Getty Realty Corp. Aktie

Good morning, and welcome to Getty Realty's Second 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, 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, 2026. The Form 8-K and earnings release are available on 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, 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 second 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 quarterly 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.

Getty continues to differentiate itself through its focused investment strategy and relationship-driven sale-leaseback approach to deal origination. Our investment platform is producing consistent external growth, while our in-place portfolio generates durable cash flows. Our results for the second quarter reflect both of these dynamics as we increased our annualized base rent by 15%, grew our AFFO per share by 5.1% and increased our full year 2026 earnings guidance for the second time this year.

The foundation of our results remains our in-place portfolio, which was largely constructed over the last decade through direct sale-leaseback transactions featuring appropriate initial rents, long initial lease terms and contractual rent escalators. The portfolio is essentially fully occupied, has an average remaining lease term of more than 10 years and continues to produce stable rent coverage. Despite the economic volatility driven by geopolitical events, our tenants and their businesses have once again proven their resilience and ability to perform during rapidly changing operating conditions.

Looking at our portfolio, based on site level reporting we received from our convenience store tenants, fuel margins averaged $0.46 per gallon for the first quarter of 2026, which was an increase of more than 10% compared to fuel margins they reported in the first quarter of 2025. Equally important, the challenging macro conditions have not resulted in a material deterioration in consumer demand across our core categories. Public company operators have reported modest increases in same-store sales and recent market level data indicates continued year-over-year growth in both convenience-oriented retail sales and automotive service revenue.

Turning to our investment activities. Year-to-date, we have deployed more than $172 million at an initial cash yield of 7.6%. Beyond what we have closed, we have approximately $95 million of investments under contract as well as a robust pipeline of transactions under signed nonbinding letters of intent. The transaction market for convenience and automotive retail properties remains constructive, and we continue to see an acceleration in the pace of our sourcing and underwriting, which we expect to translate into additional closings as we move through the balance of the year.

We are also in an excellent capital position as our recent capital markets activities have provided us with significant liquidity and an attractive cost of capital to fund our 2026 business plan. We currently have more than $190 million of unsettled forward equity and significant capacity under our $450 million revolver. When we look at the spectrum of opportunities under contract and in our pipeline, we are confident that we can deploy this capital in a productive and accretive manner. As we think about our prospects for the rest of 2026 and beyond, I take comfort in the quality of our portfolio, including its proven durability and ongoing diversification. And I'm confident that the direct sale-leaseback platform we've built can drive disciplined growth as we lean into our differentiated expertise in sourcing, underwriting and closing investments and our core convenience and automotive retail sectors. We remain committed to our disciplined underwriting approach, which prioritizes owning high-quality assets in densely populated or growing metro areas with strong access, visibility and retail synergies, which is leased to both established and emerging creditworthy operators.

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

Thank you, Chris. At quarter end, our lease portfolio included 1,220 net lease properties and 1 active redevelopment site. Excluding the active redevelopment, occupancy was 99.8% and our weighted average lease term was 10.3 years. Our net lease portfolio spans 46 states plus Washington, D.C., with 59% of our annualized base rent coming from top 50 MSAs and 75% coming from top 100 MSAs. Our rents are well covered with a trailing 12-month rent coverage ratio of 2.5x.

Turning to our investment activities. For the quarter, we invested $128.3 million, which included the acquisition of 35 properties for $117.7 million and the incremental development funding of $10.6 million. The initial cash yield on these investments was 7.4%. The weighted average lease term on acquired assets for the quarter was 18.3 years. Two highlights from this quarter's investment activity include: one, the continued expansion of our investment efforts as 28 of the acquired properties, representing approximately 60% of ABR acquired were either automotive service or drive-thru QSRs assets; and two, the addition of 6 new tenants to the portfolio, furthering our tenant diversification.

Subsequent to quarter end, we invested an additional $13.5 million, bringing our year-to-date total investments to $172.1 million at a 7.6% initial cash yield. Looking ahead, as Chris mentioned, we currently have approximately $95 million of investments under contract and a significant pipeline of investments under executed letters of intent. The majority of assets under contract are in the auto service sector, followed by drive-thru QSRs and convenience stores. These are primarily or predominantly development funding transactions with initial cash yields in the high 7% area. The pipeline of investments under executed LOIs includes opportunities across all of our convenience and automotive retail sectors with the majority representing traditional relationship sale-leaseback transactions in the convenience store space.

