Good morning and welcome to Getty Realty's Earnings Conference Call for the Third Quarter of 2021. This call is being recorded. After the presentation, there will be an opportunity to ask questions. 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 third quarter earnings conference call. Yesterday afternoon, the company released its financial results for the quarter ended September 30, 2021. The Form 8-K and earnings release are available in the Investor Relations section of our website at gettyrealty.com. Certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. These statements are based on 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 2021 guidance and may also include statements made by management in their remarks and in response to questions, including regarding the company's response to the COVID-19 pandemic, future company operations, future financial performance, and the company's acquisition or redevelopment 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, 2020, and subsequent quarterly reports filed on Form 10-Q and our other 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 the date hereof. The company undertakes no duty to update any forward-looking statements that may be made in the course of 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. Welcome to our earnings call for the third quarter of 2021. With Josh and me 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 providing an overview of our performance for the third quarter of 2021 and highlight the company's investment and capital markets activities. The net result of our well-positioned in-place portfolio and the continued execution of our active and accretive investment program was a 5.8% increase in total revenues, a 13.2% increase in Adjusted Funds From Operations, and a 6.4% increase in AFFO per share. The company benefited from its ability of its portfolio of convenience and automotive retail assets, which continue to perform well, meaning we had another quarter of full rent collections, including all amounts owed to us as a result of our 2020 COVID-related rent deferrals. The success of our investment strategies year to date has been a key contributor to our earnings growth. We invested $61.1 million in 25 properties during the quarter, and another $8.8 million just after quarter end, bringing our year-to-date total investment activity to more than $144 million. This accelerated pace of investment activity was highlighted by our ability to bring high-quality new tenants into our portfolio, including Flash markets, with sites located across the Southeastern U.S. and Flash Car Wash, whose footprint spans the Northeast. We also continue to successfully execute our multiple investment strategies, which include traditional sale-leasebacks, accretive acquisitions of net lease properties, and development funding for new-to-industry assets. In addition, rent commenced on 3 redevelopment projects during the quarter, including our second and third projects with 7-Eleven for remodeled CNG locations in the Baltimore and Dallas Fort Worth MSAs, bringing our completed projects to 22 since the inception of our redevelopment program. We also announced yesterday that we successfully amended and extended our $300 million credit agreement, which now will mature in October 2025. The improved terms of our facility further validate the company's platform and strong performance over the last several years. When combined with our active ATM program, which we've used to raise more than $50 million this year, and our strong balance sheet, we continue to have access to capital and the right credit profile to support our growth objectives. Given our performance year to date, I am pleased that our Board approved an increase of 5.1% in our recurring quarterly dividend to $0.41 per share. This represents the 8th straight year with a dividend increase. Our Board believes this annual increase is appropriate as it maintains a stable payout ratio that's tied to the company's growth over the past year. Furthermore, we are again pleased that our year-to-date accretive investment activity has positioned the company to raise its 2021 AFFO per share guidance. I want to reiterate our commitment to effectively executing on both new investment activity and the active asset management of our portfolio. Our teams continue to work diligently to source and underwrite new opportunities to invest across our target asset classes, including convenience stores, car washes, and automotive-related retail properties in strong metropolitan markets across the country, as well as to unlock embedded value through selective redevelopments. We believe our success year to date demonstrates our ability to source opportunities that align with our investment strategies and that will continue to drive additional shareholder value. With that, I will turn the call over to Mark, to discuss our portfolio and investment activities.

