Getty Realty Corp. Aktie

Good morning, and welcome to the Getty Realty First Quarter 2026 Earnings Call. This call is being recorded. [Operator Instructions]

Prior to starting the call, Joshua Dicker, Executive Vice President, General Counsel and Secretary of the company, will read a safe harbor statement and provide information about non-GAAP financial measures. Please go ahead, sir.

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, 2026. The Form 8-K and earnings release are available in the Investor Relations section of our website at gettyrealty.com.

Certain statements made during this call are not based on historical information and may constitute forward-looking statements. These statements reflect management's current expectations and beliefs and are subject to trends, events and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

Examples of forward-looking statements include our 2026 guidance and may include statements made by management, including those regarding the company's future financial performance, future operations or investment plans 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, 2025, as well as any subsequent filings with the SEC 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 today. The company undertakes no duty to update any forward-looking statements that may be made during this call. Also, please refer to our earnings release for a discussion of our use of non-GAAP financial measures, including our definition of adjusted funds from operations, or AFFO, and our reconciliation of those measures to net earnings.

With that, let me turn the call over to Christopher Constant, our Chief Executive Officer.

Thank you, Josh. Good morning, everyone, and welcome to our earnings call for the first quarter of 2026.

Joining us on the call today are Brian Dickman, our Chief Financial Officer; and RJ Ryan, our Chief Investment Officer. I will lead off today's call by providing highlights of Getty's first quarter financial performance and investment activity. RJ will then discuss our portfolio and investments in greater detail, and Brian will provide additional information regarding our earnings, balance sheet and 2026 AFFO per share guidance.

I am pleased to report that Getty is off to a strong start in 2026, highlighted by a 13.1% year-over-year increase in our annualized base rent, a 6.8% increase in our AFFO per share and an increase to our full year 2026 earnings guidance. The foundation for this growth is our in-place portfolio, which is essentially fully occupied, achieved 100% rent collections and continues to demonstrate stable rent coverage.

Despite volatility driven by current geopolitical events, our tenants and their businesses have once again proved their resilience and ability to perform during rapidly changing operating conditions. Building on that foundation is the impact of the capital we deployed in 2025 and year-to-date. We are seeing the benefits of investments we've made in our platform to accelerate growth, including a larger investment team, new technologies and improved processes. And we expect to capitalize on constructive transaction markets for convenience and automotive retail properties throughout the year.

Year-to-date, we have invested more than $34 million at an initial cash yield of 8%. Beyond that -- beyond what we have closed, we have approximately $125 million of investments under contract as well as a pipeline of transactions under signed nonbinding letters of intent that is in excess of the pipeline, which was disclosed at the time of our recent equity offering. This pipeline is supported by a robust capital position as our recent capital markets activities have provided us with significant liquidity and attractive cost of capital to fund our 2026 business plans.

We currently have more than $170 million of unsettled forward equity and our $450 million revolver is completely undrawn. When we look at the spectrum of opportunities under contract and in our pipeline, we are confident that we can deploy this capital accretively as we move through the year. As we think about the rest of 2026 and beyond, I take great comfort in the quality of our portfolio, including its proven durability and ongoing diversification. I have no doubt that the platform we've built can drive disciplined growth as we continue to lean into our expertise in sourcing, underwriting and closing investments in our core, convenience and automotive retail sectors.

We remain committed to our disciplined underwriting approach, which prioritizes owning real estate in high density or growing metro areas with excellent access and visibility in retail markets and which is leased to creditworthy operators under our long-term triple net leases. The sectors we invest in are large and fragmented and benefit from prevailing consumer demand -- consumer trends for demand, convenience, speed and service. As these industries continue to consolidate and become more institutional, we believe our direct sale-leaseback approach and deep relationships in our target segments uniquely positions Getty to grow with both established and emerging retailers.

With that, I'll let RJ discuss our portfolio and investment activities.

Thank you, Chris. At quarter end, our lease portfolio included 1,186 net lease properties and 2 active redevelopment sites. Excluding the active redevelopments, occupancy was 99.7%, and our weighted average lease term was 10.1 years. Our net lease portfolio spans 45 states plus Washington, D.C., with 61% of our annualized base rent coming from top 50 MSAs and 77% coming from top 100 MSAs. Our rents continue to be well covered with a trailing 12-month tenant rent coverage ratio of 2.5x.

Turning to our investment activities. For the quarter, we invested $30.3 million across 29 properties at an initial cash yield of 8%. The weighted average lease term on acquired assets for the quarter was 8.8 years. Highlights for this quarter's investments include the acquisition of 22 properties for $27.3 million, including 16 auto service centers and 6 drive-thru quick service restaurants and $3 million of incremental development funding for the construction of multiple new auto service centers and drive-thru quick service restaurants.

Subsequent to quarter end, we invested an additional $4.1 million, bringing our year-to-date total investments to $34.4 million at an 8% initial cash yield. Our year-to-date activity included the acquisition of several existing net leases that we view as a complement to our core sale-leaseback business. This drove a shorter weighted average lease term than our typical investment activity, but also led to us adding 11 new tenants to the portfolio and executing granular acquisitions with an average $1.2 million purchase price.

Looking ahead, as Chris mentioned, we currently have approximately $125 million of investments under contract and a significant pipeline of investments under signed letters of intent. These transactions are spread across our 4 convenience and automotive retail sectors and are predominantly relationship sale leasebacks and development funding opportunities with new 15- to 20-year lease terms. The initial cash yields for these investment opportunities are in the mid- to high 7% area.

Moving to our asset management activities. As previously announced, we extended 5 unitary leases totaling $11.3 million of ABR or 5% of total ABR during the first quarter. The net benefit of these lease extensions was an increase to our weighted average lease term and a significant reduction in ABR expiring in 2027. In addition, we sold 2 properties during the quarter for gross proceeds of $3.7 million.

With that, I will turn the call over to Brian to discuss our financial results.

Thanks, RJ. Good morning, everyone. For the first quarter of 2026, we reported AFFO per share of $0.63, a 6.8% increase over Q1 2025. FFO and net income for the quarter were $0.69 and $0.43 per share, respectively. A more detailed description of our quarterly results can be found in our earnings release and our corporate presentation contains additional information regarding our earnings and dividend per share growth over the last several years.

Starting with some color on G&A expenses. Management focuses on the ratio of G&A, excluding stock-based compensation and nonrecurring retirement costs to cash rental and interest income. That ratio was 9.2% for the quarter ended March 31, 2026, a 130 basis point improvement over the same period in 2025. As we mentioned on our last call, we expect G&A growth to be less than 2% in 2026 and for our G&A ratio to fall below 9% as we focus on controlling expenses and continuing to scale the company.

Moving to the balance sheet and liquidity. As of March 31, net debt-to-EBITDA was 5.1x or 4.2x, including the impact of unsettled forward equity, both of which compared favorably to our target leverage of 4.5x to 5.5x. Fixed charge coverage for the quarter was 4x. During the first quarter, we received $250 million from our previously announced unsecured notes issuance and used the proceeds to repay borrowings under our revolving credit facility. We ended the quarter with $1 billion of total unsecured notes outstanding with a weighted average interest rate of 4.5% and a weighted average maturity of 6 years. We have full borrowing capacity under our $450 million revolving credit facility and no debt maturities until June 2028.

In February, driven by our growing investment pipeline and the strong performance of our stock to start the year, we raised $130 million of new common equity in an overnight offering. Those shares were sold on a forward basis, and we currently have a total of 5.5 million shares subject to outstanding forward sales agreements, which upon settlement are anticipated to raise gross proceeds of approximately $171.5 million.

As Chris mentioned, we are in a very strong capital position with more than $625 million of total liquidity and have more than sufficient capital to fund our under contract pipeline and additional investments as we continue to source new opportunities. With respect to our earnings outlook, as a result of our year-to-date activities, we are increasing our full year 2026 AFFO per share guidance to a range of $2.50 to $2.52 from the prior range of $2.48 to $2.50.

As a reminder, our guidance reflects the current run rate from our in-place portfolio with certain expense and credit loss variability and does not include any prospective investments or capital markets activities. We think this approach remains appropriate for our business and look forward to updating everyone on the positive impact that our investment program has on our earnings as we move through the year.

With that, I'll ask the operator to open the call for questions.

[Operator Instructions] The first question we have comes from Mitch Germain of Citizens Bank.

Congrats on the quarter. Chris, what do you think is driving the increased momentum in the investment pipeline? Obviously, I know you've made some investments in people. Is it more kind of sellers kind of rationalizing what their pricing expectations are? Are you -- is there anything you can point out to?

I think it's a little bit all of the above, right? Obviously, with more deal makers at Getty, right, there's more business development activity. As the portfolio has grown, we obviously have more relationships that we can tap into. But I do think there's an element of businesses are growing, the theme around consolidation certainly continues in all the sectors we invest in. And as folks are looking at their capital needs, I do think the sale-leaseback market is becoming more attractive. And it's a complement in certain cases to their other capital sources like debt or even equity.

So I think it's a mix, Mitch, but what I would say is that most of our conversations are around growth and folks are constructive, right, in terms of what the current pricing dynamic looks like across the sectors, and we certainly feel that in our portfolio and in our pipeline. And I think that's why you hear the positive tone in our language in the script and in the quarter.

Are you becoming any more selective with regards to what sectors you're allocating capital to? Or are you open for business across everything that you're investing in?

We're focused investors, right? So I think by nature, that makes us sort of selective. But within the 4 sectors that we invest in, we're equally excited about all 4 of them. And the broader pipeline under contract and what's behind that includes numerous opportunities across all those verticals.

Great. Last one for me. Brian, you talked about scalability of the platform. Can you highlight maybe some of the things that you guys are -- have accomplished to kind of get a little more efficient?

Yes. I think you've heard both Chris and RJ and even in past calls, Mark talked about some of the things we've been doing around technology, around process improvement. So certainly, I think those things are having an impact. But also, I think we all understand that net lease platforms are inherently very scalable. We've been investing in the platform for a number of years. And combined with some of the market dynamics Chris went through, we're just, I think, really starting to bear the fruit of those efforts.

The next question we have comes from Upal Rana of KeyBanc Capital Markets.

Chris, with the pipeline growing, I'm just curious on what you're seeing out there in terms of larger portfolio deals?

Yes. I mean I think, obviously, what we closed this quarter was more granular in terms of maybe some more individual asset acquisitions, but the broader pipeline and the opportunities that we're underwriting has a mix of what I would call midsized to larger portfolios. And again, it just goes back to what I said on the earlier question, which is our operators are looking to continue to grow and consolidate. And that kind of mid-market M&A transaction or a larger portfolio certainly feels like there's a component for sale-leaseback financing to help get those deals done.

Okay. Great. And then, Brian, your cost of capital hasn't materially improved this year, and you have nearly $170 million in the forward equity and also the revolver. So I just want to get your thoughts on your strategy on use of capital as we go through '26 and maybe any additional appetite to raise even more capital?

