GETTY REALTY CORP /MD/

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand our operations and our present business environment from the perspective of management. The following discussion and analysis should be read in conjunction with the sections entitled “Part I, Item 1A. Risk Factors” and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025; “Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the period ended March 31, 2026; and “Part I, Item 1. Financial Statements” in this Quarterly Report on Form 10-Q for the period ended June 30, 2026.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand our operations and our present business environment from the perspective of management. The following discussion and analysis should be read in conjunction with the sections entitled “Part I, Item 1A. Risk Factors” and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025; “Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the period ended March 31, 2026; “Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the period ended June 30, 2026; and “Part I, Item 1. Financial Statements” in this Quarterly Report on Form 10-Q for the period ended September 30, 2026.

Previous wording

Examples of forward-looking statements included in this Quarterly Report on Form 10-Q include, but are not limited to, our statements regarding:

Current wording

Examples of forward-looking statements included in this Quarterly Report on Form 10-Q include, but are not limited to, our statements regarding:se

Previous wording

These forward-looking statements are based on our current beliefs and assumptions and information currently available to us, and are subject to known and unknown risks, uncertainties and other factors including, but not limited to, the risks described in “Part I, Item 1A. Risk Factors” and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K, “Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the period ended March 31, 2026, and this Quarterly Report on Form 10-Q for the period ended June 30, 2026 as such risk factors may be updated from time to time in our public filings. Such risks and uncertainties were derived based on numerous important assumptions, which may not be realized, and may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Most of these factors are difficult to predict accurately and are generally beyond our control. New risk factors and uncertainties may also emerge from time to time, and there can be no assurance that we have identified all risks and uncertainties that may affect it.

Current wording

These forward-looking statements are based on our current beliefs and assumptions and information currently available to us, and are subject to known and unknown risks, uncertainties and other factors including, but not limited to, the risks described in “Part I, Item 1A. Risk Factors” and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K, “Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the period ended March 31, 2026, Quarterly Report on Form 10-Q for the period ended June 30, 2026, and this Quarterly Report on Form 10-Q for the period ended September 30, 2026 as such risk factors may be updated from time to time in our public filings. Such risks and uncertainties were derived based on numerous important assumptions, which may not be realized, and may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Most of these factors are difficult to predict accurately and are generally beyond our control. New risk factors and uncertainties may also emerge from time to time, and there can be no assurance that we have identified all risks and uncertainties that may affect it.

Previous wording

We are a net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. Our portfolio includes convenience stores, express tunnel car washes, automotive service centers (gasoline and repair, oil and maintenance, tire and battery, and collision), drive-thru quick service restaurants, and certain other freestanding retail properties. As of June 30, 2026, our portfolio included 1,224 properties, including 1,198 properties owned by us and 26 properties that we leased from third-party landlords. As a REIT, we are not subject to federal corporate income tax on the taxable income we distribute to our stockholders. In order to continue to qualify for taxation as a REIT, we are required, among other things, to distribute at least 90% of our ordinary taxable income to our stockholders each year.

Current wording

We are a net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. Our portfolio includes convenience stores, express tunnel car washes, automotive service centers (gasoline and repair, oil and maintenance, tire and battery, and collision), drive-thru quick service restaurants, and certain other freestanding retail properties. As of September 30, 2026, our portfolio included 1,269 properties, including 1,243 properties owned by us and 26 properties that we leased from third-party landlords. As a REIT, we are not subject to federal corporate income tax on the taxable income we distribute to our stockholders. In order to continue to qualify for taxation as a REIT, we are required, among other things, to distribute at least 90% of our ordinary taxable income to our stockholders each year.

Previous wording

Our 1,224 properties are located in 46 states and Washington D.C. and our typical property is located in a larger metropolitan area and is used as a convenience store, express tunnel car wash, automotive service center, drive thru quick service restaurant, or certain other freestanding retail uses. Many of our properties are located at highly trafficked urban intersections or conveniently close to highway entrances or exit ramps.

Current wording

Our 1,269 properties are located in 46 states and Washington D.C. and our typical property is located in a larger metropolitan area and is used as a convenience store, express tunnel car wash, automotive service center, drive thru quick service restaurant, or certain other freestanding retail uses. Many of our properties are located at highly trafficked urban intersections or conveniently close to highway entrances or exit ramps.

