Getty Realty Corp. has closed a $260.9 million sale-leaseback transaction with Refuel Operating Company, acquiring 41 convenience stores and leasing the properties back to the operator under four long-term agreements. The transaction expands Getty’s exposure to Refuel while the net-lease REIT uses a combination of equity, debt and property dispositions to fund the investment on a leverage-neutral basis.
The deal, which closed Sept. 22 and was disclosed in a Sept. 28 SEC filing, covers 17 stores in South Carolina, 12 in North Carolina, seven in Texas and five in Mississippi. The properties average nearly 5,000 square feet and 2.5 acres per site, and include modern convenience stores with proprietary food offerings and branded quick-service restaurants.
Refuel will continue operating the stores under four unitary net leases with initial terms of 20 years, multiple renewal options and rent increases every five years. Refuel operates approximately 250 convenience locations under its Refuel and Double Quick brands across five states in the Southeast and is a portfolio company of First Reserve.
The transaction also changes Refuel’s position within Getty’s tenant base. Pro forma for the acquisition and other investment activity completed after June 30, Refuel is expected to become Getty Realty’s third-largest tenant, representing approximately 7.7% of the REIT’s annualized base rent. Refuel was already a Getty tenant at six convenience stores, five of which were new-to-industry locations financed through Getty’s development funding program.
Getty said it expects to fund the transaction through several capital sources rather than relying on a single new borrowing. The company has entered into forward sale agreements covering approximately 0.8 million common shares for anticipated gross proceeds of about $26.4 million, while approximately 6.6 million shares remain subject to outstanding forward sale agreements that are expected to generate about $216.9 million when settled. Getty expects to use approximately $100 million of those equity proceeds for the Refuel transaction.
The REIT has also received commitments from existing lenders for a new $200 million unsecured term loan. The loan is expected to close in October, mature in October 2028 and include three one-year extension options, subject to customary conditions. Getty expects to use approximately $100 million of the loan proceeds to fund part of the Refuel acquisition.
A third funding source is a planned portfolio of property sales. Getty has identified properties expected to generate at least $50 million of gross proceeds, with the company planning to redeploy that capital toward the Refuel transaction. Getty said it had already sold 13 properties year to date for $19.1 million of gross proceeds and had additional assets in various stages of the disposition process.
The Refuel transaction forms part of a broader investment program at Getty. The company said it had invested approximately $455.2 million in convenience and automotive retail assets year to date at a 7.1% initial cash yield, including the Refuel acquisition and approximately $35.7 million of investment activity completed after the end of the second quarter. Getty also reported a committed investment pipeline exceeding $125 million, with initial cash yields averaging 7.8%.
Getty’s portfolio comprised 1,269 freestanding properties across 46 states and Washington, D.C., as of Sept. 22. The REIT focuses on convenience stores, automotive retail properties and other single-tenant locations under net-lease structures, making the Refuel transaction consistent with its existing acquisition strategy.
For Refuel, the sale-leaseback converts ownership of the 41 properties into immediate capital while preserving operational control through the long-term leases. Refuel said the transaction, alongside a new senior secured credit facility that refinances its existing debt, is intended to create a more balanced mix of owned and leased real estate and provide additional flexibility for continued investment in its store network.
The transaction is therefore both a property acquisition for Getty and a capital-raising transaction for Refuel. Getty receives long-duration leases tied to 41 operating locations, while Refuel retains use of the stores and unlocks capital previously invested in the underlying real estate.