Yes. Thanks, Upal. Fair certainly observations and not lost on us the cost of capital. But I would say that our strategy as it were around capital -- raising capital allocation really hasn't changed, right? We're going to maintain leverage in that 4.5 to 5.5x range. We're going to look to keep the pipeline at least partially funded so that we know we have some certainty around that cost of capital. And so I think those fundamental components haven't changed. As you look to this year, I think you'll see us draw on the revolver for the debt piece and settle that equity again to maintain leverage. And then as far as additional equity behind that or beyond that, I think as always, it's going to be a combination of the pipeline, the magnitude of that pipeline, where those deals are being priced and then where the stock is trading and where our cost of capital is. But I guess it's kind of a long-winded way of saying I don't see any change in strategy. I think if you look over the last several years, that's how we've executed, and I would anticipate us doing the same thing throughout this year and beyond.

The next question we have comes from Michael Goldsmith of UBS.

Can you just talk a little bit about bad debt? Are you seeing any challenges within the portfolio? And then also, can you update us on how bad debt is baked into your 2026 guidance and if that changed since the start of the year?

Michael, it's Brian. I'll touch on that. So working backwards, we used about 25 basis points assumption for credit loss. We didn't experience any of that in the first quarter. I would say that is also conservative relative to looking back over longer periods of time. So that continues to be what's baked into the guidance on a go forward. And then the portfolio itself, quite healthy. There's nothing that rises to a level of a watch list for us, and there's nothing that we're anticipating in the near, medium term that gives us any significant concerns around credit loss in the portfolio. As we know, these are nondiscretionary defensive essential type businesses.

Obviously, there's a lot of geopolitical and macro noise. But as we sit here today, the tenants continue to perform, the businesses continue to perform. And while we do think it's prudent to have an assumption in our guidance for credit loss, there's nothing imminent that gives us any concern, as I said.

And just a follow-up. I think this was touched on, on some of the other net lease earnings calls, but 7-Eleven closing some stores and more of the smaller locations, but just wanted to get a sense of how that in any way kind of influences your portfolio or how you're thinking about your portfolio to be positioned in the C-store space going forward?

Sure. I'll start and maybe RJ wants to add a few comments here. So 7-Eleven is a tenant of ours. They're not in our top 20. But on a broader scale, Michael, like this is a trend that we've been talking about with investors for years. The C-store is getting larger. It's getting more complex, the importance of food, beverage and brand to drive customer visits inside the store. This is not a new trend. With a portfolio the size of 7-Eleven's, of course, they have stores that are smaller and they're focused on the larger store to compete with other brands that may be slightly ahead of where they are.

So from our standpoint, given that we've been around the C-store business for a very long time, this is very consistent with what our tenants are doing. If you look at the acquisition activity that we closed in C-store last year, I think our big transaction in the fourth quarter, the average store size was like either 7,000 or 8,000 square feet. That is what the modern C-store looks like, heavy food, importance of brand, loyalty programs. And of course, they do still sell fuel, right? They do still sell traditional merchandise, but it's far more than just the old line C-store.

The other thing I'd say is that we do have some of the older assets that were part of the legacy business. Those are the leases that got renewed this quarter, right? So I guess, still profitable. When you have a really well-located, maybe slightly smaller store, like those still make money for our tenants. We were really pleased to get those leases extended and our tenants wanted to stay there.

I'd echo what Chris says, 7-Eleven did announce those closures. And I would highlight, they also announced about 1/3 of those closures numerically as planned reopening or a new stores in that larger format. I think it's a reflection not only of the industry, but frankly, with Getty's investment strategy and what we've executed on certainly over the last several years, if not beyond, and how our portfolio has evolved, and it just shows the evolution of the C&G space and where we and others are focused.

[Operator Instructions] The next question we have comes from Brad Heffern of RBC Capital Markets.

Question about the soaring gas prices. I know most of the C-store margin is inside the store, but sometimes they do struggle to pass on higher gas prices right away or maybe customers have less money to spend inside the store. There can be a working capital draw too. I'm just curious, do you think there will be any net impact on your tenants from this? Or do you think that they'll be able to withstand it?

Yes. It's a great question and one that we've gotten in a lot of our meetings recently. I think the -- if you going into the, I think the nice part about our business on the fuel side is that we were starting at retail fuel prices that were less than $3 a gallon nationally. We also entered the year at probably fuel margins on average that were north of $0.40, maybe $0.45. So that's not a historical like record high, but that's a very healthy number. And you're right, typically, our tenants have struggled to pass on 100% of the increase, where there's been a rapid movement up in oil. What I would tell you is that if you look at some of the national data, almost all of that increase has been passed on.

So if margins were in the high 40s, they're still nationally above $0.40. And then what does happen on the back side of that is when the price of oil does come down, typically, our tenants are able to maybe widen out their margin a little bit or hold retail pricing. So I think to date, Brad, tenants continue to -- the fuel margin, the fuel side of the business continues to be healthy. I think the conversations we've had with tenants, right, are more about the duration of this, the health of the consumer, continuing to drive traffic in the store. And -- but we're having those conversations on a regular basis with tenants. And again, what you see in our portfolio is the C-store business is still highly profitable. The gas piece is still highly profitable. And again, tenants are just trying to drive traffic in the store for the higher-margin side of their business.

Okay. Got it. And then, Brian, on the guidance, -- you obviously closed acquisitions in the first quarter. It doesn't seem like enough to make the guide go up by 1%. So can you walk through what drove that? I'm assuming part of it was the equity raise, but anything else you would call out?

Yes. So there's really 2 components. The equity in and of itself wouldn't have impacted the first quarter. You do have the impact of the investment activity. You also have the, I guess, actualization of whatever was assumed around the credit loss and expense variability that we speak to as driving the variability in the range. And again, we had no credit loss in the first quarter and expenses generally came in at or below budget.

So I think it's really the combination of those 2 things, the just actual performance against what was forecasted plus the investment activity. And then also, candidly, Brad, sometimes when you're dealing in hundredths here and dealing in pennies, sometimes the rounding also will get you. So it may not have been a full $0.02, but certainly on the round, that's where it came out for us.

The next question we have comes from Wes Golladay of Baird.

When you look at the cap rates, I think you're guiding to mid- to high 7s, it's a little bit lower. Just wondering if that was versus what you've done in the last few quarters. Is that primarily just due to a mix where there's fewer developments or just different categories in the pipeline?

Yes, I think it's all of the above. Obviously, with the equity that we raised, there are a lot more transactions broadly speaking in the market that are maybe in and around that 7.5%. This allows us to grab some of those deals, again, maintain that healthy spread that we're looking for plus blend those with the deals that are in the high 7s approaching 8. I think that's why maybe you saw our pipeline go up and talk about some of the activity behind that. Do you want to add to that, RJ?

No. I think that's the range we've been operating in and around for quite some time. To Chris' point, I expect to still be quite active in that mid- to high 7 range, but we do have an opportunity to kind of expand our activity on the lower end and still blend in that mid- to high 7% range. We feel pretty confident in our ability to do so.

Okay. And just one housekeeping question. What are you looking at for G&A for the full year?

It should be right around $20 million, Wes, plus/minus. And that's on the cash G&A number. Just to be clear, I think we're at $5.2 million in the quarter, right? First and second quarter tend to be a little elevated over the second half of the year. So that's that $20 million range within the cash G&A number.

The next question we have comes from Jana Galan of Bank of America.

Congrats on the first quarter. Can you broadly break down how much of the $125 million pipeline is acquisitions and how much is development funding? And if you can remind us, developments, is that typically kind of like a 3-, 4-, 5-quarter construction time line?

So Jana, it's RJ. The $125 million pipeline is -- and it echoes what we said in our last call about 60 days ago. It is tilted towards the development funding, which is generally that 3- to 12-month time horizon. We have added additional more traditional sale-leaseback, acquisition leaseback type transactions. But the pipeline itself, as it sits, is skewed more towards that development funding.

The final question we have comes from Michael Gorman of BTIG.

Just a quick one for me. Obviously, rent coverage remained pretty strong in the quarter versus the fourth quarter of last year, but there were some kind of noticeable moves within the different buckets that you break out in the presentation. Anything specific to point out there in terms of tenant trends moving between those different categories or anything in particular that you're seeing on the consumer side that may be driving some of those moves between the different buckets that you break out?

Mike, it's Brian. The short answer is no. One thing I would just highlight, right, we are on a 3-month lag. So the data we're looking at is through 12/31. So it would not have captured the first quarter performance, although Chris referenced some of the conversations and anecdotal type of information we're getting from tenants such that we're not expecting significant changes in Q1 either. But back to the data that you were referencing, no, when we look at it at a slightly more granular level, look at it by lease, look at it by property type, very, very consistent results versus the prior quarter.

Sometimes a tenant or a lease will just flip on one side or the other of where the breakpoints are. And we actually see that quite a bit, a tenant that's around 2.5x might be 2.4 one period and 2.6 the next. And you do see that more than you might expect around some of those breakpoints. But from the high-level perspective, very similar, very consistent, very stable quarter-over-quarter across all 4 property types.

At this stage, there are no further questions. I would like to turn the floor back over to Christopher Constant for closing comments. Please go ahead, sir.

Thank you, operator, and thanks to everybody for participating on our call this morning. We're really pleased with the start of the year, and we look forward to getting back on phone to everybody when we report our second quarter in July.

Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.

Good morning, and welcome to the Getty Realty Fourth Quarter '25 Earnings Call. This call is being recorded. [Operator Instructions] Prior to starting the call, Joshua Dicker, Executive Vice President, General Counsel and Secretary of the company, will read a safe harbor statement and provide information about the non-GAAP financial measures. Please go ahead, Mr. Dicker.

Thank you, operator. I would like to thank you all for joining us for Getty Realty's Fourth Quarter and Year-end Earnings Conference Call. Yesterday afternoon, the company released its financial and operating results for the quarter and year ended December 31, 2025. The Form 8-K and earnings release are available in the Investor Relations section of our website at gettyrealty.com.

Certain statements made during this call are not based on historical information and may constitute forward-looking statements. These statements reflect management's current expectations and beliefs and are subject to trends, events and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Examples of forward-looking statements include our 2026 guidance, and may include statements made by management, including those regarding the company's future operations, future financial performance or investment plans 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, 2024, as well as any subsequent filings made with the SEC 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 today. The company undertakes no duty to update any forward-looking statements that may be made during this call.

Also, please refer to our earnings release for a discussion of our use of non-GAAP financial measures, including our definition of adjusted funds from operations, or AFFO, and our reconciliation of those measures to net earnings.

With that, let me turn the call over to Christopher Constant, our Chief Executive Officer.

Thank you, Josh. Good morning, everyone, and welcome to our earnings call for the fourth quarter and year-end 2025. Joining us on the call today are Mark Olear, our Chief Investment Officer and Chief Operating Officer; Brian Dickman, our Chief Financial Officer; and RJ Ryan, our Senior Vice President of Acquisitions. As previously announced, RJ will succeed Mark as Chief Investment Officer upon Mark's retirement at the end of this month.

