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Getty Realty 10-K 2008
e10vk
 

 
 
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
     
þ
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
   
 
  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
 
   
 
  OR
 
   
o
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 001-13777
GETTY REALTY CORP.
 
(Exact name of registrant as specified in its charter)
     
Maryland   11-3412575
(State or other jurisdiction of incorporation or organization)   (I.R.S. employer identification no.)
     
125 Jericho Turnpike, Suite 103, Jericho, New York   11753
(Address of principal executive offices)   (Zip Code)
     
Registrant’s telephone number, including area code: (516) 478-5400    
     
Securities registered pursuant to Section 12(b) of the Act:    
     
TITLE OF EACH CLASS   NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Stock, $0.01 par value   New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes o     No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.     Yes o     No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ     No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
             
Large accelerated filer o   Accelerated filer þ   Non-accelerated filer o
(Do not check if a smaller reporting company)
  Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes o     No þ
The aggregate market value of common stock held by non-affiliates (17,352,547 shares of common stock) of the Company was $462,965,954 as of June 30, 2007.
The registrant had outstanding 24,765,615 shares of common stock as of March 17, 2008.
DOCUMENTS INCORPORATED BY REFERENCE
     
DOCUMENT   PART OF FORM 10-K
Selected Portions of Annual Report to Shareholders for the year ended December 31, 2007 (the “Annual Report”)
  I and II
 
   
Selected Portions of Definitive Proxy Statement for the 2008 Annual Meeting of Stockholders (the “Proxy Statement”), which will be filed by the registrant on or prior to 120 days following the end of the registrant’s year ended December 31, 2007 pursuant to Regulation 14A.
  III
 
 

 


 

PART I
Item 1. Business
Recent Developments
     A substantial portion of our revenues (76% for the three months ended December 31, 2007 and 78% for the year ended December 31, 2007) are derived from leases (the “Marketing Leases”) with our primary tenant, Getty Petroleum Marketing Inc. (“Marketing”). Accordingly, our revenues are dependent to a large degree on the economic performance of Marketing and of the petroleum marketing industry, and any factor that adversely affects Marketing, or our relationship with Marketing, may have a material adverse effect on us. Through March 2008, Marketing has made all required monthly rental payments under the Marketing Leases when due, although there is no assurance that it will continue to do so. Even though Marketing is wholly-owned by a subsidiary of OAO LUKoil (“Lukoil”), one of the largest integrated Russian oil companies, Lukoil is not a guarantor of the Marketing Leases and there can be no assurance that Lukoil will continue to provide credit enhancement or additional capital to Marketing in the future.
     In accordance with generally accepted accounting principles (“GAAP”), the aggregate minimum rent due over the current terms of the Marketing Leases, substantially all of which are scheduled to expire in December 2015, is recognized on a straight-line basis rather than when the cash payment is due. We have recorded as deferred rent receivable on our consolidated balance sheet the cumulative difference between lease revenue recognized under this straight line accounting method and the lease revenue recognized when the payment is due under the contractual payment terms. We provide reserves for a portion of the recorded deferred rent receivable if circumstances indicate that a property may be disposed of before the end of the current lease term or if it is not reasonable to assume that a tenant will make all of its contractual lease payments when due during the current lease term. Our assessments and assumptions regarding the recoverability of the deferred rent receivable related to the properties subject to the Marketing Leases are reviewed on a quarterly basis and such assessments and assumptions are subject to change.
     We have had periodic discussions with representatives of Marketing regarding potential modifications to the Marketing Leases and in the course of such discussions Marketing has proposed to (i) remove approximately 40% of the properties (the “Subject Properties”) from the Marketing Leases and eliminate payment of rent to us, and eliminate or reduce payment of operating expenses, with respect to the Subject Properties, and (ii) reduce the aggregate amount of rent payable to us for the approximately 60% of the properties that would remain under the Marketing Leases (the “Remaining Properties”). In light of these developments, and Marketing’s financial performance, which continued to deteriorate in the fourth quarter and for the year ended December 31, 2007 (as discussed below), we intend to attempt to negotiate with Marketing for a modification of the Marketing Leases which removes the Subject Properties from the Marketing Leases. Following any such modification, we intend either to relet the Subject Properties or to sell the Subject Properties and reinvest the proceeds in new properties. Any such modification would likely significantly reduce the amount of rent we receive from Marketing and increase our operating expenses. We cannot accurately predict if or when the Marketing Leases will be modified or what the terms of any agreement may be if the Marketing Leases are modified. We also cannot accurately predict what actions Marketing and Lukoil may take, and what our recourse may be, whether the Marketing Leases are modified or not.
     Representatives of Marketing have also indicated to us that they are considering significant changes to Marketing’s business model. We intend to attempt to negotiate with Marketing for a modification of the Marketing Leases to remove the Subject Properties; however if Marketing ultimately determines that its business strategy is to exit all of the properties it leases from us or to divest a composition of properties different from the properties comprising the Subject Properties, it is our intention to cooperate with Marketing in accomplishing those objectives to the extent that is prudent for us to do so by seeking replacement tenants or buyers for the properties subject to the Marketing Leases, either individually, in groups of properties, or by seeking a single tenant for the entire portfolio of properties subject to the Marketing Leases. Although we are the fee or leasehold owner of the properties subject to the Marketing Leases and the owner of the Getty® brand and have prior experience with tenants who operate their gas stations, convenience stores, automotive repair services or other businesses at our properties, in the event that the Subject Properties or other properties are removed from the Marketing Leases, we cannot accurately predict if, when, or on what terms, such properties could be re-let or sold.
     In February 2008 we received Marketing’s unaudited financial statements for the year ended December 31, 2007 and became aware that the previously disclosed deterioration in Marketing’s financial performance had continued to a point where, in conjunction with our intention to attempt to negotiate with Marketing for a modification of the Marketing Leases to remove the Subject Properties, we can no longer reasonably assume that we will collect all of the rent due to us related to the Subject Properties for the remainder of

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the current lease terms. In reaching this conclusion, we relied on various indicators, including, but not limited to, the following: (i) Marketing’s significant operating losses, (ii) its negative cash flow from operating activities, (iii) its asset impairment charges for underperforming assets, and (iv) its negative earnings before interest, taxes, depreciation, amortization and rent payable to the Company. Based upon our assessments and assumptions, we believe that it is probable at this time that Lukoil would not allow Marketing to fail to perform its obligations under the Marketing Leases. Should our assessments and assumptions prove to be incorrect, the conclusions reached by the Company relating to (i) recoverability of the deferred rent receivable for the Remaining Properties and (ii) Marketing’s ability to pay its environmental liabilities (as discussed below) would likely change.
     Based upon our belief that Marketing desires to have the Subject Properties removed from the Marketing Leases, and our intention to attempt to negotiate a modification of the Marketing Leases to such end, we believe that Marketing will not make all contractual lease payments when due for the entire current term of the Marketing Leases with respect to the Subject Properties. Accordingly, we have reserved approximately $10.5 million of the deferred rent receivable recorded as of December 31, 2007, which is the full amount of the deferred rent receivable related to the Subject Properties. This non-cash reserve has been reflected in our results of operations for the fourth quarter and year ended December 31, 2007 based on information that became available to us from Marketing after we announced our results of operations for those periods. Providing this $10.5 million reserve reduces our net earnings and our funds from operations but does not impact our cash flow from operating activities or adjusted funds from operations since the impact of the straight-line method of accounting is not included in our determination of adjusted funds from operations. For additional information regarding funds from operations and adjusted funds from operations, which are non-GAAP measures, see “General — Supplemental Non-GAAP Measures” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Selected Financial Data” both of which appear in our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K and are incorporated by reference herein. While we believe it is no longer reasonable to assume that Marketing will make all contractual lease payments when due for the entire current term of the Marketing Leases with respect to the Subject Properties, after considering Marketing’s financial condition, our intention to negotiate a modification of the Marketing Leases, and certain other factors, including but not limited to those described above, we continue to believe that it is probable that we will collect the deferred rent receivable recorded as of December 31, 2007 related to the Remaining Properties. In addition, based upon our evaluation of the carrying value of the Subject Properties, we believe that no impairment adjustment is necessary for the Subject Properties as of December 31, 2007 pursuant to the provisions of Statement of Financial Accounting Standards No. 144. We intend to regularly review our assumptions that affect the accounting for rental revenue related to the Remaining Properties subject to the Marketing Leases and our assumptions regarding potential impairment of the Subject Properties and, if appropriate, to consider adjusting our reserves. Beginning in the first quarter of 2008, we anticipate that the rental revenue for the Remaining Properties will continue to be recognized on a straight-line basis and the rental revenue for the Subject Properties will be recognized when paid under the contractual payment terms.
     As the operator of our properties under the Marketing Leases, Marketing is directly responsible to pay for the remediation of environmental contamination it causes and to comply with various environmental laws and regulations. In addition, the Marketing Leases and various other agreements between Marketing and us allocate responsibility for known and unknown environmental liabilities between Marketing and us relating to the properties subject to the Marketing Leases. Based on various factors, including our assessments and assumptions at this time that Lukoil would not allow Marketing to fail to perform its obligations under the Marketing Leases, we believe that Marketing will continue to pay for substantially all environmental contamination and remediation costs allocated to it under the Marketing Leases. It is possible that our assumptions regarding the ultimate allocation methods and share of responsibility that we used to allocate environmental liabilities may change as a result of the factors discussed above, or otherwise, which may result in adjustments to the amounts recorded for environmental litigation accruals, environmental remediation liabilities and related assets. We may ultimately be responsible to directly pay for environmental liabilities as the property owner if Marketing fails to pay them. We are required to accrue for environmental liabilities that we believe are allocable to Marketing under the Marketing Leases and various other agreements if we determine that it is probable that Marketing will not pay its environmental obligations.
     Based upon our assessment of Marketing’s financial condition and certain other factors, including but not limited to those described above, we believe at this time that it is not probable that Marketing will not pay the environmental liabilities allocable to it under the Marketing Leases and various other agreements and, therefore, have not accrued for such environmental liabilities. Our assessments and assumptions that affect the recording of environmental liabilities related to the properties subject to the Marketing Leases are reviewed on a quarterly basis and such assessments and assumptions are subject to change.
     We cannot provide any assurance that Marketing will continue to pay its debts or meet its rental, environmental or other obligations under the Marketing Leases prior or subsequent to any potential modification to the Marketing Leases discussed above. Additionally, we may be required to (i) reserve additional amounts of the deferred rent receivable at a later time, (ii) accrue for

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environmental liabilities that we believe are allocable to Marketing under the Marketing Leases and various other agreements, or (iii) record an impairment charge related to the Subject Properties as a result of the proposed modification of the Marketing Leases. In the event that Marketing cannot or will not perform its rental, environmental or other obligations under the Marketing Leases; if the Marketing Leases are modified significantly or terminated; if we determine that it is probable that Marketing will not meet its environmental obligations and we accrue for such liabilities; if we are unable to relet or sell the properties subject to the Marketing Leases; or if we change our assumptions that affect the accounting for rental revenue or environmental liabilities related to the Marketing Leases; our business, financial condition, revenues, operating expenses, results of operations, liquidity, ability to pay dividends and stock price may be materially adversely affected.
     For additional information regarding factors that could adversely affect us relating to Marketing, see “Part I, Item 1A. Risk Factors” in this Annual Report on Form 10-K.
Overview
     Getty Realty Corp., a Maryland corporation, is the largest publicly-traded real estate investment trust (“REIT”) in the United States specializing in the ownership and leasing of retail motor fuel and convenience store properties and petroleum distribution terminals. As of December 31, 2007, we owned eight hundred eighty properties and leased two hundred three additional properties. Our properties are located primarily in the Northeast and the Mid-Atlantic regions in the United States. The Company also owns or leases properties in Texas, North Carolina, Hawaii, California, Florida, Arkansas, Illinois and North Dakota.
     Nearly all of our properties are leased or sublet to distributors and retailers engaged in the sale of gasoline and other motor fuel products, convenience store products and automotive repair services who are responsible for the payment of taxes, maintenance, repair, insurance and other operating expenses and for managing the actual operations conducted at these properties. As of December 31, 2007, we leased approximately 81% of our owned and leased properties on a long-term basis to Marketing. Marketing is wholly-owned by a subsidiary of Lukoil, one of the largest integrated Russian oil companies. Marketing operates the petroleum distribution terminals but typically does not itself directly operate the retail motor fuel and convenience store properties it leases from us. Rather, Marketing subleases nearly all of our retail properties to distributors and retailers who are responsible for the actual operations at the locations and operate their convenience stores, automotive repair services or other businesses at our properties.
     We are self-administered and self-managed by our experienced management team, which has over ninety-four years of combined experience in owning, leasing and managing retail motor fuel and convenience store properties. Our executive officers are engaged exclusively in the day-to-day business of the Company. We administer nearly all management functions for our properties, including leasing, legal, data processing, finance and accounting. We have invested, and will continue to invest, in real estate and real estate related investments, such as mortgage loans, when appropriate opportunities arise.
The History of Our Company
     Our founders started the business in 1955 with the ownership of one gasoline service station in New York City and combined real estate ownership, leasing and management with actual service station operation and petroleum distribution. We held our initial public offering in 1971 under the name Power Test Corp. We acquired, from Texaco in 1985, the petroleum distribution and marketing assets of Getty Oil Company in the Northeast United States along with the Getty® name and trademark in connection with our real estate and the petroleum marketing business in the United States. We became one of the largest independent owner/operators of petroleum marketing assets in the country, serving retail and wholesale customers through a distribution and marketing network of Getty® and other branded retail motor fuel and convenience store properties and petroleum distribution terminals.
     Marketing was formed to facilitate the spin-off of our petroleum marketing business to our shareholders which was completed in 1997 (the “Spin-Off”). At that time, our shareholders received a tax-free dividend of one share of common stock of Marketing for each share of our common stock. Following the Spin-Off, Marketing held the assets and liabilities of our petroleum marketing operations and a portion of our home heating oil business, and we continued operating primarily as a real estate company specializing in the ownership and leasing of retail motor fuel and convenience store properties and petroleum distribution terminals. In 1998, we acquired Power Test Investors Limited Partnership (the “Partnership”), thereby acquiring fee title to two hundred ninety-five properties we had previously leased from the Partnership and which the Partnership had acquired from Texaco in 1985. We later sold the remaining portion of our home heating oil business. As a result, we are now exclusively engaged in the ownership, leasing and management of real estate assets, principally in the petroleum marketing industry.

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     In December 2000, Marketing was acquired by a U.S. subsidiary of Lukoil. In connection with Lukoil’s acquisition of Marketing, we renegotiated our long-term unitary Master Lease with Marketing. As of December 31, 2007, Marketing leased from us eight hundred eighty properties under the Master Lease and ten properties under supplemental leases (collectively referred to as the Marketing Leases). Eight hundred eighty-one of the properties leased to Marketing are retail motor fuel and convenience store properties and nine of the properties are petroleum distribution terminals. Seven hundred and fourteen of the properties leased to Marketing are owned by us and one hundred seventy-six of the properties are leased by us from third parties. The Master Lease has an initial term expiring in December 2015, and generally provides Marketing with three renewal options of ten years each and a final renewal option of three years and ten months extending to 2049. For information regarding Marketing and the Marketing Leases, see “Part 1. Item 1. Business — Recent Developments” above. Each of the renewal options may be exercised only on an “all or nothing” basis. The supplemental leases have initial terms of varying expiration dates. The Marketing Leases are “triple-net” leases, pursuant to which Marketing is responsible for the payment of taxes, maintenance, repair, insurance and other operating expenses. We have licensed the Getty® trademarks to Marketing on an exclusive basis in its marketing territory as of December 2000. We have also licensed the trademarks to Marketing on a non-exclusive basis outside that territory, subject to a gallonage-based royalty, although to date, Marketing has not used the trademark outside that territory.
     We elected to be treated as a REIT under the federal income tax laws beginning January 1, 2001. A REIT is a corporation, or a business trust that would otherwise be taxed as a corporation, which meets certain requirements of the Internal Revenue Code. The Internal Revenue Code permits a qualifying REIT to deduct dividends paid, thereby effectively eliminating corporate level federal income tax and making the REIT a pass-through vehicle for federal income tax purposes. To meet the applicable requirements of the Internal Revenue Code, a REIT must, among other things, invest substantially all of its assets in interests in real estate (including mortgages and other REITs) or cash and government securities, derive most of its income from rents from real property or interest on loans secured by mortgages on real property, and distribute to shareholders annually a substantial portion of its otherwise taxable income. As a REIT, we are required to distribute at least ninety percent of our taxable income to our shareholders each year and would be subject to corporate level federal income taxes on any taxable income that is not distributed.
Real Estate Business
     The operators of our properties are primarily distributors and retailers engaged in the sale of gasoline and other motor fuel products, convenience store products and automotive repair services. Over the past decade, these lines of business have matured into a single industry as operators increased their emphasis on co-branded locations with multiple uses. The combination of petroleum product sales with other offerings, particularly convenience store products, has helped provide one-stop shopping for consumers and we believe represents a driving force behind the industry’s growth in recent years.
     Revenues from rental properties for the year ended December 31, 2007 were $78.5 million which is comprised of $75.0 million of lease payments received and $3.4 million of deferred rental income recognized due to the straight-line method of accounting for the leases with Marketing and certain of our other tenants and amortization of above-market and below-market rent for acquired in-place leases. In 2007, we received lease payments from Marketing aggregating approximately $60.0 million (or 80%) of the $75.0 million lease payments received. We are materially dependent upon the ability of Marketing to meet its rental, environmental and other obligations under the Marketing Leases. Marketing’s financial results depend largely on retail petroleum marketing margins and rental income from subtenants who operate our properties. The petroleum marketing industry has been and continues to be volatile and highly competitive. Marketing has made all required monthly rental payments under the Marketing Leases when due, although there is no assurance that it will continue to do so. For information regarding Marketing and the Marketing Leases, see “Part 1. Item 1. Business — Recent Developments” above. You can find more information about our revenues, profits and assets by referring to the financial statements and supplemental financial information in our Annual Report to Shareholders.
     As of December 31, 2007, we owned fee title to eight hundred seventy-one retail motor fuel and convenience store properties and nine petroleum distribution terminals. We also leased two hundred three retail motor fuel and convenience store properties. Our typical property is used as a retail motor fuel and/or convenience store, and is located on between one-half and three quarters of an acre of land in a metropolitan area. Our properties are located primarily in the Northeast and the Mid-Atlantic regions in the United States. The Company also owns or leases properties in Texas, North Carolina, Hawaii, California, Florida, Arkansas, Illinois and North Dakota. Approximately one-half of our retail motor fuel properties have repair bays (typically two or three bays per station) and nearly half have convenience stores, canopies or both. We lease four thousand square feet of office space at 125 Jericho Turnpike, Jericho, New York, which is used for our corporate headquarters.
     We believe our network of retail motor fuel and convenience store properties and terminal properties across the Northeast and the Mid-Atlantic regions of the United States is unique and that comparable networks of properties are not readily available for purchase

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or lease from other owners or landlords. Many of our properties are located at highly trafficked urban intersections or conveniently close to highway entrance and exit ramps. Furthermore, we believe that obtaining the permits necessary to operate a network of petroleum marketing properties such as ours would be a difficult, time consuming and costly process for any potential competitor. However, the real estate industry is highly competitive, and we compete for tenants with a large number of property owners. Our principal means of competition are rents charged in relation to the income producing potential of the location. In addition, we expect other major real estate investors with significant capital will compete with us for attractive acquisition opportunities. These competitors include petroleum manufacturing, distributing and marketing companies, other REITs, investment banking firms and private institutional investors. This competition has increased prices for commercial properties and may impair our ability to make suitable property acquisitions on favorable terms in the future.
     As part of our overall growth strategy we regularly review opportunities to acquire additional properties and we expect to continue to pursue acquisitions that we believe will benefit our financial performance. To the extent that our current sources of liquidity are not sufficient to fund such acquisitions we will require other sources of capital, which may or may not be available on favorable terms or at all.
Trademarks
     We own the Getty® name and trademark in connection with our real estate and the petroleum marketing business in the United States and have licensed the Getty® trademarks to Marketing on an exclusive basis in its marketing territory as of December 2000. We have also licensed the trademarks to Marketing on a non-exclusive basis outside that territory, subject to a gallonage-based royalty, although to date, Marketing has not used the trademark outside that territory. The trademark licenses with Marketing are coterminous with the Master Lease.
Regulation
     We are subject to numerous existing federal, state and local laws and regulations including matters related to the protection of the environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived assets including buildings containing hazardous materials, underground storage tanks (“UST” or “USTs”) and other equipment. The Marketing Leases and various other agreements between Marketing and us allocate responsibility for known and unknown environmental liabilities between Marketing and us relating to the properties subject to the Marketing Leases. It is possible that our assumptions regarding the ultimate allocation methods and share of responsibility that we used to allocate environmental liabilities with respect to the properties subject to the Marketing Leases may change, which may result in adjustments to the amounts recorded for environmental litigation accruals, environmental remediation liabilities and related assets. The ultimate resolution of these matters could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.
     Petroleum properties are governed by numerous federal, state and local environmental laws and regulations. These laws have included: (i) requirements to report to governmental authorities discharges of petroleum products into the environment and, under certain circumstances, to remediate the soil and/or groundwater contamination pursuant to governmental order and directive, (ii) requirements to remove and replace USTs that have exceeded governmental-mandated age limitations and (iii) the requirement to provide a certificate of financial responsibility with respect to claims relating to UST failures.
     Environmental expenses are principally attributable to remediation costs which include installing, operating, maintaining and decommissioning remediation systems, monitoring contamination, and governmental agency reporting incurred in connection with contaminated properties. In accordance with leases with certain tenants, we have agreed to bring the leased properties with known environmental contamination to within applicable standards and to regulatory or contractual closure (“Closure”) in an efficient and economical manner. Generally, upon achieving Closure at an individual property, our environmental liability under the lease for that property will be satisfied and future remediation obligations will be the responsibility of our tenant.
     We have agreed to pay all costs relating to, and to indemnify Marketing for, certain environmental liabilities and obligations that are scheduled in the Master Lease. We will continue to seek reimbursement from state UST remediation funds related to these environmental expenditures where available. As of December 31, 2007, we have regulatory approval for remediation action plans in place for two hundred sixty-three (93%) of the two hundred eighty-two properties for which we continue to retain remediation responsibility and the remaining nineteen properties (7%) were in the assessment phase. In addition, we have nominal post-closure compliance obligations at 28 properties where we have received “no further action” letters.