Previous wording

As of June 30, 2026, we leased 1,220 of our properties to tenants under triple-net leases, including 984 properties leased under 66 separate unitary or master triple-net leases, and 236 properties leased under single unit triple-net leases. These leases generally provide for an initial term of 15 or 20 years, with options for successive renewal terms of up to 20 years, and periodic rent escalations. As of June 30, 2026, our weighted average remaining lease term, excluding renewal options, was 10.3 years.

Current wording

As of September 30, 2026, we leased 1,263 of our properties to tenants under triple-net leases, including 1,030 properties leased under 71 separate unitary or master triple-net leases, and 233 properties leased under single unit triple-net leases. These leases generally provide for an initial term of 15 or 20 years, with options for successive renewal terms of up to 20 years, and periodic rent escalations. As of September 30, 2026, our weighted average remaining lease term, excluding renewal options, was 10.8 years.

Previous wording

As of June 30, 2026, we also had three vacant properties and one property under redevelopment.

Current wording

As of September 30, 2026, we also had four vacant properties and two properties under redevelopment.

Previous wording

During the six months ended June 30, 2026, we invested $162.6 million across 67 properties, including the acquisition of 30 auto service centers, 20 drive-thru quick service restaurants, six express tunnel car washes and one convenience store.

Current wording

During the nine months ended September 30, 2026, we invested a total of $462.7 million, including the acquisition of 43 convenience stores, 39 auto service centers, 22 drive-thru quick service restaurants, and six express tunnel car washes.

Previous wording

During the six months ended June 30, 2025, we invested $78.4 million across 33 properties, including the acquisition of 12 drive-thru quick service restaurants, seven auto service centers, five convenience stores and five express tunnel car washes.

Current wording

During the nine months ended September 30, 2025, we invested a total of $135.7 million, including the acquisition of 27 drive-thru quick service restaurants, nine auto service centers, 10 convenience stores, and seven express tunnel car washes.

Previous wording

As of June 30, 2026, we had one property under active redevelopment and others in various stages of feasibility planning for potential recapture from our net lease portfolio.

Current wording

As of September 30, 2026, we had two properties under active redevelopment and others in various stages of feasibility planning for potential recapture from our net lease portfolio.

Previous wording

Dividends paid and undistributed earnings allocated, if any, to unvested restricted stockholders are deducted from FFO and AFFO for the computation of the per share amounts. The following amounts were deducted:

Current wording

Dividends paid and undistributed earnings allocated, if any, to unsettled restricted stockholders are deducted from FFO and AFFO for the computation of the per share amounts. The following amounts were deducted:

Previous wording

The decrease in interest on notes and mortgages receivable was primarily due to a decrease in average notes and mortgages receivables outstanding during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.

Current wording

The increase in interest on notes and mortgages receivable was primarily due to an increase in average notes and mortgages receivables outstanding during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025.

Previous wording

The decrease in property operating expenses was primarily due to a decrease in reimbursable real estate taxes as we transitioned certain tenants to paying real estate taxes directly to the applicable taxing authorities, as well as lower rent expense and other non-reimbursable expenses.

Current wording

The decrease in property operating expenses was primarily due to a decrease in reimbursable real estate taxes as we transitioned certain tenants to paying real estate taxes directly to the applicable taxing authorities, as well as lower rent expense and other non-reimbursable expenses. The decrease in leasing and redevelopment expenses was primarily due to a decrease in professional fees and redevelopment cost write-offs related to redevelopment projects.

Previous wording

The change in environmental expenses was primarily due to a decrease in environmental litigation accruals. Environmental expenses vary from period to period and, accordingly, undue reliance should not be placed on the magnitude or the direction of change in reported environmental expenses for one period, as compared to prior periods.

Current wording

The change in environmental expenses was primarily due to a change in environmental estimates, including the removal of $4.1 million of unknown reserve liabilities during the three months ended September 30, 2025, as well as a decrease in environmental litigation accruals. Environmental expenses vary from period to period and, accordingly, undue reliance should not be placed on the magnitude or the direction of change in reported environmental expenses for one period, as compared to prior periods.

Previous wording

The increase in general and administrative expenses was primarily due to increases in employee-related expenses and professional fees.

Current wording

The increase in general and administrative expenses was primarily due to net non-recurring severance costs of $1.7 million related to our separation from our former Chief Accounting Officer, as well as increases to other employee-related expenses and professional fees.