I will lead off today's call by providing highlights of Getty's 2025 financial performance and investment activity. Mark and RJ will then discuss our portfolio and investments in greater detail, and Brian will provide additional information regarding our earnings, balance sheet and 2026 AFFO per share guidance.

I am pleased to report that the combination of stable rental income from our in-place portfolio and strong yields from acquisitions produced strong rent and earnings growth for the fourth quarter and full year 2025. Getty's annualized base rent grew by nearly 12% in 2025, while AFFO per share was up 5% for the fourth quarter and 3.8% for the full year, which was the high end of our increased earnings guidance.

Our in-place portfolio continues to provide a solid foundation for our business with essentially full occupancy and rent collections and stable rent coverage. Our tenants continue to benefit from consumer trends that drive performance at convenience and automotive retail properties, namely demand for convenience, speed and do-it-for-me services, and their businesses have proven resilient as they have historically.

Turning to our growth initiatives. For the year, we invested approximately $270 million at an initial cash yield of 7.9%. I would like to highlight a few accomplishments for the year, which demonstrates the effective execution of our strategy to accretively grow and further diversify our portfolio. First, the $100 million sale-leaseback we closed in October for a 12-property convenience store portfolio in Houston, Texas. These assets are leased to Now and Forever, a growing regional convenience store chain, with a dominant market position in densely populated Houston submarkets. Over the last 5 years, we have acquired more than 60 properties generating nearly $25 million of ABR in Texas, which is now our largest state exposure, including more than 25 properties generating over $14 million of ABR in Houston, which is now our second largest market after New York City.

Second, we made a significant commitment to the collision repair sector when we agreed to provide up to $82.5 million of development funding for the construction of 11 new-to-industry collision centers for a top 3 operator in the sector. We expect a number of these sites to open in 2026, and look forward to building on our momentum in this subsector of automotive services.

We also completed our first travel center investments with existing and new tenants who have expanded their store networks by building or acquiring large-format c-store and travel centers. We view investing in travel centers as a natural extension of our buy box. And in 2025, we acquired 4 travel centers for $47.1 million.

Additional 2025 highlights include a record year of investments for drive-thru quick-service restaurants, where deliberate resource allocation and targeted sourcing efforts resulted in Getty investing nearly $40 million across 28 properties, representing approximately 15% of our investment activity for the year.

We also continue to allocate capital to dense and growing markets during the year. More than 75% of our 2025 investment activity was in top 100 markets around the U.S., and we increased exposure to a number of attractive metro areas, including Atlanta, Dallas, Houston, Las Vegas, Memphis and San Antonio.

We also demonstrated the consistency of our relationship-based sale-leaseback acquisition strategy during the year by directly negotiating transactions with tenants that drive more than 90% of our closed transactions in 2025, which helped us add 13 new tenants to our portfolio during the year.

Finally, our ability to maintain a healthy investment pipeline, which currently consists of approximately $100 million of investments under contract, most of which we expect to fund by the end of 2026.

Sticking with our pipeline, including opportunities that are in various stages of underwriting and negotiating, our investment team continues to do an excellent job sourcing investment opportunities that fit our well-defined strategy, meet our stringent underwriting criteria and generate consistent earnings growth. Our collective ability to execute period after period regardless of market conditions is a testament to the platform and culture we've established at Getty.

As we think about 2026 and beyond, we continue to be excited about our strategy, the sectors we invest in, our people and the platform we've built. We believe we are on a path to accelerate our growth trajectory as we expand our relationships, extend our underwriting to new opportunities and further refine our processes with the help of data-driven analysis to enhance our investment decisions.

I'd like to close with some comments on our upcoming management transition. As previously announced, Mark Olear is retiring at the end of February. During his time at Getty, Mark broadened our investable universe, redefined our underwriting approach and created a redevelopment program that has seen us complete more than 30 value-add projects. I want to congratulate Mark on a successful 40-year career, and thank him for being my partner for the past decade plus at Getty. We will miss having him here on a daily basis.

I'm equally excited to announce that RJ Ryan, our current SVP of Acquisitions, will be promoted to the position of Chief Investment Officer. RJ has been with Getty for nearly a decade, has led our acquisitions team since 2018, and is ready to take on additional leadership responsibilities as our CIO. I hope you all enjoy getting to know RJ better as he plays a more visible role with the investment community.

With that, I'll turn the call over to Mark.

Thank you, Chris. I appreciate the kind words and want to thank everyone at Getty. It's been an honor to lead the company's real estate efforts for the past decade. RJ is more than ready for his new role, and I'm confident that Getty will be successful in continuing to execute its growth plans.

Turning back to the business, at year-end, our lease portfolio included 1,169 net lease properties and 2 active redevelopment sites. Excluding the active redevelopments, occupancy was 99.7%, and our weighted average lease term was 9.9 years.

Our portfolio spans 44 states plus Washington, D.C., with 61% of our annualized base rent coming from top 50 MSAs and 77% coming from top 100 MSAs. We have performance insight into approximately 95% of our ABR through site level financial reporting or financials derived from public reporting companies. Our rents for properties where we receive site level reporting continue to be well covered with a trailing 12-month rent coverage ratio of 2.5x.

Turning to our investment activities. I will let RJ take you through our results.

Thanks, Mark. Good morning, everyone. For the year, we underwrote a record $6.8 billion of potential investments. Consistent with our objective to diversify our portfolio within our target sectors, 54% of our underwriting was focused on non-convenience store properties, including auto service centers, primarily collision centers and oil change locations, drive-through quick-service restaurants and express tunnel car washes.

We had a strong fourth quarter, in which we invested $135.4 million across 26 properties at an initial cash yield of 7.9%. The weighted average lease term on acquired assets for the quarter was 15 years.

Highlights of this quarter's investments include the acquisition of the 12-property $100 million sale leaseback we completed with Now and Forever in October, 2 additional convenience stores for $18.7 million, which included a travel center and a New York City property that we previously leased, 6 auto service centers for $9.9 million, of which $1.4 million was previously funded, 2 express tunnel car wash properties for $10.9 million, of which $7.4 million was previously funded. We also advanced incremental development funding in the amount of $3.6 million for the construction of new-to-industry collision centers, oil change locations and drive-thru QSRs. These assets are either already owned by the company and are under construction or will be acquired via sale-leaseback transactions at the end of the project's respective construction periods.

For the year, Getty invested $268.8 million, which included the acquisition of 73 properties for $278.3 million, of which $23.1 million was previously funded and incremental development funding of $13.6 million. The weighted average initial yield on our investments was 7.9% for the year, and the weighted average lease term for the acquired assets was 15.8 years.

Subsequent to year-end, we invested an additional $8.7 million for the acquisition or development of 4 drive-thru QSRs and 4 auto service centers. Beyond our disclosed pipeline of approximately $100 million of investments under contract, the majority of which we expect to fund in 2026 at initial cash yields in the high 7% area, we continue to source actionable opportunities across our investable universe. These are all properties that will be additive to our portfolio and accretive to earnings as we look to further scale and diversify our business.

Thank you, RJ. As my final prepared remarks, I am pleased to say that as a result of our investment activity over the last several years, Getty currently has the most diversified portfolio in terms of tenants, sectors and geographies in the company's history. Since the onset of our current investment strategy, which emphasizes both growth and diversification, we have added 49 new tenants to our portfolio and diversified our annual rent streams with nearly 30% of our annual base rent now derived from non-convenience and gas properties. With that, I turn the call over to Brian.

Thanks, Mark and RJ. Good morning, everybody. Yesterday, we reported AFFO per share of $0.63 for Q4 2025, an increase of 5% over Q4 2024. FFO and net income for the quarter were $0.64 and $0.45 per share, respectively. For the full year 2025, AFFO per share was $2.43, an increase of 3.8% compared to the full year 2024. FFO and net income for 2025 were $2.34 and $1.35 per share, respectively.

A more detailed description of our quarterly and annual results can be found in our earnings release, and our corporate profile contains additional information regarding Getty's earnings and dividend per share growth over the last several years.

Starting with some color on G&A expenses. Management focuses on the ratio of G&A, excluding stock-based compensation and nonrecurring retirement costs to cash rental and interest income. That ratio was 9.5% for the full year 2025, a 10-basis-point improvement over 2024. Both the year and fourth quarter included elevated legal and professional fees, both transaction-related and other that we generally consider nonrecurring. Absent those charges, we would have achieved a more significant reduction in this ratio.

In 2026, we expect G&A growth to be less than 2%, and for our G&A ratio to fall below 9% as we focus on controlling expenses and continuing to scale the company.

Moving to the balance sheet and liquidity. As of December 31, net debt-to-EBITDA was 5.1x or 4.8x including unsettled forward equity, both metrics well within our target leverage range of 4.5 to 5.5x.

Fixed charge coverage for the period was 3.8x.

During the fourth quarter, as previously announced, we closed on $250 million of new unsecured notes. Those notes funded in January, and we used the proceeds to repay borrowings under our $450 million revolving credit facility. Pro forma for the notes transaction, we have $1 billion of senior unsecured notes outstanding with a weighted average interest rate of 4.5% and a weighted average maturity of 6.2 years as well as full borrowing capacity under our revolver. We have no debt maturities until 2028.

Turning to equity capital markets. During the fourth quarter, we settled approximately 2.1 million shares of common stock for net proceeds of approximately $59.1 million and entered into new forward sale agreement to sell approximately 400,000 shares for anticipated gross proceeds of approximately $12.7 million. As of December 31, we had approximately 2.1 million shares of common stock subject to outstanding forward sale agreements, which, upon settlement, are anticipated to raise gross proceeds of approximately $62.6 million.

We continue to be in a strong capital position and pro forma for the notes transaction have more than $500 million of total liquidity, including unsettled forward equity, availability on our revolver and cash on the balance sheet. We have sufficient capital to fund our committed investment pipeline, plus incremental investment activity as we look forward to 2026.

With respect to guidance, we are reaffirming the AFFO per share range of $2.48 to $2.50 that we introduced earlier this year. As a reminder, our guidance reflects the current run rate from our in-place portfolio with certain expense and credit loss variability and does not include prospective investment or capital activities. We think this approach remains appropriate for our business, but note that, historically, over the last 5 years, we have averaged more than $200 million of annual investments and added approximately 250 basis points of AFFO per share growth beyond the midpoint of our initial guidance range.

Pages 8 and 10, our corporate profile, highlight our earnings results and investment activity over the last several years. And Page 22 illustrates the difference between our actual results and our initial guidance since 2021.

We look forward to updating the market on the positive impact that our investment program has on our earnings as we move through the year.

With that, I'll ask the operator to open the call for questions.

[Operator Instructions] The first question comes from Upal Rana with KeyBanc Capital Markets.

Could you go on to provide a little more detail on the $100 million investment pipeline mentioned in the release? Any types of assets or any timing there on funding that you can provide?

Yes. Upal, it's Brian. Happy to do so. About 80% of that -- if you're looking at property types, about 80% of that is auto service, both collision centers and oil change locations, followed by CNG, drive-thrus and car wash in that order, making up the remaining 20%. And then from a transaction type perspective, about 80% of that is development funding. That's sort of the long end of that deployment range that we put out and the balance is regular way acquisitions that are more in the, call it, 60-day -- 60-, 90-day type time frame from a closing perspective.