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     For additional information please refer to “Recent Developments,” above and to “Liquidity and Capital Resources,” “Environmental Matters” and “Contractual Obligations” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
     We believe that we are in substantial compliance with federal, state and local provisions enacted or adopted pertaining to environmental matters. Although we are unable to predict what legislation or regulations may be adopted in the future with respect to environmental protection and waste disposal, existing legislation and regulations have had no material adverse effect on our competitive position. See “Item 3. Legal Proceedings.”
Personnel
     As of February 1, 2008, we had sixteen employees. Effective February 1, 2008, Joshua Dicker joined the Company as its General Counsel and Corporate Secretary. Mr. Dicker will be responsible for directing the overall legal activities of the Company.
Access to our filings with the Securities and Exchange Commission and Corporate Governance Documents
     Our website address is www.gettyrealty.com. Our address, phone number and a list of our officers is available on our website. Our website contains a hyperlink to the EDGAR database of the SEC at www.sec.gov where you can access, free-of-charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to these reports as soon as reasonably practicable after such reports are filed. Our website also contains our business conduct guidelines, corporate governance guidelines and the charters of the Compensation, Nominating/Corporate Governance and Audit Committees of our Board of Directors. We also will provide copies of these reports and corporate governance documents free-of-charge upon request, addressed to Getty Realty Corp., 125 Jericho Turnpike, Suite 103, Jericho, NY 11753, Attn: Investor Relations. Information available on or accessible through our website shall not be deemed to be a part of this Annual Report on Form 10-K. You may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Special Factors Regarding Forward-Looking Statements
     Certain statements in this Annual Report on Form 10-K may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When we use the words “believes,” “expects,” “plans,” “projects,” “estimates,” “predicts” and similar expressions, we intend to identify forward-looking statements. Examples of forward-looking statements include statements regarding recent developments related to Marketing and the Marketing Leases; the impact of any modification or termination of the Marketing Leases on our business and ability to pay dividends or our stock price; our belief that Lukoil would not allow Marketing to fail to perform its obligations under the Marketing Leases; Marketing in the future; our ability to predict if or when the Marketing Leases will be modified or terminated, the terms of any such modification or termination or what actions Marketing and Lukoil will take and what our recourse will be whether the Marketing Leases are modified or terminated or not; the expected effect of regulations on our long-term performance; our expected ability to maintain compliance with applicable regulations; our ability to renew expired leases; the adequacy of our current and anticipated cash flows; our ability to relet properties at market rents; our belief that we do not have a material liability for offers and sales of our securities made pursuant to registration statements that did not contain the financial statements or summarized financial data of Marketing; our expectations regarding future acquisitions; our expected ability to increase our available funding under the Credit Agreement; our ability to maintain our REIT status; the probable outcome of litigation or regulatory actions; our expected recoveries from UST funds; our exposure to environmental remediation costs; our estimates regarding remediation costs; our expectations as to the long-term effect of environmental liabilities on our financial condition; our exposure to interest rate fluctuations and the manner in which we expect to manage this exposure; the expected reduction in interest-rate risk resulting from our interest-rate swap agreement and our expectation that we will not settle the interest-rate swap prior to its maturity; the expectation that the Credit Agreement will be refinanced with variable interest-rate debt at its maturity; our expectations regarding corporate level federal income taxes; the indemnification obligations of the Company and others; our intention to consummate future acquisitions; our assessment of the likelihood of future competition; assumptions regarding the future applicability of accounting estimates, assumptions and policies; our intention to pay future dividends and the amounts thereof; and our beliefs about the reasonableness of our accounting estimates, judgments and assumptions.
     These forward-looking statements are based on our current beliefs and assumptions and information currently available to us, and involve known and unknown risks (including the risks described below in “Part I, Item 1A. Risk Factors” and other risks that we describe from time to time in our SEC filings), uncertainties and other factors which may cause our actual results, performance and achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-

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looking statements. You should not place undue reliance on forward-looking statements, which reflect our view only as of the date hereof. We undertake no obligation to publicly release revisions to these forward-looking statements that reflect future events or circumstances or reflect the occurrence of unanticipated events.
Item 1A. Risk Factors
     We are subject to various risks, many of which are beyond our control. As a result of these and other factors, we may experience material fluctuations in our future operating results on a quarterly or annual basis, which could materially and adversely affect our business, financial condition, results of operations liquidity, ability to pay dividends and stock price. An investment in our stock involves various risks, including those mentioned below and elsewhere this Annual Report on Form 10-K and those that are detailed from time to time in our other filings with the SEC.
We are subject to risks inherent in owning and leasing real estate.
     We are subject to varying degrees of risk generally related to leasing and owning real estate many of which are beyond our control. In addition to general risks related to owning properties used in the petroleum marketing industry, our risks include, among others:
  our liability as a lessee for long-term lease obligations regardless of our revenues,
 
  deterioration in national, regional and local economic and real estate market conditions,
 
  potential changes in supply of, or demand for, rental properties similar to ours,
 
  competition for tenants and changes in rental rates,
 
  difficulty in reletting properties on favorable terms or at all,
 
  impairments in our ability to collect rent payments when due,
 
  increases in interest rates and adverse changes in the availability, cost and terms of financing,
 
  the potential for uninsured casualty and other losses,
 
  the impact of present or future environmental legislation and compliance with environmental laws,
 
  adverse changes in zoning laws and other regulations, and
 
  acts of terrorism and war.
     Each of these factors could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price. In addition, real estate investments are relatively illiquid, which means that our ability to vary our portfolio of properties in response to changes in economic and other conditions may be limited.
Because our revenues are primarily dependent on the performance of Getty Petroleum Marketing Inc., our primary tenant, in the event that Marketing cannot or will not perform its rental, environmental and other obligations under the Marketing Leases, or if the Marketing Leases are modified significantly or terminated, or if it becomes probable that Marketing will not pay its environmental obligations, or if we change our assumptions for rental revenue or environmental liabilities related to the Marketing Leases, our business, financial condition, revenues, operating expenses, results of operations, liquidity, ability to pay dividends and stock price could be materially adversely affected. No assurance can be given that Marketing will have the ability to pay its debts or meet its rental, environmental or other obligations under the Marketing Leases.
     Marketing’s earnings and cash flow from operations depend largely upon the sale of refined petroleum products at margins in excess of its fixed and variable expenses and rental income from its subtenants. The petroleum marketing industry has been, and continues to be, volatile and highly competitive. A large, rapid increase in wholesale petroleum prices would adversely affect Marketing’s profitability and cash flow if the increased cost of petroleum products could not be passed on to Marketing’s customers or if the consumption of gasoline for automotive use were to decline significantly. Petroleum products are commodities, the prices of which depend on numerous factors that affect supply and demand. The prices paid by Marketing and other petroleum marketers for products are affected by global, national and regional factors. We cannot accurately predict how these factors will affect petroleum product prices or supply in the future, or how in particular they will affect Marketing or our other tenants.
     A substantial portion of our revenues (76% for the three months ended December 31, 2007 and 78% for the year ended December 31, 2007) are derived from Marketing Leases with Marketing. Accordingly, our revenues are dependent to a large degree on the economic performance of Marketing and of the petroleum marketing industry, and any factor that adversely affects Marketing, or our relationship with Marketing, may have a material adverse effect on us. Through March 2008, Marketing has made all required monthly rental payments under the Marketing Leases when due, although there is no assurance that it will continue to do so. Even

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though Marketing is wholly-owned by a subsidiary of LUKoil, one of the largest integrated Russian oil companies, Lukoil is not a guarantor of the Marketing Leases and there can be no assurance that Lukoil will continue to provide credit enhancement or additional capital to Marketing in the future.
     In accordance with GAAP, the aggregate minimum rent due over the current terms of the Marketing Leases, substantially all of which are scheduled to expire in December 2015, is recognized on a straight-line basis rather than when the cash payment is due. We have recorded as deferred rent receivable on our consolidated balance sheet the cumulative difference between lease revenue recognized under this straight line accounting method and the lease revenue recognized when the payment is due under the contractual payment terms. We provide reserves for a portion of the recorded deferred rent receivable if circumstances indicate that a property may be disposed of before the end of the current lease term or if it is not reasonable to assume that a tenant will make all of its contractual lease payments when due during the current lease term. Our assessments and assumptions regarding the recoverability of the deferred rent receivable related to the properties subject to the Marketing Leases are reviewed on a quarterly basis and such assessments and assumptions are subject to change.
     We have had periodic discussions with representatives of Marketing regarding potential modifications to the Marketing Leases and in the course of such discussions Marketing has proposed to (i) remove the Subject Properties from the Marketing Leases and eliminate payment of rent to us, and eliminate or reduce payment of operating expenses, with respect to the Subject Properties, and (ii) reduce the aggregate amount of rent payable to us for the Remaining Properties. In light of these developments, and Marketing’s financial performance, which continued to deteriorate in the fourth quarter and for the year ended December 31, 2007 (as discussed below), we intend to attempt to negotiate with Marketing for a modification of the Marketing Leases which removes the Subject Properties from the Marketing Leases. Following any such modification, we intend either to relet the Subject Properties or to sell the Subject Properties and reinvest the proceeds in new properties. Any such modification would likely significantly reduce the amount of rent we receive from Marketing and increase our operating expenses. We cannot accurately predict if or when the Marketing Leases will be modified or what the terms of any agreement may be if the Marketing Leases are modified. We also cannot accurately predict what actions Marketing and Lukoil may take, and what our recourse may be, whether the Marketing Leases are modified or not.
     Representatives of Marketing have also indicated to us that they are considering significant changes to Marketing’s business model. We intend to attempt to negotiate with Marketing for a modification of the Marketing Leases to remove the Subject Properties; however if Marketing ultimately determines that its business strategy is to exit all of the properties it leases from us or to divest a composition of properties different from the properties comprising the Subject Properties, it is our intention to cooperate with Marketing in accomplishing those objectives to the extent that is prudent for us to do so by seeking replacement tenants or buyers for the properties subject to the Marketing Leases, either individually, in groups of properties, or by seeking a single tenant for the entire portfolio of properties subject to the Marketing Leases. Although we are the fee or leasehold owner of the properties subject to the Marketing Leases and the owner of the Getty® brand and have prior experience with tenants who operate their gas stations, convenience stores, automotive repair services or other businesses at our properties, in the event that the Subject Properties or other properties are removed from the Marketing Leases, we cannot accurately predict if, when, or on what terms, such properties could be re-let or sold.
     In February 2008 we received Marketing’s unaudited financial statements for the year ended December 31, 2007 and became aware that the previously disclosed deterioration in Marketing’s financial performance had continued to a point where, in conjunction with our intention to attempt to negotiate with Marketing for a modification of the Marketing Leases to remove the Subject Properties, we can no longer reasonably assume that we will collect all of the rent due to us related to the Subject Properties for the remainder of the current lease terms. In reaching this conclusion, we relied on various indicators, including, but not limited to, the following: (i) Marketing’s significant operating losses, (ii) its negative cash flow from operating activities, (iii) its asset impairment charges for underperforming assets, and (iv) its negative earnings before interest, taxes, depreciation, amortization and rent payable to the Company. Based upon our assessments and assumptions, we believe that it is probable at this time that Lukoil would not allow Marketing to fail to perform its obligations under the Marketing Leases. Should our assessments and assumptions prove to be incorrect, the conclusions reached by the Company relating to (i) recoverability of the deferred rent receivable for the Remaining Properties and (ii) Marketing’s ability to pay its environmental liabilities (as discussed below) would likely change.
     Based upon our belief that Marketing desires to have the Subject Properties removed from the Marketing Leases, and our intention to attempt to negotiate a modification of the Marketing Leases to such end, we believe that Marketing will not make all contractual lease payments when due for the entire current term of the Marketing Leases with respect to the Subject Properties. Accordingly, we have reserved approximately $10.5 million of the deferred rent receivable recorded as of December 31, 2007, which is the full amount

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of the deferred rent receivable related to the Subject Properties. This non-cash reserve has been reflected in our results of operations for the fourth quarter and year ended December 31, 2007 based on information that became available to us from Marketing after we announced our results of operations for those periods. Providing this $10.5 million reserve reduces our net earnings and our funds from operations but does not impact our cash flow from operating activities or adjusted funds from operations since the impact of the straight-line method of accounting is not included in our determination of adjusted funds from operations. For additional information regarding funds from operations and adjusted funds from operations, which are non-GAAP measures, see “General — Supplemental Non-GAAP Measures” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Selected Financial Data” both of which appear in our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K and are incorporated by reference herein. While we believe it is no longer reasonable to assume that Marketing will make all contractual lease payments when due for the entire current term of the Marketing Leases with respect to the Subject Properties, after considering Marketing’s financial condition, our intention to negotiate a modification of the Marketing Leases, and certain other factors, including but not limited to those described above, we continue to believe that it is probable that we will collect the deferred rent receivable recorded as of December 31, 2007 related to the Remaining Properties. In addition, based upon our evaluation of the carrying value of the Subject Properties, we believe that no impairment adjustment is necessary for the Subject Properties as of December 31, 2007 pursuant to the provisions of Statement of Financial Accounting Standards No. 144. We intend to regularly review our assumptions that affect the accounting for rental revenue related to the Remaining Properties subject to the Marketing Leases and our assumptions regarding potential impairment of the Subject Properties and, if appropriate, to consider adjusting our reserves. Beginning in the first quarter of 2008, we anticipate that the rental revenue for the Remaining Properties will continue to be recognized on a straight-line basis and the rental revenue for the Subject Properties will be recognized when paid under the contractual payment terms.
     As the operator of our properties under the Marketing Leases, Marketing is directly responsible to pay for the remediation of environmental contamination it causes and to comply with various environmental laws and regulations. In addition, the Marketing Leases and various other agreements between Marketing and us allocate responsibility for known and unknown environmental liabilities between Marketing and us relating to the properties subject to the Marketing Leases. Based on various factors, including our assessments and assumptions at this time that Lukoil would not allow Marketing to fail to perform its obligations under the Marketing Leases, we believe that Marketing will continue to pay for substantially all environmental contamination and remediation costs allocated to it under the Marketing Leases. It is possible that our assumptions regarding the ultimate allocation methods and share of responsibility that we used to allocate environmental liabilities may change as a result of the factors discussed above, or otherwise, which may result in adjustments to the amounts recorded for environmental litigation accruals, environmental remediation liabilities and related assets. We may ultimately be responsible to directly pay for environmental liabilities as the property owner if Marketing fails to pay them. We are required to accrue for environmental liabilities that we believe are allocable to Marketing under the Marketing Leases and various other agreements if we determine that it is probable that Marketing will not pay its environmental obligations.
     Based upon our assessment of Marketing’s financial condition and certain other factors, including but not limited to those described above, we believe at this time that it is not probable that Marketing will not pay the environmental liabilities allocable to it under the Marketing Leases and various other agreements and, therefore, have not accrued for such environmental liabilities. Our assessments and assumptions that affect the recording of environmental liabilities related to the properties subject to the Marketing Leases are reviewed on a quarterly basis and such assessments and assumptions are subject to change.
     We cannot provide any assurance that Marketing will continue to pay its debts or meet its rental, environmental or other obligations under the Marketing Leases prior or subsequent to any potential modification to the Marketing Leases discussed above. Additionally, we may be required to (i) reserve additional amounts of the deferred rent receivable at a later time, (ii) accrue for environmental liabilities that we believe are allocable to Marketing under the Marketing Leases and various other agreements, or (iii) record an impairment charge related to the Subject Properties as a result of the proposed modification of the Marketing Leases. In the event that Marketing cannot or will not perform its rental, environmental or other obligations under the Marketing Leases; if the Marketing Leases are modified significantly or terminated; if we determine that it is probable that Marketing will not meet its environmental obligations and we accrue for such liabilities; if we are unable to relet or sell the properties subject to the Marketing Leases; or if we change our assumptions that affect the accounting for rental revenue or environmental liabilities related to the Marketing Leases; our business, financial condition, revenues, operating expenses, results of operations, liquidity, ability to pay dividends and stock price may be materially adversely affected.
     For additional information regarding factors that could adversely affect us relating to Marketing, see “Part I, Item 1A. Risk Factors” in this Annual Report on Form 10-K.

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In 2004, we received a comment letter from the SEC that contains one comment that remains unresolved.
     One comment remains unresolved as part of a periodic review commenced in 2004 by the Division of Corporation Finance of the SEC of our Annual Report on Form 10-K for the year ended December 31, 2003 pertaining to the SEC’s position that we must include the financial statements and summarized financial data of Marketing in our periodic filings, which Marketing contends is prohibited by the terms of the Master Lease. In June 2005, the SEC indicated that, unless we file Marketing’s financial statements and summarized financial data with our periodic reports: (i) it will not consider our Annual Reports on Forms 10-K for the years beginning with fiscal 2000 to be compliant; (ii) it will not consider us to be current in our reporting requirements; (iii) it will not be in a position to declare effective any registration statements we may file for public offerings of our securities; and (iv) we should consider how the SEC’s conclusion impacts our ability to make offers and sales of our securities under existing registration statements and if we have a liability for such offers and sales made pursuant to registration statements that did not contain the financial statements of Marketing. We have had no communication with the SEC since 2005. We cannot accurately predict the consequences if we are ultimately unable to resolve this outstanding comment.
Substantially all of our tenants depend on the same industry for their revenues.
     We derive substantially all of our revenues from leasing, primarily on a triple-net basis, retail motor fuel and convenience store properties and petroleum distribution terminals to tenants in the petroleum marketing industry. Accordingly, our revenues will be dependent on the economic success of the petroleum marketing industry, and any factors that adversely affect that industry could also have a material adverse effect on our business, financial condition and results of operations liquidity, ability to pay dividends and stock price. The success of participants in that industry depends upon the sale of refined petroleum products at margins in excess of fixed and variable expenses. A large, rapid increase in wholesale petroleum prices would adversely affect the profitability and cash flows of Marketing and our other tenants if the increased cost of petroleum products could not be passed on to their customers or if automobile consumption of gasoline were to decline significantly. Petroleum products are commodities, the prices of which depend on numerous factors that affect the supply of and demand for petroleum products. The prices paid by Marketing and other petroleum marketers for products are affected by global, national and regional factors. We cannot be certain how these factors will affect petroleum product prices or supply in the future, or how in particular they will affect Marketing or our other tenants.
Property taxes on our properties may increase without notice.
     Each of the properties we own or lease is subject to real property taxes. The leases for certain of the properties that we lease from third parties obligate us to pay real property taxes with regard to those properties. The real property taxes on our properties and any other properties that we develop, acquire or lease in the future may increase as property tax rates change and as those properties are assessed or reassessed by tax authorities. To the extent that our tenants are unable or unwilling to pay such increase in accordance with their leases, our net operating expenses may increase.
We have incurred, and may continue to incur, operating costs as a result of environmental laws and regulation, which could reduce our profitability.
     The real estate business and the petroleum products industry are subject to numerous federal, state and local laws and regulations, including matters relating to the protection of the environment. Under certain environmental laws, a current or previous owner or operator of real estate may be liable for contamination resulting from the presence or discharge of hazardous or toxic substances or petroleum products at, on, or under, such property, and may be required to investigate and clean-up such contamination. Such laws typically impose liability and clean-up responsibility without regard to whether the owner or operator knew of or caused the presence of the contaminants, or the timing or cause of the contamination, and the liability under such laws has been interpreted to be joint and several unless the harm is divisible and there is a reasonable basis for allocation of responsibility. For example, liability may arise as a result of the historical use of a property or from the migration of contamination from adjacent or nearby properties. Any such contamination or liability may also reduce the value of the property. In addition, the owner or operator of a property may be subject to claims by third parties based on injury, damage and/or costs, including investigation and clean-up costs, resulting from environmental contamination present at or emanating from a property. (See “Item 3. Legal Proceedings.”) The properties owned or controlled by us are leased primarily as retail motor fuel and convenience store properties, and therefore may contain, or may have contained, USTs for the storage of petroleum products and other hazardous or toxic substances, which creates a potential for the release of such products or substances. Some of our properties may be subject to regulations regarding the retirement and decommissioning or removal of long-lived assets including buildings containing hazardous materials, USTs and other equipment. Some of the properties may be adjacent to or near properties that have contained or currently contain USTs used to store petroleum products or other hazardous or toxic substances. In addition, certain of the properties are on, adjacent to, or near properties upon which others have engaged or may in the future engage in activities that may release petroleum products or other hazardous or toxic substances. There may be other

