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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NVhhr/x0F6Owl+VltPbntXv1Dn/jQXup/v3pt1vRuBKgoRXC6eRx+ztwjXlJRddK 16XHwRR2bzskhqrB0lttLA== 0000950137-08-003801.txt : 20080317 0000950137-08-003801.hdr.sgml : 20080317 20080317172832 ACCESSION NUMBER: 0000950137-08-003801 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20071231 FILED AS OF DATE: 20080317 DATE AS OF CHANGE: 20080317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GETTY REALTY CORP /MD/ CENTRAL INDEX KEY: 0001052752 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 113412575 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13777 FILM NUMBER: 08694178 BUSINESS ADDRESS: STREET 1: 125 JERICHO TURNPIKE CITY: JERICHO STATE: NY ZIP: 11753 BUSINESS PHONE: 5163382600 MAIL ADDRESS: STREET 1: 125 JERICHO TURNPIKE CITY: JERICHO STATE: NY ZIP: 11753 10-K 1 c23886e10vk.htm ANNUAL REPORT 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.

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.

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.

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

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.

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-

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

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.

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.

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.

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.

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

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 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

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.

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.

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

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

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.

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.

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.

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.

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

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

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.

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.

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

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.

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.

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.

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.

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.

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

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

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


	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


	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


	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


	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


	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


	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


	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


	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


	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


	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


	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


	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.

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)


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.

10.11	Form of Reorganization and Distribution Agreement between Getty Petroleum Corp. (now known as Getty Properties Corp.) and Getty Petroleum Marketing Inc. dated as of February 1, 1997.	Filed as Exhibit 10.29 to the Annual Report on Form 10-K for the fiscal year ended January 31, 1997 (File No. 1-8059) of Getty Petroleum Corp. and incorporated herein by reference.

10.12	Form of Tax Sharing Agreement between Getty Petroleum Corp (now known as Getty. Properties Corp.) and Getty Petroleum Marketing Inc.	Filed as Exhibit 10.32 to the Annual Report on Form 10-K for the fiscal year ended January 31, 1997 (File No. 1-8059) of Getty Petroleum Corp. and incorporated herein by reference.

10.13*	Form of Stock Option Reformation Agreement made and entered into as of March 21, 1997 by and between Getty Petroleum Corp. (now known as Getty Properties Corp.) and Getty Petroleum Marketing Inc.	Filed as Exhibit 10.33 to the Annual Report on Form 10-K for the fiscal year ended January 31, 1997 (File No. 1-8059) of Getty Petroleum Corp. and incorporated herein by reference.

10.14	Consolidated, Amended and Restated Master Lease Agreement dated November 2, 2000 between Getty Properties Corp. and Getty Petroleum Marketing Inc.	Filed as Exhibit 10.21(a) to Company’s Quarterly Report on Form 10-Q dated December 15, 2000 (File No. 001-13777) and incorporated herein by reference.

10.15	Environmental Indemnity Agreement dated November 2, 2000 between Getty Properties Corp. and Getty Petroleum Marketing Inc.	Filed as Exhibit 10.30 to Company’s Quarterly Report on Form 10-Q dated December 15, 2000 (File No. 001-13777) and incorporated herein by reference.

10.17	Amended and Restated Trademark License Agreement, dated November 2, 2000, between Getty Properties Corp. and Getty Petroleum Marketing Inc.	Filed as Exhibit 10.23(a) to Company’s Quarterly Report on Form 10-Q dated December 15, 2000 (File No. 001-13777) and incorporated herein by reference.

10.18	Trademark License Agreement, dated November 2, 2000, between Getty™ Corp. and Getty Petroleum Marketing Inc.	Filed as Exhibit 10.23(b) to Company’s Quarterly Report on Form 10-Q dated December 15, 2000 (File No. 001-13777) and incorporated herein by reference.

10.19*	2004 Getty Realty Corp. Omnibus Incentive Compensation Plan.	Filed as Appendix B to the Definitive Proxy Statement of Getty Realty Corp., filed April 9, 2004 (File No. 001-13777) and incorporated herein by reference.


EXHIBIT NO.	DESCRIPTION
10.19.1*	Form of restricted stock unit grant award under the 2004 Getty Realty Corp. Omnibus Incentive Compensation Plan.	Filed as Exhibit 10.20.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 001-13777) and incorporated herein by reference.

10.20 **	Contract for Sale and Purchase between Getty Properties Corp. and various subsidiaries of Trustreet Properties, Inc. dated as of February 6, 2007.	Filed as Exhibit 10.20 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 001-13777) and incorporated herein by reference.

10.21	Senior Unsecured Credit Agreement dated as of March 27, 2007 with J. P. Morgan Securities Inc., as sole bookrunner and sole lead arranger, the lenders referred to therein, and JPMorgan Chase Bank, N.A., as administrative agent for the lenders.	Filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 2, 2007 (File No. 001-13777) and incorporated herein by reference.

10.22*	Severance Agreement and General Release by and between Getty Realty Corp. and Andrew M. Smith effective October 31, 2007 and dated November 13, 2007.	Filed as Exhibit 10.22 to the Company’s Current Report on Form 8-K filed November 14, 2007 (File No. 001-13777) and incorporated herein by reference.

13	Annual Report to Shareholders for the fiscal year ended December 31, 2007.	(c)

14	The Getty Realty Corp. Business Conduct Guidelines (Code of Ethics).	Filed as Exhibit 14 to Company’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 001-13777) and incorporated herein by reference.

21	Subsidiaries of the Company.	(a)

23	Consent of Independent Registered Public Accounting Firm.	(a)

31(i).1	Rule 13a-14(a) Certification of Chief Financial Officer.	(b)

31(i).2	Rule 13a-14(a) Certification of Chief Executive Officer.	(b)

32.1	Section 1350 Certification of Chief Executive Officer.	(b)

32.2	Section 1350 Certification of Chief Financial Officer.	(b)


(a)		Filed herewith
(b)		Furnished herewith. These certifications are being furnished solely to accompany the Report pursuant to 18 U.S.C. Section. 1350, and are not being filed for purposes of Section 18 of the Exchange Act, and are not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

(c)		With the exception of information expressly incorporated herein by direct reference thereto, the Annual Report to Shareholders for the fiscal year ended December 31, 2007 is not deemed to be filed as part of this Annual Report on Form 10-K or incorporated therein.

*		Management contract or compensatory plan or arrangement.

**		Confidential treatment has been granted for certain portions of this Exhibit pursuant to Rule 24b-2 under the Exchange Act, which portions are omitted and filed separately with the SEC.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.


		Getty Realty Corp.
		(Registrant)
		By: /s/ Thomas J. Stirnweis

		Thomas J. Stirnweis,
		Vice President, Treasurer and
		Chief Financial Officer
		March 17, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


By: /s/ Leo Liebowitz		By: /s/ Thomas J. Stirnweis

Leo Liebowitz		Thomas J. Stirnweis
Chairman, Chief Executive		Vice President, Treasurer and
Officer and Director		Chief Financial Officer
(Principal Executive		(Principal Financial and
Officer)		Accounting Officer)
March 17, 2008		March 17, 2008

By: /s/ Milton Cooper		By: /s/ Philip E. Coviello

Milton Cooper		Philip E. Coviello
Director		Director
March 17, 2008		March 17, 2008

By: /s/ David Driscoll		By: /s/ Howard Safenowitz

David Driscoll		Howard Safenowitz
Director		Director
March 17, 2008		March 17, 2008

EX-10.4 2 c23886exv10w4.htm ASSIGNMENT OF TRADEMARK REGISTRATIONS exv10w4

Exhibit 10.4

ASSIGNMENT OF TRADEMARK REGISTRATIONS

ASSIGNMENT OF TRADEMARK REGISTRATIONS

WHEREAS, GETTY OIL COMPANY, a Delaware corporation located and doing business at 3810 Wilshire Boulevard, Los Angeles, California 90054 is the owner of the trademark registrations set forth in the annexed Schedule A; and

WHEREAS, POWER TEST CORP., a Delaware corporation located and doing business at 175 Sunnyside Boulevard, Plainview, New York 11803 is desirous of acquiring said trademark registrations and the goodwill of the business symbolized by the trademarks covered by said registrations;

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, said GETTY OIL Company, does herby assign unto said POWER TEST CORP. all right, title and interest in and to the trademark registrations identified in the annexed Schedule A together with the goodwill of the business symbolized by the trademarks covered by said registrations.

This Agreement is executed at White Plains, New York, this 11^th day of July, 1985.


	GETTY OIL COMPANY
	By:	/s/ William C. Weitzel Jr.
		President


Attest:

By:		/s/ Carl B. Davidson Secretary

Schedule A

Trademark Registrations


			Registration		Expiration
Description	Number		Date		Date
Getty and design		947,471		11-21-72		11-21-92
G and design		957,175		4-17-73		4-17-93
Getty		958,055		5-1-73		5-1-93
Getty Premium		915,523		6-22-71		6-22-91
Getty Premium		1,030,492		1-20-76		1-20-96
Super-GO		650,780		8-27-57		8-27-97
Super G/O		878,221		10-7-69		10-7-89
Getty Economart		1,312,638		1-1-85		1-1-2005

EX-13 3 c23886exv13.htm ANNUAL REPORT TO SHAREHOLDERS exv13

EXHIBIT 13
GETTY REALTY CORP. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(in thousands, except per share amounts and number of properties)


	FOR THE YEARS ENDED DECEMBER 31,
	2007 (a)			2006			2005			2004			2003
OPERATING DATA:
Revenues from rental properties	$	78,462		$	71,904		$	70,881		$	65,850		$	66,144
Earnings before income taxes and discontinued operations		28,103	(e)		41,620			43,573			38,996			36,656
Income tax benefit		—			700	(b)		1,494	(b)		—			—

Earnings from continuing operations		28,103			42,320			45,067			38,996			36,656
Earnings from discontinued operations		5,791			405			381			356			231

Net earnings		33,894			42,725			45,448			39,352			36,887
Diluted earnings per common share:
Earnings from continuing operations		1.13			1.71			1.82			1.59			1.48	(c)
Net earnings		1.37			1.73			1.84			1.59			1.49	(c)
Diluted weighted-average common shares outstanding		24,787			24,759			24,729			24,721			23,082
Cash dividends declared per share:
Common		1.850			1.820			1.760			1.700			1.675
Preferred		—			—			—			—			1.159	(d)
FUNDS FROM OPERATIONS (e)(f):
Net earnings		33,894			42,725			45,448			39,352			36,887
Preferred stock dividends		—			—			—			—			(2,538	)

Net earnings applicable to common shareholders		33,894			42,725			45,448			39,352			34,349
Depreciation and amortization of real estate assets		9,794			7,883			8,113			7,490			8,411
Gains on dispositions of real estate		(6,179	)		(1,581	)		(1,309	)		(618	)		(928	)
Cumulative effect of accounting change		—			—			—			—			550	(g)

Funds from operations available to common shareholders		37,509			49,027			52,252			46,224			42,382
Deferred rental revenue, net of allowance (straight-line rent)		7,382			(3,010	)		(4,170	)		(4,464	)		(5,537	)
Amortization of above-market and below-market leases		(1,047	)		—			—			—			—
Income tax benefit		—			(700	) (b)		(1,494	) (b)		--			—

Adjusted Funds From Operations available to common shareholders		43,844			45,317			46,588			41,760			36,845

(continued)

GETTY REALTY CORP. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(in thousands, except per share amounts and number of properties)


	FOR THE YEARS ENDED DECEMBER 31,
	2007 (a)		2006		2005		2004		2003
BALANCE SHEET DATA (AT END OF YEAR):
Real estate before accumulated depreciation and amortization	$	474,254	$	383,558	$	370,495	$	346,590	$	318,222
Total assets		396,911		310,922		301,468		292,088		273,596
Debt		132,500		45,194		34,224		24,509		844
Shareholders’ equity		212,178		225,575		227,883		225,503		228,025

NUMBER OF PROPERTIES:
Owned		880		836		814		795		772
Leased		203		216		241		250		256

Total properties		1,083		1,052		1,055		1,045		1,028


(a)		Includes (from the date of the acquisition) the effect of the $84.6 million acquisition of convenience stores and gas station properties from FF-TSY Holding Company II LLC (successor to Trustreet Properties, Inc.) which was substantially completed by the end of the first quarter of 2007.