Okay. Great. That was helpful. And given the improved share price and cost of capital relative to last year, do you think you can do more investment volume this year relative to last year?

Well, I'll just say is I think we're off to a great start, right? Obviously a couple of weeks into the year, to have $100 million under contract is great for Getty. We're really enthused by the pipeline we have behind that, right, that's in various stages of negotiation underwriting. I think we're already north of 25% of our last year's underwriting volume sitting here today in early February. Certainly, the improved cost of capital is helpful when looking at investments and looking at our available opportunities in the capital markets. So I think I would say we're off to a great start. We're optimistic. And I think the team has done a great job all around in bringing great opportunities in for us to evaluate, and we look forward to adding a lot of that to our company as we move through the year.

The next question comes from Mitch Germain with Citizens.

Just the cadence of that $100 million, the way to think about it is mostly kind of just going to hit on a little bit each quarter. Is that the way to think about it?

Yes. Mitch, it's Brian. That's what I was just alluding to. Again, I think you have, call it, 20% of that, that is regular way acquisitions that you're, call it, average 60 days, so kind of 30, 90 days, that's the front end of that deployment range, kind of the 3-month area. Development funding gets deployed over time. We expect the majority of that to be deployed over the next 12 months. The cadence is really dictated more by the tenants, their development schedules, when they submit for reimbursement, but assume that, that gets deployed throughout the year, which give you a little bit more visibility. But candidly, we don't always have that until the reimbursement requests are coming in.

And then I would just add and maybe to reiterate or reemphasize what Chris said, that's simply what we have under contract, right? There's a fairly sizable pipeline behind that. As we've seen in past years, there are deals that, from a public disclosure standpoint, never make it into our pipeline, so to speak. Now and Forever was a great example. When we initially reported, that deal wasn't under contract and it closed before we reported the next quarter. So I'd say that just to highlight, again, that that's what's under contract today. That's the timing that we're looking at with respect to deployment for the $100 million, but there's quite a bit of deal activity behind that, that's certainly some of which we would expect to hit this year as well.

Great. And then to that point, obviously, Chris mentioned how about 25% of that, I'll call it, $7 billion that you underwrote last year has already been kind of under consideration. I'm curious, Chris, what do you think is driving that increased emphasis to potentially sell here?

Yes. It's Mark. So a lot of things right now. The team continues to do a great job sourcing opportunities both with new potential tenants and managing relationships with our existing tenant base. We continue to talk about diversity across all of the asset classes that we trade in. So we introduced a bigger buy box a few years ago, and we're seeing the momentum and the results of that. The ability for us to both transact at the different ranges of the cap rates that are out there in the market allow us to source opportunities. We're sensing, Chris used the word, an optimistic tone around the market. The buyer pool seems more active coming out of the year -- I'm sorry, the seller pool seems more active coming out of the year. So it's a combination of a lot of things. So it's just more of the same around the efforts to develop business across all our asset classes and across the geographies and with repeat tenants. We keep business with our existing tenants, I should say so...

Great. Last one for me. ARKO priced an IPO last night. Should we think about this as a potentially credit-enhancing event?

Yes. So in conversations with them, and I think they're -- one of the primary motivations was allowing investors to see both pieces of their business independently, right, the retail assets and the wholesale business. The use of proceeds [indiscernible] was to pay down debt, so as a landlord, we certainly appreciate that. I do think that's a credit enhancement, gives folks more visibility into the various pieces of their business.

What I've said before is, I'll just say again. ARKO has been a tenant of ours since -- for almost 20 years at this point. Fantastic operator. He's got a defined strategy that he's working through. We've got 5 leases with him that we can see site level information on, and we're comfortable with how all those leases are performing. So I'm thrilled for Arie that he got his deal done. And certainly, I think, from an investment standpoint, if you're focused on maybe the fuel side or on the retail side, it does give you the ability to see those businesses and how each one operates independently.

The next question comes from Jana Galan with Bank of America.

Brian, just following up on your comments on the exclusion of prospective investment activity in the initial guide, I wanted to clarify if the current guide includes kind of the $9 million of additional acquisitions subsequent to quarter end? And then how much of that $100 million pipeline is in the current initial guidance?

The $8.7 million is in there. So it's a point in time run rate, excuse me, usually as the day of the release or the day before. So that's in there. And then by definition or by approach as it currently stands, none of the $100 million would be in that guidance number.

And then maybe for Chris, as you kind of balance portfolio diversification with kind of maintaining your niche and expertise, do you think now, at 30% of ABR from nonconvenience and gas, is the right balance? Or are you looking to increase from there?

Well, what I'd say is, Mark mentioned that now 30% of our rent comes from nonconvenience and gas asset classes, and that's basically over the last 6 years at this point or 5.5 years. During that time period, we've made significant investments in the c-store sector, including Now and Forever, and there are some larger deals that we did in 2024 in the c-store sector. So we still like all the sectors. I think what you're seeing though is on balance, the underwriting has gone from maybe $4 billion to almost $7 billion as we develop relationships in these other verticals, which do take some time, right, given how we like to transact with portfolio sale leasebacks, like you're starting to see the strategy really take off, whether it's the QSR work we did this year, we've done a lot in the car wash business. So we don't have a defined limits or category limits within those asset classes, but I think you can expect to see the business become more diversified just naturally as we develop relationships, have more resources focused on, not only CNG, but some of the other verticals. So I think we're really happy with how the business has expanded and become more diversified and got larger, but there's no hard targets in any asset class to answer your question specifically.

The next question comes from Alec Feygin with Baird.

First for me, can you speak about the dip in coverage? Was that just with the redevelopments and new developments coming in? Or is there anything else?

Yes. So about 70% of that -- of our coverage numbers that we report is from convenience stores, right, just given the fact that some of our newer activity, right, hasn't made its way into the calculation yet. The dip was really a rounding issue right around the 2.5 number, right, to go down from 2.6 to 2.5. Behind that, what rolled off was the third quarter of 2024, which was a historically high fuel margin quarter for the c-store sector. I think margins within our portfolio were approaching $0.50 a gallon. They're still over $0.40, which is still a fantastic number, but not at that historic level. So that's why you saw that. And there's nothing behind that. Car washes were stable. Our other asset classes were stable. Performance inside of c-stores is still great, but you're just seeing margins maybe come back off of that historic high, which was the quarter that dropped off.

Okay. Yes, that makes sense. And then can you speak maybe on overall tenant health, and if you're seeing a broadening of demand for development opportunities, either by tenant or category?

I mean I think generally, with a portfolio that's 99.7% occupied, with full rent collections, the coverage we just talked about, we feel good about the health of the portfolio. Your second question is around development opportunities. And I think this goes a little bit to the transaction market as well. We've got healthy tenants that are operating in growing and consolidating sectors. And as tenants are more willing to transact, one of the avenues for transacting is new store development, and that's why we created the development funding program. The large deal that's sitting out there in auto service, which is a development funding deal is a perfect illustration of that, right? That's a deal that was done last year, and a lot of that funding will be done -- excuse me, funded in 2026. And there's others that are like that just at different levels of volume. So we're -- for the sectors we like, for tenants that we like, Getty is happy to perform sale leasebacks, we're happy to fund developments. And if there are certain transactions that have a combination of both of those products, that's great for us as well.

[Operator Instructions] The next question comes from Michael Goldsmith with UBS.

Yes, Justin, on for Michael. Maybe just 2 quick ones for me. We've seen other net lease REITs increase exposure to c-stores. Do you expect your cap rates of 7.9% to hold firm? And then secondly, Getty sold 7 properties in 4Q. Can you provide some color as to why these were candidates to be disposed of?

I'll take the first one, which is the competitive landscape, right? And we've been in this sector for a long time in the c-store. The other REITs that you're referring to that are investing in c-stores have either been buying them for a long time, right? And we've been competing against them and continuing to add attractive properties to our balance sheet, or they're newer entrants and the sector itself has grown. So I feel very comfortable about the way Getty transacts and our ability to source, close investments at accretive spreads for us. The competition is not a new dynamic in this asset class. Whether it's just the way people are referring to c-stores or just talking about on their phone calls, I don't want to comment too much on that. Do you want to take the dispose?

Yes, I would just say quickly on the dispose, as Brian said, it was 7 properties. We're always evaluating the portfolio for different opportunities. 3 or 4 of those actually went back to existing tenants. That happens periodically where we'll sell assets to a tenant. Sometimes it's a CapEx dynamic in terms of who wants to ultimately invest in those properties. In this case, it's a very small portfolio, but it was a very low, like low single-digit cap rate. Just the way that operator valued the portfolio, it was opportunistic for us. And then the others were just an asset here and there that for tactical reasons or otherwise, we just thought it made sense to dispose of. So no, I wouldn't say there's any universal trends or anything that drove it, just an opportunistic deal and a couple of tactical dispositions.

At this time, there are no further questions in queue. I would like to turn the call back to management for closing comments.

Excellent. Thank you, operator, and thank you all for joining us for our fourth quarter and year-end 2025 call. We look forward to getting back on with everybody in April when we report the first quarter of 2026.

Thank you, ladies and gentlemen. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.

Good morning, and welcome to Getty Realty's 3Q '25 Earnings Call. This call is being recorded.

[Operator Instructions]

Prior to starting the call, Joshua Dicker, Executive Vice President, General Counsel and Secretary of the company, will read a safe harbor statement and provide information about non-GAAP financial measures. Please go ahead, Mr. Dicker.

Thank you, operator. I would like to thank everyone for joining us for Getty Realty's Third Quarter Earnings Conference Call. Yesterday afternoon, the company released its financial and operating results for the quarter ended September 30, 2025.

The Form 8-K and our earnings release are available in the Investor Relations section of our website at gettyrealty.com. Certain statements made during this call are not based on historical information and may constitute forward-looking statements. These statements reflect management's current expectations and beliefs and are subject to trends, events and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Examples of forward-looking statements include our 2025 guidance and may include statements made by management, including those regarding the company's future operations, future financial performance or investment plans 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, 2024, as well as our subsequent filings with the SEC 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 today. The company undertakes no duty to update any forward-looking statements that may be made during this call. Also, please refer to our earnings release for a discussion of our use of non-GAAP financial measures, including our definition of adjusted funds from operations, or AFFO, and our reconciliation of those measures to net earnings.

With that, let me turn the call over to Christopher Constant, our Chief Executive Officer.

Thank you, Josh. Good morning, everyone, and welcome to our earnings call for the third quarter of 2025. Joining us on the call today are Mark Olear, our Chief Operating Officer; and Brian Dickman, our Chief Financial Officer. I will lead off today's call by highlighting our quarterly financial results, tenant performance and recent investment activity. Mark will then discuss our portfolio investments, and Brian will provide additional details on our earnings, balance sheet and the increase in our 2025 AFFO per share guidance.