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environmental problems associated with our properties of which we are unaware. These problems may make it more difficult for us to relet or sell our properties on favorable terms, or at all.
     We have agreed to provide limited environmental indemnification to Marketing, capped at $4.25 million and expiring in 2010, for certain pre-existing conditions at six of the terminals we own and lease to Marketing. Under the agreement, Marketing is obligated to pay the first $1.5 million of costs and expenses incurred in connection with remediating any such pre-existing conditions, Marketing will share equally with us the next $8.5 million of those costs and expenses and Marketing is obligated to pay all additional costs and expenses over $10.0 million. We had accrued $0.3 million as of December 31, 2007 and 2006 in connection with this indemnification agreement. See recent developments related to Marketing and the Marketing Leases in “Part 1. Item 1. Business — Recent Developments” in this Annual Report on Form 10-K for additional information.
     We have not accrued for approximately $1.0 million in costs allegedly incurred by the current property owner in connection with removal of USTs and soil remediation at a property that was leased to and operated by Marketing. We believe Marketing is responsible for such costs under the terms of the Master Lease, but Marketing had denied its liability for claims and its responsibility to defend against, and indemnify us, for the claim. In addition, Marketing has denied liability and refused our tender for defense and indemnification for another legal proceeding. We have filed third party claims against Marketing in both proceedings. It is reasonably possible that our assumption that Marketing will be ultimately responsible for the claim may change, which may result in our providing an accrual for this matter.
     As of December 31, 2007, we had accrued $14.3 million as management’s best estimate of the net fair value of reasonably estimable environmental remediation costs which is comprised of $19.0 million of estimated environmental obligations and liabilities offset by $4.7 million of estimated recoveries from state UST remediation funds, net of allowance. Environmental expenditures were $6.3 million and recoveries from UST funds were $1.6 million for the year ended December 31, 2007.
     As the operator of our properties under the Marketing Leases, Marketing is directly responsible to pay for the remediation of environmental contamination it causes and to comply with various environmental laws and regulations. In addition, the Marketing Leases and various other agreements between Marketing and us allocate responsibility for known and unknown environmental liabilities between Marketing and us relating to the properties subject to the Marketing Leases. Based on various factors, including our assessments and assumptions at this time that Lukoil would not allow Marketing to fail to perform its obligations under the Marketing Leases, we believe that Marketing will continue to pay for substantially all environmental contamination and remediation costs allocated to it under the Marketing Leases. It is possible that our assumptions regarding the ultimate allocation methods and share of responsibility that we used to allocate environmental liabilities may change as a result of the factors discussed under Item 1, “Business — Recent Developments”, or otherwise, which may result in adjustments to the amounts recorded for environmental litigation accruals, environmental remediation liabilities and related assets. We may ultimately be responsible to directly pay for environmental liabilities as the property owner if Marketing fails to pay them.
     Based upon our assessment of Marketing’s financial condition and certain other factors, including but not limited to those described above, we believe at this time that it is not probable that Marketing will not pay the environmental liabilities allocable to it under the Marketing Leases and various other agreements and, therefore, have not accrued for such environmental liabilities. Our assessments and assumptions that affect the recording of environmental liabilities related to the properties subject to the Marketing Leases are reviewed on a quarterly basis and such assessments and assumptions are subject to change. If our assessments and assumptions regarding such matters change and we are required to accrue for environmental liabilities allocated to Marketing under the Marketing Leases and various other agreements between Marketing and us or if we ultimately are responsible to directly pay for such environmental liabilities as the property owner if Marketing fails to pay them, our business, financial condition, revenues, operating expenses, results of operations, liquidity, ability to pay dividends and stock price may be materially adversely affected.
     We cannot predict what environmental legislation or regulations may be enacted in the future, or if or how existing laws or regulations will be administered or interpreted with respect to products or activities to which they have not previously been applied. We cannot predict whether state UST fund programs will be administered and funded in the future in a manner that is consistent with past practices or whether future environmental spending will continue to be eligible for reimbursement under these programs. Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies or stricter interpretation of existing laws which may develop in the future, could have an adverse effect on us, or our tenants, and could require substantial additional expenditures for future remediation.
     For additional information with respect to environmental remediation costs and estimates see “Environmental Matters” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 5 of Notes to Consolidated

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Financial Statements, both of which appear in our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K and are incorporated by reference herein.
     As a result of the factors discussed above, or others, compliance with environmental laws and regulations could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.
We are defending pending lawsuits and claims and are subject to material losses.
     We are subject to various lawsuits and claims, including litigation related to environmental matters, damages resulting from leaking USTs and toxic tort claims. The ultimate resolution of certain matters cannot be predicted because considerable uncertainty exists both in terms of the probability of loss and the estimate of such loss. Our ultimate liabilities resulting from such lawsuits and claims, if any, could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.
A significant portion of our properties are concentrated in the Northeast and Mid-Atlantic regions of the United States, and adverse conditions in those regions, in particular, could negatively impact our operations.
     A significant portion of the properties we own and lease are located in the Northeast and Mid-Atlantic regions of the United States. Because of the concentration of our properties in those regions, in the event of adverse economic conditions in those regions, we would likely experience higher risk of default on payment of rent payable to us (including under the Marketing Leases) than if our properties were more geographically diversified. Additionally, the rents on our properties may be subject to a greater risk of default than other properties in the event of adverse economic, political, or business developments or natural hazards that may affect the Northeast or Mid-Atlantic United States and the ability of our lessees to make rent payments. This lack of geographical diversification could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.
We are in a competitive business.
     The real estate industry is highly competitive. Where we own properties, we compete for tenants with a large number of real estate property owners and other companies that sublet properties. Our principal means of competition are rents charged in relation to the income producing potential of the location. In addition, we expect other major real estate investors, some with much greater resources than us, will compete with us for attractive acquisition opportunities. These competitors include petroleum manufacturing, distributing and marketing companies, other REITs, investment banking firms and private institutional investors. This competition has increased prices for commercial properties and may impair our ability to make suitable property acquisitions on favorable terms in the future.
Our future cash flow is dependent on renewal of leases and either reletting or selling our properties.
     We are subject to risks that financial distress of our tenants may lead to vacancies at our properties, that leases may not be renewed, that locations may not be relet or that the terms of renewal or reletting (including the cost of required renovations) may be less favorable than current lease terms. As described in the recent developments section above in “Item 1. Business - Recent Developments,” we intend to attempt to negotiate a modification of the Marketing Leases with Marketing to remove the Subject Properties from the Marketing Leases. Any such modification is likely to significantly reduce the amount of rent we receive from Marketing and increase our operating expenses. We cannot accurately predict if, or when, the Marketing Leases will be modified or what the terms of any modification may be if the Marketing Leases are modified. We also cannot accurately predict what actions Marketing and Lukoil may take, and what our recourse may be, whether the Marketing Leases are modified or not. In addition, numerous properties compete with our properties in attracting tenants to lease space. The number of competitive properties in a particular area could have a material adverse effect on our ability to lease our properties or newly acquired properties and on the rents charged. If we were unable to promptly relet or renew the leases for all or a substantial portion of these locations, or if the rental rates upon such renewal or reletting were significantly lower than expected, our cash flow could be adversely affected and the resale values or our properties could decline.
We may acquire or develop new properties, and this may create risks.
     We may acquire or develop properties or acquire other real estate companies when we believe that an acquisition or development matches our business strategies. We may not succeed in consummating desired acquisitions or in completing developments on time or within our budget. We also may not succeed in leasing newly developed or acquired properties at rents sufficient to cover their costs of acquisition or development and operations.

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We are subject to losses that may not be covered by insurance.
     Marketing, and other tenants, as the lessees of our properties, are required to provide insurance for such properties, including casualty, liability, fire and extended coverage in amounts and on other terms as set forth in our leases. We carry insurance against certain risks and in such amounts as we believe are customary for businesses of our kind. However, as the costs and availability of insurance change, we may decide not to be covered against certain losses (such as certain environmental liabilities, earthquakes, hurricanes, floods and civil disorder) where, in the judgment of management, the insurance is not warranted due to cost or availability of coverage or the remoteness of perceived risk. There is no assurance that our insurance against loss will be sufficient. The destruction of, or significant damage to, or significant liabilities arising out of conditions at, our properties due to an uninsured cause would result in an economic loss and could result in us losing both our investment in, and anticipated profits from, such properties. When a loss is insured, the coverage may be insufficient in amount or duration, or a lessee’s customers may be lost, such that the lessee cannot resume its business after the loss at prior levels or at all, resulting in reduced rent or a default under its lease. Any such loss relating to a large number of properties could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.
Failure to qualify as a REIT under the federal income tax laws would have adverse consequences to our shareholders.
     We elected to be treated as a REIT under the federal income tax laws beginning January 1, 2001. We cannot, however, guarantee that we will continue to qualify in the future as a REIT. We cannot give any assurance that new legislation, regulations, administrative interpretations or court decisions will not significantly change the requirements relating to our qualification. If we fail to qualify as a REIT, we will again be subject to federal income tax at regular corporate rates, we could be subject to the federal alternative minimum tax, we would be required to pay significant income taxes and would have less money available for our operations and distributions to shareholders. This would likely have a significant adverse effect on the value of our securities. We could also be precluded from treatment as a REIT for four taxable years following the year in which we lost the qualification, and all distributions to stockholders would be taxable as regular corporate dividends to the extent of our current and accumulated earnings and profits. Loss of our REIT status would result in an event of default that, if not cured or waived, could result in the acceleration of all of our indebtedness under our Credit Agreement which could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.
As a REIT, we are dependent on external sources of capital which may not be available on favorable terms, if at all.
     To maintain our status as a REIT, we must distribute to our shareholders each year at least ninety percent of our net taxable income, excluding any net capital gain. Because of these distribution requirements, it is not likely that we will be able to fund all future capital needs, including acquisitions, from income from operations. Therefore, we will have to continue to rely on third-party sources of capital, which may or may not be available on favorable terms, or at all. We cannot accurately predict how periods of illiquidity in the credit markets, such as current market conditions, will impact our access to or cost of capital. We may be unable to pursue equity offerings until we resolve with the SEC the outstanding comment regarding disclosure of Marketing’s financial information. Moreover, additional equity offerings may result in substantial dilution of shareholders’ interests, and additional debt financing may substantially increase our leverage. Our access to third-party sources of capital depends upon a number of factors including general market conditions, the market’s perception of our growth potential, our current and potential future earnings and cash distributions, limitations on future indebtedness imposed under our Credit Agreement and the market price of our common stock.
     Our ability to meet the financial and other covenants relating to our Credit Agreement may be dependent on the performance of our tenants. (See recent developments related to Marketing and the Marketing Leases in Part I, Item 1. “Business — Recent Developments” in this Annual Report on Form 10-K for additional information.) If we are not in compliance with one or more of our covenants which, if not complied with could result in an event of default under our Credit Agreement, there can be no assurance that our lenders would waive such non-compliance. A default under our Credit Agreement, if not cured or waived, whether due to a loss of our REIT status, a material adverse effect on our business, financial condition or prospects, a failure to comply with financial and certain other covenants in the Credit Agreement or otherwise, could result in the acceleration of all of our indebtedness under our Credit Agreement. This could have a material adverse affect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.
The recent downturn in the credit markets has increased the cost of borrowing and has made financing difficult to obtain, which may negatively impact our business, and may have a material adverse effect on us.

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     During 2007, the United States housing and residential lending markets began to experience accelerating default rates, declining real estate values and increasing backlog of housing supply. The residential sector issues quickly spread more broadly into the corporate, asset-backed and other credit and equity markets and the volatility and risk premiums in most credit and equity markets have increased dramatically, while liquidity has decreased. These issues have continued into the beginning of fiscal 2008. Increasing concerns regarding the United States and world economic outlook, such as large asset write-downs at banks, rising oil prices, declining business and consumer confidence and increased unemployment, are compounding these issues and risk premiums in most capital markets remain near historical all-time highs. These factors are precipitating generalized credit market dislocations and a significant contraction in available credit. As a result, it is becoming increasingly difficult to obtain cost-effective debt capital to finance new investment activity or to refinance maturing debt and most lenders are imposing more stringent restrictions on the terms of credit. The negative impact on the tightening of the credit markets and continuing credit and liquidity concerns may have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price. Additionally, there is no assurance that the increased financing costs, financing with increasingly restrictive terms or the increase in risk premiums that are demanded by investors will not have a material adverse effect on us.
Lenders may require us to enter into more restrictive covenants relating to our operations.
     Any future credit agreements or loan documents we execute may contain additional or more restrictive covenants that could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.
The loss of certain members of our management team could adversely affect our business.
     We depend upon the skills and experience of our executive officers. Loss of the services of any of them could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price. We do not have employment agreements with any of our executives.
Our business operations may not generate sufficient cash for distributions or debt service.
     There is no assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to make distributions on our common stock, to pay our indebtedness, or to fund our other liquidity needs. We may not be able to repay or refinance existing indebtedness on favorable terms, which could force us to dispose of properties on disadvantageous terms (which may also result in losses) or accept financing on unfavorable terms.
     Borrowings under our Credit Agreement bear interest at a floating rate. Accordingly, an increase in interest rates will increase the amount of interest we must pay under our Credit Agreement and a significant increase in interest rates could also make it more difficult to find alternative financing on desirable terms. We have entered into an interest rate swap agreement with a major financial institution with respect to a portion of our variable rate debt outstanding under our Credit Agreement. Although the agreement is intended to lessen the impact of rising interest rates, it also exposes us to the risk that the other party to the agreement will not perform, the agreement will be unenforceable and the underlying transactions will fail to qualify as a highly-effective cash flow hedge for accounting purposes.
Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations, and they require management to make estimates, judgments and assumptions about matters that are inherently uncertain.
     Our accounting policies and methods are fundamental to how we record and report our financial position and results of operations. We have identified several accounting policies as being critical to the presentation of our financial position and results of operations because they require management to make particularly subjective or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be recorded under different conditions or using different assumptions. Because of the inherent uncertainty of the estimates, judgments and assumptions associated with these critical accounting policies, we cannot provide any assurance that we will not make subsequent significant adjustments to our consolidated financial statements including those included in this Form 10-K. Estimates, judgments and assumptions underlying our consolidated financial statements include, but are not limited to, deferred rent receivable, recoveries from state UST funds, environmental remediation costs, real estate, depreciation and amortization, impairment of long-lived assets, litigation, accrued expenses, income taxes payable and the allocation of the purchase price of properties acquired to the assets acquired and liabilities assumed. For example, we have made judgments regarding the level of environmental reserves and reserves for our deferred rent receivable relating to Marketing and the Marketing Leases. These judgments and assumptions may prove to be incorrect and our business, financial

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condition, revenues, operating expense, results of operations, liquidity, ability to pay dividends and stock price may be materially adversely affected if that is the case. See “Item 1. Business—Recent Developments” for information regarding Marketing and the Marketing Leases and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” for more information on our critical accounting policies.
Changes in accounting standards issued by the Financial Accounting Standards Board (the “FASB”) or other standard-setting bodies may adversely affect our reported revenues, profitability or financial position.
     Our financial statements are subject to the application of GAAP, which are periodically revised and/or expanded. The application of GAAP is also subject to varying interpretations over time. Accordingly, we are required to adopt new or revised accounting standards or comply with revised interpretations that are issued from time-to-time by recognized authoritative bodies, including the FASB and the SEC. Those changes could adversely affect our reported revenues, profitability or financial position.
We may be unable to pay dividends and our equity may not appreciate.
     Under the Maryland General Corporation Law, our ability to pay dividends would be restricted if, after payment of the dividend, (1) we would not be able to pay indebtedness as it becomes due in the usual course of business or (2) our total assets would be less than the sum of our liabilities plus the amount that would be needed, if we were to be dissolved, to satisfy the rights of any shareholders with liquidation preferences. There currently are no shareholders with liquidation preferences. No assurance can be given that our financial performance in the future will permit our payment of any dividends. (See recent developments related to Marketing and the Marketing Leases in Part I, Item 1. Business — Recent Developments in this Annual Report on Form 10-K.) In particular, our Credit Agreement prohibits the payments of dividends during certain events of default. As a result of the factors described above, we may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect our business, stock price and ability to pay dividends.
Terrorist attacks and other acts of violence or war may affect the market on which our common stock trades, the markets in which we operate, our operations and our results of operations.
     Terrorist attacks or armed conflicts could affect our business or the businesses of our tenants or of Marketing or its parent. The consequences of armed conflicts are unpredictable, and we may not be able to foresee events that could have a material adverse effect on us. More generally, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economy. Terrorist attacks also could be a factor resulting in, or a continuation of, an economic recession in the United States or abroad. Any of these occurrences could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.
Item 1B. Unresolved Staff Comments
     One comment remains unresolved as part of a periodic review commenced in 2004 by the Division of Corporation Finance of the SEC of our Annual Report on Form 10-K for the year ended December 31, 2003 pertaining to the SEC’s position that we must include the financial statements and summarized financial data of Marketing in our periodic filings, which Marketing contends is prohibited under the terms of the Master Lease. In June 2005, the SEC indicated that, unless we file Marketing’s financial statements and summarized financial data with our periodic reports: (i) it will not consider our Annual Reports on Forms 10-K for the years beginning with 2000 to be compliant; (ii) it will not consider us to be current in our reporting requirements; (iii) it will not be in a position to declare effective any registration statements we may file for public offerings of our securities; and (iv) we should consider how the SEC’s conclusion impacts our ability to make offers and sales of our securities under existing registration statements and if we have a liability for such offers and sales made pursuant to registration statements that did not contain the financial statements of Marketing.
     We believe that the SEC’s position is based on their interpretation of certain provisions of their internal Accounting Disclosure Rules and Practices Training Material, Staff Accounting Bulletin No. 71 and Rule 3-13 of Regulation S-X. We do not believe that any of this guidance is clearly applicable to our particular circumstances and we believe that, even if it were, we should be entitled to certain relief from compliance with such requirements. Marketing subleases our properties to approximately eight hundred independent, individual service station/convenience store operators (subtenants). Consequently, we believe that we, as the owner of these properties and the Getty® brand, could relet these properties to the existing subtenants who operate their convenience stores, automotive repair services or other businesses at our properties, or to others, at market rents although we cannot accurately predict whether, when, or on what terms, such properties would be re-let or sold. The SEC did not accept our positions regarding the

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inclusion of Marketing’s financial statements in our filings. We have had no communication with the SEC since 2005 regarding the unresolved comment. We cannot accurately predict the consequences if we are unable to resolve this outstanding comment.

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Item 2. Properties
     The following table summarizes the geographic distribution of our properties at December 31, 2007. The table also identifies the number and location of properties we lease from third-parties and which Marketing leases from us under the Marketing Leases. In addition, we lease four thousand square feet of office space at 125 Jericho Turnpike, Jericho, New York, which is used for our corporate headquarters, which we believe will remain suitable and adequate for such purposes for the immediate future.
                                                 
    OWNED BY GETTY REALTY     LEASED BY GETTY REALTY     TOTAL     PERCENT  
    MARKETING     OTHER     MARKETING     OTHER     PROPERTIES     OF TOTAL  
    AS TENANT (1)     TENANTS     AS TENANT     TENANTS     BY STATE     PROPERTIES  
New York
    235       30       77       5       347       32.0 %
Massachusetts
    128       1       24             153       14.1  
New Jersey
    107       11       30       4       152       14.0  
Pennsylvania
    108       6       6       4       124       11.5  
Connecticut
    59       28       18       9       114       10.5  
Virginia
    4       24       10       1       39       3.6  
New Hampshire
    26       3       3             32       3.0  
Maine
    17       1       3       1       22       2.0  
Rhode Island
    15       1       3             19       1.8  
Texas
          16                   16       1.5  
Delaware
    10       1       1             12       1.1  
North Carolina
          11                   11       1.0  
Hawaii
          10                   10       0.9  
Maryland
    4       3       1       2       10       0.9  
California
          8             1       9       0.8  
Florida
          6                   6       0.6  
Arkansas
          3                   3       0.3  
Illinois
          2                   2       0.2  
North Dakota
          1                   1       0.1  
Vermont
    1                         1       0.1  
 
                                   
Total
    714       166       176       27       1,083       100.0 %
 
                                   
 
(1)   Includes nine terminal properties owned in New York, New Jersey, Connecticut and Rhode Island.
     The properties that we lease have a remaining lease term, including renewal option terms, averaging over ten years. The following table sets forth information regarding lease expirations, including renewal and extension option terms, for properties that we lease from third parties:
                         
            PERCENT        
    NUMBER OF     OF TOTAL     PERCENT  
    LEASES     LEASED     OF TOTAL  
CALENDAR YEAR   EXPIRING     PROPERTIES     PROPERTIES  
2008
    9       4.4       0.8  
2009
    17       8.4       1.6  
2010
    9       4.4       0.8  
2011
    9       4.4       0.8  
2012
    13       6.5       1.2  
 
                 
Subtotal
    57       28.1       5.2  
 
                 
Thereafter
    146       71.9       13.5  
 
                 
Total
    203       100.0 %     18.7 %
 
                 
     We have rights-of-first refusal to purchase or lease one hundred sixty-two of the properties we lease. Although there can be no assurance regarding any particular property, historically we generally have been successful in renewing or entering into new leases when lease terms expire. Approximately 67% of our leased properties are subject to automatic renewal or extension options.
     In the opinion of our management, our owned and leased properties are adequately covered by casualty and liability insurance. In addition, we require our tenants to provide insurance for all properties they lease from us, including casualty, liability, fire and extended coverage in amounts and on other terms satisfactory to us. We have no plans for material improvements to any of our properties. However, our tenants frequently make improvements to the properties leased from us at their expense. We are not aware of any material liens or encumbrances on any of our properties.

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     We lease eight hundred eighty-one retail motor fuel and convenience store properties and our nine petroleum distribution terminals to Marketing under the Marketing Leases. The Master Lease is a unitary lease and has an initial term expiring in 2015, and generally provides Marketing with three renewal options of ten years each and a final renewal option of three years and ten months extending to 2049. Each of the renewal options may be exercised only on an “all or nothing” basis. The Marketing Leases are “triple-net” leases, under which Marketing is responsible for the payment of taxes, maintenance, repair, insurance and other operating expenses. (See recent developments related to Marketing and the Marketing Leases in Part I, Item 1. Business — Recent Developments in this Annual Report on Form 10-K for additional information.)
     If Marketing fails to pay rent, taxes or insurance premiums when due under the Marketing Leases and the failure is not cured by Marketing within a specified time after receipt of notice, we have the right to terminate the Marketing Leases and to exercise other customary remedies against Marketing. If Marketing fails to comply with any other obligation under the Master Lease after notice and opportunity to cure, we do not have the right to terminate the Master Lease. In the event of Marketing’s default where we do not have the right to terminate the Master Lease, our available remedies under the Master Lease are to seek to obtain an injunction or other equitable relief requiring Marketing to comply with its obligations under the Master Lease and to recover damages from Marketing resulting from the failure. If any lease we have with a third-party landlord for properties that we lease to Marketing is terminated as a result of our default and the default is not caused by Marketing, we have agreed to indemnify Marketing for its losses with respect to the termination. Marketing has the right-of-first refusal to purchase any property leased to Marketing under the Marketing Leases that we decide to sell.
     We have also agreed to provide limited environmental indemnification to Marketing, capped at $4.25 million and expiring in 2010, for certain pre-existing conditions at six of the terminals we own and lease to Marketing. Under the agreement, Marketing is obligated to pay the first $1.5 million of costs and expenses incurred in connection with remediating any pre-existing terminal condition, Marketing will share equally with us the next $8.5 million of those costs and expenses and Marketing is obligated to pay all additional costs and expenses over $10.0 million. We have accrued $0.3 million as of December 31, 2007 and 2006 in connection with this indemnification agreement. Under the Master Lease, we continue to have additional ongoing environmental remediation obligations for two hundred nineteen scheduled sites and our agreements with Marketing provide that Marketing otherwise remains liable for all environmental matters. (See recent developments related to Marketing and the Marketing Leases in Part I, Item 1. Business — Recent Developments in this Annual Report on Form 10-K for additional information.)
Item 3. Legal Proceedings
     In 1988 and 1989, we were named as defendants in three separate lawsuits by multiple owners of adjacent properties seeking compensatory and punitive damages for personal injury and property damages having common allegations that a leak of an underground storage tank occurred in November 1985 at one of our retail motor fuel properties. Although the first action was dismissed in January 1992 and the second action was dismissed in 1995, there is a possibility that the remaining defendants in this action may assert claims against us for contribution or indemnity in the future. We are not aware that any such claims have been asserted. The third action is still pending in New York Supreme Court, Suffolk County, remains in the pleadings stage and has remained dormant for more than eleven years. We believe that these plaintiffs no longer will assert claims for personal injuries, and that the property has been sold. If this litigation resumes, we will assert third-party claims against the party we believe is responsible for the contamination.
     In 1991, the State of New York brought an action in the New York State Supreme Court in Albany against our former heating oil subsidiary seeking reimbursement for cleanup costs claimed to have been incurred at a retail motor fuel property in connection with a gasoline release. The State is also seeking penalties plus interest. Although there has been no activity in this proceeding in the past several years, in January 2002, we received a letter from the State’s attorney indicating that the State intends to continue prosecuting the action. To date, we are not aware that the State has taken any additional actions in connection with this claim.
     In June 1991, an action was commenced against us in the Court of Common Pleas of Berks County, PA seeking reimbursement for cleanup costs claimed to have been incurred as a result of a petroleum release. Sun Company, Inc., Exxon Company, U.S.A. and Atlantic Richfield Company have been joined as defendants. This case has recently been certified by the Court for trial, scheduled to occur in August 2008.
     In 1997, an action was commenced in the New York Supreme Court in Schenectady, naming us as defendants, and seeking to recover monetary damages for personal injuries allegedly suffered from the release of petroleum and vapors from one of our retail motor fuel properties. This action has not been pursued by the plaintiff for more than nine years.

