Getty Realty Corp. (GTY): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at Getty Realty Corp. (GTY) right now, and frankly, their 2025 story is one of resilience, guided by a \$2.42 to \$2.43 per share AFFO outlook. As a long-time observer, I see their triple-net lease model in essential retail-think gas stations and car washes-providing a solid foundation, evidenced by that near-perfect 99.8% occupancy in Q3 2025. But a strong outlook doesn't mean zero risk; we need to map out exactly where the pressure points are in the market. So, let's break down the five forces-from supplier leverage to the threat of new entrants-to see precisely how durable this competitive advantage really is.

Getty Realty Corp. (GTY) - Porter's Five Forces: Bargaining power of suppliers

When looking at Getty Realty Corp. (GTY)'s suppliers, we primarily focus on two groups: property sellers in the acquisition market and capital providers, which includes lenders and debt/equity underwriters. The power each group wields directly impacts Getty Realty Corp.'s cost of growth and operational flexibility.

Property sellers maintain a moderate level of bargaining power. This stems from the competitive nature of acquiring high-quality, net-leased convenience and automotive retail properties. To keep pace and execute its growth strategy, Getty Realty Corp. has been an active buyer, investing \$237 million year-to-date 2025 in new assets. This level of investment activity suggests that Getty Realty Corp. must compete for desirable assets, which naturally gives sellers leverage in price negotiations.

Capital providers, on the other hand, hold a significant, though somewhat mitigated, level of power. This is evident in Getty Realty Corp.'s overall leverage position. As of September 30, 2025, the company reported \$940.0 million in total outstanding indebtedness. Lenders gain leverage from this debt load, especially when Getty Realty Corp. requires new financing to fuel its acquisition pipeline, which included more than \$75 million of investments under contract heading into the final quarter of 2025.

The credit profile of Getty Realty Corp. is a key factor in lender leverage. The company holds a BBB- Fitch Rating. While this is an investment-grade rating, it is on the lower end of that spectrum, which can mean lenders charge a slightly higher cost of capital compared to higher-rated peers. Furthermore, the company has actively managed its capital structure, evidenced by its recent move to issue \$250 million of senior unsecured notes, scheduled to fund in January 2026, to term out borrowings under its revolving credit facility.

To show you the scale of Getty Realty Corp.'s capital structure as of the third quarter of 2025, here are the key figures related to its debt suppliers:

However, Getty Realty Corp. has taken proactive steps to significantly mitigate the immediate power of its capital suppliers. The most concrete evidence of this is the successful management of near-term obligations. Following actions in early 2025, Getty Realty Corp. has no debt maturities until June 2028. This long runway before the next major refinancing event reduces the urgency for Getty Realty Corp. to accept unfavorable terms from lenders or the debt markets. Plus, the company maintains substantial liquidity, reporting over \$375 million in total liquidity at the end of Q3 2025, which includes \$260 million in revolver capacity.

The bargaining power of suppliers can be summarized by these key mitigating and empowering factors:

• No debt maturities until June 2028.
• Total liquidity exceeding \$375 million as of Q3 2025.
• Year-to-date investment activity of \$237 million in 2025.
• Total debt of \$940.0 million as of September 30, 2025.
• BBB- credit rating provides a baseline of market access.

Getty Realty Corp. (GTY) - Porter's Five Forces: Bargaining power of customers

When looking at Getty Realty Corp. (GTY)'s customer power-which in this net lease REIT context means tenant power-the data from late 2025 strongly suggests this force is relatively low, though concentration risk warrants attention.

Tenant power is low due to the long weighted-average lease term of approximately 9.9 years as of the third quarter of 2025. This long duration locks in revenue streams, making it difficult for tenants to demand immediate concessions or switch landlords without significant cost or operational disruption. Furthermore, the portfolio benefits from 1.8% annual rent escalations built into many leases, which helps maintain the real value of the cash flow over time.

The triple-net lease structure is a critical element that minimizes customer leverage regarding operating costs. Under this structure, the tenant is responsible for property operating expenses, including maintenance, property insurance, and real estate taxes. This shifts the burden of rising operational costs away from Getty Realty Corp. (GTY) and directly onto the customer, insulating the company's net operating income.

