4 million
    Q2 2026

    Rent commenced on this project, leased to a Take 5 Oil Change franchisee.

    Lease extension
    1
    Q2 2026

    Extended during the quarter.

    ABR expiring through 2027
    2%reduced
    Through 2027

    Reduced as a result of lease extension and recent acquisitions.

    Properties sold
    4 properties
    Q2 2026

    Sold during the quarter.

    Industry KPIs

    5
    MetricValueDetails
    Credit loss ratio25 bpsbps
    Investment volume and initial cash yield$172.1 millionUSD
    Sourced opportunity volume and selectivityAt or above a record pace
    Weighted average lease term on new investments18.3 yearsyears
    Blended acquisition cap rate and spread vs cost7.4%%

    Orderbook & backlog

    2
    Investments under contract$95 millionQ2 2026

    Majority in auto service, QSRs, and convenience stores; primarily development funding transactions with high 7% initial cash yields.

    Pipeline of investments under executed letters of intentSignificantQ2 2026

    Includes opportunities across convenience and automotive retail sectors, with majority representing traditional relationship sale-leaseback transactions in convenience stores.

    Deals & partnerships

    2
    MultipleAcquisition of 35 properties, including automotive service and drive-thru QSRs.$117.7 million

    28 of the 35 acquired properties were automotive service or drive-thru QSRs, representing approximately 60% of ABR acquired. Added 6 new tenants to the portfolio.

    MultipleSale of 4 properties.$8.2 million

    Dispositions were selective, a mix of tactical sales and former redevelopments.

    Capital programs

    1
    Redevelopment project in Bergen County, New Jerseycompleted
    Period spend: $0.4 million

    Benefit: 18% return on invested capital

    Rent commenced on this project, now leased to a Take 5 Oil Change franchisee.

    Risks & headwinds

    2
    Sub-1x rent coverage bucket roseQ2 2026

    70 bps increase in sub-1x rent coverage bucket

    Mitigation: Driven by new-to-industry car washes ramping, which typically stabilize around year 3. Management sees decent trajectory and no great concern.

    Cap rate compression on Q2 investmentsQ2 2026

    Initial cash yield on Q2 investments was 7.4%, lower than the mid-to-high 7% range seen recently

    Mitigation: Improving cost of capital allows Getty to compete for a wider range of transactions, including lower-7s. Spreads have largely remained constant or increased.

    What to watch in Q3 FY26

    4

    AFFO per share guidance

    Q3 FY26 earnings call (October)
    Current$2.52-$2.54 for FY26
    TargetContinued strong performance, potential for further raise

    Why it matters

    AFFO per share is the primary earnings metric for REITs and guidance raises signal strong operational execution and accretive investments.

    As a result of our year-to-date investment activity, we are increasing our full year 2026 AFFO per share guidance to a range of $2.52 to $2.54 from our prior guidance of $2.50 to $2.52.

    Q&A highlights

    7

    What is driving the significant momentum in QSR investments? Has the team expanded or is it due to deal flow?

    The momentum is attributed to the success of the dedicated team member focusing on QSR and the time taken to build relationships in the sector. The company anticipates balanced volumes across all automotive retail asset classes.

    “I would just say, I think it's the success of the person we brought on, right, to focus on that. And also, it takes time to build relationships in this sector through traditional and other forms of business development.”

    asked by Mitch Germain · answered by Christopher Constant

    2 min read6 chapters

    Detailed Narrative

    01

    Investment Strategy & Performance

    Getty's focused investment strategy and relationship-driven sale-leaseback approach continue to drive external growth, with over $172 million deployed year-to-date at a 7.6% initial cash yield. The company has approximately $95 million of investments under contract and a robust pipeline, expecting additional closings in the second half of the year. The improved cost of capital is opening up more opportunities, leading to an underwriting pace at or above record levels.

    02

    Portfolio Resilience & Performance

    The in-place portfolio, largely built through direct sale-leaseback transactions, demonstrates durability with 99.8% occupancy, a weighted average lease term of 10.3 years, and a trailing 12-month rent coverage ratio of 2.5x. Convenience store tenants reported healthy fuel margins averaging $0.46 per gallon for Q1 2026, an increase of over 10% compared to Q1 2025, indicating tenant resilience despite economic volatility.

    03

    Capital Position & Liquidity

    Getty is in a strong capital position with over $190 million of unsettled forward equity and significant capacity on its $450 million revolver. Total liquidity at quarter-end was over $570 million, providing ample capital to fund current under-contract pipelines and additional investment activity through 2026. Management emphasizes a balanced approach to forward equity, ensuring funding risk reduction while preserving upside.

    04

    QSR and Automotive Service Momentum

    The company is seeing significant momentum in its QSR and automotive service investment efforts, with 28 of the 35 acquired properties in Q2 being automotive service or drive-thru QSRs, representing approximately 60% of ABR acquired. This expansion contributes to tenant diversification, adding 6 new tenants to the portfolio. This success is attributed to the dedicated team and relationship building in these sectors.

    05

    Redevelopment & Asset Management

    The redevelopment platform saw rent commence on a project in Bergen County, NJ, generating an 18% return on invested capital from an investment of approximately $0.4 million. Asset management activities included extending one unitary lease by 10 years, which generates $2.9 million of ABR (1.3% of total ABR), further reducing ABR expiring through 2027 to approximately 2% of total ABR.

    06

    Leverage & Debt Profile

    Net debt to EBITDA was 5.3x, or 4.3x including unsettled forward equity, which is well within the stated target leverage of 4.5x to 5.5x. The company ended the quarter with approximately $1.1 billion of total debt outstanding, 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 has no debt maturities until June 2028.

    AI-generated summary of the company’s earnings call. Not investment advice.