Thank you, Chris. As of the end of the third quarter, our portfolio includes 1,011 net leased properties, 5 active redevelopment sites, and 5 vacant properties. Our weighted average lease term was approximately 8.8 years. And our overall occupancy, excluding active redevelopments, remains constant at 99.5%. Our portfolio spans 36 states across the country plus Washington D.C. And our annualized base rents, 63% of which come from the top 50 MSAs in the U.S., continue to be well covered by our trailing 12-month tenant rent coverage ratio of 2.6 times. In terms of our investment activities, we had a highly successful quarter in which we invested $61.1 million in 25 properties. Subsequent to the quarter-end, we acquired 2 additional properties for $8.8 million, bringing our year-to-date investment activity to $144.5 million across 82 properties. We completed 2 transactions in the Convenience & Gas sector during the quarter. The first was a 15-property sale leaseback with Flash Market, a subsidiary of Transit Energy Group. In this transaction, we invested $35.1 million to acquire the properties, which are located throughout the Southeast United States with a concentration around the Raleigh, Durham, North Carolina MSA. The properties acquired have an average store size of 3,600 square feet and an average property size of 1.7 acres. In addition, 53% of the properties have sub-tenancies with either quick-serve restaurants or auto service operators. We also completed our first development funding project with Refuel in the Charleston, South Carolina MSA. Our total investment in the project was $4.5 million, including our final investment of $1.1 million during the third quarter. As per the terms of our development funding transactions, we acquired the property upon completion of development in conjunction with our final funding payment and simultaneously entered into a long-term triple net lease. In the car wash sector, we completed 3 transactions in the quarter. We acquired 2 newly constructed properties from WhiteWater Express car wash in Michigan for $7 million. These properties were added to our existing unitary lease with WhiteWater. We also acquired 2 additional properties for an aggregate purchase price of $8 million, which are leased to Go Car Wash in San Antonio, Texas, and Las Vegas, Nevada MSAs. Additionally, we acquired our first property with Splash Car Wash, which is located in New Haven, Connecticut MSA. Our purchase price was $4 million for that property. In the auto service sector, we acquired our first Mavis Tire property and invested $4.6 million to acquire the property in the Chicago, Illinois MSA. Getty also advanced $1.2 million of development funding for 3 new industry convenience stores with Refuel in the Charleston, South Carolina MSA, bringing the total amount funded by Getty for these projects to $8.9 million at quarter end. As part of this transaction, we will accrue interest on our investment during the construction phase of the project and will expect to acquire the properties via sale leaseback transaction upon completion and final funding. The weighted average initial lease term of our completed transactions for the quarter was 14.6 years, and our aggregate initial cash yield on our third quarter acquisitions was 6.7%. Subsequent to quarter end, we acquired 2 properties in the Burlington, Vermont MSA from Splash Car Wash. The purchase price was $8.8 million, and the cap rate was consistent with our year-to-date acquisition activity. We ended the quarter with a strong investment pipeline to remain highly committed to continuing to grow our portfolio of convenience and automotive retail real estate. We expect to pursue that growth through continued sourcing of direct sale leaseback acquisitions of net leased properties and development funding for new-to-industry assets. Moving to our redevelopment platform, during the quarter we invested approximately $331,000 in both completed projects and sites which remain in our pipeline. In addition, rent commenced on 3 redevelopment projects during the quarter, including 2 7-Eleven convenience stores and 1 property leased to BJ's Wholesale Club, which is adjacent to one of our newly constructed superstores. In aggregate, we invested $0.5 million in these 3 projects and generated a return on investment capital of 43%. At quarter end, we had 8 signed leases or letters of intent, which include 5 active projects and 3 projects of properties that are currently subject to triple net leases and have not yet been recaptured from the current tenants. The company expects rent to commence at 2 additional redevelopment sites during the fourth quarter of 2021. In total, we have invested approximately $1.9 million in the 8 redevelopment projects in our pipeline and estimate that these projects will require a total investment by Getty of $7.4 million. We project these redevelopments will generate incremental returns to the company in excess of where we can invest these funds in the acquisition market today. Turning to our asset management activities for the quarter, we sold 1 property during the quarter realizing $2.3 million in gross proceeds and exited 5 leased properties. We expect the total net impact of these activities will have a minimal impact on our financial results. As we look ahead, we will continue to selectively dispose of the properties that we've determined are no longer competitive in their current format and do not have compelling redevelopment potential. With that, I'll turn the call over to Brian to discuss our financial results.