(b)		The years ended 2006 and 2005 include income tax benefits recognized due to the elimination of, or reduction in, amounts accrued for uncertain tax positions related to being taxed as a C-corp. prior to our election to be treated as a REIT under the federal income tax laws in 2001. Income taxes have not had a significant impact on our earnings since we first elected to be treated as a REIT.

(c)		Diluted earnings per common share of $1.51 before the impact of the cumulative effect of accounting change (see note (f) below).

(d)		In August 2003, we called for redemption of our outstanding preferred stock. Prior to the September 24, 2003 redemption date, shareholders with 98% of the preferred stock exercised their right to convert their shares of preferred stock into 3.2 million shares of common stock. The remaining shares of outstanding preferred stock were redeemed for an aggregate amount of $1.2 million.

(e)		Includes the effect of a $10.5 million non-cash reserve for the full amount of the deferred rent receivable recorded as of December 31, 2007 related to approximately 40% of the properties under leases with our primary tenant, Getty Petroleum Marketing, Inc. (See recent developments related to Marketing and the Marketing Leases in “Recent Developments” above for additional information.)

(f)		In addition to measurements defined by generally accepted accounting principles (“GAAP”), our management also focuses on funds from operations available to common shareholders (“FFO”) and adjusted funds from operations available to common shareholders (“AFFO”) to measure our performance. FFO is generally considered to be an appropriate supplemental non-GAAP measure of the performance of real estate investment trusts (“REITs”). FFO is defined by the National Association of Real Estate Investment Trusts as net earnings before depreciation and amortization of real estate assets, gains or losses on dispositions of real estate, (including such non-FFO items reported in discontinued operations), extraordinary items, and cumulative effect of accounting change. Other REITs may use definitions of FFO and/or AFFO that are different than ours and; accordingly, may not be comparable. We believe that FFO is helpful to investors in measuring our performance because FFO excludes various items included in GAAP net earnings that do not relate to, or are not indicative of, our fundamental operating performance such as gains or losses from property dispositions and depreciation and amortization of real estate assets. In our case, however, GAAP net earnings and FFO include the significant impact of deferred rental revenue (straight-line rental revenue) and the net amortization of above-market and below-market leases on our recognition of revenue from rental properties, as offset by the impact of related collection reserves. Deferred rental revenue results primarily from fixed rental increases scheduled under certain leases with our tenants. In accordance with GAAP, the aggregate minimum rent due over the current term of these leases is recognized on a straight-line basis rather than when the payment is due. The present value of the difference between the fair market rent and the contractual rent for in-place leases at the time properties are acquired is amortized into revenue from rental properties over the remaining lives of the in-place leases. GAAP net earnings and FFO also include income tax benefits recognized due to the elimination of, or reduction in, amounts accrued for uncertain tax positions related to being taxed as a C-corp. rather than as a REIT prior to 2001 (see note (b) above). As a result, management pays particular attention to AFFO, a supplemental non-GAAP performance measure that we define as FFO less straight-line rental revenue, net amortization of above-market and below-market leases and income tax benefit. In management’s view, AFFO provides a more accurate depiction than FFO of the impact of the scheduled rent increases under these leases, rental revenue from acquired in-place leases and our election to be treated as a REIT under the federal income tax laws beginning in 2001. Neither FFO nor AFFO represent cash generated from operating activities calculated in accordance with generally accepted accounting principles and therefore should not be considered an alternative for GAAP net earnings or as a measure of liquidity.

(g)		In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. (“SFAS”) 143, “Accounting for Asset Retirement Obligations.” SFAS 143 requires that legal obligations associated with the retirement of tangible long-lived assets be recognized at their fair value if the asset retirements obligations results from the normal operation of those assets and a reasonable estimate of fair value can be made. Due to the adoption of SFAS 143 effective January 1, 2003, accrued environmental remediation costs and recoveries from state underground storage tank funds were adjusted to their estimated fair value resulting in a one-time cumulative effect of change in accounting charge of $550,000.

GETTY REALTY CORP. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with Selected Financial Data on page 5 and 6, the consolidated financial statements and related notes and the forward-looking disclaimer language included elsewhere in this Annual Report to Shareholders.

RECENT DEVELOPMENTS

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.

We periodically receive and review Marketing’s financial statements and other financial data. We receive this information from Marketing pursuant to the terms of Master Lease. Certain of this information is not publicly available and Marketing contends that the terms of the Master Lease prohibit us from including this financial information in our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q or in our Annual Reports to Shareholders. As we had previously disclosed in our filings with the SEC, the financial performance of Marketing has been significantly deteriorating as compared to Marketing’s financial performance for prior periods that were previously presented in our filings with the SEC. Marketing’s current financial data is not publicly available. Any financial data of Marketing that we were able to provide in our periodic reports was publicly available and was derived from financial data provided by Marketing, and neither we nor our auditors were involved with the preparation of such data, and as a result, we cannot provide any assurance thereon. Additionally, our auditors were not engaged to review or audit such data. You should not rely on the selected balance sheet data or operating data related to prior years that was previously presented in our filings as representative of Marketing’s current financial condition or current results of operations.

GENERAL

Real Estate Investment Trust

We are a real estate investment trust (“REIT”) specializing in the ownership and leasing of retail motor fuel and convenience store properties and petroleum distribution terminals. We elected to be treated as a REIT under the federal income tax laws beginning January 1, 2001. As a REIT, we are not subject to federal corporate income tax on the taxable income we distribute to our shareholders. In order to continue to qualify for taxation as a REIT, we are required, among other things, to distribute at least ninety percent of our taxable income to shareholders each year.

Retail Petroleum Marketing Business

We lease or sublet our properties primarily to distributors and retailers engaged in the sale of gasoline and other motor fuel products, convenience store products and automotive repair services. These tenants 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 eight hundred ninety of our one thousand eighty-three properties on a long-term basis under a unitary Master Lease with an initial term effective through December 2015 and supplemental leases for ten properties with initial terms of varying expiration dates Marketing which was spun-off to our shareholders as a separate publicly held company in March 1997. In December 2000, Marketing was acquired by a subsidiary of Lukoil, one of the largest integrated Russian oil companies.

Marketing’s financial results depend largely on retail petroleum marketing margins and rental income from subtenants who operate their convenience stores, automotive repair service or other businesses at our properties. The petroleum marketing industry has been

and continues to be volatile and highly competitive. For information regarding factors that could adversely affect us relating to Marketing, or our other lessees, see “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K. (See recent developments related to Marketing and the Marketing Leases in “Recent Developments” above for additional information.)

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 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 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 if, when, or on what terms, such properties would be re-let or sold. The SEC did not accept our positions regarding the 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 ultimately unable to resolve this outstanding comment.

Supplemental Non-GAAP Measures

We manage our business to enhance the value of our real estate portfolio and, as a REIT, place particular emphasis on minimizing risk and generating cash sufficient to make required distributions to shareholders of at least ninety percent of our taxable income each year. In addition to measurements defined by generally accepted accounting principles (“GAAP”), our management also focuses on funds from operations available to common shareholders (“FFO”) and adjusted funds from operations available to common shareholders (“AFFO”) to measure our performance. FFO is generally considered to be an appropriate supplemental non-GAAP measure of the performance of REITs. FFO is defined by the National Association of Real Estate Investment Trusts as net earnings before depreciation and amortization of real estate assets, gains or losses on dispositions of real estate, (including such non-FFO items reported in discontinued operations), extraordinary items and cumulative effect of accounting change. Other REITs may use definitions of FFO and/or AFFO that are different than ours and; accordingly, may not be comparable.

We believe that FFO is helpful to investors in measuring our performance because FFO excludes various items included in GAAP net earnings that do not relate to, or are not indicative of, our fundamental operating performance such as gains or losses from property dispositions and depreciation and amortization of real estate assets. In our case, however, GAAP net earnings and FFO include the significant impact of deferred rental revenue (straight-line rental revenue) and the net amortization of above-market and below-market leases on our recognition of revenues from rental properties, as offset by the impact of related collection reserves. Deferred rental revenue results primarily from fixed rental increases scheduled under certain leases with our tenants. In accordance with GAAP, the aggregate minimum rent due over the current term of these leases are recognized on a straight-line basis rather than when payment is due. The present value of the difference between the fair market rent and the contractual rent for in-place leases at the time properties are acquired is amortized into revenue from rental properties over the remaining lives of the in-place leases. GAAP net earnings and FFO also include income tax benefits recognized due to the elimination of, or a net reduction in, amounts accrued for uncertain tax positions related to being taxed as a C-corp., rather than as a REIT, prior to 2001. As a result, management pays particular attention to AFFO, a supplemental non-GAAP performance measure that we define as FFO less straight-line rental revenue, net amortization of above-market and below-market leases and income tax benefit. In management’s view, AFFO provides a more accurate depiction than FFO of the impact of scheduled rent

increases under these leases, rental revenue from acquired in-place leases and our election to be treated as a REIT under the federal income tax laws beginning in 2001. Neither FFO nor AFFO represent cash generated from operating activities calculated in accordance with generally accepted accounting principles and therefore these measures should not be considered an alternative for GAAP net earnings or as a measure of liquidity. FFO and AFFO are reconciled to net earnings in Selected Financial Data on page 5 and 6.

Net earnings, earning from continuing operations and FFO for 2007 were reduced by the non-cash $10.5 million reserve for the deferred rent receivable recorded as of December 31, 2007 for approximately 40% of the properties leased to Marketing under the Marketing Leases. (See recent developments related to Marketing and the Marketing Leases in “Recent Developments” above for additional information.) If the amount of the non-cash reserve were added to our net earnings, earning from continuing operations and FFO, as compared to 2006; net earnings would have increased by $1.7 million to $44.4 million, or $1.79 per share, for the year ended December 31, 2007; earnings before discontinued operations would have decreased by $3.7 million to $38.6 million for the year ended December 31, 2007; and FFO would have decreased by $1.0 million to $48.0 million, or $1.94 per share, for the year ended December 31, 2007. We believe that these supplemental non-GAAP measures are important to assist in the analysis of our performance for 2007, as compared to 2006, exclusive of the impact of the non-cash reserve on our results of operations and are reconciled below (in thousands):


	Non-
	adjusted		Reserve		As Adjusted
Net earnings	$	33,894	$	10,494	$	44,388
Earnings from continuing operations		28,103		10,494		38,597
Funds from operations		37,509		10,494		48,003

2006 and 2007 Acquisitions

On February 28, 2006, we completed the acquisition of eighteen retail motor fuel and convenience store properties located in Western New York for approximately $13,389,000. Simultaneous with the closing on the acquisition, we entered into a triple-net lease with a single tenant for all of the properties. The lease provides for annual rentals at competitive rates and provides for escalations thereafter. The lease has an initial term of fifteen years and provides the tenant options for three renewal terms of five years each. The lease also provides that the tenant is responsible for all existing and future environmental conditions at the properties.

