Getty Looks to Place GPMI Bankruptcy in Its Rearview Mirror
JERICHO, N.Y. -- Getty Realty Corp.has made "demonstrable progress" regarding the repossession of former Getty Petroleum Marketing Inc. (GPMI)properties and the company is excited about its future, Getty Realty CEO David Driscoll said during an investor conference call this morning.
As CSNews Online previously reported, Getty Realty repossessed 788 former GPMI properties after a master lease between the two companies was terminated.
GPMI only has one gas station and convenience store under its auspices, but Driscoll said that location's contribution to Getty Realty's bottom line is "immaterial" and he expects GPMI to liquidate its entire business in the coming weeks.
GPMI filed for bankruptcy protection on Dec. 5. Once it liquidates, Driscoll said Getty Realty has "priority" on some legal claims it has made against GPMI, and could receive future funds as a result.
Returning to the 788 properties Getty Realty repossessed, it has entered into long-term triple net leases with 282 locations with affiliates of Lehigh Gas, Chestnut Petroleum Distributors, Ramoco Fuels and Sam's Food Stores, as well as adding properties to an existing lease with MWS Enterprises.
In addition, Getty Realty entered into a fuel supply and services agreement with Global Partners LP to provide gasoline supply to 254 New York City-area gas stations and convenience stores.
"We are generating revenues from a vast majority of properties that were in the [GPMI] portfolio," said Driscoll.
Getty Realty's CEO also announced that it entered into fuel supply and direct lease agreement with several other locations.
"Most of the leases we have signed last 15 years with a renewal [option]," said Getty Realty's CEO. "They also include CPI (consumer price index) increases."
Getty sold two properties during its fiscal first quarter for more than $500,000. The real estate investment trust sold an additional five properties in April for $1.5 million.
As for its quarterly earnings, Getty Realty posted a net profit of $6.5 million in its 2012 fiscal first quarter. That compares to an $11.4 million profit during the same timeframe last year.
However, Driscoll said the public should not extrapolate anything from the lower quarterly profits that continued to be "adversely affected by [GPMI]."
"It's not a good proxy for earnings ahead," he said during the conference call. "We are pleased with our progress and where we are going."
One thing on the negative side of the ledger will be environmental costs. Getty Realty must now take responsibility for any pre-existing conditions at any of its sites. GPMI absorbed those costs in the past per its master lease with Getty Realty.
"We do not expect to be able to pass off environmental contamination costs to anyone in the future," said Driscoll. "But any future problems would be the responsibility of the property [operator]."
Driscoll was not yet certain of potential costs that could be associated with environmental cleanups. He expected to have an estimate of those costs on or before Getty's second-quarter conference call, scheduled for early August.
During the question-and-answer session, Driscoll was asked about the company's dividend, which was suspended in February. He responded he was not in a position to comment about it at this time.
"The dividend is always on our mind," he said. "We realize Getty is a dividend paying company."