Getty Realty Corp. (GTY): Business Model Canvas [10-2024 Updated]
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Getty Realty Corp. (GTY) Bundle
In the competitive landscape of real estate investment trusts (REITs), Getty Realty Corp. (GTY) stands out with its strategic focus on convenience and automotive retail properties. This blog post delves into the Business Model Canvas of GTY, highlighting its key partnerships, revenue streams, and value propositions that drive its success. Discover how this innovative company navigates the market and what makes it a compelling choice for investors and tenants alike.
Getty Realty Corp. (GTY) - Business Model: Key Partnerships
Collaborations with convenience store operators
Getty Realty Corp. (GTY) primarily operates through triple-net leases with various convenience store operators. As of September 30, 2024, the company had approximately 1,074 properties leased to convenience stores across 42 states. This includes major tenants such as ARKO Corp., which accounted for 14.0% of total revenues, with 148 properties leased.
Partnerships with petroleum distributors
GTY's business model heavily relies on partnerships with petroleum distributors. For the nine months ended September 30, 2024, revenues from rental properties reached $146.4 million, with a significant portion derived from leases tied to fuel sales. The company’s agreements often include additional rent based on the aggregate volume of fuel sold.
Relationships with automotive service centers
In its portfolio, Getty Realty includes automotive service centers. As of September 30, 2024, the company owned 1,108 properties, with a portion leased to automotive service operators. During the nine months ended September 30, 2024, GTY invested $132.5 million across 60 properties, including 17 auto service centers.
Engagements with financial institutions for funding
Getty Realty has established relationships with various financial institutions to secure funding for its acquisitions and operations. In September 2024, the company received commitments for $125 million in new senior unsecured notes, including $50 million due in September 2029 and $75 million due in February 2032.
Joint ventures with real estate developers
GTY actively engages in joint ventures with real estate developers to enhance its portfolio. The company pursues sale-leaseback transactions and forward commitments for new-to-industry construction. It has completed 32 redevelopment projects since 2015, with one project actively under redevelopment as of September 30, 2024.
| Partnership Type | Key Metrics | Significant Tenants | Investment Activity (2024) |
|---|---|---|---|
| Convenience Store Operators | 1,074 properties leased | ARKO Corp. (14.0% of revenue) | $132.5 million across 60 properties |
| Petroleum Distributors | Revenue from fuel sales | Global Partners LP (12.0% of revenue) | Included in overall investment strategy |
| Automotive Service Centers | Part of 1,108 total properties | APRO, LLC (9.0% of revenue) | 17 auto service centers funded |
| Financial Institutions | $125 million in senior unsecured notes | N/A | Funding for acquisitions |
| Real Estate Developers | 32 completed redevelopment projects | N/A | Ongoing redevelopment projects |
Getty Realty Corp. (GTY) - Business Model: Key Activities
Acquisition of convenience and automotive properties
As of September 30, 2024, Getty Realty Corp. owned 1,074 properties and leased 34 properties from third-party landlords, totaling 1,108 properties across 42 states and Washington, D.C. The real estate held for use was valued at $1,938.2 million, with land amounting to $912.9 million and buildings and improvements at $980.8 million.
Management of triple-net lease agreements
Getty Realty primarily operates under triple-net lease agreements, where tenants are responsible for all operating expenses, including real estate taxes, maintenance, and insurance. For the nine months ended September 30, 2024, revenues from rental properties amounted to $146.4 million, including base rental income of $136.3 million. Major tenants included ARKO Corp. (14% of total revenues), Global Partners LP (12%), and APRO, LLC (9%).
Financing construction and redevelopment projects
In the nine months ended September 30, 2024, Getty Realty funded $12.1 million for additional investments during construction periods, with a total of $18.6 million in outstanding investments recorded in notes and mortgages receivable. The company also recognized the purchase of assets worth $51.3 million after completing construction for ten properties.