Effective March 31, 2007, we acquired fifty-nine convenience store and retail motor fuel properties in ten states from various subsidiaries of FF-TSY Holding Company II, LLC (the successor to Trustreet Properties, Inc.) (“Trustreet”), a subsidiary of General Electric Capital Corporation, for cash with funds drawn under our credit facility. Effective April 23, 2007, we acquired five additional properties from Trustreet. The aggregate cost of the acquisitions, including transaction costs, was approximately $84.5 million. Substantially all of the properties are triple-net leased to tenants who previously leased the properties from the seller. The leases generally provide that the tenants are responsible for substantially all existing and future environmental conditions at the properties. In addition, in 2007, we exercised our fixed price purchase option for seven leased properties, purchased two properties and redeveloped one property by purchasing land adjacent to it and building a new convenience store on the existing site.

RESULTS OF OPERATIONS

Year ended December 31, 2007 compared to year ended December 31, 2006

Revenues from rental properties increased by $6.6 million to $78.5 million for the year ended December 31, 2007, as compared to $71.9 million for 2006. We received approximately $60.0 million for 2007, and $59.8 million for 2006, from properties leased to Marketing under the Marketing Leases. We also received rent of $15.1 million for 2007 and $9.1 million for 2006 from other tenants. The increase in rent received was primarily due to rent from properties acquired in March 2007 and February 2006, and rent escalations, partially offset by the effect of dispositions of real estate. In addition, revenues from rental properties include deferred rental revenue of $2.4 million for 2007, as compared to $3.0 million for 2006, recorded as required by GAAP, related to fixed rent

increases scheduled under certain leases with tenants. The aggregate minimum rent due over the current term of these leases are recognized on a straight-line basis rather than when payment is due. Revenues from rental properties also include $1.0 million of net amortization of above-market and below-market leases due to the properties acquired in 2007. The present value of the difference between the fair market rent and the contractual rent for in-place leases at the time properties are acquired is amortized into revenue from rental properties over the remaining lives of the in-place leases.

As a result revenues from rental properties increased by $6.6 million to $78.5 million for the year ended December 21, 2007, as compared to $71.9 million for 2006.

Rental property expenses, which are primarily comprised of rent expense and real estate and other state and local taxes, were $9.4 million for 2007, as compared to $9.7 million for 2006. The decrease in rent expense was principally due to the reduction in the number of leased locations compared to the prior year.

Environmental expenses, net of estimated recoveries from state underground storage tank (“UST” or “USTs”) funds for 2007 were $8.2 million, as compared to $5.5 million for 2006. The increase was primarily due to a $1.9 million increase in change in net estimated environmental costs, and a $0.8 million increase in environmental related litigation expenses and legal fees as compared to the prior year period. The increase in the net change in estimated environmental costs was due to the increase in project scope or duration and related cost forecasts at a limited number of properties, including one site that we have agreed to remediate as part of a legal settlement with the State of New York and regulator mandated project changes at other sites. The increase in environmental related litigation expenses was due to $0.5 million of higher legal fees and $0.3 million of higher litigation loss reserves.

General and administrative expenses for 2007 were $6.7 million, as compared to $5.6 million recorded for 2006. The increase in general and administrative expenses was principally due to $0.5 million of higher employee related expenses, $0.2 million of higher professional fees and a charge of $0.1 million to insurance loss reserves recorded in 2007, as compared to a credit of $0.3 million recorded in 2006. The insurance loss reserves were established under our self funded insurance program that was terminated in 1997. Employee related expenses increased primarily due to the payment of severance in connection with the resignation of Mr. Andy Smith, the former President and Chief Legal Officer of the Company, in the fourth quarter of 2007.

Allowance for deferred rent receivable was $10.5 million for the quarter and year ended December 31, 2007. The non-cash allowance was provided since we can no longer reasonably assume that we will collect all of the rent due to us related to approximately 40% of the properties leased to Marketing for the remainder of the current terms of the Marketing Leases. (See recent developments related to Marketing and the Marketing Leases in “Recent Developments” above for additional information.)

Depreciation and amortization expense for 2007 was $9.8 million, as compared to $7.8 million for 2006. The increase was primarily due to properties acquired in 2007 and 2006, offset by the effect of dispositions of real estate and lease expirations.

As a result, total operating expenses increased by approximately $15.9 million for 2007 as compared to 2006.

Other income, net, substantially all of which is comprised of certain gains from dispositions of real estate and leasehold interests, was $1.9 million for 2007 and 2006. Gains on dispositions of real estate from discontinued operations were $4.6 million for 2007. Gain on dispositions of real estate in 2007 increased by an aggregate of $4.6 million to $6.2 million, as compared to $1.6 million for the prior year. For 2007, there were thirteen property dispositions, including six properties that were mutually agreed to be removed from the Marketing Leases prior to their scheduled lease expiration, a partial land taking under eminent domain and an increase in the awards for two takings that occurred in prior years, as compared to seven property dispositions, a total property taking and seven partial land takings recorded in the prior year period.

Interest expense was $7.8 million for 2007, as compared to $3.5 million for 2006. The increase was primarily due to increased borrowings used to finance the acquisition of properties in 2007 and 2006.

The income tax benefit of $0.7 million recorded in 2006 was recognized due to the elimination of the accrual for uncertain tax positions since management believes that the uncertainties regarding these exposures have been resolved or that it is no longer likely that the exposure will result in a liability upon review. However, the ultimate resolution of these matters may have a significant impact on our results of operations for any single fiscal year or interim period.

As a result, net earnings were $33.9 million for 2007, as compared to $42.7 million for 2006, a decrease of 20.6%, or $8.8 million. Earnings from continuing operations were $28.1 million for 2007, as compared to $42.3 million for 2006, a decrease of 33.6%, or $14.2 million. For the same period, FFO decreased by 23.5% to $37.5 million, as compared to $49.0 million for prior year period and AFFO decreased by 3.3%, or $1.5 million, to $43.8 million, as compared to $45.3 million for 2006. The decrease in FFO for 2007 was primarily due to the changes in net earnings described above but excludes a $1.9 million increase in depreciation and amortization expense and a $4.6 million increase in gains on dispositions of real estate. The decrease in AFFO for 2007 also excludes the $0.7 million decrease in income tax benefit, the $0.1 million decrease in deferred rental revenue, a $1.0 million increase in net amortization of above-market and below-market leases and the $10.5 million allowance for deferred rent receivable recorded in 2007 (which are included in net earnings and FFO but are excluded from AFFO).

Diluted earnings per share were $1.37 per share for 2007, a decrease of $0.36 per share, as compared to $1.73 per share for 2006. Diluted FFO per share for 2007 was $1.51 per share, a decrease of $0.47 per share, as compared to 2006. Diluted AFFO per share for 2007 was $1.77 per share, a decrease of $0.06 per share, as compared to 2006.

Year ended December 31, 2006 compared to year ended December 31, 2005

Revenues from rental properties increased by $1.0 million to $71.9 million for the year ended December 31, 2006, as compared to $70.9 million for 2005. We received approximately $59.8 million for 2006 and $59.3 million for 2005 from properties leased to Marketing under the Marketing Leases. We also received rent of $9.1 million for 2006, and $7.5 million for 2005, from other tenants. The increase in rent received was primarily due to rent from properties acquired in February 2006 and March 2005, and rent escalations, partially offset by the effect of dispositions of real estate. In addition, revenues from rental properties include deferred rental revenue of $3.0 million for 2006, as compared to $4.2 million in 2005, recorded as required by GAAP, related to fixed rent increases scheduled under certain leases with tenants. The aggregate minimum rent due over the current term of these leases are recognized on a straight-line basis rather than when the payment is due.

Rental property expenses, which are primarily comprised of rent expense and real estate and other state and local taxes, were $9.7 million for 2006, as compared to $11.7 million for 2005. The decrease in rental property expenses is principally due to an adjustment of $1.5 million recorded in the fourth quarter of 2005 for a change in accounting for rent expense from a contractual to a straight-line basis. The decrease in rent expense was also due to the reduction in the number of leased locations compared to the prior year.

Environmental expenses, net of estimated recoveries from state UST for 2006 were $5.5 million, as compared to $2.4 million for 2005. The increase was primarily due to a $1.2 million increase in environmental related litigation expenses and legal fees as well as a $1.8 million increase in net change in estimated environmental costs, as compared to the prior year period. Environmental related litigation expenses and legal fees were $1.4 million for 2006 compared to $0.2 million for 2005, which prior period includes a $0.6 million net reduction in environmental related litigation loss reserve estimates. Net change in estimated environmental costs increased in 2006, as compared to 2005, partially due to additional expenses resulting from the imposition by state regulators of more stringent remediation requirements for projects in the states of Massachusetts and New Jersey and an increase in rates paid for environmental remediation services.

General and administrative expenses for 2006 were $5.6 million, as compared to $4.9 million recorded for 2005. The increase in general and administrative expenses is due to higher professional fees.

Depreciation and amortization expense for 2006 was $7.8 million, as compared to $8.1 million recorded for 2005.

As a result, total operating expenses increased by approximately $1.5 million for 2006, as compared to 2005.

Other income, net was $1.9 million for 2006, as compared to $1.6 million for 2005. The increase was primarily due to $0.3 million of increased gains on dispositions of real estate.

Interest expense was $3.5 million for 2006, as compared to $1.8 million for 2005. The increase was primarily due to increased borrowings used to finance the acquisition of properties in March 2005 and February 2006. Interest expense also increased due to higher effective interest rates under our credit facilities which averaged 6.5% for 2006, as compared to 4.7% for 2005.

In April 2006, we entered into a $45.0 million LIBOR based interest rate swap, effective May 1, 2006 through June 30, 2011. The interest rate swap is intended to hedge our current exposure to market interest rate risk by effectively fixing, at 5.44%, the LIBOR component of the interest rate determined under our revolving credit agreement (described below) or future exposure to variable interest rate risk due to borrowing arrangements that may be entered into prior to the expiration of the interest rate swap.

Income tax benefit was $0.7 million for 2006, as compared to $1.5 million for the prior year period. The tax benefit of $0.7 million recorded in 2006 was recognized due to the elimination of the accrual for uncertain tax positions since management believes that the uncertainties regarding these exposures have been resolved or that it is no longer likely that the exposure will result in a liability upon review. However, the ultimate resolution of these matters may have a significant impact on our results of operations for any single fiscal year or interim period.

During the fourth quarter of 2005, we recorded a reduction in net earnings of $1.4 million as a result of adjustments which should have been recorded in prior years and are included in the results of operations for 2005 discussed herein. The adjustments consisted of a $0.1 million of rental income for lease terminations and $1.5 million of rent expense for a change in accounting for rent expense from a contractual to a straight-line basis. We believe that these adjustments are not material to any previously issued financial statements and that the impacts of recording these adjustments are not material, individually or in the aggregate, to the year ended December 31, 2005.

As a result, net earnings were $42.7 million for 2006, a decrease of 6.0%, or $2.7 million, as compared to $45.4 million for the comparable prior year period. Net earnings from continuing operations were $42.3 million for 2006, as compared to $45.1 million for 2005, a decrease of 6.2%, or $2.8 million. For the same period, FFO decreased by 6.2%, or $3.2 million, to $49.0 million and AFFO decreased by 2.7%, or $1.2 million, to $45.3 million. The decreases in FFO and AFFO were primarily due to the changes in net earnings from continuing operations described above but include discontinued operations and exclude the aggregate improvement in earnings of $0.5 million due to lower depreciation expense and higher gains on dispositions of properties. FFO decreased more then AFFO on both a dollar and percentage basis due to a $2.0 million aggregate decrease in deferred rental revenue and income tax benefit (which are included in net earnings and FFO but are excluded from AFFO) recorded for 2006, as compared to 2005.

Diluted earnings per share for 2006 was $1.73 per share a decrease of $0.11 per share, or 6.0%, as compared to 2005. Diluted FFO per share for 2006 was $1.98 per share, a decrease of $0.13 per share, or 6.2 %, as compared to 2005. Diluted AFFO per share for 2006 was $1.83 per share, a decrease of $0.05 per share, or 2.7%, as compared to 2005.

