Getty Realty's Q4 2024: Key Contradictions in Zips Assumptions, Cap Rates, and Capital Strategy

These are the key contradictions discussed in Getty Realty's latest 2024Q4 earnings call, specifically including: Zips Car Wash Assumptions, Cap Rate Expectations, Capital Funding Model, and Portfolio Sales Strategy:



Earnings and Portfolio Growth:
- Getty Realty reported adjusted funds from operations (AFFO) per share of $2.34 for 2024, exceeding the high end of guidance and representing a 4% increase over the prior year.
- The growth was driven by strong investment activities, including the acquisition of 71 properties and stable rents from the in-place portfolio.

Investment and Capitalization Strategy:
- Getty invested $209 million in high-quality convenience and automotive retail assets, attracting $289 million in capital.
- The company was able to lock in favorable long-term notes ahead of treasury yield increases and secure significant dry powder for acquisitions by raising capital efficiently.

Portfolio Diversification:
- Diversification efforts led to rental income from non-convenience and gas properties increasing to 28% of total ABR from less than 3% before the strategy was initiated.
- This diversification is driven by a commitment to scale the business by acquiring retail real estate with similar attributes across various sectors.

Financial Metrics and Guidance:
- Annualized base rent increased by 14.5% to approximately $198 million, with FFO and net income per share for the year at $2.21 and $1.25, respectively.
- The company revised its AFFO guidance range to $2.38 to $2.41 per share due to potential impacts from the Zips Car Wash bankruptcy.