Getty had another productive quarter, resulting in more than 10% year-over-year growth in our annualized base rent and a 5.1% increase in our quarterly AFFO per share. This performance was supported by the continued health of our in-place portfolio of convenience and automotive retail properties, which is essentially fully occupied and producing both durable rental income and stable rent coverage. For the trailing 12 months, rent coverage for our tenants that report site level financials was consistent at 2.6x. This reflects steady performance from our convenience store portfolio and a third consecutive quarter of increased rent coverage from our Express tunnel car wash assets. The latter is being driven by the maturation of new-to-industry sites and our operators' continued focus on profitability.

Turning to our growth initiatives. We are pleased with our year-to-date investment activity and the platform's ability to source relationship-based sale leasebacks at accretive investment spreads. Notably, year-to-date highlights include investing more than $235 million, which exceeds our full year activity in 2024, expanding the breadth of our investment activity, in particular, by gaining traction in the drive-thru QSR segment, where we have acquired more than 25 properties across multiple transactions. We've also diversified our tenant base by transacting with 10 new tenants in 2025, and we continue to backfill our committed investment pipeline, which currently stands at more than $75 million under contract and can be funded without having to raise additional capital. In early October, we announced a $100 million 12-unit sale-leaseback transaction in the Houston market with regional community store operator now and forever.

This transaction is representative of how our platform capitalizes on our knowledge of the convenience store sector to identify established growth-oriented operators and enter into long-term unitary net leases that provide strong reliable returns. Now & Forever is a privately owned regional community store chain with a cohesive network of sites located in densely populated Houston submarkets. Houston, as an aside, is a unique market, which is largely dominated by regional convenience store operators who have established best-in-class locations. While there are some national players, none have established a significant presence or a major share of the market. As part of this transaction, we worked with Now & Forever to select a portfolio of approximately half of their locations.

These stores average more than 8,500 square feet and include substantial food offerings, many featuring drive-through food and beverage windows. The Now & Forever portfolio also includes a large-format convenience store also referred to as a travel center. As we've mentioned previously, certain of our tenants have been exploring these large-format stores that have all the consumer-facing attributes that we value, including a large selection of grocery and household items, multiple fresh and prepared food offerings, branded QSRs, large coffee and beverage presentations seating inside the store and drive-through lanes and also generate additional visits and income from commercial drivers and the services they use.

We've evaluated several travel center opportunities in 2025 and including the Now & Forever property, have acquired 3 assets year-to-date at an average purchase price of $11 million at yields consistent with our overall investment activity. We continue to enhance our knowledge of this growing subsector of the convenience store space while cultivating relationships with operators to partner with on future transactions. We expect to selectively add travel centers that meet our underwriting criteria to the portfolio going forward.

In general, our acquisitions team continues to do an excellent job of identifying new investment opportunities that fit our portfolio and strategy. We have effectively broadened our investable universe while maintaining the distinctive advantages of our platform, including our broad network of operators, thorough underwriting process and unmatched knowledge of the convenience and automotive retail sectors. As we think about the current state of our business, we continue to be excited about the platform we've been building here at Getty over the last several years. We've evolved significantly from our days as a Northeast gas station REIT by expanding our investment thesis, adding resources to our investment team, improving our access to capital and demonstrating that we can consistently deliver strong financial results while maintaining an investment-grade credit profile. And we've achieved this during a period of market disruption, uncertainty and volatility in both the transaction and capital markets.

Looking ahead, we remain focused on acquiring well-located convenience and automotive retail properties leased to growing regional and national operators and leveraging our underwriting expertise, real estate selection and lease structuring capabilities to support our investment decisions and mitigate credit risks.

Finally, I am pleased that our Board approved an increase of 3.2% in our recurring quarterly dividend to $0.485 per share. This represents the 12th straight year we've grown the dividend alongside our earnings. With that, I will let Mark discuss our portfolio and investment activities.

Thank you, Chris. At quarter end, our leased portfolio included 1,156 net lease properties and 2 active redevelopment sites. Excluding the active redevelopments, occupancy was 99.8% and our weighted average lease term was 9.9 years. Our portfolio spans 44 states plus Washington, D.C., with 61% of our annualized base rent coming from the top 50 MSAs and 77% coming from the top 100 MSAs. We received site level financial reporting from tenants representing 73% of our ABR and have additional visibility into 21.5% of ABR that is derived from publicly reporting companies. For rents, our rents for sites where we received site level reporting continue to be well covered with a trailing 12-month tenant rent coverage ratio of 2.6x.

Turning to our investment activities for the quarter. We invested $56.3 million at an initial cash yield of 8%. The weighted average lease term on acquired assets for the quarter was 18.2 years. Highlights of this quarter's investments include the acquisition of 15 drive-thru QSRs for $18.4 million, 5 convenience stores for $19.4 million and 2 express tunnel car washes for $11.1 million. We also advanced incremental development funding in the amount of $4.5 million for the construction of 2 auto service centers and 3 express tunnel car washes. These assets are either already owned by the company and are under construction or will be acquired via sale-leaseback transactions at the end of the project's respective construction periods.

Subsequent to quarter end, we invested an additional $103.4 million, including the 12-site now travel sale leaseback transaction that Chris discussed, bringing our year-to-date total investment $236.8 million at a 7.9% initial cash yield. Beyond our disclosed pipeline of more than $75 million of investments under contract, the majority of which we expect to fund over the next 9 to 12 months and average initial cash yields in the high 7% area, we continue to source opportunities that are priced at accretive spreads and will be added to our portfolio as we look to further scale and diversify our business.

Moving to our redevelopment platform. During the third quarter, rent commenced on one redevelopment property located in the Philadelphia metro area that is now leased to a Take 5 Oil franchisee. We invested $1.2 million in this project and expect to generate a return on invested capital of 11.6%. At quarter end, we had 3 signed leases for new-to-industry oil change locations, one of which is currently under construction and additional projects in various stages in our pipeline. Continuing with our asset management efforts. During the quarter, we sold 1 property for gross proceeds of $1.8 million. And year-to-date, we have sold 6 properties for gross proceeds of $5.5 million.

With that, I'll turn the call over to Brian.

Thanks, Mark. Good morning, everyone. Yesterday, we reported AFFO per share of $0.62 for Q3 2025, an increase of 5.1% over Q3 2024. For the 9 months ended September 30, AFFO per share was $1.80, an increase of 3.5% compared to the prior year period. A more detailed description of our quarterly and year-to-date results can be found in last night's earnings release, and our corporate presentation contains additional information regarding Getty's strong earnings and dividend per share growth over the last several years.

Looking at G&A expenses, management focuses on the ratio of G&A, excluding stock-based compensation and nonrecurring retirement costs to cash rental and interest income. That ratio was 8.8% for the quarter ended September 30, a 30 basis point improvement over the prior year period and 9.7% for the 9 months ended September 30, a 10 basis point improvement over 2024. For the full year 2025, we expect to see an improvement over full year 2024 and anticipate this ratio will improve further as we benefit from continuing to scale the company.

Moving to the balance sheet and liquidity. At quarter end, net debt-to-EBITDA was 5.1x or 4.6x, taking into account unsettled forward equity. We continue to target leverage of 4.5 to 5.5x net debt to EBITDA and are well positioned to maintain these levels going forward. Fixed charge coverage for the quarter was 3.8x. As of September 30, the company's weighted average debt maturity was 4.8 years, and the weighted average cost of our debt was 4.5%. As a result of our financing activity earlier this year, we have no debt maturities until 2028. During the third quarter, we settled approximately 1.2 million shares of common stock subject to forward sale agreements for net proceeds of $32.5 million and entered into new forward sale agreements to sell approximately 1 million shares of common stock for anticipated gross proceeds of $29 million.

At quarter end, we had approximately 3.7 million shares of common stock subject to forward sale agreements, which upon settlement are anticipated to raise gross proceeds of $113 million. We continue to be in a strong capital position with more than $375 million of total liquidity at quarter end, including unsettled forward equity, availability on our revolver and cash on the balance sheet. We have capacity to fund our committed investment pipeline and incremental investment activity as we head into next year. We also remain focused on balancing the return of capital to our shareholders through our growing dividend and retaining free cash flow to support continued growth and long-term value creation.

With respect to our earnings outlook, as a result of year-to-date investment activity, we are increasing our full year 2025 AFFO per share guidance to a range of $2.42 to $2.43 from the prior guidance of $2.40 to $2.41. As a reminder, our outlook includes completed transaction activity at the date of our earnings release, but does not include assumptions for any prospective acquisitions, dispositions or capital markets activities, including the settlement of outstanding forward sale agreements. Primary factors impacting our 2025 guidance include variability with respect to certain operating expenses, certain transaction-related costs and the timing of our anticipated demolition costs for redevelopment projects, which run through property costs on our P&L.

With that, and with a moment for some of the background noise to clear, we will ask the operator to open the call for questions.

[Operator Instructions]

Our first questions come from the line of [ Daniel Behan ] with Bank of America.

15 out of 24 acquisitions were drive through QSRs. Could you provide your thoughts around the business as it relates to the health of middle to lower end consumer?

Yes. So we've been gaining momentum in the quick service restaurant as evidenced by the number of properties acquired over this last quarter. We have broadened our reach into that industry, developed a lot of relationships. We feel that the quick service restaurant concept is right in with the -- some of the macroeconomic pressures across the country, the price points that they offer, the quality of food, the convenience factor that we like and the automotive experience kind of all just fit our model. And we're going to continue to press hard to grow that as part of our efforts to diversify the portfolio.

And then just separately, can we get more color behind the 3Q environmental expense adjustments? Should we expect additional adjustments going forward?

It's Brian. For those that may remember, about 3 years ago, I think in 2022, we had similar activity at a much larger magnitude. I think it ended up being $23 million, $24 million, $25 million. But effectively, what's happened there is we determined that whatever risk we may have previously had available for environmental contamination at some of our legacy sites that, that risk has been alleviated and that falls squarely on our tenants at this point. And so as a result, we removed certain reserves that we had on the balance sheet around those environmental potential unknown environmental liabilities. And that's really the story behind those and very similar with activity we've had over the last couple of years.

Our next questions come from the line of Mitch Germain with Citizens JMP.

When -- how long does the engagement with now and forever, how long did that begin? And then basically the process ending with an acquisition? Is it a several year process to learn about their business and talk about the merits of your financing options?

Yes. I think each transaction, the time line can be a little bit different. If you recall the last year, we spent some time down in Houston and did another portfolio transaction down there. So we spent actually a lot of time in that market. So we've got to know them as an operator. And this particular transaction, I think, was probably less than 6 months start to finish. But again, we've had certain opportunities, Mitch, just to be honest with you, where it's been years of getting to know somebody and underwriting potential deals, and we finally get one done and others that can be maybe faster like than now and forever team. So it really is a range.

Great. That's helpful. And then maybe, Brian, if you could talk about for the back part of the year, obviously, you've got this $100 million transaction, another $75 million behind that. Maybe -- and I know you've got liquidity, but maybe discuss the funding plan in terms of maybe for 4Q and then as you approach growing that pipeline into 2026?

