Getty Realty Corp. Announces Common Stock Offering

Rhea-AI Summary

Getty Realty Corp. (NYSE: GTY) has announced a public offering of 3,500,000 shares of common stock, with an option for underwriters to purchase an additional 525,000 shares. The company is entering into forward sale agreements with BofA Securities, J.P. Morgan, and KeyBanc Capital Markets, who will act as book-running managers. Under these agreements, Getty Realty will receive proceeds from the sale of shares within approximately one year.

The company plans to use the net proceeds for property acquisitions, debt repayment, working capital, and other general corporate purposes. An automatic shelf registration statement for this offering has been filed with the SEC. The offering is subject to market conditions and there is no assurance as to whether or when the offering may be completed.

Positive

• Potential to raise significant capital through the offering of 3,500,000 shares with an additional 525,000 share option
• Flexibility in use of proceeds for property acquisitions and debt repayment, potentially strengthening the company's financial position
• Forward sale agreements provide the company with the ability to receive proceeds within a year, offering financial planning advantages

Negative

• Potential dilution of existing shareholders' ownership due to the issuance of new shares
• No immediate receipt of proceeds from the sale of shares, as per the forward sale agreements

Insights

Financial Analyst

Getty Realty Corp.'s announcement of a 3.5 million share common stock offering is a significant move that warrants investor attention. This offering, coupled with forward sale agreements, suggests a strategic approach to capital raising. Here's what investors should consider:

• The company's decision to offer 3.5 million shares with an option for an additional 525,000 shares indicates a substantial capital raise, potentially diluting existing shareholders.
• The use of forward sale agreements is a sophisticated financial maneuver. It allows Getty Realty to lock in a price now while deferring the actual issuance of shares for up to a year, providing flexibility in timing and potentially mitigating market risks.
• The stated use of proceeds for property acquisitions and debt repayment suggests a focus on growth and balance sheet management. This could be positive if executed well, but investors should monitor the company's ability to generate returns that justify the dilution.
• The involvement of major underwriters like BofA Securities, J.P. Morgan and KeyBanc Capital Markets lends credibility to the offering but also implies significant fees.

While the capital raise provides Getty Realty with financial flexibility, the key for investors will be how effectively management deploys this capital to drive growth and shareholder value. The stock price may face short-term pressure due to dilution concerns, but long-term prospects will depend on the success of the company's acquisition and debt management strategies.

Real Estate Investment Trust (REIT) Specialist

Getty Realty's stock offering is a strategic move that merits careful analysis within the context of the REIT sector. Here are key points for investors to consider:

• As a REIT, Getty Realty is required to distribute a high percentage of its taxable income to shareholders. This stock offering allows the company to raise capital without relying solely on debt, which is important for maintaining a healthy balance sheet in the capital-intensive real estate sector.
• The company's focus on using the proceeds for property acquisitions aligns with the growth expectations investors typically have for REITs. This could potentially lead to increased rental income and asset appreciation over time.
• The option to repay indebtedness under its revolving credit facility provides financial flexibility and could improve the company's debt metrics, which is particularly important in the current rising interest rate environment.
• The forward sale agreement structure is an intelligent way to manage the timing of share issuance. This could allow Getty Realty to better align its capital needs with acquisition opportunities, potentially minimizing cash drag.

Investors should closely monitor Getty Realty's acquisition pipeline and the cap rates of potential purchases. The success of this offering will ultimately be judged by the company's ability to accretively deploy capital in a competitive real estate market. While dilution is a concern, if Getty can acquire properties at favorable yields relative to its cost of capital, this offering could drive long-term value creation for shareholders.

NEW YORK, July 29, 2024 (GLOBE NEWSWIRE) -- Getty Realty Corp. (NYSE: GTY) (the “Company”) today announced the launch of an underwritten public offering of an aggregate of 3,500,000 shares of its common stock in connection with the forward sale agreements described below. The forward purchasers (or their affiliates) and the Company intend to grant the underwriters of the offering a 30-day option to purchase up to an additional 525,000 shares of common stock.

BofA Securities, J.P. Morgan and KeyBanc Capital Markets are acting as the book-running managers for the offering.