Moving to our redevelopment platform. During the quarter, rent commenced on redevelopment property in Bergen County, New Jersey that is now leased to a Take 5 Oil Change franchisee. We invested approximately $0.4 million in this project and expect to generate a return on invested capital of 18%. At quarter end, we had 4 signed leases for redevelopments and had additional projects in various stages of negotiation in our pipeline. With respect to our asset management activities, we extended 1 unitary lease by 10 years during the quarter. The lease generates $2.9 million of ABR or 1.3% of total ABR, and the new expiration date is December 31, 2039.

The net result of this extension, combined with our first quarter leasing activities and recent acquisitions is an increase to our weighted average lease term and a further reduction in ABR expiring through the end of 2027, which is now approximately 2% of total ABR. In addition, we sold 4 properties during the quarter for gross proceeds of $8.2 million.

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

Thanks, RJ. Good morning, everyone. Starting with headline earnings. AFFO per share was $0.62 in Q2 2026 and $1.25 for the first half of 2026, representing growth of 5.1% and 5%, respectively, over the prior year period. A more detailed description of our quarterly and year-to-date results, including AFFO and net income 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.

Moving to 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 9.3% for Q2 2026 and 9.2% for the first half of 2026, representing decreases of 60 basis points and 100 basis points, respectively, as compared to the prior year period. As mentioned on prior calls, we expect full-year G&A growth to be less than 2% and for our G&A ratio to fall below 9% as we continue to benefit from our efforts to scale the company while maintaining appropriate levels of overhead.

Turning to the balance sheet and liquidity. As of June 30, net debt to EBITDA was 5.3x or 4.3x, including unsettled forward equity, which is well within our stated target leverage of 4.5x to 5.5x. Fixed charge coverage for the quarter was 4x. We ended the quarter with approximately $1.1 billion of total debt outstanding, including $1 billion of senior unsecured notes with a weighted average interest rate of 4.6% and a weighted average maturity of 5.5 years and $73 million drawn on our $450 million revolver. We have no debt maturities until June 2028.

During the quarter, we settled approximately 1.5 million shares of common stock subject to outstanding forward sale agreements for net proceeds of approximately $39.8 million. We also entered into new forward agreements to sell approximately 1.8 million shares of common stock for anticipated gross proceeds of $60.6 million. In total, we currently have 5.8 million shares of common stock subject to outstanding forward sale agreements, which upon settlement are anticipated to raise gross proceeds of approximately $190.5 million. We continue to be in a very strong capital position with more than $570 million of total liquidity at quarter end and have more than sufficient capital to fund our under contract pipeline and additional investment activity as we move through 2026.

With respect to our earnings outlook, as a result of our year-to-date investment activity, we are increasing our full year 2026 AFFO per share guidance to a range of $2.52 to $2.54 from our prior guidance of $2.50 to $2.52. 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 investment or capital activities. We think this approach remains appropriate for our business and look forward to updating everyone on the positive impact our investment activity has on our earnings as we move through the balance of the year.

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

[Operator Instructions] And our first question will come from Mitch Germain with Citizens Bank.

Nice quarter. Chris, I know that I believe a couple of years ago, you brought someone on focusing on the QSR industry. You've seen significant momentum there. Have you expanded that team? Is it just a population of the deals that have hit your underwriting? Is there anything specific that you point out to with regards to the momentum you're seeing now?

I would just say, I think it's the success of the person we brought on, right, to focus on that. And also, it takes time to build relationships in this sector through traditional and other forms of business development. And what we're starting to see is quarter-to-quarter success in that sector, like we've seen in the other sectors that we focused on. So we're really happy with how that's progressed. And again, I think as the year goes on, we anticipate balanced volumes across the investment program. By that, it means our automotive retail asset classes that we focus on.

Great. That's super helpful. I think the last quarter, RJ has spoken about cap rates kind of mid- to high 7% range. It looks like, obviously, for the quarter, they were at the lower end of that range. Was there any specific transaction that kind of brought the cap rate lower than what you've been seeing recently? Or is that just really more broadly the market kind of correcting itself there?

No, I think our view is there's a lot of volume in that kind of mid-7% range, Mitch. And again, this is just one quarter of activity. So some of that might be based on the volume of, say, one transaction or several transactions. But generally, I still think we see cap rates in that plus or minus 7.5% range, and there's going to be deals that Getty does that touch 8 like we did at the start of the second quarter -- excuse me, third quarter. And we anticipate blending out some additional volume into that middle 7% area.

[indiscernible] please. I would add, this is Brian. I think it's important also to acknowledge, right, the improving cost of capital over the better part of this year and that opening up opportunities for us to compete for a wider swath of transactions, many of which we couldn't compete for a year ago in that low to mid-7 areas. So I think if you take what Chris said and just expanded a little bit, we're going to continue to execute as we have been for several years in that mid- to high 7s. But with the improving cost of capital, we have an opportunity to compete again, for a greater range of transactions.