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     In 1997, representatives of the County of Lancaster, Pennsylvania contacted the Company regarding alleged petroleum contamination of property owned by the County adjoining a property owned by the Company. No litigation has been instituted as a result of this potential claim and the Company is actively remediating the contamination. In 2005, the County requested reimbursement of legal fees pursuant to an access agreement between the parties. A substantial portion of the fees remains in dispute.
     In June 1998, we were sued as a third-party defendant in the Superfund case of U.S. v. Champion Chemical Co. and Imperial Oil Co., pending in the U.S. District Court for New Jersey. Our defense is being conducted by Texaco Inc., which has agreed to fully indemnify us. In August 1998, we were sued as a third-party defendant in the Superfund case of U.S. v. Manzo, pending in the U. S. District Court for New Jersey. Our defense is also being conducted by Texaco Inc., which has agreed to fully indemnify us. Both matters involve periods prior to 1985, the year we purchased the properties from Texaco Inc. pursuant to an agreement under which Texaco is obligated to indemnify us for environmental matters of this kind.
     In June 1999, an action was commenced against us in the New York Supreme Court in Richmond County seeking monetary damages for property damage alleged to have resulted from a petroleum release in connection with a tank removal by our contractor. After a number of years of inactivity by the plaintiff, in 2006 the plaintiff reactivated prosecution by filing for a preliminary conference. Since then, there had been no material activity in the case. At this time, we are unable to estimate with any certainty our ultimate legal and financial liability, if any, for the damages claimed in the litigation
     In September 1999, we brought a case against one of our tenants in the United States District Court, District of New Jersey, seeking the return of the property we leased to the tenant and the cleanup of all contamination caused by the tenant. Our tenant filed a counterclaim alleging that all or part of the contamination was attributable to contamination from USTs for which we were responsible. The State of New Jersey Department of Environmental Protection (the “NJDEP”) has notified the tenant that it is responsible for the cleanup and remediation of contamination resulting from a petroleum release. The case was settled in 2007 without any payment by the Company. As a part of the settlement, the tenant purchased the subject property in January 2008, assumed responsibility for the remediation of all environmental conditions and fully indemnified the Company and its affiliates for all environmental liability.
     In 2000, an action was commenced in New York Supreme Court in Nassau County against us by a prior landlord to recover damages arising out of a petroleum release and remediation thereof. The release dates back to 1979 and is listed as “closed” by the NYSDEC. Plaintiff has not pursued this case for more than six years.
     In December 2002, the State of New York commenced an action in the New York Supreme Court in Albany County against us and Marketing to recover costs claimed to have been expended by the State to investigate and remediate a petroleum release into the Ossining River commencing approximately in 1996. We are indemnifying Marketing in this case and have filed a claim against a potentially responsible party who is upstream of the release.
     In February 2003, an action was commenced against us, Marketing and others by the owners of an adjacent property in the Pennsylvania Court of Common Pleas in Lancaster County, asserting claims relating to a discharge of gasoline allegedly emanating from our property. The complaint states that the plaintiffs first became aware of a problem upon detecting gasoline vapors in their basement in 1996. In response to cross motions for summary judgment, the court denied our motion and granted plaintiff’s motion finding us liable for the petroleum contamination, but certified the determination for an immediate appeal. Plaintiff’s expert alleges damages of $67,000. Plaintiff’s counsel has also made demand for legal fees, which the Company disputes as grossly excessive. Certain summary judgment motions filed by the Company are pending.
     In April 2003, we were named in a class action, filed in the New York Supreme Court in Dutchess County, NY, arising out of alleged contamination of ground water with methyl tertiary butyl ether (a fuel derived from methanol, which we refer to as MTBE). We served an answer that denied liability and asserted numerous affirmative defenses. The plaintiffs have not responded to our answer and there has been no activity in the case since it was commenced.
     In July 2005, the State of Rhode Island Department of Environmental Management (“RIDEP”) issued a Notice of Violation against the Company and Marketing relating to a suspected petroleum release at a property that abuts property owned by us and leased to Marketing. The Notice of Violation was appealed by Marketing on behalf of it and the Company. An evidentiary hearing on that appeal has not yet been scheduled. We do not believe that we have any liability for the contamination, which we believe is unrelated to the products we stored at the property.

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     In July 2003, we received a Request for Reimbursement from the State of Maine Department of Environmental Protection (“MDEP”) seeking reimbursement of costs claimed to have been incurred by it in connection with the remediation of contamination found at a retail motor fuel property, purportedly linked to numerous gasoline spills in the late 1980’s. We have denied liability for the claim and discovered substantial evidence that links the contamination to gasoline releases of another company which has operated at the property since we discontinued our operations at the property. We have requested that the MDEP investigate the possibility that such other company is the responsible party.
     In September 2003, we were notified by the NJDEP that we are one of approximately sixty potentially responsible parties for natural resources damages resulting from discharges of hazardous substances into the Lower Passaic River. The definitive list of potentially responsible parties and their actual responsibility for the alleged damages, the aggregate cost to remediate the Lower Passaic River, the amount of natural resource damages and the method of allocating such amounts among the potentially responsible parties have not been determined. In September 2004, we received a General Notice Letter from the United States Environmental Protection Agency (the “EPA”) (the “EPA Notice”), advising us that we may be a potentially responsible party for costs of remediating certain conditions resulting from discharges of hazardous substances into the Lower Passaic River. ChevronTexaco received the same EPA Notice regarding those same conditions. We believe that ChevronTexaco is obligated to indemnify us, pursuant to indemnification covenants, regarding the conditions at the property identified by the NJDEP and the EPA. Accordingly, our ultimate legal and financial liability, if any, cannot be estimated with any certainty at this time.
     In September 2003, we were notified by the NJDEP that we may be responsible for damages to natural resources (“NRDs”) by reason of a petroleum release at a retail motor fuel property formerly operated by us in Egg Harbor, NJ. We have remediated the resulting contamination at the property in accordance with a plan approved by the NJDEP and continue required sampling of monitoring wells that were required to be installed. In addition, we have responded to the notice and met with the Department to determine whether, and to what extent, we may be responsible for NRDs regarding this property and our other properties formerly supplied by us with gasoline in New Jersey. The NJDEP’s right to pursue NRDs, the viability of defenses to NRDs, generally, and the NJDEP’s method for calculating NRDs are subject to ongoing litigation in the NJDEP. We are not a party to such litigation. However, the outcome of that litigation likely will affect the NJDEP’s claim against us for NRDs with regard to this property and, generally, our other properties in New Jersey.
     From October 2003 through September 2007, we were made a party to forty-nine cases in Connecticut, Florida, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Vermont, Virginia, and West Virginia, brought by local water providers or governmental agencies. These cases allege various theories of liability due to contamination of groundwater with MTBE as the basis for claims seeking compensatory and punitive damages. Each case names as defendants approximately fifty petroleum refiners, manufacturers, distributors and retailers of MTBE, or gasoline containing MTBE. The accuracy of the allegations as they relate to us, our defenses to such claims, the aggregate amount of damages, the definitive list of defendants and the method of allocating such amounts among the defendants have not been determined. At this time, four focus cases have been broken our from a consolidated Multi-District Litigation being heard in the Southern District of New York. Three of these cases name the Company as a defendant. One of the cases to which we are a party has been set for trial in September 2008. Trials in the other two focus cases in which the Company has been named are anticipated to be scheduled for sometime in 2009. The Company participates in a joint defense group with the goal of sharing expert and other costs with the other defendants, and also has separate counsel defending its interests. We are vigorously defending these matters. In June 2006, we were served with a Toxic Substance Control Act (“TSCA”) Notice Letter (“Notice Letter”), advising us that “prospective plaintiffs” listed on a schedule to the Notice Letter intend to file a TSCA citizens’ civil action against the entities listed on a schedule to the Notice Letter, including the Company’s subsidiaries, based upon alleged failure by such entities to provide information to the United States Environmental Protection Agency regarding MTBE as may be required by the TSCA and declaring that such action will be filed unless such information is delivered. We do not believe that we have any such information. Our ultimate legal and financial liability, if any, in connection with the existing litigation or any future civil litigation pursuant to the Notice Letter cannot be estimated with any certainty at this time.
     In November 2003, we received a demand from the State of New York for reimbursement of cleanup and removal costs claimed to have been incurred by the New York Environmental Protection and Spill Compensation Fund regarding contamination it alleges emanated from one of our retail motor fuel properties in 1997. We have responded to the State’s demand and have denied responsibility for reimbursement of such costs, as being attributable to contamination that emanated from properties owned and operated by others. In September 2004, the State of New York commenced an action against us and others in New York Supreme Court in Albany County seeking recovery of such costs. Discovery in this case is ongoing.
     In November 2003, an action was commenced in the New York Supreme Court in Westchester County seeking money damages against us arising out of a petroleum release in 1996 at a former retail motor fuel property of ours. Our defense is being conducted by

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the company that sold us the property, and they have agreed to fully indemnify us pursuant to the purchase agreement, which calls for indemnification for environmental matters of this kind.
     In July 2005, we received a demand from a property owner for reimbursement of cleanup and soil removal costs, at a former retail motor fuel property located in Brooklyn, New York supplied by us with gasoline, that the owner expects to incur in connection with the proposed development of its property. The owner claims that the costs will be reimbursable pursuant to an indemnity agreement that we entered into with the property owner. Although we have acknowledged responsibility for the contaminated soil, and have been engaged in the remediation of the same, we have denied responsibility for the full extent of the costs estimated to be incurred.
     In September 2005, we received a demand from a property owner for reimbursement of cleanup and soil removal costs claimed to have been incurred by it in connection with the development of its property located in Philadelphia, Pennsylvania, that, in part, is a former retail motor fuel property supplied by us with gasoline. The current owner claims that the costs are reimbursable pursuant to an indemnity agreement that we entered into with the prior property owner. Although we have acknowledged responsibility for a portion of the contaminated soil, and were engaged in the remediation of the same, we denied responsibility for the full extent of the costs estimated to be incurred. The matter was settled in June 2007, in consideration for a payment by the Company of $985,000.
     In October 2005, the State of New York commenced an action in the New York Supreme Court in Albany County against us and Marketing to recover costs claimed to have been funded by the State to remediate a petroleum release emanating from a property we acquired in 1999. The seller of the property to us, who is also party to the action, has agreed to defend and indemnify us (and Marketing) regarding the release and funds have been escrowed to cover the amount sought to be recovered.
     In November 2005, we were notified that an action had been commenced in the Superior Court in Passaic County, New Jersey, in August 2005, by a property owner, seeking compensation from us on behalf of a class not yet certified, based upon the installation of a monitoring well on the property of the property owner. The NJDEP also is named as a defendant. The matter was settled in the April 2007 for a $6,000 payment by the Company.
     In December 2005, an action was commenced against us in the Superior Court in Providence, Rhode Island, by the owner of a pier that is adjacent to one of our terminals that is leased to Marketing seeking monetary damages of approximately $500,000 representing alleged costs related to the ownership and maintenance of the pier for the period from January 2003 through September 2005. We do not believe that we have any legal, contractual or other responsibility for such costs. Additionally, we believe that, under the terms of the Master Lease, Marketing is responsible for such costs, and we tendered the matter to them for defense and indemnification. Marketing declined to accept our tender and has denied liability for the claim. We have filed a third party claim against Marketing seeking defense and indemnification that has been tolled, pending resolution of the underlying litigation. (See recent developments related to Marketing and the Marketing Leases in Part I, Item 1. Business — Recent Developments in this Annual Report on Form 10-K for additional information.) At a pre-trial conference held in this matter, the Court advised the owner that there is legal precedent from prior litigation involving the pier that is contrary to its claim.
     In February 2006, an action was commenced in the Supreme Court in Westchester County, New York against us and Marketing to recover cleanup and remediation costs related to a petroleum release and for monetary damages in excess of $1.0 million for, among other things, lost rent and diminution of property value. The matter was settled in May 2007 in consideration for a payment by the Company of $50,000.
     In April 2006, our subsidiary was added as a new defendant in an action in the Superior Court of New Jersey, Middlesex County, filed by a property owner claiming damages against multiple defendants for remediation of contaminated soil. The basis for prosecuting the claim against our subsidiary is corporate successor liability. In December 2007, pursuant to a multi-day mediation, an agreement to settle in principal was reached by all parties. Since then, one component of the settlement as it relates to the Company been put back into dispute by the plaintiff.
     In May 2006, we were advised (but not yet served) of a third party complaint filed in an action in the Superior Court of New Jersey, Essex County, against Getty Oil, Inc. and John Doe Corporations, filed by a property owner seeking to impose upon third parties (that may include a subsidiary of the Company) responsibility for damages it may suffer in the action for claims brought against it under federal environmental laws, the State’s Spill Act, the State’s Water Pollution Act and other theories of liability. It is not clear at this time whether the Company or any of its subsidiaries would have any liability for the asserted claims or whether, or to what extent, such liability would be covered by the Company’s settlement agreement with ChevronTexaco in connection with pre-1985 contamination at the Newark Terminal property, which is near the property that is the subject of the litigation. Accordingly, we

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are unable at this time to estimate with any certainty our ultimate legal and financial liability, if any, for the damages claimed in the litigation.
     In August 2006, we were advised by the State of Maryland Department of the Environment of the discovery of contaminated soil at a retail motor fuel property that was supplied by us with gasoline. We do not believe that we have any liability in connection with such contamination.
     In August 2006, an action was commenced against us and our subsidiary in the Circuit Court, Madison County, Illinois seeking a recovery of damages arising out of the death of a person allegedly exposed to asbestos at our subsidiary’s premises. We do not believe that there is any basis for a claim against us and are in the process of determining whether there is any basis at all for the claim against our subsidiary.
     In October 2006, an action was commenced against us in the New York State Supreme Court in Albany County by a property owner seeking reimbursement of the costs of cleanup and remediation of petroleum contamination at property that was supplied by us with gasoline. It appears from the pleadings filed by the plaintiff that they have confused Getty Refining and Marketing Inc. (a nonaffiliated entity acquired by Texaco Refining and Marketing Inc.) with Getty Petroleum Corp. (now known as Getty Properties Corp.).
     In November 2006, an action was commenced by the New Jersey Schools Corporation (“NJSC”) in the Superior Court of New Jersey, Union County seeking reimbursement for costs of approximately $1.0 million related to the removal of abandoned USTs and remediation of soil contamination at a retail motor fuel property that was acquired from us by eminent domain. Prior to the taking, the property was leased to and operated by Marketing. We believe that, under the terms of the Master Lease, Marketing is responsible for such costs, and we tendered the matter to Marketing for defense and indemnification. Marketing has declined to accept the tender and has denied liability for the claim. We have filed a compulsory third party claim against Marketing seeking defense and indemnification. In July 2007, Marketing filed a claim against the Company seeking defense and indemnification. A trial date is anticipated to be set for sometime in September 2008. (See recent developments related to Marketing and the Marketing Leases in Part I, Item 1. Business - Recent Developments in this Annual Report on Form 10-K for additional information.)
     In May 2007, the Company’s subsidiary received a lease default notice from its sub-landlord pertaining to an alleged underpayment of rent by our subsidiary for a period of time exceeding fifteen years. In June 2007, the Company commenced an action against the sub-landlord seeking an injunction that would preclude the sub-landlord from taking any action to terminate its sublease with our subsidiary or collect the alleged underpayment of rent. The Court issued the injunction preventing termination of the sublease pending determination of the matter. The matter remains pending.
     In July 2007, subsidiaries of the Company were notified of the commencement of three actions by the NJDEP seeking NRDs arising out of petroleum releases which occurred years ago. Answers to the complaints and discovery requests have been filed by the Company’s subsidiaries in each of these cases. The accuracy of the allegations as they relate to us, the legal right of the NJDEP to claim NRDs in these actions, the viability of our defenses to such claims, the legal basis for determining the amount of the NRDs, and the method of allocating damages, if any, between defendants have not been determined.
     In October 2007, the Company received a demand from the State of New York to pay the costs allegedly arising from investigation and remediation of petroleum spills that occurred at a property taken by Eminent Domain by the State of New York in 1991. The accuracy of the allegations as they relate to us, our interest in the property, and the nature of the alleged discharges of petroleum that are claimed to have occurred at the property are being researched. Accordingly, we are unable at this time to estimate with any certainty our ultimate legal and financial liability, if any, for the amounts demanded by the State of New York.

23


 

Item 4. Submission of Matters to a Vote of Security Holders
     No matter was submitted to a vote of security holders during the three months ended December 31, 2007.

24


 

PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
     Information in response to this item is incorporated herein by reference to information under the headings “Capital Stock”, “Stock Performance Graph” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K.
Item 6. Selected Financial Data
     Information in response to this item is incorporated herein by reference to information under the heading “Getty Realty Corp. and Subsidiaries — Selected Financial Data” in our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
     Information in response to this item is incorporated herein by reference to information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
     Information in response to this item is incorporated herein by reference to information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Disclosures about Market Risk” in our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K.
Item 8. Financial Statements and Supplementary Data
     Information in response to this item is incorporated herein by reference to the financial statements and supplementary financial information in our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K under the headings “Getty Realty Corp. and Subsidiaries — Consolidated Statements of Operations,” “—Consolidated Statements of Comprehensive Income,” “—Consolidated Balance Sheets,” “—Consolidated Statements of Cash Flows,” “—Notes to Consolidated Financial Statements” (including the supplementary financial information contained in Note 9 “Quarterly Financial Data”) and “Report of Independent Registered Public Accounting Firm.”
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
     None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
     The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or furnished pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
     As required by the Exchange Act Rule 13a-15(b), the Company has carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on the foregoing, the Company’s Chief Executive Officer and Chief

25


 

Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2007.
Management’s Report on Internal Control Over Financial Reporting
     Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment under the framework in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2007.
     The effectiveness of our internal control over financial reporting as of December 31, 2007, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K.
     There have been no changes in the Company’s internal control over financial reporting during the latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information
     None.

26


 

PART III
Item 10. Directors, Executive Officers and Corporate Governance
     Information with respect to compliance with section 16(a) of the Exchange Act is incorporated herein by reference to information under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement. Information with respect to directors, the audit committee and the audit committee financial expert, and procedures by which shareholders may recommend to nominees to the board of directors in response to this item is incorporated herein by reference to information under the headings “Election of Directors” and “Directors’ Meetings, Committees and Executive Officers” in the Proxy Statement. The following table lists our executive officers, their respective ages, and the offices and positions held.
             
NAME   AGE   POSITION   OFFICER SINCE
Leo Liebowitz
  80   Chairman and Chief Executive Officer   1971
Kevin C. Shea
  48   Executive Vice President   2001
Thomas J. Stirnweis
  49   Vice President, Treasurer and Chief Financial Officer   2001
Joshua Dicker
  47   General Counsel and Corporate Secretary   2008
     Mr. Liebowitz has been Chief Executive Officer of the Company since 1985. He was the President of the Company from May 1971 to May 2004. Mr. Liebowitz served as Chairman, Chief Executive Officer and a director of Marketing from October 1996 until December 2000. He is also a director of the Regional Banking Advisory Board of J.P. Morgan Chase & Co.
     Mr. Shea has been with the Company since 1984 and has served as Executive Vice President since May 2004 and was Vice President since January 2001. Prior thereto, he was Director of National Real Estate Development.
     Mr. Stirnweis joined the Company in January 2001 as Corporate Controller and Treasurer and has served as Vice President, Treasurer and Chief Financial Officer since May 2003. Prior to joining the Company, he was Manager of Financial Reporting and Analysis of Marketing, where he provided services to the Company under a services agreement since the Spin-Off of Marketing in March 1997. Prior thereto, he held the same position at the Company since November 1988.
     Mr. Dicker joined the Company in February 2008 as General Counsel and Corporate Secretary. Prior to joining Getty, he was a partner at the national law firm Arent Fox, LLP since 2002.
     There are no family relationships between any of its directors or executive officers.
     The Getty Realty Corp. Business Conduct Guidelines (“Code of Ethics”), which applies to all employees, including our chief executive officer and chief financial officer, is available on our website at www.gettyrealty.com.
Item 11. Executive Compensation
     Information in response to this item is incorporated herein by reference to information under the heading “Compensation” in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
     Information in response to this item is incorporated herein by reference to information under the heading “Beneficial Ownership of Capital Stock” and “Executive Compensation — Compensation Discussion and Analysis — Equity Compensation — Equity Compensation Plan Information” in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
     There were no such relationships or transactions to report for the year ended December 31, 2007. Information with respect to director independence is incorporated herein by reference to information under the heading “Directors’ Meetings, Committees and Executive Officers — Independence of Directors” in the Proxy Statement.

27


 

Item 14. Principal Accountant Fees and Services
     Information in response to this item is incorporated herein by reference to information under the heading “Ratification of Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement.

