Getty Realty Playing a Part in Couche-Tard & CST Merger
JERICHO, N.Y. — Getty Realty Corp. has entered into a definitive agreement providing for acquisition leaseback funding to Empire Petroleum Partners LLC.
The deal is in conjunction with Dallas-based Empire's pending deal to acquire 70 locations from Alimentation Couche-Tard Inc. The Laval, Quebec-based retailer has been directed by the Federal Trade Commission to sell properties as part of its acquisition of San Antonio-based CST Brands Inc., as CSNews Online previously reported.
The proposed divestiture also requires Couche-Tard to give Empire the option to buy one damaged site in Albany, Ga. If Empire declines, the agreement prohibits Couche-Tard from restricting the use of the property as a retail fuel station in any future sale for 10 years.
For its part, Getty, through a subsidiary, will acquire fee simple interests in 49 convenience store and gasoline station properties for $123 million under a unitary lease.
The transaction is expected to close before the end of the third quarter of 2017.
The properties are located primarily within metropolitan markets in Arizona, Colorado, Florida, Georgia, Louisiana, New Mexico and Texas.
The unitary lease to be effective at closing provides for an initial term of 15 years, with four, five-year renewal options. Rent is scheduled to increase annually during the initial and renewal terms of the lease, according to Getty.
"We are excited to have entered into this transaction and to begin a long-term relationship with Empire. The properties being acquired represent a high-quality convenience store and gasoline station portfolio and are located in markets which we have been targeting for some time," said Christopher J. Constant, Getty's president and CEO.
"We believe this transaction demonstrates our commitment to the convenience store industry as well as our ability to respond quickly to meet the capital needs of our customers," he added.
Upon closing, Getty expects the transaction to be immediately accretive to net earnings. It plans to fund the transaction through funds available under its credit agreement.
The transaction is subject to numerous closing conditions, including the closing of the Empire and Couche-Tard acquisition agreement.
Jericho-based Getty Realty is a publicly traded real estate investment trust specializing in the ownership, leasing and financing of convenience store and gasoline station properties. As of March 31, the company owned 736 properties and leased 87 properties from-third party landlords in 24 states across the United States and Washington, D.C.