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity are the cash flows from our business, funds available under a revolving credit agreement that expires in 2011 and available cash and cash equivalents. Management believes that our operating cash needs for the next twelve months can be met by cash flows from operations, borrowings under our credit agreement and available cash and cash equivalents. The recent disruption in the credit markets and the resulting impact on the availability of funding generally may limit our access to one or more funding sources. In addition, we expect that the costs associated with any additional borrowings we may undertake may be adversely impacted, as compared to such costs prior to the disruption of the credit markets.

On March 27, 2007, we entered into an amended and restated senior unsecured revolving credit agreement (the “Credit Agreement”) with a group of domestic commercial banks (the “Bank Syndicate”). The Credit Agreement, among other items, increases the aggregate amount of our credit facility by $75,000,000 to $175,000,000; reduces the interest rate margin on LIBOR based borrowings by 0.25% and extends the term of the Credit Agreement from July 2008 to March 2011. The Credit Agreement does not provide for scheduled reductions in the principal balance prior to its maturity. The Credit Agreement permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.0% or 0.25% or a LIBOR rate plus a margin of 1.0%, 1.25% or 1.5%. The applicable margin is based on our leverage ratio, as defined in the Credit Agreement. Based on our leverage ratio as of December 31, 2007, the applicable margin is 0.0% for base rate borrowings and 1.25% for LIBOR rate borrowings. The benefit of the 0.25% reduction in the interest rate margin effective with the amendment of the Credit Agreement was offset by the increase in our leverage ratio caused by an increase in our outstanding borrowings used for the Trustreet acquisition, resulting in no net change in the LIBOR rate margin.

Subject to the terms of the Credit Agreement, we have the option to extend the term of the Credit Agreement for one additional year and/or increase the amount of the credit facility available pursuant to the Credit Agreement by $125,000,000 to $300,000,000, subject to approval by our Board of Directors and the Bank Syndicate. The annual commitment fee on the unused Credit Agreement ranges from 0.10% to 0.20% based on the average amount of borrowings outstanding. The Credit Agreement contains customary terms and conditions, including customary financial covenants such as leverage and coverage ratios and other customary covenants, including limitations on our ability to incur debt and pay dividends and maintenance of tangible net worth, and events of default, including change of control and failure to maintain REIT status. A material adverse effect on our business, assets, prospects or condition, financial or otherwise, would also result in an event of default. Any event of default, if not cured or waived, could result in the acceleration of all of our indebtedness under our Credit Agreement.

In April 2006, we entered into a $45.0 million LIBOR based interest rate swap, effective May 1, 2006 through June 30, 2011. The interest rate swap is intended to hedge our current exposure to market interest rate risk by effectively fixing, at 5.44%, the LIBOR component of the interest rate determined under our existing credit agreement or future exposure to variable interest rate risk due to borrowing arrangements that may be entered into prior to the expiration of the interest rate swap. As of December 31, 2007, $45.0 million of our LIBOR based borrowings under the Credit Agreement bear interest at an effective rate of 6.69%.

Total borrowings outstanding under the Credit Agreement at December 31, 2007 were $132.5 million, bearing interest at an average effective rate of 6.37% per annum. Accordingly, we had $42.5 million available under the terms of the Credit Agreement as of December 31, 2007, or $167.5 million available assuming the exercise of our right to increase the credit agreement by $125.0 million. The increases in our borrowings outstanding during 2007 and 2006 relate primarily to borrowings used to fund acquisitions.

Since we generally lease our properties on a triple-net basis and we do not capitalize environmental remediation equipment, we do not incur significant capital expenditures other than those related to acquisitions. Capital expenditures, including acquisitions, for 2007, 2006 and 2005 amounted to $90.6 million, $15.5 million and $29.6 million, respectively.

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. We cannot accurately predict how periods of illiquidity in the credit markets, such as current market conditions, will impact our access to capital.

We elected to be treated as a REIT under the federal income tax laws with the year beginning January 1, 2001. As a REIT, we are required, among other things, to distribute at least ninety percent of our taxable income to shareholders each year. Payment of dividends is subject to market conditions, our financial condition and other factors, and therefore cannot be assured. In particular, our Credit Agreement prohibits the payment of dividends during certain events of default. Dividends paid to our shareholders aggregated $45.7 million, $44.8 million and $43.0 million for 2007, 2006 and 2005, respectively, and were paid on a quarterly basis during each of those years. We presently intend to pay common stock dividends of $0.465 per share each quarter ($1.86 per share, or $46.1 million, on an annual basis), and commenced doing so with the quarterly dividend declared in May 2007. Due to the recent developments related to Marketing and the Marketing Leases discussed above, there is no assurance that we will be able to continue to pay dividends at the rate of $0.465 per share per quarter, if at all.

CONTRACTUAL OBLIGATIONS

Our significant contractual obligations and commitments are comprised of borrowings under the Credit Agreement, operating lease payments due to landlords and estimated environmental remediation expenditures, net of estimated recoveries from state UST funds. In addition, as a REIT we are required to pay dividends equal to at least ninety percent of our taxable income in order to continue to qualify as a REIT. Our contractual obligations and commitments as of December 31, 2007 are summarized below (in thousands):


													MORE
				LESS			ONE TO			THREE TO			THAN
				THAN ONE			THREE			FIVE			FIVE
	TOTAL			YEAR			YEARS			YEARS			YEARS
Operating leases	$	29,373		$	8,034		$	11,329		$	5,563		$	4,447
Borrowing under the Credit Agreement (a)		132,500			—			132,500			—			—
Estimated environmental remediation expenditures (b)		18,523			7,113			6,987			2,453			1,970
Estimated recoveries from state underground storage tank funds (b)		(4,652	)		(1,228	)		(1,859	)		(1,047	)		(518	)

Estimated net environmental remediation expenditures (b)		13,871			5,885			5,128			1,406			1,452

Total	$	175,744		$	13,919		$	148,957		$	6,969		$	5,899


(a)		Excludes related interest payments. See “Liquidity and Capital Resources” above and “Disclosures About Market Risk” below.

(b)		Estimated environmental remediation expenditures and estimated recoveries from state UST funds have been adjusted for inflation and discounted to present value.

Generally, the leases with our tenants are “triple-net” leases, with the tenant responsible for the payment of taxes, maintenance, repair, insurance, environmental remediation and other operating expenses. We estimate that Marketing makes annual real estate tax payments for properties leased under the Marketing Leases of approximately $12.0 million and makes additional payments for other operating expenses related to our properties, including environmental remediation costs other than those liabilities that were retained by us. These costs are not reflected in our consolidated financial statements. (See recent developments related to Marketing and the Marketing Leases in “Recent Developments” above for additional information.)

We have no significant contractual obligations not fully recorded on our consolidated balance sheets or fully disclosed in the notes to our consolidated financial statements. We have no off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the Exchange Act.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The consolidated financial statements included in this Annual Report include the accounts of Getty Realty Corp. and our wholly-owned subsidiaries. The preparation of financial statements in accordance with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in its financial statements. Although we have made our best estimates, judgments and assumptions regarding future uncertainties relating to the information included in our financial statements, giving due consideration to the accounting policies selected and materiality, actual results could differ from these estimates, judgments and assumptions. We do not believe that there is a great likelihood that materially different amounts would be reported related to the application of the accounting policies described below.

Estimates, judgments and assumptions underlying the accompanying 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 and exposure to uncertain tax positions. The information included in our financial statements that is based on estimates, judgments and assumptions is subject to significant change and is adjusted as circumstances change and as the uncertainties become more clearly defined. Our accounting policies are described in Note 1 of Notes to Consolidated Financial Statements. We believe the following are our critical accounting policies:

Revenue recognition — We earn revenue primarily from operating leases with Marketing and other tenants. We recognize income under the Master Lease with Marketing, and with other tenants, on the straight-line method, which effectively recognizes contractual lease payments evenly over the current term of the leases. The present value of the difference between the fair market rent and the contractual rent for in-place leases at the time properties are acquired is amortized into revenue from rental properties over the remaining lives of the in-place leases. A critical assumption in applying the straight-line accounting method is that the tenant will make all contractual lease payments during the current lease term and that the deferred rent receivable of $24.9 million recorded as of December 31, 2007 will be collected when the payment is due, in accordance with the annual rent escalations provided for in the leases. Historically our tenants have generally made rent payments when due. However, we may be required to reverse, or provide reserves for, a portion of the recorded deferred rent receivable if it becomes apparent that a property may be disposed of before the end of the current lease term or if circumstances indicate that the tenant may not make all of its contractual lease payments when due during the current term of the lease. (See recent developments related to Marketing and the Marketing Leases in “Recent Developments” above for additional information.)

Impairment of long-lived assets — Real estate assets represent “long-lived” assets for accounting purposes. We review the recorded value of long-lived assets for impairment in value whenever any events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We may become aware of indicators of potentially impaired assets upon tenant or landlord lease renewals, upon receipt of notices of potential governmental takings and zoning issues, or upon other events that occur in the normal course of business that would cause us to review the operating results of the property. We believe our real estate assets are not carried at amounts in excess of their estimated net realizable fair value amounts.

Income taxes — Our financial results generally do not reflect provisions for current or deferred federal income taxes since we elected to be treated as a REIT under the federal income tax laws effective January 1, 2001. Our intention is to operate in a manner that will allow us to continue to be treated as a REIT and, as a result, we do not expect to pay substantial corporate-level federal income taxes. Many of the REIT requirements, however, are highly technical and complex. If we were to fail to meet the requirements, we may be subject to federal income tax, excise taxes, penalties and interest or we may have to pay a deficiency dividend to eliminate any earnings and profits that were not distributed. Certain states do not follow the federal REIT rules and we have included provisions for these taxes in rental property expenses.

Environmental costs and recoveries from state UST funds — We provide for the estimated fair value of future environmental remediation costs when it is probable that a liability has been incurred and a reasonable estimate of fair value can be made (see “Environmental Matters” below). Environmental liabilities and related recoveries are measured based on their expected future cash flows which have been adjusted for inflation and discounted to present value. Since environmental exposures are difficult to assess and estimate and knowledge about these liabilities is not known upon the occurrence of a single event, but rather is gained over a continuum of events, we believe that it is appropriate that our accrual estimates are adjusted as the remediation treatment progresses, as circumstances change and as environmental contingencies become more clearly defined and reasonably estimable. A critical assumption in accruing for these liabilities is that the state environmental laws and regulations will be administered and enforced in the future in a manner that is consistent with past practices. Recoveries of environmental costs from state UST remediation funds, with respect to past and future spending, are accrued as income, net of allowance for collection risk, based on estimated recovery rates developed from our experience with the funds when such recoveries are considered probable. A critical assumption in accruing for these recoveries is that the state UST fund programs will be administered and funded in the future in a manner that is consistent with past practices and that future environmental spending will be eligible for reimbursement at historical rates under these programs. We accrue environmental liabilities based on our share of responsibility as defined in our lease contracts with our tenants or if circumstances indicate that the tenant may not have the financial resources to pay its share of the costs. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in adjustments to the amounts recorded for environmental litigation accruals, environmental remediation liabilities and related assets. (See recent developments related to Marketing and the Marketing Leases in “Recent Developments” above for additional information.) We may ultimately be responsible to directly pay for environmental liabilities as the property owner if Marketing fails to pay them. In certain environmental matters the effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists both in terms of the probability of loss and the estimate of such loss. The ultimate liabilities resulting from such lawsuits and claims, if any, may be material to our results of operations in the period in which they are recognized.

Litigation — Legal fees related to litigation are expensed as legal services are performed. We provide for litigation reserves, including certain environmental litigation (see “Environmental Matters” below), when it is probable that a liability has been incurred and a reasonable estimate of the liability can be made. If the best estimate of the liability can only be identified as a range, and no amount within the range is a better estimate than any other amount, the minimum of the range is accrued for the liability.