28


 

PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) 1. Financial Statements
The financial statements listed in the Index to Financial Statements and Financial Statement Schedules on page 31 are incorporated herein by reference to our Annual Report to Shareholders filed as exhibit 13 to this Annual Report on Form 10-K.
2. Financial Statement Schedules
The financial statement schedules listed in the Index to Financial Statements and Financial Statement Schedules on page 31 are filed as part of this Annual Report on Form 10-K.
3. Exhibits
The exhibits listed in the Exhibit Index are filed (or furnished, as applicable) as part of this Annual Report on Form 10-K.

29


 

GETTY REALTY CORP. INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES COVERED BY REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Items 15(a) 1 & 2
                 
    REFERENCE
    2007 ANNUAL   2007 ANNUAL
    REPORT ON   REPORT TO
    FORM 10-K   SHAREHOLDERS
    (PAGES)   (PAGES)
Data incorporated by reference from attached 2007 Annual Report to Shareholders of Getty Realty Corp.
               
Report of Independent Registered Public Accounting Firm
            24  
Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005
            25  
Consolidated Statements of Comprehensive Income for the years ended December 31, 2007, 2006 and 2005
            25  
Consolidated Balance Sheets as of December 31, 2007 and 2006
            26  
Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005
            27  
Notes to Consolidated Financial Statements
            28-41  
Report of Independent Registered Public Accounting Firm on Financial Statement Schedules
    31          
Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2007, 2006 and 2005
    32          
Schedule III — Real Estate and Accumulated Depreciation and Amortization as of December 31, 2007
    34-45          
All other schedules are omitted for the reason that they are either not required, not applicable, not material or the information is included in the consolidated financial statements or notes thereto.

30


 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of Getty Realty Corp.:
Our audits of the consolidated financial statements and of the effectiveness of internal control over financial reporting referred to in our report dated March 17, 2008 appearing in the 2007 Annual Report to Shareholders of Getty Realty Corp. (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
New York, New York
March 17, 2008

31


 

GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE II — VALUATION and QUALIFYING ACCOUNTS and RESERVES
for the years ended December 31, 2007, 2006 and 2005
(in thousands)
                                 
    BALANCE AT                     BALANCE  
    BEGINNING                     AT END  
    OF YEAR     ADDITIONS     DEDUCTIONS     OF YEAR  
December 31, 2007:
                               
Allowance for deferred rent receivable
  $     $ 10,494     $     $ 10,494  
Allowance for mortgages and accounts receivable
  $ 30     $ 70     $     $ 100  
Allowance for recoveries from state underground storage tank funds
  $ 650     $     $     $ 650  
December 31, 2006:
                               
Allowance for mortgages and accounts receivable
  $ 29     $ 44     $ 43     $ 30  
Allowance for recoveries from state underground storage tank funds
  $ 750     $     $ 100     $ 650  
December 31, 2005:
                               
Allowance for mortgages and accounts receivable
  $ 5     $ 24     $     $ 29  
Allowance for recoveries from state underground storage tank funds
  $ 910     $     $ 160     $ 750  

32


 

GETTY REALTY CORP. and SUBSIDIARIES
SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION
As of December 31, 2007
(in thousands)
The summarized changes in real estate assets and accumulated depreciation are as follows:
                         
    2007     2006     2005  
Investment in real estate:
                       
Balance at beginning of year
  $ 383,558     $ 370,495     $ 346,590  
Acquisitions
    94,700       15,496       29,566  
Capital expenditures
    1,310       42       7  
Sales and condemnations
    (3,464 )     (1,416 )     (1,434 )
Lease terminations
    (1,850 )     (1,059 )     (4,234 )
 
                 
Balance at end of year
  $ 474,254     $ 383,558     $ 370,495  
 
                 
Accumulated depreciation and amortization:
                       
Balance at beginning of year
  $ 116,089     $ 109,800     $ 106,463  
Depreciation and amortization expense
    9,448       7,883       8,113  
Sales and condemnations
    (1,222 )     (535 )     (542 )
Lease terminations
    (1,850 )     (1,059 )     (4,234 )
 
                 
Balance at end of year
  $ 122,465     $ 116,089     $ 109,800  
 
                 
     We are not aware of any material liens or encumbrances on any of our properties.
                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
BROOKLYN, NY
    $282,104       $301,052       $176,292       $406,864       $583,156       $352,988       1967  
JAMAICA, NY
    12,000       295,750       12,000       295,750       307,750       189532       1970  
REGO PARK, NY
    33,745       281,380       23,000       292,125       315,125       224156       1974  
BROOKLYN, NY
    74,808       125,120       30,694       169,234       199,928       163758       1967  
BRONX, NY
    60,000       353,955       60,800       353,155       413,955       263225       1965  
CORONA, NY
    114,247       300,172       112,800       301,619       414,419       200844       1965  
OCEANSIDE, NY
    40,378       169,929       40,000       170,307       210,307       132864       1970  
BLUEPOINT, NY
    96,163       118,524       96,068       118,619       214,687       111594       1972  
BRENTWOOD, NY
    253,058       84,485       125,000       212,543       337,543       197754       1968  
BAY SHORE, NY
    47,685       289,972       0       337,657       337,657       336010       1969  
PELHAM MANOR, NY
    127,304       85,087       75,800       136,591       212,391       122652       1972  
BRONX, NY
    0       293,507       0       293,507       293,507       197611       1972  
BROOKLYN, NY
    0       365,767       0       365,767       365,767       305736       1970  
POUGHKEEPSIE, NY
    32,885       168,354       35,904       165,335       201,239       156235       1971  
CARMEL, NY
    20,419       158,943       20,750       158,612       179,362       153394       1970  
KINGSTON, NY
    68,341       115,961       44,379       139,923       184,302       135524       1971  
WAPPINGERS FALLS, NY
    114,185       159,162       111,785       161,562       273,347       151379       1971  
STONY POINT, NY
    59,329       203,448       55,800       206,977       262,777       197509       1971  
KINGSTON, NY
    29,010       159,986       12,721       176,275       188,996       165916       1972  
POUGHKEEPSIE, NY
    63,030       158,415       26,226       195,219       221,445       194104       1972  
LAGRANGEVILLE, NY
    129,133       101,140       64,626       165,647       230,273       163468       1972  
BRONX, NY
    128,419       221,197       100,681       248,935       349,616       189533       1972  
STATEN ISLAND, NY
    40,598       256,262       26,050       270,810       296,860       188355       1973  
BRONX, NY
    141,322       141,909       86,800       196,431       283,231       182594       1972  
NEW YORK, NY
    125,923       168,772       78,125       216,570       294,695       212886       1972  
MIDDLE VILLAGE, NY
    130,684       73,741       89,960       114,465       204,425       106289       1972  
LONG ISLAND CITY, NY
    90,895       91,386       60,030       122,251       182,281       112658       1972  
BROOKLYN, NY
    100,000       254,503       66,890       287,613       354,503       229875       1972  
BROOKLYN, NY
    135,693       91,946       100,035       127,604       227,639       104243       1972  
BROOKLYN, NY
    147,795       228,379       103,815       272,359       376,174       224133       1972  
STATEN ISLAND, NY
    101,033       371,591       75,650       396,974       472,624       262582       1972  
STATEN ISLAND, NY
    25,000       351,829       0       376,829       376,829       253858       1972  
BRONX, NY
    543,833       693,438       473,695       763,576       1,237,271       746143       1970  

33


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
BRONX, NY
    90,176       183,197       40,176       233,197       273,373       194161       1976  
BRONX, NY
    82,141       106,173       32,941       155,373       188,314       145234       1972  
BRONX, NY
    105,176       70,736       40,176       135,736       175,912       114487       1968  
BRONX, NY
    45,044       196,956       10,044       231,956       242,000       196160       1976  
BRONX, NY
    128,049       315,917       83,849       360,117       443,966       245526       1972  
BRONX, NY
    130,396       184,222       90,396       224,222       314,618       199481       1972  
BRONX, NY
    118,025       290,298       73,025       335,298       408,323       270303       1972  
BRONX, NY
    70,132       322,265       30,132       362,265       392,397       256738       1972  
BRONX, NY
    78,168       450,267       65,680       462,755       528,435       330991       1972  
BRONX, NY
    69,150       300,279       34,150       335,279       369,429       240304       1972  
YONKERS, NY
    291,348       170,478       216,348       245,478       461,826       219859       1972  
SLEEPY HOLLOW, NY
    280,825       102,486       129,744       253,567       383,311       243345       1969  
OLD BRIDGE, NJ
    85,617       109,980       56,190       139,407       195,597       136965       1972  
BREWSTER, NY
    117,603       78,076       72,403       123,276       195,679       114880       1972  
FLUSHING, NY
    118,309       280,435       78,309       320,435       398,744       217107       1973  
BRONX, NY
    0       278,517       0       278,517       278,517       202871       1976  
STATEN ISLAND, NY
    173,667       133,198       113,369       193,496       306,865       175721       1976  
BRIARCLIFF MANOR, NY
    652,213       103,753       501,687       254,279       755,966       219256       1976  
BRONX, NY
    95,328       102,639       73,750       124,217       197,967       115344       1976  
BRONX, NY
    88,865       193,679       63,315       219,229       282,544       216628       1976  
NEW YORK, NY
    106,363       103,035       79,275       130,123       209,398       125505       1976  
NEW YORK, NY
    146,159       407,286       43,461       509,984       553,445       366641       1976  
GLENDALE, NY
    124,438       287,907       86,160       326,185       412,345       258344       1976  
OZONE PARK, NY
    57,289       331,799       44,715       344,373       389,088       275568       1976  
LONG ISLAND CITY, NY
    106,592       151,819       73,260       185,151       258,411       149462       1976  
RIDGE, NY
    276,942       73,821       200,000       150,763       350,763       118312       1977  
LAKE RONKONKOMA, NY
    0       176,622       0       176,622       176,622       169146       1977  
NEW CITY, NY
    180,979       100,597       109,025       172,551       281,576       170914       1978  
W. HAVERSTRAW, NY
    194,181       38,141       140,000       92,322       232,322       83288       1978  
PIERMONT, NY
    151,125       31,470       90,675       91,920       182,595       91920       1978  
STATEN ISLAND, NY
    0       301,713       0       301,713       301,713       191894       1978  
BROOKLYN, NY
    74,928       250,382       44,957       280,353       325,310       195597       1978  
RONKONKOMA, NY
    76,478       208,121       46,057       238,542       284,599       231814       1978  
STONY BROOK, NY
    175,921       44,529       105,000       115,450       220,450       113644       1978  
MILLER PLACE, NY
    110,000       103,160       66,000       147,160       213,160       144457       1978  
LAKE RONKONKOMA, NY
    87,097       156,576       51,000       192,673       243,673       187350       1978  
E. PATCHOGUE, NY
    57,049       210,390       34,213       233,226       267,439       229793       1978  
AMITYVILLE, NY
    70,246       139,953       42,148       168,051       210,199       168051       1978  
BETHPAGE, NY
    210,990       38,356       126,000       123,346       249,346       122529       1978  
HUNTINGTON STATION, NY
    140,735       52,045       84,000       108,780       192,780       108019       1978  
BALDWIN, NY
    101,952       106,328       61,552       146,728       208,280       109061       1978  
ELMONT, NY
    388,848       114,933       231,000       272,781       503,781       235335       1978  
NORTH BABYLON, NY
    91,888       117,066       59,059       149,895       208,954       146031       1978  
CENTRAL ISLIP, NY
    103,183       151,449       61,435       193,197       254,632       193197       1978  
WHITE PLAINS, NY
    120,393       67,315       0       187,708       187,708       177981       1979  
OZONE PARK, NY
    0       217,234       0       217,234       217,234       146797       1978  
STATEN ISLAND, NY
    0       222,525       0       222,525       222,525       142974       1981  
BROOKLYN, NY
    116,328       232,254       75,000       273,582       348,582       183518       1980  
LONG ISLAND CITY, NY
    191,420       390,783       116,554       465,649       582,203       308098       1981  
BAY SHORE, NY
    156,382       123,032       85,854       193,560       279,414       187,676       1981  
BRISTOL, CT
    108,808       81,684       44,000       146,492       190,492       140,998       1982  
CROMWELL, CT
    70,017       183,119       24,000       229,136       253,136       229,136       1982  
EAST HARTFORD, CT
    208,004       60,493       84,000       184,497       268,497       183,715       1982  
FRANKLIN, CT
    50,904       168,470       20,232       199,142       219,374       197,718       1982  
MANCHESTER, CT
    65,590       156,628       64,750       157,468       222,218       156,584       1982  
MERIDEN, CT
    207,873       39,829       84,000       163,702       247,702       162,347       1982  
NEW MILFORD, CT
    113,947       121,174       0       235,121       235,121       230,336       1982  
NORWALK, CT
    257,308       128,940       104,000       282,248       386,248       280,855       1982  
SOUTHINGTON, CT
    115,750       158,561       70,750       203,561       274,311       202,880       1982  
TERRYVILLE, CT
    182,308       98,911       74,000       207,219       281,219       206,987       1982  
TOLLAND, CT
    107,902       100,178       44,000       164,080       208,080       160,066       1982  
WATERFORD, CT
    76,981       133,059       0       210,040       210,040       199,048       1982  
WEST HAVEN, CT
    185,138       48,619       74,000       159,757       233,757       157,300       1982  
AGAWAM, MA
    65,000       120,665       0       185,665       185,665       182,124       1982  
GRANBY, MA
    58,804       232,477       24,000       267,281       291,281       192,095       1982  
HADLEY, MA
    119,276       68,748       36,080       151,944       188,024       146,795       1982  
PITTSFIELD, MA
    97,153       87,874       40,000       145,027       185,027       144,903       1982  
PITTSFIELD, MA
    123,167       118,273       50,000       191,440       241,440       190,478       1982  

34


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
SOUTH HADLEY, MA
    232,445       54,351       90,000       196,796       286,796       190,277       1982  
SPRINGFIELD, MA
    139,373       239,713       50,000       329,086       379,086       234,450       1983  
SPRINGFIELD, MA
    0       239,087       0       239,087       239,087       173,318       1984  
SPRINGFIELD, MA
    122,787       105,706       50,000       178,493       228,493       175,301       1982  
WESTFIELD, MA
    123,323       96,093       50,000       169,416       219,416       165,593       1982  
OSSINING, NY
    140,992       104,761       97,527       148,226       245,753       140,240       1982  
FREEHOLD, NJ
    494,275       68,507       402,834       159,948       562,782       86,226       1978  
HOWELL, NJ
    9,750       174,857       0       184,607       184,607       183,813       1978  
LAKEWOOD, NJ
    130,148       77,265       70,148       137,265       207,413       134,359       1978  
NORTH PLAINFIELD, NJ
    227,190       239,709       175,000       291,899       466,899       281,210       1978  
SOUTH AMBOY, NJ
    299,678       94,088       178,950       214,816       393,766       212,759       1978  
GLEN HEAD, NY
    234,395       192,295       102,645       324,045       426,690       324,045       1982  
NEW ROCHELLE, NY
    188,932       34,649       103,932       119,649       223,581       118,612       1982  
ELMONT, NY
    108,348       85,793       64,290       129,851       194,141       92,586       1982  
MERIDEN, CT
    126,188       106,805       72,344       160,649       232,993       150,737       1982  
PLAINVILLE, CT
    80,000       290,433       0       370,433       370,433       306,693       1983  
FRANKLIN SQUARE, NY
    152,572       121,756       137,315       137,013       274,328       90,096       1978  
SEAFORD, NY
    32,000       157,665       0       189,665       189,665       152,537       1978  
BROOKLYN, NY
    276,831       376,706       168,423       485,114       653,537       336,406       1978  
NEW HAVEN, CT
    1,412,860       56,420       898,470       570,810       1,469,280       261,409       1985  
BRISTOL, CT
    359,906       0       0       359,906       359,906       113,972       2004  
BRISTOL, CT
    1,594,129       0       1,036,184       557,945       1,594,129       70,674       2004  
BRISTOL, CT
    253,639       0       149,553       104,086       253,639       13,183       2004  
BRISTOL, CT
    365,028       0       237,268       127,760       365,028       16,182       2004  
COBALT, CT
    395,683       0       0       395,683       395,683       125,299       2004  
DURHAM, CT
    993,909       0       0       993,909       993,909       314,738       2004  
ELLINGTON, CT
    1,294,889       0       841,678       453,211       1,294,889       57,405       2004  
ENFIELD, CT
    259,881       0       0       259,881       259,881       96,818       2004  
FARMINGTON, CT
    466,271       0       303,076       163,195       466,271       20,672       2004  
HARTFORD, CT
    664,966       0       432,228       232,738       664,966       29,482       2004  
HARTFORD, CT
    570,898       0       371,084       199,814       570,898       25,311       2004  
MERIDEN, CT
    1,531,772       0       989,165       542,607       1,531,772       70,626       2004  
MIDDLETOWN, CT
    1,038,592       0       675,085       363,507       1,038,592       46,043       2004  
NEW BRITAIN, CT
    390,497       0       253,823       136,674       390,497       17,312       2004  
NEWINGTON, CT
    953,512       0       619,783       333,729       953,512       42,272       2004  
NORTH HAVEN, CT
    405,389       0       251,985       153,404       405,389       24,669       2004  
PLAINVILLE, CT
    544,503       0       353,927       190,576       544,503       24,140       2004  
PLYMOUTH, CT
    930,885       0       605,075       325,810       930,885       41,268       2004  
SOUTH WINDHAM, CT
    644,141       1,397,938       598,394       1,443,685       2,042,079       28,557       2004  
SOUTH WINDSOR, CT
    544,857       0       336,737       208,120       544,857       41,829       2004  
SUFFIELD, CT
    237,401       602,635       200,878       639,158       840,036       142,628       2004  
VERNON, CT
    1,434,223       0       0       1,434,223       1,434,223       454,170       2004  
WALLINGFORD, CT
    550,553       0       334,901       215,652       550,553       34,026       2004  
WATERBURY, CT
    804,040       0       516,387       287,653       804,040       39,897       2004  
WATERBURY, CT
    515,172       0       334,862       180,310       515,172       22,838       2004  
WATERBURY, CT
    468,469       0       304,505       163,964       468,469       20,770       2004  
WATERTOWN, CT
    924,586       0       566,986       357,600       924,586       71,794       2004  
WETHERSFIELD, CT
    446,610       0       0       446,610       446,610       141,427       2004  
WEST HAVEN, CT
    1,214,831       0       789,640       425,191       1,214,831       53,859       2004  
WESTBROOK, CT
    344,881       0       0       344,881       344,881       109,212       2004  
WILLIMANTIC, CT
    716,782       0       465,908       250,874       716,782       31,778       2004  
WINDSOR, CT
    1,042,081       0       669,804       372,277       1,042,081       117,889       2004  
WINDSOR LOCKS, CT
    1,433,330       0       0       1,433,330       1,433,330       453,888       2004  
WINDSOR LOCKS, CT
    360,664       0       0       360,664       360,664       45,686       2004  
BLOOMFIELD, CT
    141,452       54,786       90,000       106,238       196,238       98,493       1986  
SIMSBURY, CT
    317,704       144,637       206,700       255,641       462,341       175,017       1985  
RIDGEFIELD, CT
    535,140       33,590       347,900       220,830       568,730       105,722       1985  
BRIDGEPORT, CT
    349,500       56,209       227,600       178,109       405,709       102,004       1985  
NORWALK, CT
    510,760       209,820       332,200       388,380       720,580       220,134       1985  
BRIDGEPORT, CT
    313,400       20,303       204,100       129,603       333,703       62,382       1985  
STAMFORD, CT
    506,860       15,635       329,700       192,795       522,495       84,558       1985  
BRIDGEPORT, CT
    245,100       20,652       159,600       106,152       265,752       52,683       1985  
BRIDGEPORT, CT
    313,400       24,314       204,100       133,614       337,714       65,853       1985  
BRIDGEPORT, CT
    377,600       83,549       245,900       215,249       461,149       135,791       1985  
BRIDGEPORT, CT
    526,775       63,505       342,700       247,580       590,280       134,198       1985  
BRIDGEPORT, CT
    338,415       27,786       219,800       146,401       366,201       72,473       1985  
NEW HAVEN, CT
    538,400       176,230       350,600       364,030       714,630       250,236       1985  
DARIEN, CT
    667,180       26,061       434,300       258,941       693,241       117,112       1985  