Yes, absolutely. I mean you hit on the major sources there, Mitch. In the immediate term, as we do each quarter, we're typically funding investment activity on the line and then settling forward equity towards the end of the quarter to manage leverage and revolver availability. That's the same process and cadence we follow every quarter, so that won't be any different here.

And then as you pointed out, we have additional equity beyond that. We have capacity on the revolver. We are generating more free cash flow each year as we continue to grow the platform and expand the company. And looking into certainly the early part of next year, looking into our pipeline, looking into the timing of when we think capital needs to be deployed, we feel very well positioned. And we'll assess additional capital sources as the pipeline further materializes and we time passes as we move into next year.

Our next questions come from the line of Rob Stevenson with Janney Montgomery Scott.

Just to follow up on Mitch's question. Brian, no near-term debt maturities, but if you do more deals and want to move some debt off the line, what's your best source of debt today? And where is that pricing versus the line?

Yes. It's a great question, Rob, because I think it is reasonable to assume, given the constructive debt markets that there may be an opportunity to term out some of that revolver balance. As a reminder, $150 million of that is fixed at 6.1%, the balance close with the line. We've been very active in the private placement market for well over 10 years. some great relationships there. So that would be the likely route. I would put forth that right now, on a new 10-year, we're probably in the high 5s all in, given where treasuries are and where spreads are. So call that 5.9% area, plus or minus is where we see new tenure today.

Okay. And then, Chris, the Board has been increasing the annual dividend by about $0.02 a share since late 2019. This year, they decided to do $0.015. Can you talk about the thought process they went through here to retain more cash internally? And arguably, the dividend yield was already high enough, how you guys sort of went through that process on the evaluation of the dividend this year?

Sure. Yes. I think it's representative of the Board's view that retaining capital to help us grow and scale the business is critical right now. And we're cognizant of the fact that we've grown earnings and the dividend should follow that. But again, if we look to grow at scale, that's an attractive cost for us to be able to redeploy that capital.

Our next questions come from the line of Upal Rana with KeyBanc Capital Markets.

Would you like to provide some details on how you're able to source the Now & Forever acquisition? And how do you plan to source even more of some of these travel center transactions in the future?

Yes. I'll take maybe the first part, Mark, you can talk about travel center. But again, I think very similar to how we've grown in other markets over the years, Upal. Yes, we did a couple of transactions down in the Texas market at the end of last year in Q4. We are constantly trying to establish new relationships and build on our network, particularly in the C-store space. It is -- it's a large market, I'd say, just given the breadth of the Houston market, there's -- these sites happen to be in the western and southern areas of Houston. So they didn't really overlap with the deals we did last year, but really just relationship building. We're down there driving the market and got to know the Now & Forever management team and are happy to get that deal done. You can touch on travel center.

Yes. As far as continue to source travel centers, there's a number of opportunities. One is many of our current relationships and tenants that operate traditional convenience stores are branching out into the travel center sector and exploring ways to grow their business. So we have that had a built-in relationship to kind of grow that relationship. Secondly, there's the old fashioned business development, the trade shows, dedicated brokerage networks, deal advisers that are dedicated to the space.

And lastly, what I'd say is there's about 5,000 in -- what we call in our profile travel centers in United States. The top 3 operators own about 30% of those units. So it's still a very highly fragmented industry, which typically is good for sale leaseback or those type of aggregators and consolidators use sale leaseback to help grow that business. We're making a lot of great inroads with those consolidators. We've got great early returns from kind of expanding our strategy early this year, putting a few deals in the close category. So we think there's a lot of opportunity for us to be active in that space.

Okay. Great. That was helpful. And then, Brian, maybe you could provide us with an update on the bad debt so far this year and what you currently have baked into your updated guidance?

Yes, absolutely. As you can see from the collections and I guess, the lack of any other commentary beyond the Zips situation from the first quarter, which we had fully resolved by the end of the second quarter. There has been no rent collection issues this year. In terms of what's in that number, it's the typical kind of 15 basis points or so that we roll through down the quarterly number there. So that's really just math, but nothing specific and nothing has risen to any level of concern since Zips earlier this year.

Our next questions come from the line of Wes Golladay with Baird.

Sticking with the tenant health, are you seeing any more an uptick in request to substitute assets in your master leases?

Well, the short answer is not at this time, Wes. We do have a few larger unitary leases that are set to expire in '27. Each of those has different notice periods. Probably a little too early for us to assess or comment on the specifics there. But again, those are profitable leases. And I'd say we expect the vast majority of those properties to remain on our portfolio for the long term.

Okay. And then when you look to go to like a new segment like the larger format centers, are you comfortable taking that exposure up to 5%, 10% of the portfolio? Or do you have a sort of governor in the first few years where you want to just monitor what you buy?

Yes. And I think I said we bought 3 of these are slightly larger purchase prices than maybe a typical 5,000 square foot C-stores for us. We really view this as an extension of the C-store space, particularly as some of our tenants that we know really well are getting into them. I think we'll -- we're getting ourselves a lot smarter on some of the dynamics on the commercial side as opposed to the consumer that we feel very comfortable with. I don't think we've established a specific target at this point in time, but I think there is a bit of a learning curve before we would significantly expand the portfolio, the concentration in our portfolio.

Our next questions come from the line of Brad Heffern with RBC.

On the travel centers, can you talk about maybe how the underwriting is different there? I would think a traditional small format store is a little easier to re-tenant than a large one with branded food and beverage, but they probably cover better as well. I guess, is that right? Or is there anything else that you would call out about the differences in the risk profile?

Yes, it's Mark. So certainly, as you said, the land component of the overall value of these centers is a little smaller in relationship to the total investment than we would have in a traditional C-store. That said, though, we're developing the model underwriting as we learn more and more about these businesses to be specifically a total value approach to any acquisition. But with the risk mitigants that you highlighted there on the travel centers, these tend to be anywhere from 2 to 4 acres upwards of 10 acres versus the 1 to 2 acres we have been acquiring. The store size is anywhere from 2 to 3x the size.

But that said, the breadth of the services that these operations offer. And again, think of it less about being just a stop for the professional driver. These operations attract the recreational driver, families on vacations, commuters. So the investments we'll make will be with operators that offer goods and services to all of us, not only the typical retail customer, but the professional driver. They're going to be more focused about maybe on the fringes of the MSAs because they need to leverage the high traffic count of the interstate system, so less around internal or community type centers. But yes, I think all of that being considered, -- we are -- we have developed and we'll continue to perfect our underwriting model for a total value approach to get comfortable with the higher value per unit investments.

Okay. Got it. And then, Brian, can you walk through the puts and takes on the new guide? Obviously, you have a lot of deal activity that probably wasn't in the old guide, but it's also pretty late in the year for that to move AFFO much. So just wondering if there was anything else that contributed.

No. I mean I think you hit it, right? We're still a relatively small company, small denominator, $100 million deal at the beginning of a quarter that wouldn't have been in our prior guidance, right? That alone could actually have that kind of impact even in only a quarter, just given the relative sizing. We also had a fairly active third quarter overall. So I think if you look there's probably upwards of $140 million plus or minus of acquisition activity that's in this guidance that wouldn't have been in our guidance 1 quarter ago. That's the big driver.

And then obviously, just crystallizing any expenses, right, that had estimates around them, had ranges around them coming in at the mid or lower end of what those estimates have been. But really acquisition activity driving earnings growth given the magnitude of it relative to the size of the whole.

[Operator Instructions]

Our next questions come from the line of Michael Goldsmith with UBS.

First, just given the moderating tenure in the last couple of weeks, is that impacting the cap rate discussion in any way? And do you think there's been enough of a move that it may shake some sellers loose and want to come to the table to deal?

We haven't seen a big move in cap rates, I'd say, over the last several quarters. And my initial reaction, Michael, is that this move is a little too quick to say it's going to have a Q4 impact on cap rates. I think, a longer-term shift. And you're correct, you may start to see some different asks.

Got it. And then another question we had is just how do you think about transacting in volume versus acquisition cap rates and just trying to think about the trade-offs between how much -- how accretive a deal is versus kind of the volume of transaction activity that you're completing?

Yes. I'd say our mandate has always been about selecting the right assets for this portfolio in the sectors that we like. I don't think I would categorize Getty as a "volume shop. And to the extent that we do close more volume, we're certainly looking to grow and scale the business, but it's got to be transactions that are priced accretively for Getty. So I think we'll continue to be focused on the sectors that we like on the sale leasebacks where we can drive a little bit of incremental price, and you'll continue to see us deploy capital in around the same range that we indicated for our pipeline and that should produce future earnings growth.

And maybe one more for me. We've gotten this far we haven't talked too much about Car Wash, which I presume is a good thing. But can you just talk -- I think in the prepared remarks, you talked a little bit about some of the newer car washes and they've kind of stabilized as they've ramped up. So maybe you can provide a little bit more color about what you're seeing in the car wash industry more recently.

Yes, sure. We feel good about the increase in rent coverage in Car Wash this quarter. Many of the sites that we've acquired were new builds, which requires a ramping period, right, to get up to what we'll call a stabilized level of profitability. We generally underwrote those on a 3-year basis where we say it would take the operator 3 years to get to a fully mature site. And what we've seen to date is they're kind of trending ahead of schedule as they reach stabilization. But to the extent these assets continue to come online, we're always going to be monitoring the trend, right, in terms of whether it's visits, memberships and how much time it's taking them to stabilize.

But again, for the last several quarters, what we've seen is a very healthy ramp for those new builds that are coming online. And obviously, that's good for our portfolio, and it's great for the health of our tenant as well.

And Michael, I'll just add one thing or perhaps clarify. The operators project 3-year stabilization period. As Chris just said, we underwrite a 3-year stabilization period, but we do put them in our reporting after 12 months. And so to some degree, the car washes can act depending on the particular point in time as a little bit of a drag on coverage. But what we've seen over the last 3 quarters, in particular, and that's what we're really emphasizing is as these car washes have been ramping up, as they've been stabilizing, many of them not at that 3-year period yet. right, you're starting to see that impact in a more material way to the point where the car wash side of the business is actually covering greater than the C-store side of the business, although it is a much smaller weight on the whole.

So even as we go forward and we continue to bring more properties into the coverage calculation into the presentation that we put out there, you'll continue to see that dynamic. If there's things that are open a year that are on the lower end, that will come into coverage that way. We'll disclose that as it comes in. But the expectation even for those assets to the extent there are any, is that as they move into year 2 and 3 and beyond, that it will match the performance we've been seeing from the other facilities and closer to where we're underwriting them.

I'm showing no further questions at this time. I would now like to hand the call back over to Christopher Constant for closing remarks.

Great. Thank you, operator. I just want to thank everybody for joining us this morning, and we look forward to speaking with everybody when we get on the phone in February and report our fourth quarter and full year earnings for 2025.