Previous wording

The gains on dispositions of real estate were primarily due to the disposition of four properties during the three months ended June 30, 2026 and the disposition of three properties during the three months ended June 30, 2025.

Current wording

The gains on dispositions of real estate were primarily due to the disposition of eight properties and the lease reclassification of 25 properties to sales-type during the three months ended September 30, 2026, and the disposition of one property during the three months ended September 30, 2025.

Previous wording

Six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

Nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

The following table presents select data and comparative results from our consolidated statements of operations for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 (in thousands):

Current wording

The following table presents select data and comparative results from our consolidated statements of operations for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025 (in thousands):

Previous wording

The following table presents the results for revenues from rental properties for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 (in thousands):

Current wording

The following table presents the results for revenues from rental properties for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025 (in thousands):

Previous wording

The decrease in interest on notes and mortgages receivable was primarily due to a decrease in average notes and mortgages receivables outstanding during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.

Current wording

The increase in interest on notes and mortgages receivable was primarily due to an increase in average notes and mortgages receivables outstanding during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.

Previous wording

The following table presents the results for property costs for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 (in thousands):

Current wording

The following table presents the results for property costs for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025 (in thousands):

Previous wording

The decrease in property operating expenses was primarily due to a decrease in reimbursable real estate taxes as we transitioned certain tenants to paying real estate taxes directly to the applicable taxing authorities, as well as lower rent expense. The increase in leasing and redevelopment expenses was primarily due to demolition costs for redevelopment projects.

Current wording

The decrease in property operating expenses was primarily due to a decrease in reimbursable real estate taxes as we transitioned certain tenants to paying real estate taxes directly to the applicable taxing authorities, as well as lower rent expense. The decrease in leasing and redevelopment expenses was primarily due to a decrease in professional fees and redevelopment cost write-offs related to redevelopment projects, partially offset by an increase in demolition costs.

Previous wording

Impairments are recorded when the carrying value of a property is reduced to fair value. Impairment charges for the six months ended June 30, 2026 and 2025 were attributable to (i) the addition of asset retirement costs to certain properties due to changes in estimates associated with our environmental liabilities, which increased the carrying values of these properties in excess of their fair values, and (ii) reductions in the carrying value of certain properties based on third-party indications of potential selling prices Impairment charges for the six months ended June 30, 2025 also included reductions in estimated undiscounted cash flows expected to be received during the assumed holding period for certain of our properties.

Current wording

Impairments are recorded when the carrying value of a property is reduced to fair value. Impairment charges for the nine months ended September 30, 2026 and 2025 were attributable to (i) the addition of asset retirement costs to certain properties due to changes in estimates associated with our environmental liabilities, which increased the carrying values of these properties in excess of their fair values, and (ii) reductions in the carrying value of certain properties based on third-party indications of potential selling prices Impairment charges for the nine months ended September 30, 2025 also included reductions in estimated undiscounted cash flows expected to be received during the assumed holding period for certain of our properties.

Previous wording

The change in environmental expenses was primarily due to (i) the removal of the remaining $7.7 million of unknown reserve liabilities which had previously been accrued for certain properties, and (ii) a decrease in environmental litigation accruals. Environmental expenses vary from period to period and, accordingly, undue reliance should not be placed on the magnitude or the direction of change in reported environmental expenses for one period, as compared to prior periods.

Current wording

The change in environmental expenses was primarily due to (i) a change in environmental estimates, including the removal of the remaining $7.7 million of unknown reserve liabilities during the nine months ended September 30, 2026, and (ii) a decrease in environmental litigation accruals. Environmental expenses vary from period to period and, accordingly, undue reliance should not be placed on the magnitude or the direction of change in reported environmental expenses for one period, as compared to prior periods.

Previous wording

The increase in general and administrative expenses was primarily due to net non-recurring retirement costs of $2.3 million, of which $2.1 million related to the retirement of our former Chief Operating Officer, partially offset by decreases in employee-related expenses, professional fees, and certain transaction related costs.

Current wording

The increase in general and administrative expenses was primarily due to net non-recurring retirement and severance costs of $4.0 million, approximately $3.8 million of which was related to the retirement of our former Chief Operating Officer and our separation from our former Chief Accounting Officer, as well as increases to other employee-related expenses and professional fees.