35


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
WESTPORT, CT
    603,260       23,070       392,500       233,830       626,330       101,997       1985  
STAMFORD, CT
    603,260       112,305       392,500       323,065       715,565       191,738       1985  
STAMFORD, CT
    506,580       40,429       329,700       217,309       547,009       106,957       1985  
GUILFORD, CT
    147,071       28,486       30,000       145,557       175,557       102,556       1993  
STRATFORD, CT
    301,300       70,735       196,200       175,835       372,035       106,324       1985  
STRATFORD, CT
    285,200       14,728       185,700       114,228       299,928       53,309       1985  
CHESHIRE, CT
    490,200       19,050       319,200       190,050       509,250       86,440       1985  
MILFORD, CT
    293,512       43,846       191,000       146,358       337,358       81,201       1985  
FAIRFIELD, CT
    430,000       13,631       280,000       163,631       443,631       71,198       1985  
HARTFORD, CT
    233,000       32,563       151,700       113,863       265,563       61,390       1985  
NEW HAVEN, CT
    217,000       23,889       141,300       99,589       240,889       52,678       1985  
RIDGEFIELD, CT
    401,630       47,610       166,861       282,379       449,240       274,868       1985  
BRIDGEPORT, CT
    346,442       16,990       230,000       133,432       363,432       127,504       1985  
WILTON, CT
    518,881       71,425       337,500       252,806       590,306       136,170       1985  
MIDDLETOWN, CT
    133,022       86,915       131,312       88,625       219,937       88,625       1987  
EAST HARTFORD, CT
    555,826       13,797       301,322       268,301       569,623       66,016       1991  
WATERTOWN, CT
    351,771       58,812       204,027       206,556       410,583       101,761       1992  
AVON, CT
    730,886       0       402,949       327,937       730,886       81,762       2002  
WILMINGTON, DE
    309,300       67,834       201,400       175,734       377,134       100,081       1985  
ST. GEORGES, DE
    498,200       222,596       324,725       396,071       720,796       279,534       1985  
WILMINGTON, DE
    313,400       103,748       204,100       213,048       417,148       130,772       1985  
WILMINGTON, DE
    242,800       32,615       158,100       117,315       275,415       66,214       1985  
WILMINGTON, DE
    381,700       156,704       248,600       289,804       538,404       165,261       1985  
CLAYMONT, DE
    237,200       30,878       151,700       116,378       268,078       66,164       1985  
NEWARK, DE
    578,600       166,781       376,800       368,581       745,381       220,972       1985  
NEWARK, DE
    405,800       35,844       264,300       177,344       441,644       90,339       1985  
WILMINGTON, DE
    369,600       38,077       240,700       166,977       407,677       87,530       1985  
WILMINGTON, DE
    446,000       33,323       290,400       188,923       479,323       93,498       1985  
WILMINGTON, DE
    337,500       21,971       219,800       139,671       359,471       67,605       1985  
SOUTH PORTLAND, ME
    176,700       6,938       115,100       68,538       183,638       30,432       1985  
LEWISTON, ME
    341,900       89,500       222,400       209,000       431,400       135,741       1985  
PORTLAND, ME
    325,400       42,652       211,900       156,152       368,052       75,836       1985  
BIDDEFORD, ME
    723,100       8,009       470,900       260,209       731,109       108,049       1985  
SACO, ME
    204,006       37,173       150,694       90,485       241,179       90,114       1986  
SANFORD, ME
    265,523       9,178       201,316       73,385       274,701       73,385       1986  
WESTBROOK, ME
    93,345       193,654       50,431       236,568       286,999       183,037       1986  
WISCASSET, ME
    156,587       33,455       90,837       99,205       190,042       99,205       1986  
AUBURN, ME
    105,908       77,928       105,908       77,928       183,836       77,601       1986  
SOUTH PORTLAND, ME
    180,689       84,980       110,689       154,980       265,669       154,980       1986  
LEWISTON, ME
    180,338       62,629       101,338       141,629       242,967       139,111       1986  
N. WINDHAM, ME
    161,365       53,923       86,365       128,923       215,288       128,821       1986  
BALTIMORE, MD
    474,100       176,067       308,700       341,467       650,167       184,102       1985  
RANDALLSTOWN, MD
    590,600       33,594       384,600       239,594       624,194       115,308       1985  
EMMITSBURG, MD
    146,949       73,613       101,949       118,613       220,562       118,329       1986  
MILFORD, MA
    0       214,331       0       214,331       214,331       152,272       1985  
AGAWAM, MA
    209,555       63,621       136,000       137,176       273,176       90,178       1985  
S. WEYMOUTH, MA
    211,891       44,893       256,784       0       256,784       0       1985  
WESTFIELD, MA
    289,580       38,615       188,400       139,795       328,195       78,033       1985  
WEST ROXBURY, MA
    490,200       23,134       319,200       194,134       513,334       86,390       1985  
MAYNARD, MA
    735,200       12,714       478,800       269,114       747,914       112,319       1985  
GARDNER, MA
    1,008,400       73,740       656,700       425,440       1,082,140       200,084       1985  
STOUGHTON, MA
    775,300       34,554       504,900       304,954       809,854       137,171       1985  
ARLINGTON, MA
    518,300       27,906       337,500       208,706       546,206       99,273       1985  
METHUEN, MA
    379,664       64,941       245,900       198,705       444,605       116,115       1985  
BELMONT, MA
    301,300       27,938       196,200       133,038       329,238       67,344       1985  
RANDOLPH, MA
    743,200       25,069       484,000       284,269       768,269       125,105       1985  
ROCKLAND, MA
    534,300       23,616       347,900       210,016       557,916       96,333       1985  
WATERTOWN, MA
    357,500       296,588       321,030       333,058       654,088       197,122       1985  
READING, MA
    261,100       12,829       170,000       103,929       273,929       44,769       1985  
WEYMOUTH, MA
    643,297       36,516       418,600       261,213       679,813       119,745       1985  
DEDHAM, MA
    225,824       19,150       125,824       119,150       244,974       118,351       1987  
HINGHAM, MA
    352,606       22,484       242,520       132,570       375,090       130,255       1989  
ASHLAND, MA
    606,700       17,424       395,100       229,024       624,124       96,857       1985  
WOBURN, MA
    507,600       294,303       507,600       294,303       801,903       129,000       1985  
BELMONT, MA
    389,700       28,871       253,800       164,771       418,571       80,726       1985  
HYDE PARK, MA
    499,175       29,673       321,800       207,048       528,848       101,350       1985  
EVERETT, MA
    269,500       190,931       269,500       190,931       460,431       103,753       1985  
PITTSFIELD, MA
    281,200       51,100       183,100       149,200       332,300       87,970       1985  

36


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
NORTH ATTLEBORO, MA
    662,900       16,549       431,700       247,749       679,449       106,452       1985  
WORCESTER, MA
    497,642       67,806       321,800       243,648       565,448       138,914       1985  
NEW BEDFORD, MA
    522,300       18,274       340,100       200,474       540,574       88,047       1985  
TAUNTON, MA
    0       180,724       0       180,724       180,724       118,691       1989  
FALL RIVER, MA
    859,800       24,423       559,900       324,323       884,223       139,814       1985  
WORCESTER, MA
    385,600       21,339       251,100       155,839       406,939       73,507       1985  
WEBSTER, MA
    1,012,400       67,645       659,300       420,745       1,080,045       203,525       1985  
CLINTON, MA
    586,600       52,725       382,000       257,325       639,325       128,062       1985  
FOXBOROUGH, MA
    426,593       34,403       325,000       135,996       460,996       124,783       1990  
CLINTON, MA
    385,600       95,698       251,100       230,198       481,298       145,527       1985  
HYANNIS, MA
    650,800       42,552       423,800       269,552       693,352       132,239       1985  
HOLYOKE, MA
    329,500       38,345       214,600       153,245       367,845       80,041       1985  
NEWTON, MA
    691,000       42,832       450,000       283,832       733,832       130,224       1985  
FALMOUTH, MA
    519,382       43,841       458,461       104,762       563,223       103,129       1988  
METHUEN, MA
    490,200       16,282       319,200       187,282       506,482       83,917       1985  
ROCKLAND, MA
    578,600       185,285       376,800       387,085       763,885       216,740       1985  
WILLIAMSTOWN, MA
    221,000       54,948       143,900       132,048       275,948       77,536       1985  
FAIRHAVEN, MA
    725,500       48,828       470,900       303,428       774,328       147,575       1985  
BELLINGHAM, MA
    734,189       132,725       476,200       390,714       866,914       224,156       1985  
NEW BEDFORD, MA
    482,275       95,553       293,000       284,828       577,828       182,477       1985  
SEEKONK, MA
    1,072,700       29,112       698,500       403,312       1,101,812       171,357       1985  
WALPOLE, MA
    449,900       20,586       293,000       177,486       470,486       78,299       1985  
NORTH ANDOVER, MA
    393,700       220,132       256,400       357,432       613,832       205,831       1985  
LOWELL, MA
    360,949       83,674       200,949       243,674       444,623       243,331       1985  
AUBURN, MA
    175,048       30,890       125,048       80,890       205,938       80,470       1986  
METHUEN, MA
    147,330       188,059       50,731       284,658       335,389       229,856       1986  
IPSWICH, MA
    138,918       46,831       95,718       90,031       185,749       85,915       1986  
SALISBURY, MA
    119,698       59,615       80,598       98,715       179,313       87,098       1986  
BEVERLY, MA
    275,000       150,741       175,000       250,741       425,741       205,226       1986  
BILLERICA, MA
    400,000       135,809       250,000       285,809       535,809       265,887       1986  
HAVERHILL, MA
    400,000       17,182       225,000       192,182       417,182       191,770       1986  
CHATHAM, MA
    275,000       197,302       175,000       297,302       472,302       227,858       1986  
HARWICH, MA
    225,000       12,044       150,000       87,044       237,044       83,739       1986  
IPSWICH, MA
    275,000       19,161       150,000       144,161       294,161       141,987       1986  
LEOMINSTER, MA
    185,040       49,592       85,040       149,592       234,632       146,588       1986  
LOWELL, MA
    375,000       175,969       250,000       300,969       550,969       233,578       1986  
METHUEN, MA
    300,000       50,861       150,000       200,861       350,861       198,550       1986  
ORLEANS, MA
    260,000       37,637       185,000       112,637       297,637       107,535       1986  
PEABODY, MA
    400,000       200,363       275,000       325,363       600,363       273,557       1986  
QUINCY, MA
    200,000       36,112       125,000       111,112       236,112       108,978       1986  
REVERE, MA
    250,000       193,854       150,000       293,854       443,854       239,912       1986  
SALEM, MA
    275,000       25,393       175,000       125,393       300,393       123,409       1986  
TEWKSBURY, MA
    125,000       90,338       75,000       140,338       215,338       130,275       1986  
FALMOUTH, MA
    150,000       322,942       75,000       397,942       472,942       295,831       1986  
WEST YARMOUTH, MA
    225,000       33,165       125,000       133,165       258,165       131,942       1986  
WESTFORD, MA
    275,000       196,493       175,000       296,493       471,493       230,007       1986  
WOBURN, MA
    350,000       45,681       200,000       195,681       395,681       193,094       1986  
YARMOUTHPORT, MA
    300,000       26,940       150,000       176,940       326,940       176,897       1986  
BRIDGEWATER, MA
    190,360       36,762       140,000       87,122       227,122       78,503       1987  
STOUGHTON, MA
    0       235,794       0       235,794       235,794       165,889       1990  
WORCESTER, MA
    476,102       174,233       309,466       340,869       650,335       150,230       1991  
AUBURN, MA
    369,306       27,792       240,049       157,049       397,098       48,054       1991  
BARRE, MA
    535,614       163,028       348,149       350,493       698,642       143,387       1991  
WORCESTER, MA
    275,866       11,674       179,313       108,227       287,540       29,617       1992  
BROCKTON, MA
    275,866       194,619       179,313       291,172       470,485       152,098       1991  
CLINTON, MA
    177,978       29,790       115,686       92,082       207,768       39,617       1992  
WORCESTER, MA
    167,745       275,852       167,745       275,852       443,597       141,828       1991  
DUDLEY, MA
    302,563       141,993       196,666       247,890       444,556       99,104       1991  
FITCHBURG, MA
    311,808       16,384       202,675       125,517       328,192       35,863       1991  
FRANKLIN, MA
    253,619       18,437       164,852       107,204       272,056       33,963       1988  
WORCESTER, MA
    342,608       11,101       222,695       131,014       353,709       32,342       1991  
HYANNIS, MA
    222,472       7,282       144,607       85,147       229,754       21,774       1991  
LEOMINSTER, MA
    195,776       177,454       127,254       245,976       373,230       135,790       1991  
WORCESTER, MA
    231,372       157,356       150,392       238,336       388,728       125,499       1991  
NORTHBOROUGH, MA
    404,900       18,353       263,185       160,068       423,253       42,252       1993  
WEST BOYLSTON, MA
    311,808       28,937       202,675       138,070       340,745       47,350       1991  
WORCESTER, MA
    186,877       33,510       121,470       98,917       220,387       43,262       1993  
SOUTH YARMOUTH, MA
    275,866       49,961       179,313       146,514       325,827       58,853       1991  

37


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
STERLING, MA
    476,102       165,998       309,466       332,634       642,100       140,385       1991  
SUTTON, MA
    714,159       187,355       464,203       437,311       901,514       178,639       1993  
WORCESTER, MA
    275,866       150,472       179,313       247,025       426,338       122,489       1991  
FRAMINGHAM, MA
    297,568       203,147       193,419       307,296       500,715       162,645       1992  
UPTON, MA
    428,498       24,611       278,524       174,585       453,109       51,559       1991  
WESTBOROUGH, MA
    311,808       205,994       202,675       315,127       517,802       164,212       1991  
HARWICHPORT, MA
    382,653       173,989       248,724       307,918       556,642       142,447       1991  
WORCESTER, MA
    547,283       205,733       355,734       397,282       753,016       175,606       1991  
WORCESTER, MA
    978,880       191,413       636,272       534,021       1,170,293       191,712       1991  
FITCHBURG, MA
    390,276       216,589       253,679       353,186       606,865       168,435       1992  
WORCESTER, MA
    146,832       140,589       95,441       191,980       287,421       105,553       1991  
LEICESTER, MA
    266,968       197,898       173,529       291,337       464,866       143,391       1991  
NORTH GRAFTON, MA
    244,720       35,136       159,068       120,788       279,856       47,057       1991  
SOUTHBRIDGE, MA
    249,169       62,205       161,960       149,414       311,374       76,057       1993  
OXFORD, MA
    293,664       9,098       190,882       111,880       302,762       27,870       1993  
WORCESTER, MA
    284,765       45,285       185,097       144,953       330,050       61,940       1991  
ATHOL, MA
    164,629       22,016       107,009       79,636       186,645       30,681       1991  
FITCHBURG, MA
    142,383       194,291       92,549       244,125       336,674       131,522       1992  
WORCESTER, MA
    271,417       183,331       176,421       278,327       454,748       142,805       1991  
ORANGE, MA
    476,102       4,015       309,466       170,651       480,117       35,118       1991  
FRAMINGHAM, MA
    400,449       22,280       260,294       162,435       422,729       46,805       1991  
MILFORD, MA
    0       262,436       0       262,436       262,436       165,639       1991  
JONESBORO, AR
    2,985,267       (0 )     330,322       2,654,945       2,985,267       82,636       2007  
BELLFLOWER, CA
    1,369,511       0       910,252       459,259       1,369,511       18,475       2007  
BENICIA, CA
    2,223,362       0       1,057,519       1,165,843       2,223,362       48,980       2007  
COACHELLA, CA
    2,234,957       0       1,216,646       1,018,312       2,234,957       39,892       2007  
EL CAJON, CA
    1,292,114       0       779,828       512,286       1,292,114       18,202       2007  
FILLMORE, CA
    1,354,113       0       950,061       404,052       1,354,113       16,194       2007  
HESPERIA, CA
    1,643,449       0       849,352       794,097       1,643,449       29,426       2007  
LA PALMA, CA
    1,971,592       0       1,389,383       582,210       1,971,592       22,969       2007  
POWAY, CA
    1,439,021       (0 )     0       1,439,021       1,439,021       49,057       2007  
SAN DIMAS, CA
    1,941,008       0       749,066       1,191,942       1,941,008       40,519       2007  
HALEIWA, HI
    1,521,648       0       1,058,124       463,524       1,521,648       22,980       2007  
HONOLULU, HI
    1,538,997       0       1,219,217       319,780       1,538,997       12,409       2007  
HONOLULU, HI
    1,768,878       0       1,192,216       576,662       1,768,878       20,605       2007  
HONOLULU, HI
    1,070,141       0       980,680       89,460       1,070,141       37,570       2007  
HONOLULU, HI
    9,210,707       0       8,193,984       1,016,724       9,210,707       20,249       2007  
KANEOHE, HI
    1,977,671       0       1,473,275       504,396       1,977,671       22,566       2007  
KANEOHE, HI
    1,363,901       0       821,691       542,210       1,363,901       40,450       2007  
WAIANAE, HI
    1,996,811       0       870,775       1,126,036       1,996,811       31,160       2007  
WAIANAE, HI
    1,520,144       0       648,273       871,871       1,520,144       51,895       2007  
WAIPAHU, HI
    2,458,592       0       945,327       1,513,264       2,458,592       10,298       2007  
COTTAGE HILLS, IL
    249,419       0       26,199       223,220       249,419       17,430       2007  
FAIRVIEW HEIGHTS, IL
    516,564       0       78,440       438,124       516,564       53,815       2007  
BALTIMORE, MD
    2,258,897       0       721,876       1,537,022       2,258,897       30,091       2007  
BALTIMORE, MD
    802,414       0       0       802,414       802,414       35,331       2007  
ELLICOTT CITY, MD
    895,049       (0 )     0       895,049       895,049       4,845       2007  
KERNERSVILLE, NC
    296,770       0       72,777       223,994       296,770       13,473       2007  
KERNERSVILLE, NC
    638,633       0       338,386       300,247       638,633       15,326       2007  
KERNERSVILLE, NC
    608,441       0       250,505       357,936       608,441       7,544       2007  
LEXINGTON, NC
    204,139       0       43,311       160,828       204,139       14,942       2007  
MADISON, NC
    420,878       0       45,705       375,174       420,878       8,353       2007  
NEW BERN, NC
    349,946       0       190,389       159,557       349,946       12,136       2007  
TAYLORSVILLE, NC
    422,809       0       134,188       288,621       422,809       16,955       2007  
WALKERTOWN, NC
    844,749       0       488,239       356,509       844,749       29,706       2007  
WALNUT COVE, NC
    1,140,945       0       513,565       627,380       1,140,945       20,862       2007  
WINSTON SALEM, NC
    696,397       0       251,987       444,410       696,397       55,487       2007  
BELFIELD, ND
    1,232,010       0       381,909       850,101       1,232,010       51,326       2007  
ALLENSTOWN, NH
    1,787,116       0       466,994       1,320,122       1,787,116       44,110       2007  
BEDFORD, NH
    2,301,297       0       1,271,171       1,030,126       2,301,297       49,673       2007  
HOOKSETT, NH
    1,561,628       0       823,915       737,712       1,561,628       7,376       2007  
ARLINGTON, TX
    182,460       0       30,425       152,035       182,460       56,042       2007  
AUSTIN, TX
    2,368,425       0       738,210       1,630,215       2,368,425       9,128       2007  
AUSTIN, TX
    462,233       0       274,300       187,933       462,233       66,614       2007  
AUSTIN, TX
    3,510,062       0       1,594,536       1,915,526       3,510,062       12,513       2007  
BEDFORD, TX
    353,047       0       112,953       240,094       353,047       5,320       2007  
CEDAR PARK, TX
    178,507       0       42,091       136,415       178,507       47,574       2007  
FT WORTH, TX
    2,114,924       0       866,062       1,248,863       2,114,924       82,635       2007  

38


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
HARKER HEIGHTS, TX
    2,051,704       0       588,320       1,463,384       2,051,704       47,587       2007  
HOUSTON, TX
    1,688,904       0       223,664       1,465,240       1,688,904       55,171       2007  
KELLER, TX
    2,506,573       0       996,029       1,510,544       2,506,573       15,901       2007  
MIDLOTHIAN, TX
    429,142       0       71,970       357,172       429,142       7,631       2007  
N RICHLAND HILLS, TX
    314,246       0       125,745       188,501       314,246       57,205       2007  
SAN MARCOS, TX
    1,953,653       0       250,739       1,702,914       1,953,653       44,482       2007  
TEMPLE, TX
    2,405,953       0       1,215,488       1,190,465       2,405,953       128,630       2007  
THE COLONY, TX
    4,395,696       0       337,083       4,058,613       4,395,696       112,315       2007  
WACO, TX
    3,884,407       0       894,356       2,990,051       3,884,407       0       2007  
BROOKLAND, AR
    1,464,270       0       728,895       735,375       1,464,270       0       2007  
JONESBORO, AR
    823,651       0       415,065       408,586       823,651       0       2007  
MANCHESTER, NH
    261,100       36,404       170,000       127,504       297,504       63,143       1985  
CONCORD, NH
    233,400       68,292       151,700       149,992       301,692       94,660       1985  
DERRY, NH
    417,988       16,295       157,988       276,295       434,283       275,383       1987  
PLAISTOW, NH
    300,406       117,924       244,694       173,636       418,330       161,170       1987  
SOMERSWORTH, NH
    180,800       60,497       117,700       123,597       241,297       66,973       1985  
SALEM, NH
    743,200       19,847       484,000       279,047       763,047       119,181       1985  
LONDONDERRY, NH
    703,100       31,092       457,900       276,292       734,192       125,534       1985  
ROCHESTER, NH
    972,200       12,775       633,100       351,875       984,975       145,320       1985  
HAMPTON, NH
    193,103       26,449       135,598       83,954       219,552       83,126       1986  
MERRIMACK, NH
    151,993       205,823       100,598       257,218       357,816       186,246       1986  
NASHUA, NH
    197,142       219,639       155,837       260,944       416,781       186,170       1986  
PELHAM, NH
    169,182       53,497       136,077       86,602       222,679       78,739       1986  
PEMBROKE, NH
    138,492       174,777       100,837       212,432       313,269       146,548       1986  
ROCHESTER, NH
    179,717       208,103       100,000       287,820       387,820       222,817       1986  
SOMERSWORTH, NH
    210,805       15,012       157,520       68,297       225,817       68,087       1986  
EXETER, NH
    113,285       149,265       65,000       197,550       262,550       184,266       1986  
CANDIA, NH
    130,000       184,004       80,000       234,004       314,004       227,283       1986  
EPPING, NH
    170,000       131,403       120,000       181,403       301,403       156,038       1986  
EPSOM, NH
    220,000       96,022       155,000       161,022       316,022       142,210       1986  
EXETER, NH
    160,000       44,343       105,000       99,343       204,343       81,290       1986  
MILFORD, NH
    190,000       41,689       115,000       116,689       231,689       111,379       1986  
PORTSMOUTH, NH
    235,000       20,257       150,000       105,257       255,257       104,908       1986  
PORTSMOUTH, NH
    225,000       228,704       125,000       328,704       453,704       250,704       1986  
SALEM, NH
    450,000       47,484       350,000       147,484       497,484       139,467       1986  
SEABROOK, NH
    199,780       19,102       124,780       94,102       218,882       93,771       1986  
PELHAM, NH
    0       234,915       0       234,915       234,915       126,282       1996  
MCAFEE, NJ
    670,900       15,711       436,900       249,711       686,611       106,303       1985  
HAMBURG, NJ
    598,600       22,121       389,800       230,921       620,721       103,605       1985  
WEST MILFORD, NJ
    502,200       31,918       327,000       207,118       534,118       101,316       1985  
LIVINGSTON, NJ
    871,800       30,003       567,700       334,103       901,803       148,221       1985  
TRENTON, NJ
    373,600       9,572       243,300       139,872       383,172       60,035       1985  
WILLINGBORO, NJ
    425,800       29,928       277,300       178,428       455,728       88,834       1985  
BAYONNE, NJ
    341,500       18,947       222,400       138,047       360,447       65,048       1985  
CRANFORD, NJ
    342,666       29,222       222,400       149,488       371,888       75,974       1985  
NUTLEY, NJ
    0       512,504       329,248       183,256       512,504       11,710       1986  
TRENTON, NJ
    466,100       13,987       303,500       176,587       480,087       77,513       1985  
WALL TOWNSHIP, NJ
    336,441       55,709       121,441       270,709       392,150       264,586       1986  
UNION, NJ
    490,200       41,361       319,200       212,361       531,561       104,300       1985  
CRANBURY, NJ
    606,700       31,467       395,100       243,067       638,167       113,748       1985  
HILLSIDE, NJ
    225,000       31,552       150,000       106,552       256,552       102,065       1987  
SPOTSWOOD, NJ
    466,675       69,036       303,500       232,211       535,711       132,757       1985  
LONG BRANCH, NJ
    514,300       22,951       334,900       202,351       537,251       94,114       1985  
ELIZABETH, NJ
    405,800       18,881       264,300       160,381       424,681       73,580       1985  
BELLEVILLE, NJ
    397,700       39,410       259,000       178,110       437,110       92,370       1985  
NEPTUNE CITY, NJ
    269,600       0       175,600       94,000       269,600       37,288       1985  
BASKING RIDGE, NJ
    362,172       32,960       200,000       195,132       395,132       120,995       1986  
DEPTFORD, NJ
    281,200       24,745       183,100       122,845       305,945       62,030       1985  
CHERRY HILL, NJ
    357,500       13,879       232,800       138,579       371,379       62,344       1985  
SEWELL, NJ
    551,912       48,485       355,712       244,685       600,397       120,516       1985  
FLEMINGTON, NJ
    546,742       17,494       346,342       217,894       564,236       94,514       1985  
BLACKWOOD, NJ
    401,700       36,736       261,600       176,836       438,436       92,221       1985  
TRENTON, NJ
    684,650       33,275       444,800       273,125       717,925       127,943       1985  
LODI, NJ
    0       1,037,440       587,823       449,617       1,037,440       131,554       1988  
EAST ORANGE, NJ
    421,508       37,977       272,100       187,385       459,485       98,297       1985  
FREEHOLD, NJ
    240,642       0       1       240,641       240,642       165,998       1995  
BELMAR, NJ
    630,800       22,371       410,800       242,371       653,171       108,363       1985  
MOORESTOWN, NJ
    470,100       27,064       306,100       191,064       497,164       91,827       1985  