Thanks, Mark. Good morning, everyone. Let me start with a recap of earnings. AFFO, which we believe best reflects the company's core operating performance, was $0.50 per share for the third quarter, representing a year-over-year increase of 6.4%. FFO was $0.48 per share for the quarter. Our total revenues were $40.1 million, representing a year-over-year increase of 5.8%. Rental income, which excludes tenant reimbursements and interest on notes and mortgages receivables, increased 7.5% to $34.3 million. Strong acquisition activity over the last 12 months and recurring rent escalators on our leases were the primary drivers of the increase, with additional contributions from rent commencements and completed redevelopment projects. On the expense side, G&A costs increased in the quarter primarily due to employee-related expenses, including non-cash stock-based compensation. Property costs decreased marginally due to a reduction in real estate tax expenses, while environmental expenses, which are highly variable due to a number of estimates and non-cash adjustments, increased in the quarter due to certain legal fees and changes in net remediation costs and estimates. Returning to the balance sheet and our capital markets activities, we ended the quarter with $567.5 million of total debt outstanding, including $525 million of long-term fixed rate unsecured notes and $42.5 million outstanding on our $300 million revolving credit facility. Our weighted average borrowing cost was 4%, and the weighted average maturity of our debt was 6.3 years. In addition, our total debt to total market capitalization was 29%. Our total debt to total asset value was 37%, and our net debt-to-EBITDA was 5.1 times. Each of these leveraged metrics is calculated according to the definitions in our loan agreements. As Chris mentioned, yesterday we announced the amendment and extension of our $300 million revolving credit facility, which is now set to mature in October 2025 with 2, 6-month extensions, but we have the option to extend it to October 2026. In addition to extending the term, we were able to reduce the interest rate by 20 to 50 basis points, depending on where we are in the leverage-based pricing grid, and amend certain covenant provisions to align with those generally applicable to investment-grade rated REITs. We also amended each of our outstanding unsecured notes to conform to the new credit facility covenant provisions. All in all, this was a good transaction for Getty; we reduced our cost of capital, improved some terms, and importantly, demonstrated the continued support of our bank group and unsecured noteholders. With the credit facility extended, our nearest debt maturity is now the $75 million of senior unsecured notes that come due in June of 2023. Moving to ATM activity, we continue to be selective with our equity issues during the quarter, raising $19.8 million at an average price of $31.12 per share. Year-to-date, we've raised a total of $50.1 million through the ATM. When we think about our future capital needs more broadly, we remain committed to maintaining a strong credit profile with meaningful liquidity and access to capital, low-to-moderate leverage, and a well-laddered and flexible balance sheet. With respect to our environmental liability, we ended the quarter at $47.8 million, which was a decrease of approximately $300,000 from the end of 2020. For the quarter, net environmental remediation spending was approximately $1.3 million. Finally, as a result of our investment and capital markets activities in the first 9 months of the year, we're raising our 2021 AFFO per share guidance to a range of $1.93 to $1.94 from our previous range of $1.89 to $1.91. Our guidance includes transaction activity completed year-to-date, but does not otherwise assume potential acquisitions or capital markets activities for the remainder of 2021. Factors that may impact our guidance include variability with respect to certain operating costs, and our expectation that we will remain active in pursuing acquisitions and redevelopments, which could result in additional expenses, including certain property demolition costs and transaction costs for deals that are ultimately not completed. With that, I will ask the operator to open the call for questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Our first question comes from Brad Heffern with RBC. Please go ahead with your question.

Hey, good morning, everyone. Thanks for taking the questions. On the acquisition front, I was just wondering if you could talk through how deal flow looks right now. Obviously, the $61 million number was pretty robust. So, do you think that's a sustainable run rate number or how are you viewing that?

Yeah, this is Mark. I can comment on our pipeline as I mentioned in the comments is very healthy. We're very happy with where it is. The flow of opportunities we're seeing and we're full underwriting is ahead of where it was this time last year. So we continue to grow our opportunity sets and our relationships in all the retail verticals that we've now expanded to. I would say that we're pretty happy with what we have to look at, and we look forward to reporting on more as we go forward.

Okay. And then, I appreciate the increased disclosure on the escalators. I was curious for the CPI linked escalators, do those have caps? And then, the escalator guidance ticked up by 10 basis points. Is part of the reason that CPI linkage or any color you can give on that? Thanks.

Hey, Brad. It is Brian. The CPI, it's a small number of leases. One of them just happens to be some material dollar amount. So it's not the typical escalator clause we have in the leases, but they do have floors and ceilings, for their collar, which is pretty typical when you have that structure. In terms of the tick-up, from the 1.6% to the 1.7%, you have the Flash Market deal, the transit deal that has 2% annual escalators. So that's probably the difference there again on the round. For the most part, I think what we're seeing in our associations and the deals we're closing are the structures that are in line with the majority of our deals, which are annual escalators, in the 1.5% to 2%, that range.

Our next question comes from Lizzy Dorkin with Bank of America. Please go ahead with your question.

Hi, good morning, everybody. This is Lizzy on for Josh Dennerlein. I'm just curious to see if you guys can comment on any specific opportunities to accelerate redevelopment plans for 2022.