Previous wording

The gain on dispositions of real estate were primarily due to the sale of six properties and one partial condemnation during the six months ended June 30, 2026, and the sale of five properties and two partial condemnations during the six months ended June 30, 2025.

Current wording

The gain on dispositions of real estate were primarily due to the sale of 14 properties, one partial condemnation, and the lease reclassification of 25 properties to sales-type leases during the nine months ended September 30, 2026, and the sale of five properties and two partial condemnations during the nine months ended September 30, 2025.

Previous wording

The increase in interest expense was due to higher average borrowings and higher average interest rates during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.

Current wording

The increase in interest expense was due to higher average borrowings and higher average interest rates during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.

Previous wording

We expect to meet our short-term liquidity requirements through cash flow from operations, funds available under our Credit Facility, proceeds from the settlement of shares of common stock subject to forward sales agreements under our Equity Offering and ATM Program, and available cash and cash equivalents.

Current wording

We expect to meet our short-term liquidity requirements through cash flow from operations, funds available under our Credit Facility, proceeds from the settlement of shares of common stock subject to forward sale agreements under our Equity Offering and ATM Program, and available cash and cash equivalents.

Previous wording

As of June 30, 2026, we had $377.0 million of availability under our Credit Facility, 5.8 million shares of common stock subject to forward sales agreements which are anticipated to generate approximately $190.5 million of gross proceeds upon settlement, and available cash and cash equivalents of $4.8 million.

Current wording

As of September 30, 2026, we had $250.0 million of availability under our Credit Facility, 1.5 million shares of common stock subject to forward sale agreements which are anticipated to generate approximately $51.8 million of gross proceeds upon settlement, and available cash and cash equivalents of $8.8 million.

Previous wording

Our cash flow activities for the six months ended June 30, 2026 and 2025, are summarized as follows (in thousands):

Current wording

Our cash flow activities for the nine months ended September 30, 2026 and 2025, are summarized as follows (in thousands):

Previous wording

The change in net cash flow provided by operating activities for the six months ended June 30, 2026 and 2025 was primarily the result of changes in revenues and expenses as discussed in “Results of Operations” above and the other changes in assets and liabilities on our consolidated statements of cash flows.

Current wording

The change in net cash flow provided by operating activities for the nine months ended September 30, 2026 and 2025 was primarily the result of changes in revenues and expenses as discussed in “Results of Operations” above and the other changes in assets and liabilities on our consolidated statements of cash flows.

Previous wording

The increase in net cash flow used in investing activities was primarily due to a $63.6 million increase in property acquisitions, an $11.1 million decrease in collections of notes and mortgages receivable, a $7.4 million increase in issuance of notes and mortgages receivable, and a $6.9 million decrease in deposits for property acquisitions, partially offset by a $7.7 million increase in proceeds from dispositions of real estate.

Current wording

The increase in net cash flow used in investing activities was primarily due to a $303.3 million increase in property acquisitions, a $16.0 million increase in issuance of notes and mortgages receivable, a $6.6 million decrease in collections of notes and mortgages receivable, and a $5.9 million decrease in deposits for property acquisitions, partially offset by an $18.5 million increase in proceeds from dispositions of real estate.

Previous wording

The increase in net cash flow provided by financing activities was primarily due to a net increase in total borrowings of $55.5 million and an increase in net proceeds from the issuance of common stock of $16.0 million, partially offset by an increase in cash dividends paid of $6.7 million.

Current wording

The increase in net cash flow provided by financing activities was primarily due to a net increase in total net borrowings of $167.5 million and an increase in net proceeds from the issuance of common stock of $148.1 million, partially offset by an increase in cash dividends paid of $10.2 million.

Previous wording

In January 2025, we used borrowings under the Third Restated Credit Agreement to repay, in full, the Term Loan. As a result of this early repayment, we recognized approximately $0.9 million in unamortized debt issuance costs, which were expensed as interest expense on our consolidated statements of operations.

Current wording

In January 2025, we used borrowings under the Third Restated Credit Agreement to repay, in full, the Term Loan. As a result of this early repayment, we recognized approximately $0.9 million in unamortized debt issuance costs, which were expensed as interest expense on our consolidated statements of operations for the nine months ended September 30, 2025.