In connection with the offering of shares of its common stock, the Company expects to enter into forward sale agreements with each of BofA Securities, J.P. Morgan and KeyBanc Capital Markets (or their respective affiliates), each referred to in this capacity as the forward purchaser. In connection with such forward sale agreements, the forward purchasers (or their affiliates) are expected to borrow from third parties and sell to the underwriters an aggregate of 3,500,000 shares of the Company’s common stock (or 4,025,000 shares if the underwriters’ option is exercised in full and the Company elects to execute additional forward sale agreements). Pursuant to the terms of each forward sale agreement, and subject to its right to elect cash or net share settlement, the Company is obligated to issue and deliver, upon physical settlement of such forward sale agreement on one or more dates specified by the Company, the number of shares of the Company’s common stock underlying such forward sale agreement in exchange for a cash payment per share equal to the forward sale price under such forward sale agreement. The Company expects to physically settle the forward sale agreements and receive proceeds, subject to certain adjustments, from the sale of its shares of common stock upon one or more such physical settlements within approximately one year from the date of the prospectus supplement relating to the offering.

The Company will not initially receive any proceeds from the sale of shares of its common stock by the forward purchasers. The Company intends to use the net proceeds from the offering and the net proceeds, if any, received upon the settlement of the forward sale agreements to fund property acquisitions, to repay indebtedness outstanding under its revolving credit facility, for working capital and other general corporate purposes, or a combination of the foregoing.

An automatic shelf registration statement on Form S-3 relating to the public offering of the shares of common stock described above was filed with the Securities and Exchange Commission (the “SEC”) and became effective on January 5, 2024. A preliminary prospectus supplement relating to the offering has been filed with the SEC. When available, copies of the prospectus supplement for the offering may be obtained on the website of the SEC, www.sec.gov, or by contacting BofA Securities, NC1-022-02-25, 201 North Tryon Street, Charlotte, North Carolina 28255-0001, Attention: Prospectus Department, email: dg.prospectus_requests@bofa.com; J.P. Morgan, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717 or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; or KeyBanc Capital Markets Inc., Attn: Equity Syndicate, 127 Public Square, 7th Floor, Cleveland, OH 44114, phone: 1.800.859.1783.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any shares of common stock, nor shall there be any sale of such common stock in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

The offering of these securities may be made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Forward Looking Statements

CERTAIN STATEMENTS CONTAINED HEREIN MAY CONSTITUTE “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN THE WORDS “BELIEVES,” “EXPECTS,” “SEEKS,” “PLANS,” “PROJECTS,” “ESTIMATES,” “ANTICIPATES,” “PREDICTS,” “OUTLOOK” AND SIMILAR EXPRESSIONS ARE USED, THEY IDENTIFY FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT’S CURRENT BELIEFS AND ASSUMPTIONS AND INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT AND INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. EXAMPLES OF FORWARD-LOOKING STATEMENTS INCLUDE BUT ARE NOT LIMITED TO STATEMENTS REGARDING THE EXECUTION OF FORWARD SALE AGREEMENTS, THE COMPANY’S ELECTION FOR SETTLEMENT OF SUCH FORWARD SALE AGREEMENTS, AND THE COMPANY’S USE OF PROCEEDS FROM THE OFFERING AND ANY PROCEEDS RECEIVED FROM THE SETTLEMENT OF THE FORWARD SALE AGREEMENTS.

INFORMATION CONCERNING FACTORS THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THESE FORWARD-LOOKING STATEMENTS CAN BE FOUND ELSEWHERE IN THIS PRESS RELEASE, INCLUDING, WITHOUT LIMITATION, THOSE STATEMENTS IN THE COMPANY’S PERIODIC REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS OR CIRCUMSTANCES OR REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.

About Getty Realty Corp.

Getty Realty Corp. is a publicly traded, net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. As of June 30, 2024, the Company’s portfolio included 1,124 freestanding properties located in 42 states across the United States and Washington, D.C.

Contact:	Investor Relations
	(646) 349-0598
	ir@gettyrealty.com

FAQ

How many shares is Getty Realty Corp. (GTY) offering in its public offering?

Getty Realty Corp. (GTY) is offering 3,500,000 shares of common stock, with an option for underwriters to purchase an additional 525,000 shares.

What are the intended uses for the proceeds from Getty Realty Corp.'s (GTY) stock offering?

Getty Realty Corp. (GTY) intends to use the proceeds for property acquisitions, repaying indebtedness under its revolving credit facility, working capital, and other general corporate purposes.

Who are the book-running managers for Getty Realty Corp.'s (GTY) stock offering?

The book-running managers for Getty Realty Corp.'s (GTY) stock offering are BofA Securities, J.P. Morgan, and KeyBanc Capital Markets.

When does Getty Realty Corp. (GTY) expect to receive proceeds from the forward sale agreements?

Getty Realty Corp. (GTY) expects to receive proceeds from the forward sale agreements within approximately one year from the date of the prospectus supplement relating to the offering.