So we have a constant effort to deliver with the returns that we've reported, deliver as high volume and as fast a pace as possible in the redevelopment program. There are certain barriers to growing that materially from where we are today with respect to extracting properties from leases, marketing efforts, and the entitlement efforts are always the challenge. The typical development hurdles that you experience in getting these projects through permitting and construction. So, I think right now, the pace we're on is about what we see. Again, constant effort by the asset management team to call opportunities out of the portfolio, but there are certain restrictions and obstacles to significant growth at that pace.

Okay. And my second question is, how are your C-store tenants thinking about electric vehicles and working to capitalize on that trend? I don't know if you guys have any more insight into that, if that's becoming more of a hot topic?

Yeah, I think it's been a hot topic for several years now with our operators who are on the ground. There are certain operators that are evaluating adding charging stations right at their properties. Now, just to caution everyone, that's not going to be a charging station in each and every property. But certain properties that lend themselves more towards longer commutes, or longer driving times, where a charging station really fits well. But the goal for our operators, it's to drive traffic not only to their locations for fueling or for charging but for convenience store items and food, beverages. What you've seen is a sort of a concerted effort by tenants to drive traffic to the location, whether it's charging or gas or adding a carwash on site, but most importantly, the food and the convenience store items within the store. I think what you can expect in short, is that you'll start to see our operators, where it makes sense, to add a charging station to that certain property.

Great, thank you.

Our next question comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

Hi, thanks. Good morning. Just first question on the investments completed in the quarter, sorry, if I missed this. But can you just discuss the cap rate or the initial yields on those investments? And can you discuss sort of the environment in general around pricing, the competition that you're seeing and whether you're starting to see any reduction in yields or cap rate compression as you move forward with future investments?

So, the market has been active in the verticals that we're targeting and certainly, it's competitive. It's an attractive set of retail operations that the cap rates are compressing as we come out of last year and through this year. We continue to acquire in that range of mid-6s to 7. The market for this product we're looking at is active, and we feel we're competitive. I'm not sure what the run rate will be here over the next few quarters of continued compression. But I think we're priced at certainly in the range of buying some.

Okay. That's helpful. And then, I just wanted to follow-up on the rent escalators across the portfolio. So you commented, Brian, on the increase to 1.7% from 1.6%. You talked about the Flash Market deal and some other deals you're closing. Will CPI increases - do you expect CPI increases to have any impact on that 1.7% annual rent escalation in the near term? I mean, do you expect to see that improve as we move into 2022 from that current annual rate?

I don't think you'd see anything material there, Todd. What should we use the floor of the collars on the CPIs in our calculation, and it's an every 3-year reset? Again, we're talking about our portfolio is really a handful; this is just one of them that happens to be a larger unitary lease. And it's an every 3-year reset, and it has the floor and it has the ceiling. So, I don't expect that to have any significant impact on our operations here as we sit here today.

Okay, got it. And then, just in terms of the balance sheet and funding investments, as we move ahead here, you've obviously utilized the ATM a little bit. Leverage ticked up just slightly 5.1 times, debt-to-EBITDA from 5 times last quarter. Can you just remind us what the long-term target leverage level is for the company and sort of where you see that trending in the near term?

Yeah, I think we're in a really good position when it comes to capital, just generally speaking. There's significant capacity on the revolver, significant headroom within leverage. We've typically guided in the 4.5 to 5.5 times allowing for opportunities to tick up a little bit above that into the higher 5s if it was appropriate. Sitting where we are at 5 times, 5.1, again, significant headroom. Capital markets are broadly constructive. You'll see us execute as we have been, we will utilize the revolver, will utilize the ATM. If there's an opportunity or a need to look for permanent capital, I think, as we sit here today, we have options, and markets are broadly constructive to our asset class and our business.

Okay. All right. Great. Thank you.

Our next question comes from the line of John Massocca with Ladenburg Thalmann. Please proceed with your question.

Good morning, everyone.

Good morning.

So with regards to the Flash Market deal, I guess, if you can provide some color on how that was sourced, why they were a seller of the real estate? And was that transaction maybe typical of what you're seeing in the pipeline today for c-store deals?

Yeah, so specific to the Flash Market deal, obviously, they're an existing chain. They are in the process of acquiring some regional competitors. The transaction was really a combination of sale-leaseback on existing own sites but also part of the overall acquisition financing, again sourced directly by our team here, which is pretty typical of what we've been able to do specifically in the C&G space, car wash space, and as we expand into other asset classes to gain relationships. What we hope to do as we broaden our investment.

So it sounds like it was kind of smaller M&A, I mean, is that something you're seeing accelerate or continue as we look forward in 4Q maybe even 2022?