And I think you'll continue to see this blend in the mid-7s. But from our perspective, this is exactly where we want to be when you look at the magnitude of activity and the increase of activity. And yes, that cap rate has come down a little bit on a blend, but our spreads have largely remained constant, if not increased a little bit in some instances.

And our next question will come from Jana Galan with Bank of America.

This is Dan Byun on for Jana Galan. Could you clarify if that $19.3 million advanced aggregate funding is included in that $95 million pipeline?

No, that would have already been deployed. That's just the balance of capital that's been deployed for those projects, and it would be incremental funding to that, that's in the $95 million. And then when those projects are completed, it will no longer be mortgage notes receivable, it will be real estate subject to a long-term lease.

And also just kind of talking about the rent coverage, you held it at 2.5, but the sub-1x bucket rose by 70 bps. Are there any specific tenants or sectors driving that? Are you seeing any softening at all to kind of note?

No, certainly no softening. We've seen really stable coverage across tenants, leases, sectors. That bucket continues to be the same portfolio of ramping new-to-industry car washes. There's just some incremental individual units that aged into our reporting this quarter. So same portfolio, ramping car washes. We acknowledge they're ramping maybe at a little bit of a slower rate than we've seen from some of the other new-to-industry car washes that we funded, but they're, on average, just over 2 years into their operating histories. We're seeing decent trajectory there. So nothing that's causing us any great concern at this point as they continue to push into their third year where they more typically stabilize.

And we'll go next to Upal Rana with KeyBanc Capital Markets.

I just want to get a sense on your investment pool today. Given the improved cost of capital, has your pool meaningfully increased in terms of what you're looking at? Or is this really just the same pool that you can now just move down the risk curve given the improved cost of capital?

It's RJ. Certainly, the improved cost of capital, as Brian brought up earlier and Chris, it's just opening up more opportunities. So our underwriting pace so far this year is at or above a record pace, and I think some of the velocity you're seeing reflects that. So long story short, I think having that improved cost of capital just opens up things that a year ago, maybe we couldn't really act on, that's now just opening up opportunities for us and leading to that increased velocity.

Got you. Okay. And then maybe just on the pace and the visibility in the back half. Obviously, at this point, you've completed and what you have committed already in the pipeline, you're kind of near last year's volume. So just wanted to kind of get a sense of what maybe the back half could potentially look like.

I mean I think that sort of -- I'll answer the question with what you said there, which is we're sitting here in July, right, with visibility into kind of roughly what we did last year with still several months before we get to the end of the year. So we feel very good about our ability to continue to source bring deals in and get those closed before year-end. So Again, I think what we've been messaging is what we've done over the last couple of years, we view as the floor. And now we're sort of -- we have the team, the systems in place and what RJ mentioned in terms of underwriting and Brian mentioned in terms of cost of capital, we see that as upside to that floor in '26 and beyond.

And moving on to Rob Stevenson with Huntington.

Chris, any new sort of tangential types of assets that you don't already own today that you guys are underwriting today to any significant degree?

I mean I'll start by saying the sectors that we invest in large, fragmented, healthy and given what some of the comments we've made from some of the prior questions, there's a lot to work on. I think we're always looking at are there ways for us to extend. But when we think about what -- how we've been successful, right, building knowledge, it's building relationships, it's opportunity set and users of sale-leaseback financing.

So I'm not going to say we're not looking at new asset classes, Rob, but we're trying to be really thoughtful as we think about extending beyond the 4 asset classes that we focus on today. So I guess I would say that there's a lot to work on in the 4 we have. We're really happy with the team and the pace and the opportunities we've closed on. But we're always thinking about how we continue to scale and get, right? Our goals are growth, diversification, really scaling this business into a much larger platform.

Okay. And speaking of scaling, how do you view the opportunity to potentially scale the development program over the next couple of years? I mean, versus where you are today and the partners that you have, like where do you think that, that goes over time?

Yes. I mean we came up with development funding as a way to provide a product for tenants in our -- in the sectors we invest in and to grow with certain partners that we're looking to build their prototype stores as opposed to refinance their balance sheet or grow through acquisition. So it's really a product that we offer to tenants. And we're happy if there's a sale leaseback component. We're happy if there's a development component. There's maybe a slight premium on the development side, but then there is a little bit of a time before -- as you deploy that capital, right? So it takes time for it to come on to the balance sheet and actually put all that money to work.