New Accounting Pronouncements — In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides guidance for using fair value to measure assets and liabilities. SFAS 157 generally applies whenever other standards require assets or liabilities to be measured at fair value. SFAS 157 is effective in fiscal years beginning after November 15, 2007, except for non-financial assets and non-financial liabilities that are not recognized or disclosed at fair value on a recurring basis, for which the effective date is fiscal years beginning after November 15, 2008. We do not believe that the adoption of SFAS 157 will have a material impact on our financial position and results of operations.

In December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”), which establishes principles and requirements for how the acquirer shall recognize and measure in its financial statements the identifiable assets acquired, liabilities assumed, any noncontrolling interest in the acquiree and goodwill acquired in a business combination. SFAS 141(R) is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We are currently assessing the potential impact that the adoption of SFAS 141(R) will have our financial position and results of operations.

ENVIRONMENTAL MATTERS

We are subject to numerous existing federal, state and local laws and regulations, including matters relating 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, USTs and other equipment. We enter into leases and various other agreements which allocate responsibility for know and unknown environmental liabilities by establishing the percentage and method of allocating responsibility between the parties. In accordance with the leases with certain of our 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 will continue to seek reimbursement from state UST remediation funds related to these environmental liabilities where available. Generally, the liability for the retirement and decommissioning or removal of USTs and other equipment is the responsibility of our tenants. We are contingently liable for these obligations in the event that our tenants do not satisfy their responsibilities. A liability has not been accrued for obligations that are the responsibility of our tenants based on our tenant’s past history of paying such obligations and/or their financial ability to pay their share of such costs. It is possible that our assumptions regarding the ultimate allocation methods and share of responsibility that we used to allocate environmental liabilities may change, which may result in adjustments to the amounts recorded for environmental litigation accruals, environmental remediation liabilities and related assets. (See recent developments related to Marketing and the Marketing Leases in “Recent Developments” above for additional information.) We may ultimately be responsible to directly pay for environmental liabilities as the property owner if Marketing fails to pay them. 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.

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. Marketing is responsible for such costs under the terms of the Master Lease but Marketing has denied its liability for the claim 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.

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 indemnification 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 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.

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.

The estimated future costs for known environmental remediation requirements are accrued when it is probable that a liability has been incurred and a reasonable estimate of fair value can be made. Environmental liabilities and related recoveries are measured based on their expected future cash flows which have been adjusted for inflation and discounted to present value. The environmental remediation liability is estimated based on the level and impact of contamination at each property and other factors described herein. The accrued liability is the aggregate of the best estimate for the fair value of cost for each component of the liability. Recoveries of environmental costs from state UST remediation funds, with respect to both past and future environmental spending, are accrued at fair value as income, net of allowance for collection risk, based on estimated recovery rates developed from our experience with the funds when such recoveries are considered probable.

Environmental exposures are difficult to assess and estimate for numerous reasons, including the extent of contamination, alternative treatment methods that may be applied, location of the property which subjects it to differing local laws and regulations and their interpretations, as well as the time it takes to remediate contamination. In developing our liability for probable and reasonably estimable environmental remediation costs, on a property by property basis, we consider among other things, enacted laws and regulations, assessments of contamination and surrounding geology, quality of information available, currently available technologies for treatment, alternative methods of remediation and prior experience. These accrual estimates are subject to significant change, and are adjusted as the remediation treatment progresses, as circumstances change and as these contingencies become more clearly defined and reasonably estimable. 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.

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, net of recoveries from UST funds, were $4.7 million, $3.0 million and $3.5 million, respectively, for 2007, 2006 and 2005. For 2007, 2006 and 2005, the net change in estimated remediation cost and accretion expense included in our consolidated statements of operations amounted to $5.2 million, $3.3 million and $1.4 million, respectively, which amounts were net of probable recoveries from state UST remediation funds.

Environmental liabilities and related assets are currently measured at fair value based on their expected future cash flows which have been adjusted for inflation and discounted to present value. We also use probability weighted alternative cash flow forecasts to determine fair value. We assumed a 50% probability factor that the actual environmental expenses will exceed engineering estimates for an amount assumed to equal one year of net expenses aggregating $6.3 million. Accordingly, the environmental accrual as of December 31, 2007 was increased by $2.4 million, net of assumed recoveries and before inflation and present value discount adjustments. The resulting net environmental accrual as of December 31, 2007 was then further increased by $0.9 million for the assumed impact of inflation using an inflation rate of 2.75%. Assuming a credit-adjusted risk-free discount rate of 7.0%, we then reduced the net environmental accrual, as previously adjusted, by a $2.0 million discount to present value. Had we assumed an inflation rate that was 0.5% higher and a discount rate that was 0.5% lower, net environmental liabilities as of December 31, 2007 would have increased by $0.2 million and $0.1 million, respectively, for an aggregate increase in the net environmental accrual of $0.3 million. However, the aggregate net change in environmental estimates expense recorded during the year ended December 31, 2007 would not have changed significantly if these changes in the assumptions were made effective December 31, 2006.

In view of the uncertainties associated with environmental expenditures and the recent developments related to Marketing and the Marketing Leases, however, we believe it is possible that the fair value of future actual net expenditures could be substantially higher than these estimates. (See recent developments related to Marketing and the Marketing Leases in “Recent Developments” above for additional information.) Adjustments to accrued liabilities for environmental remediation costs will be reflected in our financial statements as they become probable and a reasonable estimate of fair value can be made. Future environmental costs could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.

We cannot predict what environmental legislation or regulations may be enacted in the future 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 if state UST fund programs will be administered and funded in the future in a manner that is consistent with past practices and if future environmental spending will continue to be eligible for reimbursement at historical recovery rates 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 our financial position, or that of our tenants, and could require substantial additional expenditures for future remediation.

In September 2003, we were notified by the State of New Jersey Department of Environmental Protection (the “NJDEP”) that we are one of approximately sixty potentially responsible parties for natural resource 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. Additionally, we believe that ChevronTexaco is contractually obligated to indemnify us, pursuant to an indemnification agreement for most of 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.

From October 2003 through September 2007, we were notified that we were made 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. Accordingly, our ultimate legal and financial liability, if any, cannot be estimated with any certainty at this time.

DISCLOSURES ABOUT MARKET RISK

Prior to April 2006, we had not used derivative financial or commodity instruments for trading, speculative or any other purpose, and had not entered into any instruments to hedge our exposure to interest rate risk. We do not have any foreign operations, and are therefore not exposed to foreign currency exchange rate risks.

We are exposed to interest rate risk, primarily as a result of our $175.0 million Credit Agreement. Our Credit Agreement, which expires in June 2011, permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.0% or 0.25% or a LIBOR rate plus a margin of 1.0%, 1.25% or 1.5%. The applicable margin is based on our leverage ratio, as defined in the Credit Agreement. Based on our leverage ratio as of December 31, 2007, the applicable margin is 0.0% for base rate borrowings and 1.25% for LIBOR rate borrowings. At December 31, 2007, we had borrowings outstanding of $132.5 million under our Credit Agreement bearing interest at an average rate of 6.37% per annum (or an average effective rate of 6.44% including the impact of the interest rate swap discussed below). We use borrowings under the Credit Agreement to finance acquisitions and for general corporate purposes.

We manage our exposure to interest rate risk by minimizing, to the extent feasible, our overall borrowing and monitoring available financing alternatives. Our interest rate risk as of December 31, 2007 increased significantly due to increased borrowings under the Credit Agreement, as compared to December 31, 2006. In April 2006, we entered into a $45.0 million LIBOR based interest rate swap, effective May 1, 2006 through June 30, 2011, to manage a portion of our interest rate risk. The interest rate swap is intended to hedge $45.0 million of our current exposure to variable interest rate risk by effectively fixing, at 5.44%, the LIBOR component of the interest rate determined under our existing Credit Agreement or future exposure to variable interest rate risk due to borrowing arrangements that may be entered into prior to the expiration of the interest rate swap. As of December 31, 2007, $45.0 million of our LIBOR based borrowings under the Credit Agreement bear interest at an effective rate of 6.69%. As a result, we are, and will be, exposed to interest rate risk to the extent that our borrowings exceed the $45.0 million notional amount of the interest rate swap. As of December 31, 2007, our borrowings exceeded the notional amount of the interest rate swap by $87.5 million. As a result of the increase in the funding available under the Credit Agreement from $100.0 million to $175.0 million, and the subsequent increase in

our total borrowings, the interest rate swap covers a smaller percentage of our total borrowings than it did previously. We do not foresee any significant changes in how we manage our interest rate risk in the near future.

We entered into the $45.0 million notional five year interest rate swap agreement with a major financial institution designated and qualifying as a cash flow hedge to reduce our exposure to the variability in future cash flows attributable to changes in the LIBOR rate. Our primary objective when undertaking hedging transactions and derivative positions is to reduce our variable interest rate risk by effectively fixing a portion of the interest rate for existing debt and anticipated refinancing transactions. This in turn, reduces the risks that the variability of cash flows imposes on variable rate debt. Our strategy protects us against future increases in interest rates. Although this 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.

In the event that we were to settle the interest rate swap prior to its maturity, if the corresponding LIBOR swap rate for the remaining term of the agreement is below the 5.44% fixed strike rate at the time we settle the swap, we would be required to make a payment to the swap counter-party; if the corresponding LIBOR swap rate is above the fixed strike rate at the time we settle the swap, we would receive a payment from the swap counter-party. The amount that we would either pay or receive would equal the present value of the basis point differential between the fixed strike rate and the corresponding LIBOR swap rate at the time we settle the swap.

Based on our average outstanding borrowings under the Credit Agreement projected for 2008, if market interest rates for 2008 increase by an average of 0.5% more than the weighted-average interest rate of 6.32% for the quarter ended December 31, 2007 (exclusive of the impact of the interest rate swap), the additional annualized interest expense would decrease 2008 net income and cash flows by $438,000. This amount was determined by calculating the effect of a hypothetical interest rate change on our Credit Agreement borrowings that is not covered by our $45.0 million interest rate swap and assumes that the $132.6 million average outstanding borrowings during the fourth quarter of 2007 is indicative of our future average borrowings for 2008 before considering additional borrowings required for future acquisitions. The calculation also assumes that there are no other changes in our financial structure or the terms of our borrowings. We estimate that the fair value of the Credit Agreement approximates $128,600,000 at December 31 2007. The fair value of the Credit Agreement was estimated based on the discounted future cash flows at an assumed discount rate that approximates our effective borrowing rate for a comparable loan. Due to illiquidity in the credit markets as of December 31, 2007, we estimate that our effective interest rate would be 0.75% higher if we had entered into the Credit Agreement on that date. Our exposure to fluctuations in interest rates will increase or decrease in the future with increases or decreases in the outstanding amount under our Credit Agreement.

In order to minimize our exposure to credit risk associated with financial instruments, we place our temporary cash investments with high-credit-quality institutions. Temporary cash investments, if any, are held in overnight bank time deposits and an institutional money market fund.

FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report 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 the 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; our belief that Marketing will continue to pay for substantially all environmental contamination and remediation costs allocated to it under the Marketing Leases; our intention to attempt to negotiate with Marketing for a modification of the Marketing Leases which removes the Subject Properties from the Marketing leases; 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; our belief that it is probable that we will collect the deferred rent receivable recorded as of December 31, 2007 related to the Remaining Properties; 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 business, financial condition, results of operations, liquidity, ability to pay dividends and stock price; 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 herein and other risks that we describe from time to time in our filings with the SEC), 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-looking statements. These factors include, but are not limited to: risks associated with owning and leasing real estate generally; dependence on Marketing as a tenant and on rentals from companies engaged in the petroleum marketing and convenience store businesses; our unresolved SEC comment; competition for properties and tenants; risk of tenant non-renewal; the effects of taxation and other regulations; potential litigation exposure; costs of completing environmental remediation and of compliance with environmental regulations; the risk of loss of our management team; the impact of our electing to be treated as a REIT under the federal income tax laws, including subsequent failure to qualify as a REIT; risks associated with owning real estate primarily concentrated in the Northeast and Mid-Atlantic regions of the United States; risks associated with potential future acquisitions; losses not covered by insurance; future dependence on external sources of capital; the risk that our business operations may not generate sufficient cash for distributions or debt service; our potential inability to pay dividends; and terrorist attacks and other acts of violence and war.