Conducting market analysis for new property investments
Getty Realty conducts thorough market analysis to identify potential investment opportunities in convenience and automotive properties. The company’s strategy includes monitoring market trends and tenant performance to optimize its portfolio. The total cash flow provided by operating activities for the nine months ended September 30, 2024, was $94.3 million, reflecting increased operational efficiency.
Environmental risk management and compliance
Environmental compliance is critical for Getty Realty due to the nature of its properties. The company recorded environmental expenses of $0.3 million for the three months ended September 30, 2024, reflecting ongoing management of environmental liabilities. As of September 30, 2024, environmental remediation obligations were estimated at $20.8 million.
| Key Activity | Details | Financial Data |
|---|---|---|
| Acquisition of Properties | Owned 1,074 properties across 42 states | Real estate held for use: $1,938.2 million |
| Management of Leases | Triple-net lease agreements with major tenants | Rental revenues: $146.4 million |
| Financing Projects | Funding for construction and redevelopment | Investments during construction: $12.1 million |
| Market Analysis | Identifying investment opportunities | Operating cash flow: $94.3 million |
| Environmental Management | Compliance with environmental regulations | Environmental obligations: $20.8 million |
Getty Realty Corp. (GTY) - Business Model: Key Resources
Portfolio of 1,108 properties across 42 states
As of September 30, 2024, Getty Realty Corp. owns and operates a portfolio of 1,108 properties located in 42 states and Washington, D.C. These properties primarily consist of convenience stores, automotive service centers, express tunnel car washes, and other retail locations. The portfolio is diversified across various tenants, which include national and regional brands.
Experienced management team in real estate investment
The management team at Getty Realty has extensive experience in the acquisition, management, and leasing of net lease retail real estate. This expertise is critical in identifying valuable properties and ensuring operational efficiency. The team’s proficiency contributes to the company's strategic positioning within the REIT sector.
Strong financial backing and access to capital markets
Getty Realty has maintained a robust financial profile with strong access to capital markets. As of September 30, 2024, the company had $287.5 million available under its Revolving Credit Facility and $4.0 million in cash and cash equivalents. The company also anticipates generating approximately $132.5 million in gross proceeds from shares of common stock subject to forward sale agreements.
Established brand reputation in the REIT sector
Getty Realty is recognized as a prominent player in the REIT sector, particularly in the net lease market. The company’s brand reputation is bolstered by its long-standing history since its inception in 1955 and its public listing on the NYSE since 1997. This reputation attracts tenants and investors alike, enhancing its market position.
Technology for property management and tenant relations
Getty Realty employs advanced technology solutions for property management and tenant relations. This includes systems for tracking lease agreements, managing tenant communications, and overseeing property maintenance. The integration of technology enhances operational efficiency and tenant satisfaction, which is vital for retaining tenants and ensuring steady revenue streams.
| Resource | Details |
|---|---|
| Properties Owned | 1,108 properties across 42 states |
| Available Capital | $287.5 million under Revolving Credit Facility |
| Cash and Cash Equivalents | $4.0 million |
| Gross Proceeds from Stock | $132.5 million anticipated from forward sale agreements |
| Management Experience | Extensive experience in net lease retail real estate |
| Brand Reputation | Long-standing history and public listing since 1997 |
Getty Realty Corp. (GTY) - Business Model: Value Propositions
High-quality convenience and automotive retail properties
Getty Realty Corp. focuses on acquiring and managing high-quality properties primarily in the convenience store and automotive retail sectors. As of September 30, 2024, the company owned 1,074 properties with a total acquisition cost of approximately $204.5 million for 52 properties acquired during the year.
Triple-net leases providing stable income streams
Getty Realty utilizes triple-net lease agreements, which require tenants to cover property taxes, insurance, and maintenance costs. For the three months ended September 30, 2024, the total revenues from rental properties were $50.5 million, reflecting a significant increase compared to $48.8 million in the same period of 2023. The stability of income is further emphasized by tenant reimbursements, which totaled $2.9 million for the three months ended September 30, 2024.