So we're happy with being able to offer tenants that we like both sale-leaseback financing and development funding, but we view it as another path to fee ownership and another path to growth. So it's -- we're really trying to work with our partners and figure out what's best for them and then how we can finance that accretively for us.

Okay. I guess said another way, is the demand there accelerating at this point? Or is it pretty much what it is in terms of -- from your partner standpoint on that?

It and flows. It's really how our tenant or our operating partner thinks about their growth, right? If there's someone that likes to grow through acquisition, right, we have a product for them. If it's someone that's really focused on site selection, developing their prototype stores, they can use our balance sheet to accelerate their growth. So sometimes we have transactions like the one that we have in the collision sector right now, they want to build their prototypes. And some of the things we accomplished in the second quarter were more traditional sale leasebacks. And again, we're -- from a Getty's standpoint, right, it's accretive fundings in the sectors we know with tenants we like. And eventually, we get to the same place, which is the fee with a partner on a long-term lease.

Okay. A couple of quick ones. The sales in the quarter more defensive? Or did you just get offers on those 4 properties that were attractive to you guys?

Rob, it's Brian. It was selection. Like you said, it was just $8 million, handful of properties. We've been pretty selective with dispositions over the years. We'll continue to do that, certainly taking as the portfolio has gotten larger and more diverse. I think we have maybe a more strategic view around dispositions. But in the quarter, it's just a handful there, and it was a mix. There's a couple that we disposed of in a more tactical way. And then there was a couple of former redevelopments in there, frankly, that we were able to round trip and get some really attractive valuations in a disposition market versus the equity markets.

Okay. And then last one for you, Brian. If you wanted to term out some debt following the next massive acquisitions, where is the best source for you today? And where would that be pricing?

It's a great question just as the credit markets continue to move around, they're definitely open, constructive. Spreads are on the tighter side, but benchmarks are on the wider side. I think a 10-year note for us, which is our sort of base case financing would be about 6.25%, driven primarily by the increase in the 10-year. We printed a 5.75% at the end of last year. So spreads have come in maybe about 5 basis points, but treasury is up about 50, 60 basis points. So again, that's our plan A. That's our base case. We have in the past, looked at term loan financing. We've done shorter-term 5- and 7-year private placements. There's only $73 million on the line right now. So that's sub-20% utilization.

So we're not feeling any pressure in the near term to go term that out. But we would look across those markets, term loan, private placement, different durations. We do have a preference, all else being equal for long-term fixed rate debt given the nature of the cash flows we have coming in. But if the facts and circumstances drive a shorter-term debt or different execution, we have and we'll have no problem executing on that going forward.

And Michael Goldsmith with UBS has our next question.

Pipeline remains healthy and you guys continue to invest beyond what you report in the prior quarter for the pipeline. So I guess, can you talk about a little bit about like the level -- how we should think about the level of visibility into acquisitions in the quarter, like what kind of the opportunities that pop up through the period just to get a sense of the upside to the acquisition opportunity just given that you've been beating what you've seen and reported ahead of the quarter?

Michael, it's RJ. So I think as you know, our pipeline is what we have under contract when we report. And I think as we've discussed in the past, there's always things that close that never hit the pipeline. If you just think about the normal cycle of a transaction, anything we signed under contract, call it, the front side of a quarter, in general, will close within that interquarter, and that's never going to hit the pipeline. That happens every quarter, happened this quarter. So certainly, I think our pipeline is a decent proxy for activity, but I certainly wouldn't get hyper focused on any incremental movements up or down because there's so much activity that transpires in the quarter that just never hits that pipeline.

Got it. I'll try to control my excitement there. And then Brian, can we talk a little bit about just you've got good funding, which should carry you through the year and into next year. But like can you talk -- we've seen a couple of the net lease REITs have built up quite large forwards and have very strong visibility to funding through the end of next year. You guys are thinking maybe a little bit more at a more measured pace on your forward. So can you guys just talk a little bit about your philosophy on just what's the right level of forward liquidity for your business model?

Yes. It's a great question, Michael. It's certainly topical, given some of the activity in the net lease space, equity raising, stock prices, et cetera. I think for us and philosophically, as you put it, the best word is balance, right? I don't think there's any question that prefunding or at least partially prefunding pipelines, giving ourselves and the market visibility into our funding needs or lack thereof. RJ and I talk all the time, the clarity that raised equity gives our acquisition team around pricing, around the cost of our capital and therefore, where they price deals.

So I don't think there's any question that it's the ATM, the forward execution that all of these technology as a word that's become more accepted over the last decade or so are great for all net lease platforms, including ours. I think the one place where maybe we have a differentiated view or not is maybe it is just the order of magnitude, right? I think our view here is that if we do what we're supposed to do and we execute, grow earnings, create value for shareholders, all else held equal, the share price should be higher in 9, 12, 15 months or whatever time frame you want to use than it is today.