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

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" UBS Investment Bank, Research Division

" BTIG, LLC, Research Division

" Citizens JMP Securities, LLC, Research Division

" KeyBanc Capital Markets Inc., Research Division

" Robert W. Baird & Co. Incorporated, Research Division

" RBC Capital Markets, Research Division

" BofA Securities, Research Division

Good morning, and welcome to Getty Realty's Second Quarter 2025 Earnings Call. This call is being recorded. [Operator Instructions] Prior to starting the call, Joshua Dicker, Executive Vice President, General Counsel and Secretary of the company, will read a safe harbor statement and provide information about non-GAAP financial measures. Please go ahead, Mr. Dicker.

Thank you, operator. I would like to thank you all for joining us for Getty Realty's Second Quarter Earnings Conference Call. Yesterday afternoon, the company released its financial and operating results for the quarter ended June 30, 2025. The Form 8-K and earnings release are available in the Investor Relations section of our website at gettyrealty.com. Certain statements made during this call are not based on historical information and may constitute forward-looking statements.

These statements reflect management's current expectations and beliefs and are subject to trends, events and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Examples of forward-looking statements include our 2025 guidance and may include statements made by management, including those regarding the company's future operations, future financial performance or investment plans 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, 2024, as well as any subsequent filings with the SEC 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 today.

The company undertakes no duty to update any forward-looking statements that may be made during this call. Also, please refer to our earnings release for a discussion of our use of non-GAAP financial measures, including our definition of adjusted funds from operations, or AFFO, and our reconciliation of those measures to net earnings. With that, let me turn the call over to Christopher Constant, our Chief Executive Officer.

Thank you, Josh. Good morning, everyone, and welcome to our earnings call for the second quarter of 2025. Joining us on the call today are Mark Olear, our Chief Operating Officer; and Brian Dickman, our Chief Financial Officer. I will lead off today's call by highlighting our quarterly financial results, accelerating investment activity and recent tenant performance. Mark will then discuss our portfolio and investment activities, and Brian will provide additional details on our earnings, balance sheet and 2025 AFFO guidance.

Getty had a strong quarter and grew its annualized base rent by 9.9% to approximately $204 million during the second quarter. And we also produced AFFO per share of $0.59, an increase of 1.7% compared to the prior year. Our consistent financial results continue to be driven by the steady performance of our in-place portfolio. With nearly 100% rent collections, annual rent increases averaging 1.8% and stable rent coverage, our in-place portfolio provides a base for reliable and growing cash rental income. We further enhanced that income growth with accretive investment activity supported by prudent balance sheet management.

Our pace of underwriting and closing transactions showed acceleration as we move through the second quarter. Year-to-date, we have closed $95.5 million of investments at an initial cash yield of 8.1%, and operators are taking a noticeably more constructive stance towards moving deals forward. We're also energized by the increasing diversity of opportunities we're seeing and our ability to close transactions across our investable universe. We've deployed meaningful amounts of capital into each of our target property types this year and continue to add new tenants to the portfolio while expanding our geographic footprint.

Our acquisitions team is doing an excellent job of identifying transactions that meet our investment criteria with both larger, more established tenants that have broad store networks and emerging high-growth tenants that are building platforms across the U.S. Our $90-plus million investment pipeline and the deals we are currently underwriting both reflect this increased transaction activity and diversity of prospects. Our pipeline includes acquisitions or development funding in all of our target sectors with the majority allocated to automotive service centers. Importantly, the increase in transaction activity that we saw at the end of the second quarter has continued as we move through the third quarter.

Coming back to our in-place portfolio and the steady, resilient performance we've consistently seen from our tenants, we reported strong trailing 12 months rent coverage of 2.6x this quarter. Rent coverage improved for nearly all of our convenience store portfolios, driven by healthy fuel margins, stable fuel volumes and expanding profit margins inside the store. Additionally, rent coverage for our Car Wash portfolio showed noticeable improvement for the second consecutive quarter as new-to-industry sites continue to mature and operators focused on profitability.

As we think about recent performance, the evolution of our platform over the last few years and the opportunities we see ahead, we have more conviction than ever in the sectors in which we invest and in our ability to further scale the company. Our strategy to focus on well-located convenience and automotive retail properties is proven. These are largely recession-resistant businesses providing nondiscretionary goods and services to mobile consumers that prioritize convenience, speed and service.

Our approach to underwriting and structuring investments is effective. We emphasize market and real estate fundamentals and strong lease terms to support our investment decisions and mitigate the credit risks real or perceived inherent in a net lease business. And our results are compelling. Our earnings growth, dividend growth and leverage compare favorably to peers. As do our portfolio metrics such as occupancy, remaining lease term, tenant rent coverage and rent collections.

Looking ahead, we're going to keep executing on strategy and focus on what we can control. We've demonstrated that we can effectively allocate capital, drive outperformance and create shareholder value, and we are confident the market will recognize our success. With that, I will let Mark discuss our portfolio and investment activities.

Thank you, Chris. At quarter end, our lease portfolio included 1,132 net lease properties and 2 active redevelopment sites. Excluding the active redevelopments, occupancy was 99.7%, and our weighted average lease term remained at 10 years. Our portfolio spans 44 states plus Washington, D.C., with 61% of our annualized base rent coming from the top 50 MSAs and 76% coming from the top 100 MSAs. Our rents continue to be well covered with a trailing 12-month tenant rent coverage ratio of 2.6x.

Turning to our investment activities. For the quarter, we invested $66.1 million at an initial cash yield of 8.1%. The weighted average lease term on acquired assets for the quarter was 15.9 years. Highlights of this quarter's investments include the acquisitions of 9 drive-thru QSRs for $14.9 million, 6 automotive service centers for $7.99 million, 5 convenience stores for $33.39 million and 4 express tunnel car washes for $5.59 million, net of amounts funded in prior periods. We also advanced incremental development funding in the amount of $4 million for the construction of 3 auto service centers and 1 express tunnel car wash. These assets are either already owned by the company and are under construction or will be acquired via sale-leaseback transaction at the end of the project's respective construction period.

Subsequent to quarter end, we invested an additional $18.5 million, bringing our year-to-date total investments to $95.5 million at an 8.1% initial cash yield. Beyond our disclosed pipeline of more than $90 million of investments under contract, the majority of which we expect to fund over the next 6 to 9 months at average initial cash yields in the high 7% area, we continue to source actionable opportunities that are priced at accretive spreads and will be additive to our portfolio as we look to further scale and diversify our business.

Moving to our redevelopment platform. We advanced several projects this quarter, which are in various stages of the redevelopment process. At quarter end, we had 4 signed leases for new-to-industry oil change locations, of which 2 are under construction, and we have additional projects in various stages in our pipeline.

Continuing with our asset management efforts, during the quarter, we sold 3 properties for $3.2 million. As it relates to the 12 Express Tunnel Car Wash assets that were previously leased to Zips Car Wash, we have effectively concluded the repositioning of this portfolio and the results were in line with our previous disclosures. Zips remains our tenant at 6 properties and 5 of the sites are now subject to new leases with 2 new experienced car wash operators. While both operators are new to Getty's portfolio, each has an existing presence in the market where they acquired assets, and we look forward to developing these relationships moving forward. The remaining properties under contract to be sold, which we expect to close by year-end. With that, I'll turn the call over to Brian.

Thanks, Mark. Good morning, everyone. Chris went through the earnings highlights in his opening remarks and a more detailed description of our quarterly results can be found in our earnings release. Our corporate presentation also contains additional information regarding our earnings and dividend per share growth over the last several years.

Looking at G&A a little more closely, management focuses on the ratio of G&A, excluding stock-based compensation and nonrecurring retirement costs to cash rental and interest income. This ratio was 9.9% for the quarter ended June 30, 2025 and 10.2% for the 6 months ended June 30, 2025, both of which were essentially flat to the comparable periods in 2024. For the full year 2025, we do expect to see an improvement versus full year 2024. And in general, we remain focused on improving overhead efficiency and expect our relative G&A burden to decrease further as we continue to scale the company.

Moving to the balance sheet and liquidity. At quarter end, net debt to EBITDA was 5.2x or 4.6x, taking into account unsettled forward equity. We continue to target leverage of 4.5 to 5.5x net debt to EBITDA and are well positioned to maintain those levels going forward. Fixed charge coverage was 3.9x for the quarter. As of June 30, 2025, the company's weighted average debt maturity was 5.1 years, and the weighted average cost of our debt was 4.5% -- as a result of our debt financings earlier this year, we have no debt maturities until 2028.

During the second quarter, we settled approximately 1.2 million shares of common stock subject to forward sales agreements for net proceeds of approximately $32.8 million. At quarter end, we had approximately 3.9 million shares of common stock subject to forward sales agreements, which upon settlement are anticipated to raise gross proceeds of approximately $118.8 million. We continue to be in a strong capital position with more than $400 million of total liquidity at quarter end, including unsettled forward equity, capacity in our revolver and cash on the balance sheet. Our under contract investment pipeline is fully funded, and we have capacity to fund additional investment activity as we move through 2025.

With respect to guidance, as a result of our year-to-date investment activity and the repositioning of the Zips portfolio, we are increasing our full year 2025 AFFO per share guidance to a range of $2.40 to $2.41 from our prior guidance of $2.38 to $2.41. As a reminder, our outlook includes completed transaction activity as of the date of our earnings release, but does not include assumptions for prospective acquisitions, dispositions or capital markets activities, including the settlement of outstanding forward sales agreements.

Primary factors impacting our 2025 guidance include variability with respect to certain operating expenses, certain transaction-related costs and the timing of anticipated demolition costs for redevelopment projects, which run through property costs on our P&L. With that, I will ask the operator to open the call for questions.

[Operator Instructions] Our first question is from Brad Heffern with RBC Capital Markets.

You called out the accelerating investment activity in the prepared remarks. What do you attribute that to? Is it just people getting comfortable with the tariffs? Is it seasonality? Or is it something else?

Yes, Mark. I think, yes, we've definitely seen a more willingness to get back into the transaction market. Those companies that are looking to continue to grow need sources of capital. We're a good option for that. We talked about some pricing, which remains kind of in line with earlier in the year, but our team has been able to source and use its relationship building with our existing tenants, source some new tenants, spread out the investments across all of our asset classes. And yes, I think it's just the more willingness for those -- the market to transact. And we've been staying on those relationships through the entire cycle, and we're ready to partner with them.

Okay. And then now that Zips is in the rearview mirror, can you just talk about your overall comfort level on the car wash space? And is there anything of note at this point on the watch list?

So I'll start with the back half of that question, which is there's nothing of note on our watch list with respect to our car wash tenants. We said this on prior calls. We continue to be very comfortable with the Express Car Wash as part of our investment thesis, right? It's a mobile consumer. I think the model has proven to be working throughout the last several years. The majority of our tenants or the vast majority of our tenants are large operators with networks that are primarily focused either on a region or even national. And we're actually very happy that we've seen probably a slowdown in new store count, right, and more focus on the profitability, letting these new industry stores mature. So we're comfortable with where we are. We're selectively adding, right, we see good opportunities in this sector. And again, I think we're very pleased with how we've seen the coverage ramp up for 2 consecutive quarters for the sector.

Our next question is from Mitch Germain with Citizens JMP.