We can see the stability in the operational metrics that underpin this low power:

High tenant concentration, with the Top 10 tenants representing a significant portion of Annualized Base Rent (ABR), increases their collective leverage. While the precise 2025 figure for the Top 10 is not immediately available, data from September 30, 2024, showed the Top 10 tenants accounted for 67% of ABR, indicating that losing even one major tenant would have a material impact. To counter this, Getty Realty Corp. (GTY) is strategically diversifying its tenant base, having added 10 new tenants in 2025 alone.

The geographic concentration also plays a role in customer power dynamics, as the customer base is not evenly spread across the country. As of Q3 2025:

• 61% of Annualized Base Rent (ABR) comes from the top 50 MSAs (Metropolitan Statistical Areas).
• 77% of Annualized Base Rent (ABR) comes from the top 100 MSAs.

Finally, Getty Realty Corp. (GTY)'s high occupancy rate of 99.8% in Q3 2025 shows low tenant churn. This high retention rate suggests tenants are satisfied with the lease terms and property performance, reducing their incentive to exert bargaining power for better conditions upon renewal or during the lease term.

Getty Realty Corp. (GTY) - Porter's Five Forces: Competitive rivalry

Rivalry is high in the single-tenant net lease retail REIT sector, competing with major investors for acquisitions. You see this competition in the deployment of capital; Getty Realty Corp. invested a total of $236.8 million year-to-date at an initial cash yield of 7.9% as of October 22, 2025.

Differentiation is a key factor; Getty Realty Corp. focuses on recession-resistant, non-discretionary convenience and automotive retail. This focus is reflected in the portfolio composition as of September 30, 2025, where convenience stores made up 62.7% of Annualized Base Rent (ABR), followed by express tunnel car washes at 20.5%.

The market is fragmented, but Getty Realty Corp. has scale with 1,160 freestanding properties across 44 states as of September 30, 2025. The base rental income for the nine months ended September 30, 2025, was $151.7 million.

Getty Realty Corp.'s strategy of direct tenant transactions (over 90%) reduces rivalry in sourcing deals. The company continues to build its pipeline, reporting a committed investment pipeline of more than $75.0 million for the development and/or acquisition of 22 convenience and automotive retail properties as of October 22, 2025.

Here's a quick look at the scale and recent activity:

The properties acquired in the third quarter of 2025 highlight the focus on specific subsectors:

• Acquisition of 24 properties for $51.8 million in Q3 2025.
• 15 of those acquisitions were drive thru quick service restaurants (QSRs).
• 5 of those acquisitions were convenience stores.
• Incremental development funding of $4.5 million for car washes and service centers.

Getty Realty Corp. (GTY) - Porter's Five Forces: Threat of substitutes

The threat of substitutes for Getty Realty Corp. (GTY) is generally considered low due to the nature of its underlying real estate assets. Unlike traditional retail, which faces intense substitution pressure from e-commerce, GTY's properties-gas stations, car washes, and auto service centers-are inherently resistant to online displacement. These are essential, physical services that require a brick-and-mortar presence. As of the third quarter of 2025, Getty Realty Corp.'s portfolio comprised 1,160 freestanding properties across 44 states, generating $210 million in annualized base rent.

The resilience of the portfolio is evident in its operating metrics. In the second quarter of 2025, the company maintained a 99.7% occupancy rate and achieved 99.9% year-to-date rent collections, demonstrating the essential nature of the tenant base.

The primary substitute for Getty Realty Corp.'s sale-leaseback model is direct ownership by the tenants themselves. When a tenant chooses to own the real estate under their gas station or auto service center rather than lease it from a REIT like Getty Realty Corp., that represents a direct substitution of the capital structure. However, Getty Realty Corp.'s focus on direct relationships helps mitigate this, as more than 90% of its transactions are direct with tenants, suggesting a strong, entrenched lease-based model.

For Getty Realty Corp.'s shareholders, alternative investment vehicles in the net lease space serve as substitutes for capital allocation. Investors seeking stable, income-producing real estate can look at larger, more diversified peers. For instance, as of late 2025, Realty Income Corporation (O) offered a dividend yield of around 5.7%, while W.P. Carey Inc. (WPC) was yielding approximately 5.40% (Trailing Twelve Months as of November 06, 2025). These alternatives compete for the same income-focused investor dollar.

