Getty Realty Corp. (the “Company”) announced that it has entered into a definitive agreement providing for acquisition lease-back funding to Empire Petroleum Partners, LLC (“Empire”). The Company, through a subsidiary, will acquire fee simple interests in 49 convenience store and gasoline station properties (the “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 the states of 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.
“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 that we have been targeting for some time. 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,” stated Christopher J. Constant, Getty’s President and Chief Executive Officer.
The Company is providing acquisition lease-back funding to Empire to facilitate its acquisition of properties from Circle K Stores Inc. (“Circle K”). Circle K has agreed to sell a portfolio of properties to Empire to satisfy compliance with regulatory requirements associated with its acquisition of CST Brands, Inc.
Upon closing, the Company expects the transaction to be immediately accretive to net earnings. The Company plans to fund the transaction through funds available under its credit agreement. The transaction is subject to numerous closing conditions, including the closing of a separate purchase agreement under which Empire has agreed to purchase the Properties from Circle K, and regulatory review and approval of such separate agreement. The Company can offer no assurances that the transaction will close on the terms described herein, or at all.