39


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
SPRING LAKE, NJ
    345,500       42,194       225,000       162,694       387,694       83,836       1985  
HILLTOP, NJ
    329,500       16,758       214,600       131,658       346,258       61,058       1985  
CLIFTON, NJ
    301,518       6,413       150,000       157,931       307,931       95,301       1987  
SEWELL, NJ
    405,800       12,338       264,300       153,838       418,138       67,412       1985  
FRANKLIN TWP., NJ
    683,000       30,257       444,800       268,457       713,257       123,970       1985  
FLEMINGTON, NJ
    708,160       33,072       460,500       280,732       741,232       125,538       1985  
CLEMENTON, NJ
    562,500       27,581       366,300       223,781       590,081       104,615       1985  
ASBURY PARK, NJ
    418,966       18,038       272,100       164,904       437,004       76,999       1985  
MIDLAND PARK, NJ
    201,012       4,080       150,000       55,092       205,092       46,337       1989  
PATERSON, NJ
    619,548       16,765       402,900       233,413       636,313       102,021       1985  
FREEHOLD, NJ
    450,300       7,822       293,200       164,922       458,122       69,162       1985  
OCEAN CITY, NJ
    843,700       113,162       549,400       407,462       956,862       228,346       1985  
WHITING, NJ
    447,199       3,519       167,090       283,628       450,718       282,621       1989  
HILLSBOROUGH, NJ
    237,122       7,729       100,000       144,851       244,851       62,123       1985  
PRINCETON, NJ
    703,100       40,615       457,900       285,815       743,715       136,481       1985  
NEPTUNE, NJ
    455,726       39,090       293,000       201,816       494,816       101,673       1985  
NEWARK, NJ
    3,086,592       164,432       2,005,800       1,245,224       3,251,024       593,711       1985  
OAKHURST, NJ
    225,608       46,405       100,608       171,405       272,013       168,165       1985  
BELLEVILLE, NJ
    215,468       38,163       149,237       104,394       253,631       102,702       1986  
PINE HILL, NJ
    190,568       39,918       115,568       114,918       230,486       111,478       1986  
TUCKERTON, NJ
    224,387       132,864       131,018       226,233       357,251       220,876       1987  
WEST DEPTFORD, NJ
    245,450       50,295       151,053       144,692       295,745       141,520       1987  
ATCO, NJ
    153,159       85,853       131,766       107,246       239,012       106,731       1987  
SOMERVILLE, NJ
    252,717       254,230       200,500       306,447       506,947       181,360       1987  
CINNAMINSON, NJ
    326,501       24,931       176,501       174,931       351,432       172,103       1987  
RIDGEFIELD PARK, NJ
    273,549       0       150,000       123,549       273,549       80,437       1997  
BRICK, NJ
    1,507,684       0       1,000,000       507,684       1,507,684       221,418       2000  
LAKE HOPATCONG, NJ
    1,305,034       0       800,000       505,034       1,305,034       271,025       2000  
BERGENFIELD, NJ
    381,590       36,271       300,000       117,861       417,861       113,596       1990  
ORANGE, NJ
    281,200       24,573       183,100       122,673       305,773       62,409       1985  
BLOOMFIELD, NJ
    695,000       21,021       452,600       263,421       716,021       117,174       1985  
IRVINGTON, NJ
    271,200       79,011       176,600       173,611       350,211       111,024       1985  
UNION, NJ
    441,900       36,198       287,800       190,298       478,098       190,298       1985  
SCOTCH PLAINS, NJ
    331,063       14,455       214,600       130,918       345,518       60,832       1985  
NUTLEY, NJ
    433,800       48,677       282,500       199,977       482,477       106,576       1985  
PLAINFIELD, NJ
    470,100       29,975       306,100       193,975       500,075       91,060       1985  
MOUNTAINSIDE, NJ
    664,100       31,620       431,700       264,020       695,720       119,615       1985  
WATCHUNG, NJ
    449,900       20,339       293,000       177,239       470,239       80,555       1985  
GREEN VILLAGE, NJ
    277,900       44,471       127,900       194,471       322,371       189,818       1985  
IRVINGTON, NJ
    409,700       54,841       266,800       197,741       464,541       111,152       1985  
JERSEY CITY, NJ
    438,000       51,856       285,200       204,656       489,856       108,711       1985  
BLOOMFIELD, NJ
    441,900       32,951       287,800       187,051       474,851       93,201       1985  
DOVER, NJ
    606,700       30,153       395,100       241,753       636,853       111,484       1985  
PARLIN, NJ
    441,900       29,075       287,800       183,175       470,975       89,365       1985  
UNION CITY, NJ
    799,500       3,440       520,600       282,340       802,940       114,071       1985  
COLONIA, NJ
    253,100       3,395       164,800       91,695       256,495       38,422       1985  
NORTH BERGEN, NJ
    629,527       81,006       409,527       301,006       710,533       163,304       1985  
WAYNE, NJ
    490,200       21,766       319,200       192,766       511,966       88,452       1985  
HASBROUCK HEIGHTS, NJ
    639,648       19,648       416,000       243,296       659,296       105,940       1985  
COLONIA, NJ
    952,200       74,451       620,100       406,551       1,026,651       200,994       1985  
OLD BRIDGE, NJ
    319,521       24,445       204,621       139,345       343,966       69,135       1985  
RIDGEWOOD, NJ
    703,100       36,959       457,900       282,159       740,059       129,312       1985  
HAWTHORNE, NJ
    245,100       10,967       159,600       96,467       256,067       44,883       1985  
WAYNE, NJ
    474,100       42,926       308,700       208,326       517,026       108,075       1985  
WASHINGTON TOWNSHIP, NJ
    912,000       21,261       593,900       339,361       933,261       145,679       1985  
PARAMUS, NJ
    381,700       42,394       248,600       175,494       424,094       94,653       1985  
JERSEY CITY, NJ
    401,700       43,808       261,600       183,908       445,508       98,845       1985  
FORT LEE, NJ
    1,245,500       39,408       811,100       473,808       1,284,908       208,941       1985  
AUDUBON, NJ
    421,800       12,949       274,700       160,049       434,749       70,911       1985  
TRENTON, NJ
    337,500       69,461       219,800       187,161       406,961       115,775       1985  
STRATFORD, NJ
    215,597       0       1       215,596       215,597       191,217       1995  
MAGNOLIA, NJ
    329,500       26,488       214,600       141,388       355,988       72,066       1985  
BEVERLY, NJ
    470,100       24,003       306,100       188,003       494,103       86,611       1985  
PISCATAWAY, NJ
    269,200       28,232       175,300       122,132       297,432       64,047       1985  
WEST ORANGE, NJ
    799,500       34,733       520,600       313,633       834,233       145,142       1985  
ROCKVILLE CENTRE, NY
    350,325       315,779       201,400       464,704       666,104       333,404       1985  
GLENDALE, NY
    368,625       159,763       235,500       292,888       528,388       164,085       1985  
BELLAIRE, NY
    329,500       73,358       214,600       188,258       402,858       104,052       1985  

40


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
BROOKLYN, NY
    0       178,082       0       178,082       178,082       116,130       1987  
BAYSIDE, NY
    245,100       202,833       159,600       288,333       447,933       171,703       1985  
YONKERS, NY
    153,184       67,266       76,592       143,858       220,450       73,903       1987  
DOBBS FERRY, NY
    670,575       33,706       434,300       269,981       704,281       124,906       1985  
NORTH MERRICK, NY
    510,350       141,506       332,200       319,656       651,856       170,400       1985  
GREAT NECK, NY
    500,000       24,468       450,000       74,468       524,468       74,284       1985  
GLEN HEAD, NY
    462,468       45,355       300,900       206,923       507,823       108,753       1985  
GARDEN CITY, NY
    361,600       33,774       235,500       159,874       395,374       82,285       1985  
HEWLETT, NY
    490,200       85,618       319,200       256,618       575,818       114,549       1985  
EAST HILLS, NY
    241,613       21,070       241,613       21,070       262,683       19,995       1986  
YONKERS, NY
    111,300       80,000       65,000       126,300       191,300       112,853       1988  
LEVITTOWN, NY
    502,757       42,113       327,000       217,870       544,870       109,778       1985  
LEVITTOWN, NY
    546,400       113,057       355,800       303,657       659,457       151,007       1985  
ST. ALBANS, NY
    329,500       87,250       214,600       202,150       416,750       121,235       1985  
RIDGEWOOD, NY
    278,372       38,578       277,606       39,344       316,950       19,802       1986  
BROOKLYN, NY
    626,700       282,677       408,100       501,277       909,377       300,696       1985  
BROOKLYN, NY
    476,816       272,765       306,100       443,481       749,581       261,880       1985  
SYOSSET, NY
    139,686       37,407       65,982       111,111       177,093       106,979       1986  
SEAFORD, NY
    325,400       83,257       211,900       196,757       408,657       90,507       1985  
BAYSIDE, NY
    470,100       246,576       306,100       410,576       716,676       227,317       1985  
BAY SHORE, NY
    188,900       26,286       123,000       92,186       215,186       50,237       1985  
ELMONT, NY
    360,056       90,633       224,156       226,533       450,689       105,777       1985  
WHITE PLAINS, NY
    258,600       60,120       164,800       153,920       318,720       88,839       1985  
SCARSDALE, NY
    257,100       102,632       167,400       192,332       359,732       118,409       1985  
EASTCHESTER, NY
    614,700       34,500       400,300       248,900       649,200       117,693       1985  
NEW ROCHELLE, NY
    337,500       51,741       219,800       169,441       389,241       89,557       1985  
BROOKLYN, NY
    421,800       270,436       274,700       417,536       692,236       248,018       1985  
COMMACK, NY
    321,400       25,659       209,300       137,759       347,059       69,284       1985  
SAG HARBOR, NY
    703,600       36,012       458,200       281,412       739,612       133,256       1985  
EAST HAMPTON, NY
    659,127       39,313       427,827       270,613       698,440       126,359       1985  
MASTIC, NY
    313,400       110,180       204,100       219,480       423,580       153,537       1985  
BRONX, NY
    390,200       329,357       251,100       468,457       719,557       271,990       1985  
YONKERS, NY
    1,020,400       61,875       664,500       417,775       1,082,275       196,754       1985  
GLENVILLE, NY
    343,723       98,299       219,800       222,222       442,022       137,127       1985  
YONKERS, NY
    202,826       42,877       144,000       101,703       245,703       80,342       1986  
MINEOLA, NY
    341,500       34,411       222,400       153,511       375,911       80,015       1985  
ALBANY, NY
    404,888       104,378       261,600       247,666       509,266       158,087       1985  
LONG ISLAND CITY, NY
    1,646,307       259,443       1,071,500       834,250       1,905,750       483,474       1985  
ALBANY, NY
    142,312       36,831       91,600       87,543       179,143       57,208       1985  
RENSSELAER, NY
    1,653,500       514,444       1,076,800       1,091,144       2,167,944       743,203       1985  
RENSSELAER, NY
    683,781       0       286,504       397,277       683,781       65,950       2004  
PORT JEFFERSON, NY
    400,725       63,743       259,000       205,468       464,468       118,132       1985  
SALT POINT, NY
    0       554,243       301,775       252,468       554,243       83,157       1987  
ROTTERDAM, NY
    140,600       100,399       91,600       149,399       240,999       109,050       1985  
OSSINING, NY
    231,100       44,049       149,200       125,949       275,149       71,434       1985  
ELLENVILLE, NY
    233,000       53,690       151,700       134,990       286,690       81,071       1985  
CHATHAM, NY
    349,133       131,805       225,000       255,938       480,938       167,990       1985  
HYDE PARK, NY
    253,100       12,015       164,800       100,315       265,115       46,416       1985  
SHRUB OAK, NY
    1,060,700       81,807       690,700       451,807       1,142,507       220,728       1985  
NEW YORK, NY
    0       229,435       0       229,435       229,435       179,060       1985  
BROOKLYN, NY
    237,100       125,067       154,400       207,767       362,167       114,625       1985  
STATEN ISLAND, NY
    301,300       288,603       196,200       393,703       589,903       244,179       1985  
STATEN ISLAND, NY
    357,904       39,588       230,300       167,192       397,492       89,898       1985  
STATEN ISLAND, NY
    349,500       176,590       227,600       298,490       526,090       174,146       1985  
BRONX, NY
    93,817       120,396       67,200       147,013       214,213       118,146       1985  
BRONX, NY
    104,130       360,410       90,000       374,540       464,540       288,051       1985  
OZONE PARK, NY
    0       193,968       0       193,968       193,968       120,319       1986  
PELHAM MANOR, NY
    136,791       78,987       75,000       140,778       215,778       135,817       1985  
EAST MEADOW, NY
    425,000       86,005       325,000       186,005       511,005       140,863       1986  
STATEN ISLAND, NY
    389,700       88,922       253,800       224,822       478,622       138,535       1985  
MERRICK, NY
    477,498       77,925       240,764       314,659       555,423       129,461       1987  
MASSAPEQUA, NY
    333,400       53,696       217,100       169,996       387,096       98,405       1985  
TROY, NY
    225,000       60,569       146,500       139,069       285,569       80,289       1985  
BALDWIN, NY
    290,923       5,007       151,280       144,650       295,930       52,805       1986  
NEW YORK, NY
    0       605,891       0       605,891       605,891       389,383       1986  
MIDDLETOWN, NY
    751,200       166,411       489,200       428,411       917,611       205,679       1985  
OCEANSIDE, NY
    313,400       88,863       204,100       198,163       402,263       92,775       1985  
WANTAGH, NY
    261,814       85,758       175,000       172,572       347,572       117,708       1985  

41


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
NORTHPORT, NY
    241,100       33,036       157,000       117,136       274,136       65,628       1985  
BALLSTON, NY
    160,000       134,021       110,000       184,021       294,021       180,262       1986  
BALLSTON SPA, NY
    210,000       105,073       100,000       215,073       315,073       209,354       1986  
COLONIE, NY
    245,150       28,322       120,150       153,322       273,472       148,916       1986  
DELMAR, NY
    150,000       42,478       70,000       122,478       192,478       117,419       1986  
ELLENVILLE, NY
    170,000       72,869       70,000       172,869       242,869       159,204       1986  
FORT EDWARD, NY
    225,000       65,739       150,000       140,739       290,739       136,285       1986  
QUEENSBURY, NY
    225,000       105,592       165,000       165,592       330,592       159,252       1986  
GLOVERSVILLE, NY
    200,000       52,696       100,000       152,696       252,696       147,926       1986  
HALFMOON, NY
    415,000       205,598       228,100       392,498       620,598       377,964       1986  
HANCOCK, NY
    100,000       109,470       50,000       159,470       209,470       153,140       1986  
HYDE PARK, NY
    300,000       59,198       175,000       184,198       359,198       177,320       1986  
LATHAM, NY
    275,000       68,160       150,000       193,160       343,160       184,790       1986  
MALTA, NY
    190,000       91,726       65,000       216,726       281,726       207,573       1986  
MILLERTON, NY
    175,000       123,063       100,000       198,063       298,063       181,344       1986  
NEW WINDSOR, NY
    150,000       94,791       75,000       169,791       244,791       153,305       1986  
NISKAYUNA, NY
    425,000       35,421       275,000       185,421       460,421       179,119       1986  
PLEASANT VALLEY, NY
    398,497       115,129       240,000       273,626       513,626       206,528       1986  
POUGHKEEPSIE, NY
    250,000       82,485       150,000       182,485       332,485       168,976       1986  
POUGHKEEPSIE, NY
    175,000       0       175,000       0       175,000       0       1986  
QUEENSBURY, NY
    230,000       65,245       155,000       140,245       295,245       131,790       1986  
ROTTERDAM, NY
    132,287       166,077       1       298,363       298,364       233,582       1995  
SCHENECTADY, NY
    225,000       298,103       150,000       373,103       523,103       365,765       1986  
S. GLENS FALLS, NY
    325,000       58,892       225,000       158,892       383,892       158,892       1986  
TROY, NY
    175,000       65,690       75,000       165,690       240,690       155,310       1986  
HUDSON FALLS, NY
    190,000       55,750       65,000       180,750       245,750       172,503       1986  
ALBANY, NY
    206,620       87,949       81,620       212,949       294,569       205,153       1986  
NEWBURGH, NY
    430,766       25,850       150,000       306,616       456,616       295,848       1989  
RHINEBECK, NY
    203,658       0       101,829       101,829       203,658       2,376       2007  
PORT EWEN, NY
    657,147       0       176,924       480,223       657,147       11,963       2007  
CATSKILL, NY
    404,988       0       354,365       50,623       404,988       2,025       2007  
CATSKILL, NY
    321,446       0       125,000       196,446       321,446       35,872       2004  
CATSKILL, NY
    104,447       99,076       203,523       0       203,523       0       1989  
HUDSON, NY
    303,741       126,379       151,871       278,249       430,120       126,094       1989  
SAUGERTIES, NY
    328,668       63,983       328,668       63,983       392,651       59,976       1988  
GREENVILLE, NY
    77,153       105,325       77,152       105,326       182,478       97,911       1989  
QUARRYVILLE, NY
    35,917       168,199       35,916       168,200       204,116       159,600       1988  
MENANDS, NY
    150,580       60,563       49,999       161,144       211,143       145,399       1988  
BREWSTER, NY
    302,564       44,393       142,564       204,393       346,957       199,534       1988  
VALATIE, NY
    165,590       394,981       90,829       469,742       560,571       397,496       1989  
CAIRO, NY
    191,928       142,895       46,650       288,173       334,823       277,752       1988  
RED HOOK, NY
    0       226,787       0       226,787       226,787       218,159       1991  
WEST TAGHKANIC, NY
    202,750       117,540       121,650       198,640       320,290       131,203       1986  
RAVENA, NY
    0       199,900       0       199,900       199,900       190,640       1991  
SAYVILLE, NY
    528,225       0       300,000       228,225       528,225       85,965       1998  
WANTAGH, NY
    640,680       0       370,200       270,480       640,680       101,878       1998  
CENTRAL ISLIP, NY
    572,244       0       357,500       214,744       572,244       80,777       1998  
FLUSHING, NY
    516,110       0       320,125       195,985       516,110       73,650       1998  
NORTH LINDENHURST, NY
    341,530       0       192,000       149,530       341,530       56,237       1998  
WYANDANCH, NY
    453,131       0       279,500       173,631       453,131       65,252       1998  
NEW ROCHELLE, NY
    415,180       0       251,875       163,305       415,180       61,180       1998  
FLORAL PARK, NY
    616,700       0       356,400       260,300       616,700       97,916       1998  
RIVERHEAD, NY
    723,346       0       431,700       291,646       723,346       109,708       1998  
AMHERST, NY
    223,009       0       173,451       49,558       223,009       26,689       2000  
BUFFALO, NY
    312,426       0       150,888       161,538       312,426       65,591       2000  
GRAND ISLAND, NY
    350,849       0       247,348       103,501       350,849       49,835       2000  
HAMBURG, NY
    294,031       0       163,906       130,125       294,031       43,808       2000  
LACKAWANNA, NY
    250,030       0       129,870       120,160       250,030       50,543       2000  
LEWISTON, NY
    205,000       0       125,000       80,000       205,000       26,933       2000  
TONAWANDA, NY
    189,296       0       147,122       42,174       189,296       14,199       2000  
TONAWANDA, NY
    304,762       11,493       211,337       104,918       316,255       35,324       2000  
WEST SENECA, NY
    257,142       0       184,385       72,757       257,142       24,500       2000  
WILLIAMSVILLE, NY
    211,972       0       176,643       35,329       211,972       11,893       2000  
ALFRED STATION , NY
    714,108       0       414,108       300,000       714,108       22,000       2006  
AVOCA, NY
    935,543       0       634,543       301,000       935,543       22,000       2006  
BATAVIA, NY
    684,279       0       364,279       320,000       684,279       23,467       2006  
BYRON, NY
    969,117       0       669,117       300,000       969,117       22,000       2006  
CASTILE, NY
    307,196       0       132,196       175,000       307,196       12,833       2006  