Focus on well-located, high-traffic properties
The company strategically invests in well-located properties that experience high consumer traffic, enhancing their appeal to tenants and ensuring consistent rental income. The average remaining lease term was approximately 7.1 years as of September 30, 2024, which supports long-term income stability.
Expertise in property redevelopment for enhanced value
Getty Realty demonstrates expertise in property redevelopment, which is essential for maximizing asset value. In the nine months ended September 30, 2024, the company completed construction on 10 properties, transitioning them into rental income-generating assets. The redevelopment efforts contribute to the overall increase in rental income, which rose from $120.2 million in 2023 to $137.1 million in 2024.
Tax-efficient structure as a REIT
As a Real Estate Investment Trust (REIT), Getty Realty benefits from a tax-efficient structure that allows it to avoid federal income tax on earnings distributed to shareholders. This structure requires the company to distribute at least 90% of its taxable income as dividends, which it has consistently adhered to, enhancing shareholder returns. For the nine months ended September 30, 2024, the net earnings attributable to common shares were $0.87 per share.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenues from Rental Properties | $50.5 million | $48.8 million | $1.7 million increase |
| Tenant Reimbursements | $2.9 million | $7.5 million | $4.6 million decrease |
| Total Acquisitions (Year-to-Date) | 52 properties | 37 properties | 15 properties increase |
| Net Earnings per Share | $0.27 | $0.31 | $0.04 decrease |
Getty Realty Corp. (GTY) - Business Model: Customer Relationships
Long-term leases fostering stable tenant relationships
Getty Realty Corp. specializes in long-term leases, which account for a significant portion of its revenue structure. As of September 30, 2024, the future base rent contractually due from tenants under leases with terms exceeding one year is as follows (in thousands):
| Year | Operating Leases | Direct Financing Leases |
|---|---|---|
| 2024 | $45,245 | $2,388 |
| 2025 | $182,577 | $9,654 |
| 2026 | $184,133 | $9,868 |
| 2027 | $178,372 | $10,089 |
| 2028 | $169,530 | $9,799 |
| Thereafter | $1,331,334 | $14,486 |
| Total | $2,091,191 | $56,284 |
Regular communication and support for tenants
Getty Realty maintains a proactive approach in communicating with tenants. The company ensures regular updates and feedback loops, which are critical for tenant satisfaction and retention. This includes addressing tenant inquiries and providing necessary support to foster a collaborative environment.
Monitoring tenant performance and financial health
The financial health of tenants is closely monitored through specified unit-level and corporate-level financial disclosures. This oversight helps Getty Realty assess risks and make informed decisions regarding lease renewals and adjustments. As of September 30, 2024, no material balances of investment in direct financing leases were past due, indicating effective monitoring practices.
Responsive management to tenant inquiries and needs
Management at Getty Realty is structured to respond quickly to tenant needs. During the three months ended September 30, 2024, Getty Realty recorded revenues from rental properties of $50.5 million, up from $48.8 million in the same period of 2023, reflecting the effectiveness of their responsive management approach in fostering tenant satisfaction and retention.
Commitment to environmental responsibilities
Getty Realty is committed to environmental responsibilities, which enhances tenant relationships. The company incurred environmental expenses of $138,000 for the three months ended September 30, 2024, compared to $977,000 for the same period in 2023. This reduction demonstrates efficient management of environmental liabilities, which can positively impact tenant perceptions and long-term relationships.
Getty Realty Corp. (GTY) - Business Model: Channels
Direct leasing agreements with tenants
Getty Realty Corp. primarily utilizes direct leasing agreements with its tenants, which are predominantly structured as triple-net leases. As of September 30, 2024, the company owned 1,074 properties leased to various tenants, including convenience store operators and petroleum distributors, who are responsible for all property-related expenses, including taxes, maintenance, and insurance. The total future base rent contractually due from tenants under leases with terms exceeding one year was approximately $2.09 billion .
Real estate brokers for property acquisitions
Getty Realty engages real estate brokers to facilitate property acquisitions. During the nine months ended September 30, 2024, the company acquired fee simple interests in 52 properties for an aggregate purchase price of $204.5 million . This included various asset types, with a significant focus on express tunnel car washes and convenience stores .
