Getty Realty Acquires 77 Stores in 'High-Growth Regions'
JERICHO, N.Y. — Getty Realty Corp. inked a $214-million acquisition deal with Pacific Convenience and Fuels LLC.
Jericho-based Getty has acquired fee-simple interests in 77 convenience stores and retail gas stations in several "high-growth regions," including Northern California, Southern California, Colorado, Washington, Nevada and Oregon.
The properties operate under well-known banners including 76, Conoco, Circle K, 7-Eleven and My Goods Market.
"This acquisition is immediately accretive to AFFO, FFO and earnings. It also achieves several important objectives for our company, including materially expanding our geographic reach primarily in high growth regions and adding a new institutional quality tenant," said David B. Driscoll, Getty's president and CEO.
"We believe the addition of these properties, combined with other activity in our portfolio, has materially improved the overall credit quality of our revenue stream," he continued. "In addition, we believe we are positioned to provide sustained cash flow growth for shareholders in the coming years."
All of the properties were acquired from affiliates of Pleasanton, Calif.-based Pacific Convenience and Fuels and simultaneously leased to United Oil, a regional convenience store and gas station operator. United Oil is triple-net leasing the 77 properties acquired by Getty for an initial term of 20 years, with three five-year renewal options. The company expects to receive approximately $16.7 million of annual GAAP revenue from the transaction.
United Oil operates approximately 400 locations (inclusive of the current transaction) in the western United States and Colorado, and is a portfolio company of Fortress Investment Group LLC.
Financing Details
In conjunction with the acquisition transaction, Getty entered into a new $225-million senior unsecured credit facility with a consortium of banks led by Bank of America and JP Morgan Chase on June 2. The financing replaces its existing $175-million senior secured credit facility.
The new credit facility consists of an unsecured $175-million revolving facility that bears interest at a margin of 195 to 325 basis points over LIBOR based on the company's total leverage, and an unsecured $50-million term loan that bears interest at a margin of 190 to 320 basis points over LIBOR based on its total leverage.
The revolving facility matures in 2018 and has a one-year extension option, and the term loan matures in 2020.
Also on Tuesday, Getty entered into a new $75-million unsecured term loan with The Prudential Insurance Co. of America. This term loan matures in 2023 and bears interest at 5.35 percent.
The company financed the acquisition transaction by utilizing the $75-million and $50-million term loans and drawing the remainder from the revolving credit facility.