Previous wording

Unamortized debt issuance costs related to the Credit Facility were $3.0 million and $3.5 million as of June 30, 2026 and December 31, 2025, respectively, and are included in prepaid expenses and other assets on our consolidated balance sheets

Current wording

Unamortized debt issuance costs related to the Credit Facility were $2.7 million and $3.5 million as of September 30, 2026 and December 31, 2025, respectively, and are included in prepaid expenses and other assets on our consolidated balance sheets

Previous wording

In July 2024, we completed a follow-on public offering of 4.0 million shares of common stock in connection with forward sales agreements. During the year ended December 31, 2025, we settled all 4.0 million shares and realized net proceeds of $113.6 million after deducting fees and expenses and making certain other adjustments as provided in the equity distribution agreement.

Current wording

In July 2024, we completed a follow-on public offering of 4.0 million shares of common stock in connection with forward sale agreements. During the year ended December 31, 2025, we settled all 4.0 million shares and realized net proceeds of $113.6 million after deducting fees and expenses and making certain other adjustments as provided in the equity distribution agreement.

Previous wording

In February 2023, we established and, in February 2024, we amended, an at-the-market equity offering program (the “ATM Program”), pursuant to which we are able to issue and sell shares of our common stock with an aggregate sales price of up to $350.0 million through a consortium of banks acting as our sales agents or acting as forward sellers on behalf of any forward purchasers pursuant to forward sales agreements. Sales of the shares of common stock may be made, as needed, from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act, including by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or as otherwise agreed to with the applicable agent.

Current wording

In February 2023, we established and, in February 2024, we amended, an at-the-market equity offering program (the “ATM Program”), pursuant to which we are able to issue and sell shares of our common stock with an aggregate sales price of up to $350.0 million through a consortium of banks acting as our sales agents or acting as forward sellers on behalf of any forward purchasers pursuant to forward sale agreements. Sales of the shares of common stock may be made, as needed, from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act, including by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or as otherwise agreed to with the applicable agent. Sales of common stock under our ATM Program, if any, will depend on a variety of factors to be determined by us from time to time, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding available to us.

Previous wording

The use of forward sales agreements allow us to establish a share price for the sale of shares of common stock at the time the forward sales agreements become effective, but defer receiving the proceeds from the sale of shares of common stock until a later date. To account for the forward sales agreements, we considered the accounting guidance governing financial instruments and derivatives. To date, we have concluded that our forward sales agreements are not liabilities as they do not embody obligations to repurchase our shares nor do they embody obligations to issue a variable number of shares for which the monetary value are predominantly fixed, varying with something other than the fair value of the shares, or varying inversely in relation to our shares.

Current wording

The use of forward sale agreements allow us to establish a share price for the sale of shares of common stock at the time the forward sale agreements become effective, but defer receiving the proceeds from the sale of shares of common stock until a later date. To account for the forward sale agreements, we considered the accounting guidance governing financial instruments and derivatives. To date, we have concluded that our forward sale agreements are not liabilities as they do not embody obligations to repurchase our shares nor do they embody obligations to issue a variable number of shares for which the monetary value are predominantly fixed, varying with something other than the fair value of the shares, or varying inversely in relation to our shares.

Previous wording

We also evaluated whether the forward sales agreements meet the derivatives and hedging guidance scope exception to be accounted for as equity instruments. We concluded that the forward sales agreements are classifiable as equity contracts based on the following assessments: (i) none of the agreements’ exercise contingencies that are based on observable markets or indices besides those related to the market for our own stock price and operations, and (ii) none of the settlement provisions precluded the agreements from being indexed to our own stock.

Current wording

We also evaluated whether the forward sale agreements meet the derivatives and hedging guidance scope exception to be accounted for as equity instruments. We concluded that the forward sale agreements are classifiable as equity contracts based on the following assessments: (i) none of the agreements’ exercise contingencies that are based on observable markets or indices besides those related to the market for our own stock price and operations, and (ii) none of the settlement provisions precluded the agreements from being indexed to our own stock.

Previous wording

We also consider the potential dilution resulting from the forward sales agreements on our earnings per share calculations. We use the treasury stock method to determine the dilution resulting from the forward sales agreements during the period of time prior to settlement.

Current wording

We also consider the potential dilution resulting from the forward sale agreements on our earnings per share calculations. We use the treasury stock method to determine the dilution resulting from the forward sale agreements during the period of time prior to settlement.