Getty provides lease-back funding necessary for Empire Petroleum to purchase the 70 sites Couche-Tard must shed to finish its CST Brands acquisition.
In order to complete it’s acquisition of CST Brands as scheduled on June 28, Alimentation Couche-Tard’s Circle K Stores must divest 70 locations. Those locations are being purchased by Empire Petroleum Partners LLC, and Getty Realty Corp. is providing acquisition lease-back funding to Empire to facilitate its acquisition of properties from Circle K Stores Inc.
Getty Realty Corp. entered into a definitive agreement providing for acquisition lease-back funding to 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, which 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 Constant, Getty’s president & CEO.
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 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.