I think just the asset classes that we're targeting, C&G, car wash, auto service, those are asset classes that we've been saying have been consolidating for a number of years now. Again, this is sort of what we do well; we partner with operators who are growing, taking market share, becoming a dominant presence within their region or even nationally, and establishing a long-term partnership. We hope to do more with all these types of tenants over time as they grow their businesses.

I feel like I remember maybe this was pre-pandemic, it felt like pricing was getting kind of lofty and maybe slowing down some of that M&A and kind of tenants and potential tenants. Has that been re-accelerating over the last couple of quarters?

No, I think the pricing specifically on the very large transactions was where we saw pretty high multiples. Again, this is talking about the operating businesses in the M&A context. Our comments on the field specifically, but our opportunities were much better to acquire either a direct comp within a market or enter adjacent market at an attractive price. You gained scale specifically in C&G and car wash. There are certain synergies that are realized in pretty short order. That certainly helps from an operating pricing perspective on the M&A side.

Okay. And then bigger picture, looking back at how your portfolio has performed historically during periods of rising gas prices, as we kind of see gas prices moving upward? Is that going to have any impact you think on tenant credit, just - if there is some kind of pressure on visitation, and I know, they can pass a lot of that pricing on to consumers, but historically, has there been any kind of impact on how tenants performed during periods of rising gas prices?

Yeah, certainly, rapid movements in the wholesale pricing rent have historically resulted in a declining retail margin environment. We have a slide in our investor presentation that goes through the change in retail margins over the last several years. One thing you're seeing is that there has been a steady shift upwards in retail fuel margins over the last several years. If you think about pricing and demand for fuel, we expect that trend to continue and stabilize at a higher level. I'm not trying to call specific cents per gallon margin, but just at a higher level on a permanent basis; I think that's going to help our tenants pass along a lot of the higher costs to the consumer.

Okay, that's it for me. Thank you very much for the questions.

Our next question comes from the line of Wes Golladay with Robert W. Baird. Please proceed with your question.

Hey, good morning, guys. Can you talk about how the composition of the pipeline is changing? Is it more driven by new relationships maybe versus a few years ago? And then, obviously, making some progress on the car washes. But you did do a tire-store deal this quarter. So is that becoming a bigger part of the pipeline as well?

Yeah, if you look back where we were a couple of years ago, we were kind of flat-footed on store and carwash, but we've grown that to a material part of our pipeline. The pipeline is still weighted towards gas convenience operators. That said, it's growing. Both sides of the equation are growing. We started to make inroads in the other verticals that we targeted, specifically, tire, lube centers, tire and battery, and all parts of auto service. So I think you should expect that we grow all those pieces of the pie at different paces, but certainly expect growth over the next couple of years. Many of our deals to your question on sourcing or composition are through the efforts of our investment acquisition team to grow where it's appropriate, existing relationships, good relationships with our stronger tenants, and also to create new opportunities for not only geographic but tenant and category diversity among the portfolio. We are executing on all fronts.

And, I guess, when we look at, I mean, your timing to build these relationships and you actually get into that, I mean, for that to translate into deal volume, is that a multiyear process, where is it a linear growth? Or does it grow exponentially maybe a few years later?

So, listen, I think we're looking for long-term relationships with strong operators. As their businesses grow, they look to acquire - everyone is looking to take the lumpiness out of all their programs. But there are ebbs and flows with all our tenant relationships and in the pipeline. We just constantly manage those relationships, ready to be a funding partner when appropriate. Some of these are deals that come up quickly. There is a gap between the next deal; some are pretty steady state. The combination of all those relationship management, pipeline management fuels the program on an ongoing basis.

Okay. And then, you did mention selling some non-core assets. But, I guess, would you also be open to selling assets opportunistically, looking at the - I think you delivered 2 7-Elevens this quarter, and they have a pretty strong bid in the private market.

Typically, we've been, especially with our new developments, buy-and-hold investors. If you look at what we've been selling, it's been kind of underperforming assets across the portfolio. Just holistically, if we look at sort of all of our options, I wouldn't guide you towards expecting significant asset sales of what we decide for our holdings.

There are no further questions in the queue. I would like to hand the call back to management for closing remarks.

Great. Thank you, operator, and thank you, everyone for joining us this morning for our third quarter call. We look forward to getting back on with everyone in late February when we close out our fourth quarter and fiscal year 2021. We appreciate your interest in the company.

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