42


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
CHURCHVILLE, NY
    1,011,381       0       601,381       410,000       1,011,381       30,067       2006  
EAST PEMBROKE, NY
    787,465       0       537,465       250,000       787,465       18,333       2006  
FRIENDSHIP, NY
    392,517       0       42,517       350,000       392,517       25,667       2006  
NAPLES , NY
    1,257,487       0       827,487       430,000       1,257,487       31,533       2006  
ROCHESTER , NY
    559,049       0       159,049       400,000       559,049       29,333       2006  
PERRY      , NY
    1,443,847       0       1,043,847       400,000       1,443,847       29,333       2006  
PRATTSBURG      , NY
    553,136       0       303,136       250,000       553,136       18,333       2006  
SAVONA , NY
    1,314,135       0       964,136       349,999       1,314,135       25,667       2006  
WARSAW , NY
    990,259       0       690,259       300,000       990,259       22,000       2006  
WELLSVILLE, NY
    247,281       0       0       247,281       247,281       18,134       2006  
ROCHESTER      , NY
    823,031       0       273,031       550,000       823,031       40,722       2006  
PHILADELPHIA, PA
    687,000       25,017       447,400       264,617       712,017       117,343       1985  
PHILADELPHIA, PA
    237,100       205,495       154,400       288,195       442,595       167,882       1985  
ALLENTOWN, PA
    357,500       76,385       232,800       201,085       433,885       101,980       1985  
NORRISTOWN, PA
    241,300       78,419       157,100       162,619       319,719       83,151       1985  
BRYN MAWR, PA
    221,000       59,832       143,900       136,932       280,832       85,216       1985  
CONSHOHOCKEN, PA
    261,100       77,885       170,000       168,985       338,985       104,642       1985  
PHILADELPHIA, PA
    281,200       34,285       183,100       132,385       315,485       71,000       1985  
HUNTINGDON VALLEY, PA
    421,800       36,439       274,700       183,539       458,239       92,731       1985  
FEASTERVILLE, PA
    510,200       160,144       332,200       338,144       670,344       204,281       1985  
PHILADELPHIA, PA
    285,200       65,498       185,700       164,998       350,698       99,044       1985  
PHILADELPHIA, PA
    289,300       50,010       188,400       150,910       339,310       87,342       1985  
PHILADELPHIA, PA
    405,800       221,269       264,300       362,769       627,069       231,421       1985  
PHILADELPHIA, PA
    417,800       210,406       272,100       356,106       628,206       192,146       1985  
PHILADELPHIA, PA
    369,600       276,720       240,700       405,620       646,320       255,950       1985  
HATBORO, PA
    285,200       61,979       185,700       161,479       347,179       99,185       1985  
HAVERTOWN, PA
    402,000       22,660       253,800       170,860       424,660       88,868       1985  
MEDIA, PA
    326,195       24,082       191,000       159,277       350,277       97,062       1985  
PHILADELPHIA, PA
    389,700       28,006       253,800       163,906       417,706       81,213       1985  
MILMONT PARK, PA
    343,093       32,840       222,400       153,533       375,933       80,830       1985  
PHILADELPHIA, PA
    341,500       224,647       222,400       343,747       566,147       197,907       1985  
ALDAN, PA
    281,200       45,539       183,100       143,639       326,739       78,959       1985  
BRISTOL, PA
    430,500       82,981       280,000       233,481       513,481       137,045       1985  
TREVOSE, PA
    215,214       16,382       150,000       81,596       231,596       67,072       1987  
HAVERTOWN, PA
    265,200       24,500       172,700       117,000       289,700       57,984       1985  
ABINGTON, PA
    309,300       43,696       201,400       151,596       352,996       83,283       1985  
HATBORO, PA
    289,300       61,371       188,400       162,271       350,671       97,395       1985  
CLIFTON HGTS., PA
    428,201       63,403       256,400       235,204       491,604       149,320       1985  
ALDAN, PA
    433,800       21,152       282,500       172,452       454,952       79,483       1985  
SHARON HILL, PA
    411,057       39,574       266,800       183,831       450,631       96,659       1985  
MEDIA, PA
    474,100       5,055       308,700       170,455       479,155       70,665       1985  
ROSLYN, PA
    349,500       173,661       227,600       295,561       523,161       210,173       1985  
CLIFTON HGTS, PA
    213,000       46,824       138,700       121,124       259,824       72,485       1985  
PHILADELPHIA, PA
    369,600       273,642       240,700       402,542       643,242       276,600       1985  
MORRISVILLE, PA
    377,600       33,522       245,900       165,222       411,122       84,476       1985  
PHILADELPHIA, PA
    302,999       220,313       181,497       341,815       523,312       273,401       1985  
PHOENIXVILLE, PA
    413,800       17,561       269,500       161,861       431,361       74,314       1985  
LANGHORNE, PA
    122,202       69,328       50,000       141,530       191,530       93,449       1987  
POTTSTOWN, PA
    430,000       48,854       280,000       198,854       478,854       107,257       1985  
BOYERTOWN, PA
    233,000       5,373       151,700       86,673       238,373       37,623       1985  
QUAKERTOWN, PA
    379,111       89,812       243,300       225,623       468,923       137,701       1985  
SOUDERTON, PA
    381,700       172,170       248,600       305,270       553,870       182,449       1985  
LANSDALE, PA
    243,844       200,458       243,844       200,458       444,302       111,180       1985  
FURLONG, PA
    175,300       151,150       175,300       151,150       326,450       92,940       1985  
DOYLESTOWN, PA
    405,800       32,659       264,300       174,159       438,459       87,227       1985  
WEST CHESTER, PA
    421,800       21,935       274,700       169,035       443,735       79,713       1985  
NORRISTOWN, PA
    175,300       120,786       175,300       120,786       296,086       62,548       1985  
TRAPPE, PA
    377,600       44,509       245,900       176,209       422,109       96,131       1985  
GETTYSBURG, PA
    157,602       28,530       67,602       118,530       186,132       117,711       1986  
PARADISE, PA
    132,295       151,188       102,295       181,188       283,483       132,120       1986  
LINWOOD, PA
    171,518       22,371       102,968       90,921       193,889       88,662       1987  
YORK, PA
    0       401,771       152,470       249,301       401,771       36,942       1987  
READING, PA
    750,000       49,125       0       799,125       799,125       787,082       1989  
ELKINS PARK, PA
    275,171       17,524       200,000       92,695       292,695       90,724       1990  
NEW OXFORD, PA
    1,044,707       13,500       18,687       1,039,520       1,058,207       730,286       1996  
HANOVER, PA
    108,435       417,763       108,435       417,763       526,198       410,513       1958  
GLEN ROCK, PA
    20,442       166,633       20,442       166,633       187,075       141,233       1961  
BOILING SPRINGS, PA
    14,792       167,641       14,792       167,641       182,433       147,865       1961  

43


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
NORTH KINGSTOWN, RI
    211,835       25,971       89,135       148,671       237,806       146,390       1985  
MIDDLETOWN, RI
    306,710       16,364       176,710       146,364       323,074       145,060       1987  
WARWICK, RI
    376,563       39,933       205,889       210,607       416,496       208,051       1989  
PROVIDENCE, RI
    231,372       191,647       150,392       272,627       423,019       125,730       1991  
EAST PROVIDENCE, RI
    2,297,435       568,241       1,495,700       1,369,976       2,865,676       591,659       1985  
ASHAWAY, RI
    618,609       0       402,096       216,513       618,609       27,427       2004  
EAST PROVIDENCE, RI
    309,950       49,546       202,050       157,446       359,496       88,276       1985  
PAWTUCKET, RI
    212,775       161,188       118,860       255,103       373,963       212,262       1986  
WARWICK, RI
    434,752       24,730       266,800       192,682       459,482       106,213       1985  
CRANSTON, RI
    466,100       12,576       303,500       175,176       478,676       76,401       1985  
PAWTUCKET, RI
    237,100       2,990       154,400       85,690       240,090       35,795       1985  
BARRINGTON, RI
    490,200       213,866       319,200       384,866       704,066       249,214       1985  
WARWICK, RI
    253,100       34,400       164,800       122,700       287,500       66,005       1985  
N. PROVIDENCE, RI
    542,400       61,717       353,200       250,917       604,117       135,833       1985  
EAST PROVIDENCE, RI
    486,675       13,947       316,600       184,022       500,622       80,534       1985  
WAKEFIELD, RI
    413,800       39,616       269,500       183,916       453,416       86,973       1985  
EPHRATA, PA
    183,477       96,937       136,809       143,605       280,414       117,077       1990  
DOUGLASSVILLE, PA
    178,488       23,321       154,738       47,071       201,809       44,648       1990  
POTTSVILLE, PA
    162,402       82,769       43,471       201,700       245,171       183,693       1990  
POTTSVILLE, PA
    451,360       19,361       147,740       322,981       470,721       314,869       1990  
LANCASTER, PA
    208,677       24,347       78,254       154,770       233,024       154,770       1989  
BETHLEHEM, PA
    208,677       42,927       130,423       121,181       251,604       118,613       1989  
EASTON, PA
    113,086       199,385       0       312,471       312,471       261,192       1989  
LANCASTER, PA
    642,000       17,993       300,000       359,993       659,993       359,993       1989  
HAMBURG, PA
    219,280       75,745       130,423       164,602       295,025       151,403       1989  
READING, PA
    182,592       82,812       104,338       161,066       265,404       141,779       1989  
MOUNTVILLE, PA
    195,635       19,506       78,254       136,887       215,141       136,887       1989  
EBENEZER, PA
    147,058       88,474       68,804       166,728       235,532       139,668       1989  
INTERCOURSE, PA
    311,503       81,287       157,801       234,989       392,790       92,191       1989  
REINHOLDS, PA
    176,520       83,686       82,017       178,189       260,206       147,727       1989  
COLUMBIA, PA
    225,906       13,206       75,000       164,112       239,112       134,143       1989  
OXFORD, PA
    191,449       118,321       65,212       244,558       309,770       211,165       1989  
POTTSTOWN, PA
    166,236       16,010       71,631       110,615       182,246       91,562       1989  
EPHRATA, PA
    208,604       52,826       30,000       231,430       261,430       163,225       1989  
ROBESONIA, PA
    225,913       102,802       70,000       258,715       328,715       216,202       1989  
KENHORST, PA
    143,466       94,592       65,212       172,846       238,058       149,426       1989  
NEFFSVILLE, PA
    234,761       45,637       91,296       189,102       280,398       184,238       1989  
LEOLA, PA
    262,890       102,007       131,189       233,708       364,897       95,993       1989  
EPHRATA, PA
    187,843       9,400       65,212       132,031       197,243       130,986       1989  
SHREWSBURY, PA
    132,993       126,898       52,832       207,059       259,891       169,482       1989  
RED LION, PA
    221,719       29,788       52,169       199,338       251,507       197,132       1989  
READING, PA
    129,284       137,863       65,352       201,795       267,147       158,467       1989  
ROTHSVILLE, PA
    169,550       25,188       52,169       142,569       194,738       142,569       1989  
HANOVER, PA
    231,028       13,252       70,000       174,280       244,280       151,242       1989  
LANCASTER, PA
    156,507       19,215       52,169       123,553       175,722       123,553       1989  
HARRISBURG, PA
    399,016       347,590       198,740       547,866       746,606       328,749       1989  
ADAMSTOWN, PA
    213,424       108,844       100,000       222,268       322,268       158,974       1989  
LANCASTER, PA
    308,964       83,443       104,338       288,069       392,407       267,364       1989  
NEW HOLLAND, PA
    313,015       106,839       143,465       276,389       419,854       247,086       1989  
CHRISTIANA, PA
    182,593       11,178       65,212       128,559       193,771       128,559       1989  
WYOMISSING HILLS, PA
    319,320       113,176       76,074       356,422       432,496       327,995       1989  
LAURELDALE, PA
    262,079       15,550       86,941       190,688       277,629       187,206       1989  
REIFFTON, PA
    338,250       5,295       43,470       300,075       343,545       300,075       1989  
W.READING, PA
    790,432       68,726       387,641       471,517       859,158       459,081       1989  
ARENDTSVILLE, PA
    173,759       101,020       32,603       242,176       274,779       215,783       1989  
MOHNTON, PA
    317,228       56,374       66,425       307,177       373,602       288,539       1989  
MCCONNELLSBURG, PA
    155,367       145,616       69,915       231,068       300,983       122,379       1989  
ROANOKE, VA
    91,281       206,221       0       297,502       297,502       216,994       1990  
RICHMOND, VA
    120,818       167,895       0       288,713       288,713       232,390       1990  
CHESAPEAKE, VA
    1,184,759       32,132       604,983       611,908       1,216,891       108,518       1990  
PORTSMOUTH, VA
    562,255       17,106       221,610       357,751       579,361       352,536       1990  
NORFOLK, VA
    534,910       6,050       310,630       230,330       540,960       230,330       1990  
CHESAPEAKE, VA
    883,685       26,247       325,508       584,424       909,932       577,725       1990  
ASHLAND, VA
    0       839,997       839,997       0       839,997       0       2005  
FARMVILLE, VA
    0       1,226,505       621,505       605,000       1,226,505       66,550       2005  
FREDERICKSBURG, VA
    0       1,279,280       469,280       810,000       1,279,280       89,100       2005  
FREDERICKSBURG, VA
    0       1,715,914       995,914       720,000       1,715,914       79,200       2005  
FREDERICKSBURG, VA
    0       1,289,425       798,444       490,981       1,289,425       74,338       2005  

44


 

                                                         
    Initial Cost     Cost     Gross Amount at Which             Date of  
    of Leasehold     Capitalized     Carried at Close of Period             Initial  
    or Acquisition     Subsequent                                     Leasehold or  
    Investment to     to Initial             Building and             Accumulated     Acquisition  
Description   Company (1)     Investment (1)     Land     Improvements     Total     Depreciation (2)     Investment (1)  
FREDERICKSBURG, VA
    0       3,623,228       2,828,228       795,000       3,623,228       87,450       2005  
GLEN ALLEN, VA
    0       1,036,585       411,585       625,000       1,036,585       68,750       2005  
GLEN ALLEN, VA
    0       1,077,402       322,402       755,000       1,077,402       83,050       2005  
KING GEORGE, VA
    0       293,638       293,638       0       293,638       0       2005  
KING WILLIAM, VA
    0       1,687,540       1,067,540       620,000       1,687,540       68,200       2005  
MECHANICSVILLE, VA
    0       1,124,769       504,769       620,000       1,124,769       68,200       2005  
MECHANICSVILLE, VA
    0       902,892       272,892       630,000       902,892       69,300       2005  
MECHANICSVILLE, VA
    0       1,476,043       876,043       600,000       1,476,043       66,000       2005  
MECHANICSVILLE, VA
    0       957,418       324,158       633,260       957,418       104,887       2005  
MECHANICSVILLE, VA
    0       193,088       193,088       0       193,088       0       2005  
MECHANICSVILLE, VA
    0       1,677,065       1,157,065       520,000       1,677,065       57,200       2005  
MECHANICSVILLE, VA
    0       1,042,870       222,870       820,000       1,042,870       90,200       2005  
MONTPELIER, VA
    0       2,480,686       1,725,686       755,000       2,480,686       83,050       2005  
PETERSBURG, VA
    0       1,441,374       816,374       625,000       1,441,374       68,750       2005  
RICHMOND, VA
    0       1,131,878       546,878       585,000       1,131,878       64,350       2005  
RUTHER GLEN, VA
    0       466,341       31,341       435,000       466,341       47,850       2005  
SANDSTON, VA
    0       721,651       101,651       620,000       721,651       68,200       2005  
SPOTSYLVANIA, VA
    0       1,290,239       490,239       800,000       1,290,239       88,000       2005  
CHESAPEAKE, VA
    1,026,115       7,149       407,026       626,238       1,033,264       624,350       1990  
BENNINGTON, VT
    309,300       154,480       201,400       262,380       463,780       137,045       1985  
JACKSONVILLE, FL
    559,514       0       296,434       263,080       559,514       88,568       2000  
JACKSONVILLE, FL
    485,514       0       388,434       97,080       485,514       32,681       2000  
JACKSONVILLE, FL
    196,764       0       114,434       82,330       196,764       27,716       2000  
JACKSONVILLE, FL
    201,477       0       117,907       83,570       201,477       28,136       2000  
JACKSONVILLE, FL
    545,314       0       256,434       288,880       545,314       97,254       2000  
ORLANDO, FL
    867,515       0       401,435       466,080       867,515       156,911       2000  
Miscellaneous Investments
    9,742,674       14,270,203       5,479,775       18,533,101       24,012,877       16,394,187          
             
 
    $362,770,408       $111,483,960       $222,193,997       $252,060,371       $474,254,368       $122,465,302          
             
 
(1)   Initial cost of leasehold or acquisition investment to company represents the aggregate of the cost incurred during the year in which the company purchased the property for owned properties or purchased a leasehold interest in leased properties. Cost capitalized subsequent to initial investment also includes investments made in previously leased properties prior to their acquisition.
 
(2)   Depreciation of real estate is computed on the straight-line method based upon the estimated useful lives of the assets, which generally range from sixteen to twenty-five years for buildings and improvements, or the term of the lease if shorter. Leasehold interests are amortized over the remaining term of the underlying lease. (3) The aggregate cost for federal income tax purposes was approximately $372,633,000 at December 31, 2007.

45


 

EXHIBIT INDEX
GETTY REALTY CORP.
Annual Report on Form 10-K
for the year ended December 31, 2007
         
EXHIBIT NO.   DESCRIPTION    
2.1
  Agreement and Plan of Reorganization and Merger, dated as of December 16, 1997 (the “Merger Agreement”) by and among Getty Realty Corp., Power Test Investors Limited Partnership and CLS General Partnership Corp.   Filed as Exhibit 2.1 to Company’s Registration Statement on Form S-4, filed on January 12, 1998 (File No. 333-44065), included as Appendix A To the Joint Proxy Statement/Prospectus that is a part thereof, and incorporated herein by reference.

       
3.1
  Articles of Incorporation of Getty Realty Holding Corp. (“Holdings”), now known as Getty Realty Corp., filed December 23, 1997.   Filed as Exhibit 3.1 to Company’s Registration Statement on Form S-4, filed on January 12, 1998 (File No. 333-44065), included as Appendix D. to the Joint Proxy/Prospectus that is a part thereof, and incorporated herein by reference.

       
3.2
  Articles Supplementary to Articles of Incorporation of Holdings, filed January 21, 1998.   Filed as Exhibit 3.2 to Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated herein by reference.

       
3.3
  By-Laws of Getty Realty Corp.   Filed as Exhibit 3.3 to Company’s Annual Report On Form 10-K for the year ended December 31, 2002 (File No. 001-13777) and incorporated herein by reference.

       
3.4
  Articles of Amendment of Holdings, changing its name to Getty Realty Corp., filed January 30, 1998.   Filed as Exhibit 3.4 to Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated herein by reference.

       
3.5
  Amendment to Articles of Incorporation of Holdings, filed August 1, 2001.   Filed as Exhibit 99.2 to Company’s Current Report on Form 8-K dated August 1, 2001(File No. 001-13777) and incorporated herein by reference.

       
4.1
  Dividend Reinvestment/Stock Purchase Plan.   Filed under the heading “Description of Plan” on pages 4 through 17 to Company’s Registration Statement on Form S-3D, filed on April 22, 2004 (File No.333-114730) and incorporated herein by reference.

       
10.1*
  Retirement and Profit Sharing Plan (amended and restated as of September 19, 1996), adopted by the Company on December 16, 1997.   Filed as Exhibit 10.2(b) to Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1997. (File No. 1-8059) and incorporated herein by reference.

       
10.1(a)*
  Retirement and Profit Sharing (amended and restated as of January 1, 2002), adopted by the Company on September 3, 2002.   Filed as Exhibit 10.1(a) to Company’s Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 001-13777) and incorporated herein by reference.

       
10.2*
  1998 Stock Option Plan, effective as of January 30, 1998.   Filed as Exhibit 10.1 to Company’s Registration Statement on Form S-4, filed on January 12, 1998 (File No. 333-44065), included as Appendix H to the Joint Proxy Statement/Prospectus that is a part thereof, and incorporated herein by reference.

       
10.3
  Asset Purchase Agreement among Power Test Corp. (now known as Getty Properties Corp.), Texaco Inc., Getty Oil Company and Getty Refining and Marketing Company, dated as of December 21, 1984.   Filed as Exhibit 2(a) to the Current Report on Form 8-K of Power Test Corp., filed February 19, 1985 (File No. 1-8059) and incorporated herein by reference.

       
10.4
  Assignment of Trademark Registrations   (a)

46


 

         
EXHIBIT NO.   DESCRIPTION    
10.5*
  Form of Indemnification Agreement between the Company and its directors.   Filed as Exhibit 10.15 to Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated herein by reference.

       
10.6*
  Supplemental Retirement Plan for Executives of the Company (then known as Getty Petroleum Corp.) and Participating Subsidiaries (adopted by the Company on December 16, 1997).   Filed as Exhibit 10.22 to the Annual Report on Form 10-K for the fiscal year ended January 31, 1990 (File No. 1-8059) of Getty Petroleum Corp. and incorporated herein by reference.

       
10.7*
  Form of Agreement dated December 9, 1994 between Getty Petroleum Corp. and its non-director officers and certain key employees regarding compensation upon change in control.   Filed as Exhibit 10.23 to the Annual Report on Form 10-K for the fiscal year ended January 31, 1995 (File No. 1-8059) of Getty Petroleum Corp. and incorporated herein by reference.

       
10.8*
  Form of Agreement dated as of March 7, 1996 amending Agreement dated as of December 9, 1994 between Getty Petroleum Corp. (now known as Getty Properties Corp.) and its non-director officers and certain key employees regarding compensation upon change in control (See Exhibit 10.11).   Filed as Exhibit 10.27 to the Annual Report on Form 10-K for the fiscal year ended January 31, 1996 (File No. 1-8059) of Getty Petroleum Corp. and incorporated herein by reference.

       
10.9*
  Form of letter from Getty Petroleum Corp. dated April 8, 1997, confirming that a change of control event had occurred pursuant to the change of control agreements. (See Exhibits 10.7 and 10.8).   Filed as Exhibit 10.19 to Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated herein by reference.

       
10.10*
  Form of Agreement dated March 9, 1998, from the Company to certain officers and key employees, adopting the prior change of control agreements, as amended, and further amending those agreements. (See Exhibits 10.7, 10.8 and 10.9).   Filed as Exhibit 10.20 to Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 1998 (File No. 001-13777) and incorporated and incorporated herein by reference.