So the more constructive stance, Chris, toward investments or toward deals, I guess, you said, is that a suggestion that we're seeing a narrowing of that bid ask? Are sellers now embracing this higher interest rate kind of pricing paradigm?

I think I'll echo what Mark said, which is I think there was a lot of noise just generally in the first quarter of the year. When you look at the performance of our tenants, right, there continue to be healthy businesses operating in sectors that have a lot of positive fundamentals and even overall macro themes, right, that they're continuing to benefit from. And as these folks look to either grow through M&A or through new store builds, we've been a very consistent capital provider in our target markets. And I think what we're seeing now is folks are kind of returning towards growth and some of our consistent presence and dialogue with repeat business and existing tenants and even new tenants, you're starting to see that flow through various stages in our pipeline.

And I know you've made some investments, particularly on the acquisition side. Are we seeing the benefits of those investments in the numbers today? Or do you think that, that's still really kind of in the future that you'll really begin to see some of those kind of...

No, we've added personnel to look at deals across the 4 sectors that we invest in. We've invested in technology. I think you're starting to see those pay off. We're hopeful as an organization that our growth will continue to accelerate. And so we believe that the investments are important today and will be even more important as we scale the business going forward.

Got you. Last one for me. Any change in lease structure in terms of your ability to maybe get higher escalators? Or are you requiring some sort of security just to avoid any credit issues in the future? Anything that has shifted there?

So broadly speaking, no change to our lease structure. We continue to prioritize unitary master leases. escalations generally are hovering in that 2% area today. We're mindful, especially being sale-leaseback providers where we're structuring the transaction and negotiating the lease on our form, right? You've got to have an operator that can grow that business in order to support an increasing rent over time. So we're not necessarily trying to push for significantly higher rent bumps there. Security guarantees, all the other attributes of a true triple net lease on our form. There's definitely some negotiation by transaction, but we get various enhancements, again, through our business model, consistent with how we've always done it, Mitch, to be honest with you.

Our next question is from Upal Rana with KeyBanc Capital Markets.

Chris, you mentioned that you're all set up well for the back half in terms of investment spend. Could you give us a sense of how the back half may play out? Earlier this year, you mentioned most of the investment spend for '25 will mostly be back half weighted. Is that still the case?

So we got on the phone last quarter, right? It was actually our slowest closing quarter since the fourth quarter of 2019. Some of that was because our pipeline at that point in time was a lot of development funding, which has a natural lag. I think what you saw this quarter and even into some of our pipeline deals is that a lot more acquisition activity is flowing through our business, right, whether it's in the pipeline or under contract or not closed. So we're at 95.5% year-to-date. We've obviously got the pipeline, which is just over 90%. A lot of that we think will close in 2025. And quite frankly, the team is out there underwriting deals, and we hope to be able to add to that and still get more deals closed as this year goes on that have yet to touch that pipeline number. So I'll just go back to what Mark says. I think people are looking to grow their businesses. We're a consistent capital provider to these sectors, and we're really happy with how we're seeing more activity in all stages of our pipeline across all the sectors that we invest in.

Okay. Great. That was helpful. And then on the cash cap rates on your investment spreads in the quarter, you saw an increase to 8.1%. What was driving that? And should we expect similar cap rates going forward into the back half?

Yes. We don't -- we haven't seen a lot of change. We've said that the market is there in the kind of mid- to high 7s, touching 8. Again, certain transactions may have been just north of 8, which is what drove the number this quarter. But in Mark's remarks, he said that the $90-plus million in the pipeline is priced in aggregate in the high 7s. Again, our best -- for Getty, our view has been that's where the market is for the first half of this year, and that's where we'll continue to be as we move through the balance of the year.

Our next question is from Daniel Brun with Bank of America.

It was mentioned that the bid-ask price was -- or the bid-ask spread was tightening and you're seeing cap rates around the high 7s for the $90 million pipeline. Are you seeing any heightened competition within the buyer pool?

B, the sectors that we invest in, I think if you look across net lease portfolios. We have a lot of competition in the public markets. There's obviously a big private market as well. We are a primarily direct sale-leaseback provider where we're not necessarily always looking at the marketed deals. We're trying to generate business through traditional business development or through repeat business or relationships that we have in the sector. So I think there's always been competition. We think we can find transactions that are compelling for our portfolio that may be less competitive. And again, just to go back to Mark's comments, we've had a view of pricing. And I think what we're seeing now is tenants are looking to transact and grow their businesses, and that's why you've seen some accelerating activity for us.

Got it. And just to kind of follow-up on the improved rent coverage in car wash. Is that mainly the Zips resolution? Or is there anything underlying that we should be aware of?

Daniel, it's Brian. Actually, Zips was not in our numbers last quarter either given the situation there. So this was really organic fundamental improvement across the portfolio. As Chris mentioned in his remarks, it was the second quarter we've seen this type of improvement. I think what we're looking at, there's the magnitude of improvement, sure, but it's really across the portfolio and in each of our leases. And I think that breadth of improvement is what we find encouraging. And then Chris mentioned also that we do have a significant portion of that portfolio that are relative new builds in that stabilization period. Again, just to remind you, we put properties in our data when they've been open for a year. Car washes typically stabilize closer to 3 years. And so you are seeing that ramping of those operations having a positive impact on coverage.

Our next question is from Wes Golladay with Baird.

If you were to source more traditional acquisitions, what is the lag time typically between identifying the deal for the pipeline and out.

When you say traditional, you're like a net lease existing property or sale leaseback?

Acquisition or sale leaseback versus a development. I just want to exclude the developments from the conversation...

Excluding development. I would say that from initiation of the first conversation through letter of intent, due diligence, the contract process, that can be anywhere from accelerated 60-day period to 120-day period. Each deal is slightly different. Sometimes we're subject to the buyer, seller transaction on the business side, but we're -- we always keep pace with the deal and try and get them done as quickly as possible.

Okay. And when you look at your existing pipeline of the $90 million plus, is there a lot of new relationships in that -- in the pipeline?

I mean it's a healthy blend. Again, the team has done a really good job of not only maintaining relationships with our existing tenant roster and being selective as they become more select. Chris mentioned, there's a return to focus on just growing the business, perfecting the business and being more selective on some of the de novo developments, but also through our business development, our industry reach, people becoming more and more aware as we get more momentum in the verticals that we're newer to, we like to think that not only geographically, tenant-wise and vertical-wise, it's a pretty good blend.

Okay. And last one for me. When you look at the one big beautiful bill, is there anything there that could spur more demand for you?

Yes. And I think just if we look across other operators, right, lower taxes, again, our view is that our tenant base generally does not have a large exposure to tariffs, especially some of the automotive service sectors could actually benefit, right? A lot of C-store supply chains aren't necessarily tied to some of the countries that are more at risk from a tariff perspective. I think, quite frankly, less the certainty that our tenants don't have as to the environment they're going to be operating in for the next year or 2 or I guess, the next several years, that's been very helpful, right, just in terms of knowing the playing field for them and then they can then think through how they want to continue to operate and grow their businesses.

Our next question is from Michael Gorman with BTIG.

Just had a question maybe going with the car washes again here. Chris, I'm curious your thoughts. You talked about focusing on profitability, the operators. Where are we in the competitive cycle with the express tunnel car washes, right? I still seeing headlines of new entrants into the industry. But I guess that's just my question. Where are we in the evolution? Are we going to get some consolidation here from existing operators? And how do you think about that as you're constructing the portfolio?

Yes. I think you've seen some consolidation, right? Obviously, Whistle bought the Driven U.S. platform earlier this year. So that was -- put Whistle as the #1 operator. What I think has been interesting is there's been some acquisitions like Circle K made a significant acquisition is now a big player. [indiscernible] was a private equity, but that was a big transaction earlier this year. So I think you started to see some consolidation, some recaps in the sector. I think like any business, there's always going to be new entrants. Again, what we've done in -- for Getty is really tried to focus on the larger, more established platforms, right? I think you've got to be a good operator. You've got to know how to manage a network. You've got to have a good handle on your membership or subscription program.

So I think, yes, I think new entrants have slowed down. Yes, I think new stores have maybe slowed down. But again, in our view, I'd echo what I said earlier, which is focusing on profitability and perfecting your membership or subscription program and how you're kind of working with the consumer. We don't think that's a bad thing. right? And I think that's what you're seeing as our coverage has ticked up inside our portfolio.

That's helpful. And I apologize if I missed it. But as you think about the pipeline and the deals that you've done year-to-date, is there a major stratification or a meaningful stratification in the cap rates between the different verticals that you're looking at or the competition levels that you're seeing in the different property types amongst the QSRs, the auto service, the car wash and the C-stores?

So there's not a significant stratification on cap rate, right? Again, I call it, mid-7s through into the low 8s, right? So if you call it 50 basis points wide on cap rates across what we've done this year. Competition -- Mark, I don't think there's that much of a difference in terms of competition by asset class.

Yes, I think the competitive landscape has remained generally unchanged recently. As Chris said, the attractiveness of the verticals that we invest in are part of other parties' investment programs also. And that's something we've dealt with not only recently, but for years. And it's our job to continue to position ourselves to keep that pipeline filled with accretive deals and consistent with our strategy, underwriting standards. So you could view it as competition as a validation of our thesis of how strong we think those asset classes are, we just continue to keep that pipeline fill.

Our next question is from Michael Goldsmith with UBS.

In the press release, Chris, you said that you are identifying new investment opportunities. I just want to clarify, is that within your existing verticals? Or does that identify new investment opportunities suggest that you're looking kind of outside of some of the stated verticals that you already have exposure to?

No, there's no current plans for us to expand beyond our 4 primary target sectors. My comments were really that the team has done a great job of bringing in repeat business, new relationships. We've added more than 40 new tenants to the portfolio over the last several years. So we're really diversifying the business, whether that's by sector, by tenant, geographically. But we think these are large addressable markets, healthy tenants, growing tenants that need capital to execute their business plans.

Got it. And my follow-up is there was a large environmental expense accrual taken during the period. I think that's backed out of AFFO, so doesn't influence guidance, but would influence cash flow. Can you just provide a little bit of color on what's going on there and just kind of the history of these type of accruals and how we should be thinking about them going forward?

Sure, Michael. This is Brian. So that accrual is related to one of the litigation cases that are disclosed in our 10-Q. There's been some lengthy disclosure in our filings for 10, 12, 15 years on some of these cases. It goes back to when Getty was an owner-operator decades ago. Most of these have been resolved. The remaining ones, again, are disclosed in our filings. I think our perspective on this is it is a positive that this case has progressed to the point where we can estimate a potential settlement and sort of put an order of magnitude around that, obviously, subject to all the accounting standards on how to estimate and book these accruals. But again, it's related to one of those cases that are disclosed in the filings, and we think it's a positive that is progressing and allows us to book an accrual to put an order of magnitude around it.

There are no further questions at this time. I would like to turn the conference back over to Christopher for closing remarks.

Thank you, operator. Thank you, everyone, for joining us this morning. We appreciate your interest in Getty, and we look forward to getting back on with you when we report our third quarter at the end of October.

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.