Getty Realty Corp. Announces Pricing of Public Offering of 3,500,000 Shares of Common Stock

Rhea-AI Summary

Getty Realty Corp. (NYSE: GTY) has announced the pricing of a public offering of 3,500,000 shares of common stock at $30.10 per share. The offering, expected to close on July 31, 2024, includes a 30-day option for underwriters to purchase up to 525,000 additional shares. The company plans to enter into forward sale agreements with BofA Securities, J.P. Morgan, and KeyBanc Capital Markets. Getty Realty intends to use the net proceeds to fund property acquisitions, repay debt, and for general corporate purposes. The offering is made under an automatic shelf registration statement filed with the SEC on January 5, 2024.

Positive

• Potential to raise approximately $105.35 million from the offering (excluding underwriter options)
• Flexibility in capital deployment with multiple use cases for the proceeds
• 30-day option for underwriters to purchase additional shares, potentially increasing capital raised
• Forward sale agreements provide flexibility in timing of share issuance and receipt of proceeds

Negative

• Potential dilution of existing shareholders' ownership
• Increase in the number of outstanding shares may negatively impact earnings per share

Insights

Financial Analyst

Getty Realty Corp.'s public offering of 3,500,000 shares at $30.10 per share is a significant move that could have both positive and negative implications for the company and its investors. Here are the key points to consider:

• Capital Raise: The offering could potentially raise up to $105.35 million (excluding the overallotment option), providing Getty with substantial capital for property acquisitions and debt repayment.
• Dilution: Existing shareholders may face dilution of their ownership stake, which could potentially impact earnings per share in the short term.
• Forward Sale Agreement: The use of forward sale agreements allows Getty to delay the issuance of new shares for up to a year, providing flexibility in timing the capital influx and potentially minimizing immediate dilution effects.
• Use of Proceeds: The company's plan to use the funds for property acquisitions and debt repayment could strengthen its real estate portfolio and improve its balance sheet, potentially leading to long-term value creation.
• Market Reception: The pricing at $30.10 per share suggests a slight discount to the current market price, which may indicate strong demand for the offering.

Investors should closely monitor how effectively Getty deploys this capital and whether the potential benefits of expansion and debt reduction outweigh the dilutive effects of the share issuance. The company's ability to generate returns above its cost of capital will be important in determining the long-term impact of this offering on shareholder value.

Real Estate Investment Expert

Getty Realty Corp.'s decision to raise capital through a public offering is a strategic move that warrants careful analysis:

• Market Timing: The company's choice to raise capital now could indicate management's belief that current market conditions are favorable for expansion or that attractive acquisition opportunities are available in the real estate market.
• Portfolio Growth: With a focus on using proceeds for property acquisitions, Getty is positioning itself for potential growth in its real estate portfolio. This could lead to increased rental income and asset appreciation over time.
• Debt Management: The intention to use part of the proceeds to repay revolving credit facility debt suggests a prudent approach to balance sheet management. This could improve the company's debt-to-equity ratio and potentially lead to better financing terms in the future.
• Competitive Position: By strengthening its financial position, Getty may be better equipped to compete for prime real estate assets, potentially enhancing its market position in the specialty REIT sector.

Investors should consider how this capital raise aligns with Getty's long-term strategy and its potential to create value in the competitive real estate market. The success of this move will largely depend on management's ability to identify and execute accretive acquisitions that outperform the cost of the new equity capital.

NEW YORK, July 30, 2024 (GLOBE NEWSWIRE) -- Getty Realty Corp. (NYSE: GTY) (the “Company”) today announced the pricing of an underwritten public offering of 3,500,000 shares of its common stock, sold on a forward basis in connection with the forward sale agreements described below, at a public offering price of $30.10 per share. The forward purchasers (or their affiliates) and the Company have also granted the underwriters of the offering a 30-day option to purchase up to an additional 525,000 shares of common stock. The offering is expected to close on July 31, 2024, subject to customary closing conditions.

BofA Securities, J.P. Morgan and KeyBanc Capital Markets acted as joint book-running managers for the offering. Goldman Sachs & Co. LLC and TD Securities acted as book-running managers for the offering. Baird, Capital One Securities, Citizens JMP and BTIG acted as co-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 (or their affiliates). 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 and related base prospectus 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 Securities LLC, 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, Ohio 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 in its public offering, with an additional 30-day option for underwriters to purchase up to 525,000 more shares.

What is the price per share for Getty Realty Corp.'s (GTY) public offering?

The public offering price for Getty Realty Corp.'s (GTY) shares is $30.10 per share.

When is the expected closing date for Getty Realty Corp.'s (GTY) public offering?

The public offering is expected to close on July 31, 2024, subject to customary closing conditions.

How does Getty Realty Corp. (GTY) plan to use the proceeds from the offering?

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

What are the forward sale agreements in Getty Realty Corp.'s (GTY) offering?

Getty Realty Corp. (GTY) plans to enter into forward sale agreements with BofA Securities, J.P. Morgan, and KeyBanc Capital Markets, allowing the company to issue and deliver shares in exchange for cash payments within approximately one year from the offering date.