And so I think for us, it's just striking that balance to ensure that we reduce funding risk that we have significant liquidity, demonstrated access to capital, but don't want to be too long, too much equity at a lower price such that we miss out on an opportunity to generate some better spreads and better earnings growth in forward years.

Moving on to Anthony Paolone with JPMorgan.

I think I just have one last one here. The 2.5x store level coverage that you talked about, I know it's a quarter lag and it's trailing. And so I just want to make sure I understand like as we kind of roll that forward and sort of incorporate what's happened to oil price this year, does that number go up or down? I mean you mentioned the fuel margins being up in the first quarter, but I just want to understand like what we should expect with the coverage there.

Yes. So again, I referenced in my script that Q1 margins for our portfolio were $0.46. I'll just go that is very healthy, right, and better than Q1 2025. That certainly supported the growth of the performance of the C-store tenants in our portfolio. As we look ahead, all that I can tell you is that if you look at national margins because we don't have that data from our tenants at this point, margins continue to hold. So as the price has gone up and down, our tenants have been able to pass that on and continue to make what I would think are very healthy profits at the pump. And then the back half of that is, as we referenced public companies that report maybe monthly same-store, right? Again, you're seeing that same-store plus or minus couple of percent.

So we haven't really seen in the C-store business, which is the lion's share of our reporting, any significant fluctuation. So just continues to be resilient. Think about habitual, think about some of the nondiscretionary pieces in our portfolio. But I always like to say, I think our portfolio is sort of built for periods where there may be some stress and the consumer might be looking for some value. And then certainly, on the auto side, right, this is nondiscretionary, right, repairs and oil changes in general maintenance and tires and things like that. So again, we're not expecting to see any massive fluctuation, Tony, just given what we see for all this thing in the market and what we hear from our tenants. But that's probably about as much as far as we can go at this point without seeing the data.

Our next question comes from Michael Gorman with BTIG.

Chris, maybe just staying on that for a second. I'm just curious, obviously, it's been a robust transaction environment. Is any of that driven by the strength of the margins that you're seeing at the C-store level? Does that tend to increase transaction activity either from the seller or on the buyer side as people underwrite these assets? Does that have an impact at all? Or maybe expanding out, are you seeing any impact from the geopolitical instability at all?

On the broader consolidation or M&A market, I'll say not. It's a good question, but I don't think today's margin environment is really what's driving increased M&A. What I would just say is the sector itself, and it includes the other pieces of our portfolio as well, continues to be healthy. You have large operators that are looking to grow. There are real economies of scale, both on the fuel side from a purchasing standpoint and pricing standpoint and also in the store as well. So what I would just say is large sectors fragmented, definitely, there are consolidators across the board. And the fact that their core businesses remain healthy is only going to continue to fuel their desire to grow through either new store development or further consolidation.

Okay. Great. That's helpful. And then maybe just one quick one, Brian. I apologize if I missed it, but can you just give an update on credit losses year-to-date, kind of where that stands relative to guidance? And have you changed the underlying assumption for credit losses for the full year in the updated guidance range?

Yes. You didn't miss it. Fair question. No realized credit losses to date. We continue to use a 25 basis point assumption in our models, but we roll that forward, so to reflect more of a half a year than a full year, if that makes sense. So that does still drive a little bit of variability. I think we've mentioned when we provide that range, right, given that's a run rate number, our guidance, the range is really driven by that credit loss assumption as well as some expense variability, a little bit on the operating side, some dead deal costs, things that do impact the business from time to time.

But to date, we have not realized any. And there's always situations we're monitoring, but nothing rising to the level of a formal watch list at this time.

We'll go next to Wes Golladay with Baird.

I just want to go back to the comment about the accelerating pace of the underwriting. Is that more so due to deal volume? Or do you have new systems in place?

Wes, candidly, I think it's probably both. We've spent quite a bit of time and effort investing in the people and our processes and how we go about underwriting and executing. So certainly, that's, I think, a key factor, I think, coupled with the market. And frankly, I think the products we offer right now are probably more attractive to our counterparties than they've been in recent times. So I think those 2 things are kind of converging and providing a pretty good universe for us to underwrite and address.

And this now concludes our question-and-answer session. I would like to turn the floor back over to Christopher Constant for closing comments.

Thank you, operator. I just want to thank everyone for joining the call today and for your interest in Getty, and we look forward to getting back to everybody when we report our Q3 earnings in October.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

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.