The most significant long-term, defintely real substitute risk stems from the structural shift in the automotive sector toward electric vehicles (EVs). Getty Realty Corp. is uniquely exposed as the only U.S. publicly traded REIT specializing in this area. While the company has diversified, a substantial portion of its revenue remains tied to gasoline sales. An analysis from early 2025 indicated that Getty Realty Corp. generated around 70% of its Annualized Base Rent from convenience stores and gas stations. The growth of EVs directly threatens the core business model of fuel sales, even if the co-located convenience store business remains strong.

The speed of this transition is a key variable, though the trend is undeniable. In the top three states contributing to GTY's ABR (New York, Texas, and Virginia), year-over-year growth in new EV registrations in the counties where GTY owns properties showed growth exceeding 100% in some areas, indicating rapid adoption in their markets.

The composition of Getty Realty Corp.'s portfolio highlights where the substitution risk is concentrated:

• Convenience stores: 63.1% of the portfolio (Q2 2025)
• Express tunnel car washes: 20.5% of the portfolio (Q2 2025)
• Auto service centers: 6.0% of the portfolio (Q2 2025)
• The remaining percentage is composed of other automotive and single-tenant retail properties.

The company's mitigation strategy involves increasing exposure to less fuel-dependent assets. For example, in the first quarter of 2025, Getty Realty Corp. invested $10.9 million across six properties, including three drive-thru quick service restaurants (QSRs), one auto service center, and one express tunnel car wash. Furthermore, in the first nine months of 2025, the company invested $237 million, acquiring 27 QSRs, 22 convenience stores, 9 auto service centers, and 5 express tunnel car washes, showing a clear pivot toward auto service and QSRs over pure gas stations.

Getty Realty Corp. (GTY) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers to entry in the net lease REIT space, specifically for convenience and automotive retail. Honestly, for a new player to step in and meaningfully challenge Getty Realty Corp., the hurdles are quite high, largely due to the scale and established operational advantages Getty has built.

The sheer size of Getty Realty Corp.'s existing footprint acts as a major deterrent. A new entrant would need massive capital just to approach parity in terms of asset count and geographic spread. As of September 30, 2025, Getty Realty Corp. manages a portfolio of 1,160 freestanding properties.

This scale is matched by a broad geographic reach, which creates operational complexity for newcomers. Getty Realty Corp.'s assets are spread across 44 states plus Washington, D.C.. Navigating the regulatory, zoning, and property management requirements across that many jurisdictions is a significant, costly undertaking that established players like Getty have already mastered.

Furthermore, the deal sourcing mechanism presents a relationship-based moat. Getty Realty Corp. has cultivated deep ties within its niche, evidenced by the fact that more than 90% of its transactions come directly from tenants. This direct sourcing bypasses competitive brokerage fees and often secures off-market deals, which new entrants, lacking these established relationships, would struggle to access.

Finally, new entrants would face immediate pressure to match Getty Realty Corp.'s acquisition economics. The company has demonstrated an ability to deploy capital accretively. Year-to-date in 2025, Getty Realty Corp. invested $236.8 million across its pipeline at an initial cash yield of 7.9%. Competing with that yield, especially when factoring in the cost of capital for a new, unproven entity, is tough.

Here's a quick look at the key structural barriers facing potential competitors:

The barriers to entry are definitely structural, rooted in capital, relationships, and operational complexity. You can see this reflected in the disciplined nature of Getty Realty Corp.'s investment activity, which relies on these established advantages.

Consider the operational complexity involved in simply managing the portfolio size:

• Managing 1,160 assets requires significant, specialized infrastructure.
• Operating across 44 states demands expertise in diverse state-level regulations.
• Maintaining more than 90% direct tenant sourcing requires years of relationship building.
• Deploying capital at a 7.9% initial cash yield demands deep sector knowledge.

Finance: draft a sensitivity analysis on the impact of a 50-basis-point drop in acquisition yield for the 2026 pipeline by Friday.