Online platforms for investor relations and communications
The company maintains a robust online presence for investor relations, providing access to financial reports, presentations, and other relevant communications. For the nine months ended September 30, 2024, Getty Realty reported total revenues from rental properties of $146.4 million, indicating a strategic focus on keeping investors informed through digital platforms.
Financial reports and disclosures to stakeholders
Getty Realty regularly publishes financial reports, including quarterly earnings statements and annual reports, to keep stakeholders updated on its financial performance. For the third quarter of 2024, the company reported net earnings of $0.27 per share, with funds from operations (FFO) amounting to $0.56 per share. The comprehensive financial disclosures ensure transparency and foster trust among investors and stakeholders.
Conferences and investor presentations
The company participates in various conferences and investor presentations to communicate directly with potential and existing investors. This strategy helps in building relationships and enhancing visibility in the investment community. During these engagements, Getty Realty emphasizes its financial performance, operational strategies, and future growth prospects, which are crucial for investor confidence and market positioning.
Getty Realty Corp. (GTY) - Business Model: Customer Segments
Convenience store operators
Getty Realty Corp. has a significant focus on convenience store operators, comprising a substantial portion of its tenant base. As of September 30, 2024, Getty Realty owned 3 convenience store properties, which were part of a larger transaction that included 52 properties acquired for a total purchase price of $204.5 million .
Automotive service businesses
The automotive service sector represents another essential customer segment for Getty Realty Corp. The company holds 17 properties specifically leased to automotive service businesses. These properties were included in the aggregate purchase price of $204.5 million for the 52 properties acquired .
Retail tenants in high-traffic areas
Getty Realty focuses on retail tenants situated in high-traffic areas. The company’s strategic acquisitions include properties that are expected to yield higher foot traffic and visibility, which is critical for retail success. The emphasis on these locations allows Getty Realty to attract quality tenants and secure higher rental income .
Institutional and individual investors in REITs
Getty Realty caters to institutional and individual investors by offering a stable investment through its Real Estate Investment Trust (REIT) structure. For the nine months ended September 30, 2024, the company paid dividends totaling $74.8 million, equating to $1.35 per share. This consistent dividend yield is appealing to both institutional and individual investors seeking income-generating investments.
Environmental and regulatory agencies
Environmental and regulatory agencies are crucial stakeholders in Getty Realty’s operations. The company actively engages with these agencies to ensure compliance with environmental regulations, particularly given its focus on properties that may have environmental considerations. As of September 30, 2024, Getty Realty had accrued $20.8 million for environmental remediation obligations, reflecting its commitment to environmental responsibility .
| Customer Segment | Properties Owned | Total Purchase Price (in millions) | Dividends Paid (2024) | Environmental Remediation Obligations (in millions) |
|---|---|---|---|---|
| Convenience store operators | 3 | $18.9 | $74.8 | $20.8 |
| Automotive service businesses | 17 | $41.4 | $74.8 | $20.8 |
| Retail tenants in high-traffic areas | Varies | Included in total acquisitions | $74.8 | $20.8 |
| Institutional and individual investors in REITs | N/A | N/A | $74.8 | N/A |
| Environmental and regulatory agencies | N/A | N/A | N/A | $20.8 |
Getty Realty Corp. (GTY) - Business Model: Cost Structure
Property maintenance and operational costs
For the nine months ended September 30, 2024, Getty Realty Corp. reported total property costs of $11,614,000, a decrease from $18,221,000 in the same period of 2023. The breakdown of property costs includes:
| Cost Type | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Property operating expenses | $11,174 | $17,655 | $(6,481) |
| Leasing and redevelopment expenses | $440 | $566 | $(126) |
| Total Property Costs | $11,614 | $18,221 | $(6,607) |
General and administrative expenses
General and administrative expenses for the nine months ended September 30, 2024, totaled $18,772,000, compared to $17,942,000 in 2023, reflecting an increase of $830,000. This increase is primarily attributed to higher employee-related expenses and certain professional fees.