As a result of these and other factors, we may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect our business, financial condition, operating results and stock price. An investment in our stock involves various risks, including those mentioned above and elsewhere in this report and those that are detailed from time to time in our other filings with the SEC.

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.

FOR THE ANNUAL REPORT TO SHAREHOLDERS:

Environmental Remediation Overview
(three graphs to follow)

historical spending
lifecycle phase
projected spending and counts

FOR THE ANNUAL REPORT ON FORM 10-K:

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Getty Realty Corp.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, comprehensive income and cash flows present fairly, in all material respects, the financial position of Getty Realty Corp. and its subsidiaries at December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the Management’s Report on Internal Control Over Financial Reporting on page 42. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP
New York, New York
March 17, 2008

GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)


	YEAR ENDED DECEMBER 31,
	2007			2006			2005
Revenues from rental properties	$	78,462		$	71,904		$	70,881
Operating expenses:
Rental property expenses		9,356			9,684			11,723
Environmental expenses, net		8,247			5,476			2,398
General and administrative expenses		6,669			5,607			4,925
Allowance for deferred rent receivable		10,494			—			—
Depreciation and amortization expense		9,756			7,849			8,075

Total expenses		44,522			28,616			27,121

Operating income		33,940			43,288			43,760

Other income, net		1,923			1,859			1,578
Interest expense		(7,760	)		(3,527	)		(1,765	)

Earnings before income taxes and discontinued operations		28,103			41,620			43,573
Income tax benefit		—			700			1,494

Earnings from continuing operations		28,103			42,320			45,067

Discontinued operations:
Earnings from operating activities		1,226			405			381
Gains on dispositions of real estate		4,565			—			—

Earnings from discontinued operations		5,791			405			381

Net earnings	$	33,894		$	42,725		$	45,448


Basic earnings per common share:
Earnings from continuing operations	$	1.13		$	1.71		$	1.82
Earnings from discontinued operations	$	.23		$	.02		$	.02
Net earnings	$	1.37		$	1.73		$	1.84

Diluted earnings per common share:
Earnings from continuing operations	$	1.13		$	1.71		$	1.82
Earnings from discontinued operations	$	.23		$	.02		$	.02
Net earnings	$	1.37		$	1.73		$	1.84

Weighted-average shares outstanding:
Basic		24,765			24,735			24,711
Stock options and restricted stock units		22			24			18

Diluted		24,787			24,759			24,729


Dividends declared per share	$	1.85		$	1.82		$	1.76

GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)


	YEAR ENDED DECEMBER 31,
	2007			2006			2005
Net earnings	$	33,894		$	42,725		$	45,448
Other comprehensive loss:
Net unrealized loss on interest rate swap		(1,478	)		(821	)		—

Comprehensive Income	$	32,416		$	41,904		$	45,448

GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)


	DECEMBER 31,
	2007			2006
ASSETS:
Real Estate:
Land	$	222,194		$	180,409
Buildings and improvements		252,060			203,149

		474,254			383,558
Less — accumulated depreciation and amortization		(122,465	)		(116,089	)

Real estate, net		351,789			267,469
Deferred rent receivable (net of allowance of $10,494 at December 31, 2007)		24,915			32,297
Cash and cash equivalents		2,071			1,195
Recoveries from state underground storage tank funds, net		4,652			3,845
Mortgages and accounts receivable, net		1,473			1,784
Prepaid expenses and other assets		12,011			4,332

Total assets	$	396,911		$	310,922

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Debt	$	132,500		$	45,194
Environmental remediation costs		18,523			17,201
Dividends payable		11,534			11,284
Accounts payable and accrued expenses		22,176			11,668

Total liabilities		184,733			85,347

Commitments and contingencies (notes 2, 3, 5 and 6) Shareholders’ equity:
Common stock, par value $.01 per share; authorized 50,000,000 shares; issued 24,765,065 at December 31, 2007 and 24,764,765 at December 31, 2006		248			248
Paid-in capital		258,734			258,647
Dividends paid in excess of earnings		(44,505	)		(32,499	)
Accumulated other comprehensive loss		(2,299	)		(821	)

Total shareholders’ equity		212,178			225,575

Total liabilities and shareholders’ equity	$	396,911		$	310,922

The accompanying notes are an integral part of these consolidated financial statements.

GETTY REALTY CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)


	YEAR ENDED DECEMBER 31,
	2007			2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	33,894		$	42,725		$	45,448
Adjustments to reconcile net earnings to net cash flow provided by operating activities:
Depreciation and amortization expense		9,794			7,883			8,113
Gain on dispositions of real estate		(6,179	)		(1,581	)		(1,309	)
Deferred rental revenue, net of allowance		(3,112	)		(3,010	)		(4,170	)
Allowance for Deferred Rent Receivable		10,494			—			—
Amortization of above-market and below-market leases		(1,047	)		—			—
Accretion expense		974			923			925
Stock-based employee compensation expense		492			186			134
Changes in assets and liabilities:
Recoveries from state underground storage tank funds, net		(379	)		772			1,557
Mortgages and accounts receivable, net		44			(172	)		(132	)
Prepaid expenses and other assets		(130	)		170			(1,100	)
Environmental remediation costs		(80	)		(1,425	)		(4,585	)
Accounts payable and accrued expenses		(249	)		545			1,541
Accrued income taxes		—			(700	)		(1,494	)

Net cash flow provided by operating activities		44,516			46,316			44,928

CASH FLOWS FROM INVESTING ACTIVITIES:
Property acquisitions and capital expenditures		(90,636	)		(15,538	)		(29,573	)
Proceeds from dispositions of real estate		8,420			2,462			2,201
(Increase) decrease in cash held for property acquisitions		(2,079	)		(465	)		629
Collection of mortgages receivable, net		267			326			335

Net cash flow used in investing activities		(84,028	)		(13,215	)		(26,408	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit agreement, net		87,500			11,000			10,000
Cash dividends paid		(45,650	)		(44,819	)		(43,025	)
Credit agreement origination costs		(863	)		—			—
Cash paid in settlement of restricted stock units		(405	)		—			—
Repayment of mortgages payable, net		(194	)		(30	)		(285	)
Proceeds from exercise of stock options		—			696			337

Net cash flow provided by (used in) financing activities		40,388			(33,153	)		(32,973	)

Net increase (decrease) in cash and cash equivalents		876			(52	)		(14,453	)
Cash and cash equivalents at beginning of year		1,195			1,247			15,700

Cash and cash equivalents at end of year	$	2,071		$	1,195		$	1,247

Supplemental disclosures of cash flow information Cash paid (refunded) during the year for:
Interest	$	7,021		$	2,638		$	1,464
Income taxes, net		488			576			582
Recoveries from state underground storage tank funds		(1,644	)		(2,128	)		(2,304	)
Environmental remediation costs		6,314			5,132			5,822

The accompanying notes are an integral part of these consolidated financial statements.

GETTY REALTY CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Getty Realty Corp. and its wholly-owned subsidiaries (the “Company”). The Company is a real estate investment trust (“REIT”) specializing in the ownership and leasing of retail motor fuel and convenience store properties and petroleum distribution terminals. The Company manages and evaluates its operations as a single segment. All significant inter-company accounts and transactions have been eliminated.

Use of Estimates, Judgments and Assumptions: The financial statements have been prepared in conformity with GAAP, which requires management to make its best estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Although all available information has been considered, actual results could differ from those estimates, judgments and assumptions. Estimates, judgments and assumptions underlying the accompanying consolidated financial statements include, but are not limited to, deferred rent receivable, recoveries from state underground storage tank (“UST” or “USTs”) funds, environmental remediation costs, real estate, depreciation and amortization, impairment of long-lived assets, litigation, accrued expenses, income taxes and the allocation of the purchase price of properties acquired to the assets acquired and liabilities assumed.

Discontinued Operations: The operating results and gains from certain dispositions of real estate sold in 2007 are reclassified as discontinued operations. The operating results of such properties for the years ended 2006 and 2005 have been reclassified to discontinued operations to conform to the 2007 presentation. Discontinued operations for the year ended December 31, 2007 are primarily comprised of gains or losses from eleven property dispositions. The revenue from rental properties and expenses related to these properties are immaterial for the each of the three years ended December 31, 2007, 2006 and 2005.

Out of Period Adjustments: During 2005, the Company recorded a reduction in net earnings of $1,419,000 as a result of adjustments which should have been recorded in prior years. The adjustments consisted of $115,000 of rental income for lease terminations and $1,534,000 of rent expense for a change in accounting for rent expense from a contractual to a straight-line basis. Management believes that these adjustments are not material to any previously issued financial statements and that the impacts of recording these adjustments are not material, individually or in the aggregate, to the year ended December 31, 2005.

Real Estate: Real estate assets are stated at cost less accumulated depreciation and amortization. Upon acquisition of real estate operating properties and leasehold interests, the Company estimates the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant” and identified intangible assets and liabilities (consisting of leasehold interests, above-market and below-market leases, in-place leases and tenant relationships) and assumed debt. Based on these estimates, the Company allocates the purchase price to the applicable assets and liabilities. When real estate assets are sold or retired, the cost and related accumulated depreciation and amortization is eliminated from the respective accounts and any gain or loss is credited or charged to income. Expenditures for maintenance and repairs are charged to income when incurred.

Depreciation and amortization: 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, capitalized above-market and below-market leases, in-place leases and tenant relationships are amortized over the remaining term of the underlying lease.

Cash and Cash Equivalents: The Company considers highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Deferred Rent Receivable and Revenue Recognition: The Company earns rental income under operating leases with tenants. Minimum lease rentals and lease termination payments are recognized on a straight-line basis over the term of the leases. The cumulative difference between lease revenue recognized under this method and the contractual lease payment terms is recorded as deferred rent receivable on the consolidated balance sheet. Lease termination fees are recognized as rental income when earned upon

the termination of a tenant’s lease and relinquishment of space in which the Company has no further obligation to the tenant. The present value of the difference between the fair market rent and the contractual rent for in-place leases at the time properties are acquired is amortized into revenue from rental properties over the remaining lives of the in-place leases. The Company provides 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 the tenant will not make all of its contractual lease payments when due during the current term of the lease.

Environmental Remediation Costs and Recoveries from State UST Funds, Net: The estimated future costs for known environmental remediation requirements are accrued when it is probable that a liability has been incurred, including legal obligations associated with the retirement of tangible long-lived assets if the asset retirement obligation results from the normal operation of those assets and a reasonable estimate of fair value can be made. The environmental remediation liability is estimated based on the level and impact of contamination at each property. The accrued liability is the aggregate of the best estimate of the fair value of cost for each component of the liability. Recoveries of environmental costs from state UST remediation funds, with respect to both past and future environmental spending, are accrued at fair value as income, net of allowance for collection risk, based on estimated recovery rates developed from prior experience with the funds when such recoveries are considered probable. Environmental liabilities and related assets are currently measured based on their expected future cash flows which have been adjusted for inflation and discounted to present value. We will accrue for environmental liabilities that we believe are allocable to other potentially responsible parties if it becomes probable that the other parties will not pay their environmental obligations.

Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of: Assets are written down to fair value when events and circumstances indicate that the assets might be impaired and the projected undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Assets held for disposal are written down to fair value less disposition costs.

Litigation: Legal fees related to litigation are expensed as legal services are performed. The Company provides for litigation reserves, including certain litigation related to environmental matters, when it is probable that a liability has been incurred and a reasonable estimate of the liability can be made. If the best estimate of the liability can only be identified as a range, and no amount within the range is a better estimate than any other amount, the minimum of the range is accrued for the liability. The Company accrues its share of environmental liabilities based on its assumptions of the ultimate allocation method and share that will be used when determining its share of responsibility.

Income Taxes: The Company and its subsidiaries file a consolidated federal income tax return. Effective January 1, 2001, the Company elected to qualify, and believes it is operating so as to qualify, as a REIT for federal income tax purposes. Accordingly, the Company generally will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Internal Revenue Code. If the Company sells any property within ten years after its REIT election that is not exchanged for a like-kind property, it will be taxed on the built-in gain realized from such sale at the highest corporate rate. This ten-year built-in gain tax period will end in 2011. In June 2006 the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 (“FIN 48”) “Accounting for Uncertainty in Income Taxes.” FIN 48 addresses the recognition and measurement of tax positions taken or expected to be taken in a tax return. The adoption of FIN 48 in January 2007 did not have any impact on the Company’s financial position or results of operation.

Interest Expense and Interest Rate Swap Agreement: The Company entered into an interest rate swap agreement with a major financial institution, designated and qualifying as a cash flow hedge, to reduce its variable interest rate risk by effectively fixing a portion of the interest rate for existing debt and anticipated refinancing transactions. The Company has not entered into financial instruments for trading or speculative purposes. The fair value of the derivative is reflected on the consolidated balance sheet and will be reclassified as a component of interest expense over the remaining term of the interest rate swap agreement since the Company does not expect to settle the interest rate swap prior to its maturity. The fair value of the interest rate swap obligation is based upon the estimated amounts the Company would receive or pay to terminate the contract and is determined using an interest rate market pricing model. Changes in the fair value of the agreement would be recorded in the consolidated statements of operations if the agreement was not an effective cash flow hedge for accounting purposes.

Earnings per Common Share: Basic earnings per common share is computed by dividing net earnings by the weighted-average number of common shares outstanding during the year. Diluted earnings per common share also gives effect to the potential dilution from the exercise of stock options and the issuance of common shares in settlement of restricted stock units.

Stock-Based Compensation: Compensation cost for the Company’s stock-based compensation plans using the fair value method was $492,000, $186,000 and $134,000 for the years ended 2007, 2006 and 2005, respectively, and is included in general and administrative expense. The impact of the accounting for stock-based compensation is, and is expected to be, immaterial to the Company’s financial position and results of operations.

New Accounting Pronouncements: In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides guidance for using fair value to measure assets and liabilities. SFAS 157 generally applies whenever other standards require assets or liabilities to be measured at fair value. SFAS 157 is effective in fiscal years beginning after November 15, 2007, except for nonfinancial assets and nonfinancial liabilities that are not recognized or disclosed at fair value on a recurring basis, for which the effective date is fiscal years beginning after November 15, 2008. The Company does not believe that the adoption of SFAS 157 will have a material impact on its financial position and results of operations.

In December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”), which establishes principles and requirements for how the acquirer shall recognize and measure in its financial statements the identifiable assets acquired, liabilities assumed, any non-controlling interest in the acquiree and goodwill acquired in a business combination. SFAS 141(R) is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company is currently assessing the potential impact that the adoption of SFAS 141(R) will have on its financial position and results of operations.

2. LEASES

The Company leases or sublets its properties primarily 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. The Company’s properties are primarily located in the Northeast and Mid-Atlantic regions of the United States. The Company also owns or leases properties in Texas, North Carolina, Hawaii, California, Florida, Arkansas, Illinois and North Dakota.

As of December 31, 2007, Getty Petroleum Marketing Inc. (“Marketing”) leased from the Company, eight hundred and eighty properties under an amended and restated Master Lease Agreement (the “Master Lease”) and ten properties under supplemental leases (collectively the “Marketing Leases”). As of December 31, 2007, the Marketing Leases included eight hundred eighty-one retail motor fuel and convenience store properties and nine distribution terminals, seven hundred and fourteen of the properties are owned by the Company and one hundred seventy-six of the properties are leased by the Company from third parties. The Master Lease has an initial term of fifteen years commencing December 9, 2000, and generally provides Marketing with options for three renewal terms of ten years each and a final renewal option of three years and ten months extending to 2049 (or such shorter initial or renewal term as the underlying lease may provide). The Marketing Leases include provisions for 2% annual rent escalations. The Master Lease is a unitary lease and, accordingly, Marketing’s exercise of renewal options must be on an “all or nothing” basis. The supplemental leases have initial terms of varying expiration dates. See footnote 3 for contingencies related to Marketing and the Marketing Leases.

The Company estimates that Marketing makes annual real estate tax payments for properties leased under the Marketing Leases of approximately $12.0 million. Marketing also makes additional payments for other operating expenses related to these properties, including environmental remediation costs other than those liabilities that were retained by the Company. These costs, which have been assumed by Marketing under the terms of the Marketing Leases, are not reflected in the consolidated financial statements.

Revenues from rental properties for the years ended December 31, 2007, 2006 and 2005 were $78,462,000, $71,904,000 and $70,881,000, respectively, of which $59,970,000, $59,792,000 and $59,257,000, respectively, were received from Marketing under the Marketing Leases. In addition, revenues from rental properties for the years ended December 31, 2007, 2006 and 2005 include $3,432,000, $2,998,000 and $4,154,000, respectively, of deferred rental revenue accrued due to recognition of rental revenue on a straight-line basis and amortization of above-market and below-market leases. The Company has provided a non-cash $10.5 million

reserve for a portion of the deferred rent receivable recorded as of December 31, 2007 related to the Marketing Leases, which has been reflected in the results for the fourth quarter and year ended December 31, 2007. See footnote 3 for additional information related to the Marketing Leases and the reserve.

Future contractual minimum annual rentals receivable from Marketing under the Marketing Leases and from other tenants, which have terms in excess of one year as of December 31, 2007, are as follows (in thousands. See footnote 3 for additional information related to the Marketing Leases and the reserve):


			OTHER
YEAR ENDING DECEMBER 31,	MARKETING		TENANTS		TOTAL (a)
2008	$	60,473	$	17,523	$	77,996
2009		60,570		17,497		78,067
2010		60,658		17,337		77,995
2011		60,790		17,379		78,169
2012		61,120		17,165		78,285
Thereafter		181,050		130,869		311,919


(a)		Includes $95,991 of future minimum annual rentals receivable under subleases.

Rent expense, substantially all of which consists of minimum rentals on non-cancelable operating leases, amounted to $8,337,000, $8,677,000 and $10,718,000 for the years ended December 31, 2007, 2006 and 2005, respectively, and is included in rental property expenses using the straight-line method. Rent expense of $10,718,000 for the year ended December 31, 2005 includes an adjustment of $1,534,000 for a change in accounting for rent expense to a straight-line basis (see footnote 1). Rent received under subleases for the years ended December 31, 2007, 2006 and 2005 was $14,145,000, $14,646,000 and $15,240,000, respectively.

The Company has obligations to lessors under non-cancelable operating leases which have terms (excluding renewal term options) in excess of one year, principally for gasoline stations and convenience stores. Substantially all of these leases contain renewal options and rent escalation clauses. The leased properties have a remaining lease term averaging over ten years, including renewal options. Future minimum annual rentals payable under such leases, excluding renewal options, are as follows: 2008 — $8,034,000, 2009 — $6,470,000, 2010 — $4,859,000, 2011 — $3,483,000, 2012 — $2,080,000 and $4,447,000 thereafter.

3. COMMITMENTS AND CONTINGENCIES

In order to minimize the Company’s exposure to credit risk associated with financial instruments, the Company places its temporary cash investments with high credit quality institutions. Temporary cash investments, if any, are held in an institutional money market fund and federal agency discount notes.

As of December 31, 2007, the Company leased eight hundred ninety of its one thousand eighty-three properties on a long-term net basis to Marketing under the Marketing Leases (see footnote 2).

A substantial portion of the Company’s revenues (76% for the three months ended December 31, 2007 and 78% for the year ended December 31, 2007), are derived from the Marketing Leases. Accordingly, the Company’s 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 the Company’s relationship with Marketing, may have a material adverse effect on the Company. Marketing operated substantially all of the Company’s petroleum marketing businesses when it was spun-off to the Company’s shareholders as a separate publicly held company in March 1997 (the “Spin-Off”). In December 2000, Marketing was acquired by a subsidiary of OAO LUKoil (“Lukoil”), one of the largest integrated Russian oil companies; however, Lukoil is not a guarantor of the Marketing Leases. The Company’s financial results depend largely on rental income from Marketing, and to a lesser extent on rental income from other tenants, and are therefore 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 its sub-tenants who operate their respective convenience stores, automotive repair services or other businesses at the Company’s 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.

The Company has periodically discussed with representatives of Marketing 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 the Company, and eliminate or reduce payment of operating expenses,

with respect to the Subject Properties, and (ii) reduce the aggregate amount of rent payable to the Company 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, the Company intends to negotiate with Marketing for a modification of the Marketing Leases which removes the Subject Properties from the Marketing Leases following any such modification, the Company believes that it will either relet or sell those locations and reinvest the proceeds in new properties. The Company 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. The Company also cannot accurately predict what actions Marketing and Lukoil may take, and what its recourse may be, whether the Marketing Leases are modified or not.

Representatives of Marketing have also indicated to the Company that they are considering significant changes to Marketing’s business model. The Company intends 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 the Company or to divest a composition of properties different from the properties comprising the Subject Properties, it is the Company’s intention to cooperate with Marketing in accomplishing those objectives to the extent that is prudent for the Company 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 the Company is the fee or leasehold owner of the properties subject to the Marketing Leases and the owner of the Getty^® brand and has prior experience with tenants who operate their convenience stores, automotive repair services or other businesses at its properties, in the event that properties are removed from the Marketing Leases, the Company cannot accurately predict if, when, or on what terms, such properties could be re-let or sold.

In February 2008, when the Company 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 the Company’s intention to attempt to negotiate with Marketing for a modification of the Marketing Leases to remove the Subject Properties, the Company can no longer reasonably assume that it will collect all of the rent due to the Company related to the Subject Properties for the remainder of the current lease terms. In reaching this conclusion, the Company 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 the Company’s assessments and assumptions, the Company 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 the Company’s 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 would likely change.

Based upon the Company’s belief that Marketing desires to have the Subject Properties removed from the Marketing Leases, and its intention to attempt to negotiate a modification of the Marketing Leases to such end, the Company believes 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, the Company has 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. Providing this $10.5 million reserve reduces the Company’s net earnings but does not impact the Company’s cash flow from operating activities. In addition, based upon our evaluation of the carrying value of the Subject Properties, the Company believes 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. The Company intends to regularly review its assumptions that affect the accounting for rental revenue related to the Remaining Properties subject to the Marketing Leases and its assumptions regarding potential impairment of the Subject Properties and, if appropriate, to consider adjusting its reserves.

As the operator of the Company’s properties, Marketing is primarily responsible to pay for the remediation of environmental contamination it causes and to comply with various environmental laws and regulations. As the property owner, the Company may be held liable for those liabilities that Marketing does not pay for. In addition, the Marketing Leases and various other agreements allocate responsibility for known and unknown environmental liabilities between Marketing and the Company relating to Marketing’s business and properties subject to the Marketing Leases. It is possible that the Company’s assumptions regarding the ultimate allocation methods and share of responsibility that it 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. The Company is required to accrue for environmental liabilities that the Company believes are allocable to Marketing under the Marketing Leases and various other agreements if the Company determines that it is probable that Marketing will not meet its environmental obligations. The Company may ultimately be responsible to pay for environmental liabilities as the property owner if Marketing fails to pay them.