Interest expenses on debt financing
Interest expenses for the nine months ended September 30, 2024, were $28,849,000, which represents an increase of $6,148,000 from $22,701,000 in the prior year. The rise in interest expense is due to higher average borrowings and increased interest rates.
Environmental compliance costs
For the nine months ended September 30, 2024, environmental compliance costs amounted to $138,000, significantly down from $977,000 in 2023, marking a decrease of $839,000. This reduction was primarily due to changes in environmental estimates and lower accretion expenses.
Costs associated with property acquisition and redevelopment
During the nine months ended September 30, 2024, Getty Realty Corp. acquired fee simple interests in 52 properties for an aggregate purchase price of $204,488,000. The allocation of this purchase price is detailed below:
| Asset Type | Properties | Purchase Price (in thousands) | Land (in thousands) | Buildings & Improvements (in thousands) | Intangible/Market Lease Assets (in thousands) |
|---|---|---|---|---|---|
| Express tunnel car washes | 29 | $136,070 | $31,497 | $89,775 | $14,870 |
| Convenience stores | 3 | $18,853 | $6,271 | $10,964 | $1,618 |
| Auto service centers | 17 | $41,370 | $11,534 | $19,104 | $4,842 |
| Drive thru QSRs | 3 | $8,195 | $1,689 | $5,538 | $968 |
| Total | 52 | $204,488 | $50,991 | $125,381 | $22,298 |
Getty Realty Corp. (GTY) - Business Model: Revenue Streams
Rental income from triple-net leases
For the nine months ended September 30, 2024, Getty Realty Corp. reported revenues from rental properties amounting to $146.4 million, which includes base rental income of $136.3 million. This represents an increase from $134.9 million in total revenues for the same period in 2023, which included base rental income of $120.2 million.
For the three months ended September 30, 2024, the rental income was $50.5 million, compared to $48.8 million for the same period in 2023.
Interest income from financing activities
Getty Realty generated $3.945 million in interest on notes and mortgages receivable for the nine months ended September 30, 2024, up from $3.331 million in the same period in 2023. For the three months ended September 30, 2024, the interest income was $973,000, compared to $1.638 million for the same period in 2023.
Tenant reimbursement income for property expenses
Tenant reimbursements, which include real estate taxes and other municipal charges, amounted to $8.739 million for the nine months ended September 30, 2024, down from $15.047 million for the same period in 2023. For the three months ended September 30, 2024, tenant reimbursements were $2.913 million, decreased from $7.538 million in 2023.
Revenue from property sales and dispositions
During the nine months ended September 30, 2024, Getty Realty sold 24 properties, resulting in an aggregate loss of $0.4 million. For the three months ended September 30, 2024, the company recorded a loss of $1.471 million on the dispositions of real estate.
Income from redevelopment projects once leased
In 2024, Getty Realty commenced rental income recognition from completed redevelopment projects. The company funded a total of $9.2 million in construction loans during the nine months ended September 30, 2024. Upon completion of the construction for 11 properties, the company recognized rental income, removing finance receivables totaling $51.3 million.
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (in millions) | 9M 2024 (in millions) | 9M 2023 (in millions) | Change (in millions) |
|---|---|---|---|---|---|---|
| Rental Income | 50.5 | 48.8 | 1.6 | 146.4 | 134.9 | 11.6 |
| Interest Income | 0.973 | 1.638 | (0.665) | 3.945 | 3.331 | 0.614 |
| Tenant Reimbursement Income | 2.913 | 7.538 | (4.625) | 8.739 | 15.047 | (6.308) |
| Loss on Dispositions of Real Estate | (1.471) | 0.583 | (2.054) | (0.286) | 1.486 | (1.772) |
| Rental Income from Redevelopment Projects | N/A | N/A | N/A | N/A | N/A | N/A |
Article updated on 8 Nov 2024
Resources:
- Getty Realty Corp. (GTY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Getty Realty Corp. (GTY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Getty Realty Corp. (GTY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.