The Company cannot accurately predict what portion of those environmental liabilities, if any, the Company ultimately might have to accrue for as a result of the factors discussed above, or otherwise. Based upon the Company’s assessment of Marketing’s financial condition and certain other factors, the Company’s believes 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 between Marketing and the Company and, therefore, has not accrued for such environmental liabilities. The Company’s 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.

The Company 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, the Company may be required to (i) reserve additional amounts of the deferred rent receivable at a later time, (ii) accrue for environmental liabilities that the Company believes 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 the Company determines that it is probable that Marketing will not meet its environmental obligations and the Company accrue for such liabilities; if the Company is unable to relet or sell the properties subject to the Marketing Leases; or if the Company changes its assumptions that affect the accounting for rental revenue or environmental liabilities related to the Marketing Leases; the Company’s business, financial condition, revenues, operating expenses, results of operations, liquidity, ability to pay dividends and stock price may be materially adversely affected.

Under the Master Lease, the Company has also agreed to provide limited environmental indemnification to Marketing, capped at $4,250,000 and expiring in 2010, for certain pre-existing conditions at six of the terminals which are owned by the Company and leased to Marketing. Under the agreement, Marketing is obligated to pay the first $1,500,000 of costs and expenses incurred in connection with remediating any such pre-existing conditions, Marketing and the Company will share equally the next $8,500,000 of those costs and expenses and Marketing is obligated to pay all additional costs and expenses over $10,000,000. The Company has accrued $300,000 as of December 31, 2007 and 2006 in connection with this indemnification agreement.

The Company is subject to various legal proceedings and claims which arise in the ordinary course of its business. In addition, the Company has retained responsibility for certain legal proceedings and claims relating to the petroleum marketing business that were identified at the time of the Spin-Off. As of December 31, 2007 and 2006, the Company had accrued $2,575,000 and $2,822,000, respectively, for certain of these matters which it believes were appropriate based on information then currently available. The

Company has not accrued for approximately $950,000 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. Marketing is responsible for such costs under the terms of the Master Lease but Marketing has denied its liability for the claim and its responsibility to defend against, and indemnify the Company for, the claim. It is reasonably possible that the Company’s assumption that Marketing will be ultimately responsible for the claim may change, which may result in the Company providing an accrual for this matter. The ultimate resolution of these matters could cause a material adverse effect on the Company’s business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.

In September 2003, the Company was notified by the State of New Jersey Department of Environmental Protection that the Company is one of approximately sixty potentially responsible parties for natural resource 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, the Company received a General Notice Letter from the United States Environmental Protection Agency (the “EPA”) (the “EPA Notice”), advising the Company that it 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. Additionally, the Company believes that ChevronTexaco is contractually obligated to indemnify the Company, pursuant to an indemnification agreement, for most of the conditions at the property identified by the New Jersey Department of Environmental Protection and the EPA. Accordingly, the ultimate legal and financial liability of the Company, if any, cannot be estimated with any certainty at this time.

From October 2003 through September 2007, the Company was notified that the Company was made 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 the Company, its 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. Accordingly, the ultimate legal and financial liability of the Company, if any, cannot be estimated with any certainty at this time.

Prior to the Spin-Off, the Company was self-insured for workers’ compensation, general liability and vehicle liability up to predetermined amounts above which third-party insurance applies. As of December 31, 2007 and 2006, the Company’s consolidated balance sheets included, in accounts payable and accrued expenses, $310,000 and $332,000, respectively, relating to self-insurance obligations. The Company estimates its loss reserves for claims, including claims incurred but not reported, by utilizing actuarial valuations provided annually by its insurance carriers. The Company is required to deposit funds for substantially all of these loss reserves with its insurance carriers, and may be entitled to refunds of amounts previously funded, as the claims are evaluated on an annual basis. The Company’s consolidated statements of operations for the years ended December 31, 2007, 2006 and 2005 included, in general and administrative expenses, charges (credits) of $81,000, ($301,000) and ($150,000), respectively, for self-insurance loss reserve adjustments. Since the Spin-Off, the Company has maintained insurance coverage subject to certain deductibles.

4. CREDIT AGREEMENT

As of December 31, 2007, borrowings under the Credit Agreement, described below, were $132,500,000, bearing interest at a weighted-average effective interest rate of 6.44% per annum. The Company has estimated that the fair value of the Credit Agreement approximates $128,600,000 at December 31 2007. The Company estimated the fair value of the Credit Agreement based on the discounted future cash flows at an assumed discount rate that approximates the Company’s effective borrowing rate for a comparable loan. Due to illiquidity in the credit markets as of December 31, 2007, the Company estimates that its effective interest rate would be 0.75% higher if it had entered into the Credit Agreement on that date.

On March 27, 2007, the Company entered into an amended and restated senior unsecured revolving credit agreement (the “Credit Agreement”) with a group of domestic commercial banks. The Credit Agreement, among other items, increases the aggregate amount of the Company’s credit facility by $75,000,000 to $175,000,000; reduces the interest rate margin on LIBOR based borrowings by 0.25% and extends the term of the Credit Agreement from June 2008 to March 2011. The Credit Agreement does not provide for

scheduled reductions in the principal balance prior to its maturity. The Credit Agreement permits borrowings at an interest rate equal to the sum of a base rate plus a margin of 0.0% or 0.25% or a LIBOR rate plus a margin of 1.0%, 1.25% or 1.5%. The applicable margin is based on the Company’s leverage ratio, as defined in the Credit Agreement. Based on the Company’s leverage ratio as of December 31, 2007, the applicable margin is 0.0% for base rate borrowings and 1.25% for LIBOR rate borrowings. The benefit of the 0.25% reduction in the interest rate margin effective with the amendment of the Credit Agreement was offset by the increase in the Company’s leverage ratio caused by an increase in its outstanding borrowings used for the March 2007 acquisition discussed in footnote 10, resulting in no net change in the LIBOR rate margin.

Subject to the terms of the Credit Agreement, the Company has option to extend the term of the Credit Agreement for one additional year and/or increase the amount of the credit facility available pursuant to the Credit Agreement by $125,000,000 to $300,000,000, subject to approval by the Company’s Board of Directors and the Bank Syndicate. The annual commitment fee on the unused Credit Agreement ranges from 0.10% to 0.20% based on the amount of borrowings. The Credit Agreement contains customary terms and conditions, including customary financial covenants such as leverage and coverage ratios and other customary covenants, including limitations on the Company’s ability to incur debt, pay dividends and maintenance of tangible net worth, and events of default, including change of control and failure to maintain REIT status. A material adverse effect the Company’s business, assets, prospects or condition, financial or otherwise, would also result in an event of default. Any event of default, if not cured or waived, could result in the acceleration of all of the Company’s indebtedness under the Credit Agreement.

In April 2006, the Company entered into a $45,000,000 LIBOR based interest rate swap, effective May 1, 2006 through June 30, 2011. The interest rate swap is intended to effectively fix, at 5.44%, the LIBOR component of the interest rate determined under the Credit Agreement. As of December 31, 2007, $45,000,000 of the Company’s LIBOR based borrowings under the Credit Agreement bear interest at an effective rate of 6.69%.

The Company entered into the interest rate swap agreement with a major financial institution, designated and qualifying as a cash flow hedge, to reduce its exposure to the variability in future cash flows attributable to changes in the LIBOR rate. The Company’s primary objective when undertaking the hedging transaction and derivative position was to reduce its variable interest rate risk by effectively fixing a portion of the interest rate for existing debt and anticipated refinancing transactions. The Company determined, as of both the hedging instrument’s inception and as of December 31, 2007 and 2006, that the derivative used in the hedging transaction is highly effective in offsetting changes in cash flows associated with the hedged item and that no gain or loss was required to be recognized in earnings during 2007 or 2006 representing the hedge’s ineffectiveness. At December 31, 2007 and 2006, the Company’s consolidated balance sheets include, in accounts payable and accrued expenses, an obligation for the fair value of the derivative of $2,299,000 and $821,000, respectively. For the years ended December 31, 2007 and 2006, the Company has recorded the loss in fair value of the swap contract related to the effective portion of the interest rate contract totaling $1,478,000 and $821,000, respectively, in other comprehensive income in the Company’s consolidated balance sheet. The accumulated comprehensive loss will be reclassified as an increase in interest expense over the remaining term of the interest rate swap agreement, (of which approximately $627,000 is expected to be reclassified within the next twelve months), since it is expected that the Credit Agreement will be refinanced with variable interest rate debt at its maturity. The $2,290,000 recorded loss in fair value of the swap contract as of December 31, 2007 has been determined separately from the $3,900,000 unrecorded gain in fair value of the Credit Agreement as of December 31, 2007 discussed above.

5. ENVIRONMENTAL EXPENSES

The Company is subject to numerous existing federal, state and local laws and regulations, including matters relating 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, USTs and other equipment. 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.

The Company enters into leases and various other agreements which allocate responsibility for known and unknown environmental liabilities by establishing the percentage and method of allocating responsibility between the parties. It is possible that the Company’s assumptions regarding the ultimate allocation methods and share of responsibility that we used to allocate environmental liabilities may change, which may result in adjustments to the amounts recorded for environmental litigation accruals, environmental remediation liabilities and related assets. See footnote 3 for contingencies related to Marketing and the Marketing

Leases. The ultimate resolution of these matters could cause a material adverse effect on the Company’s business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.

Environmental remediation liabilities and related assets are measured at fair value based on their expected future cash flows which have been adjusted for inflation and discounted to present value. The net change in estimated remediation cost and accretion expense included in environmental expenses in the Company’s consolidated statements of operations aggregated $5,193,000, $3,260,000 and $1,385,000 for 2007, 2006 and 2005, respectively, which amounts were net of changes in estimated recoveries from state UST remediation funds. In addition to net change in estimated remediation costs, environmental expenses also include project management fees, legal fees and provisions for environmental litigation loss reserves.

In accordance with the leases with certain tenants, the Company has 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 each individual property, the Company’s environmental liability under the lease for that property will be satisfied and future remediation obligations will be the responsibility of the Company’s tenant. Generally the liability for the retirement and decommissioning or removal of USTs and other equipment is the responsibility of the Company’s tenants. The Company is contingently liable for these obligations in the event that the tenants do not satisfy their responsibilities. See footnote 3 for contingencies related to Marketing and the Marketing Leases. A liability has not been accrued for obligations that are the responsibility of the Company’s tenants.

Of the eight hundred ninety properties leased to Marketing as of December 31, 2007, the Company has agreed to pay all costs relating to, and to indemnify Marketing for, certain environmental liabilities and obligations for the remaining two hundred nineteen properties that have not achieved Closure and are scheduled in the Master Lease. The Company will continue to seek reimbursement from state UST remediation funds related to these environmental expenditures where available.

The estimated future costs for known environmental remediation requirements are accrued when it is probable that a liability has been incurred and a reasonable estimate of fair value can be made. The environmental remediation liability is estimated based on the level and impact of contamination at each property. The accrued liability is the aggregate of the best estimate of the fair value of cost for each component of the liability. Recoveries of environmental costs from state UST remediation funds, with respect to both past and future environmental spending, are accrued at fair value as income, net of allowance for collection risk, based on estimated recovery rates developed from prior experience with the funds when such recoveries are considered probable.

and reasonably estimable environmental remediation costs, on a property by property basis, the Company considers among other things, enacted laws and regulations, assessments of contamination and surrounding geology, quality of information available, currently available technologies for treatment, alternative methods of remediation and prior experience. These accrual estimates are subject to significant change, and are adjusted as the remediation treatment progresses, as circumstances change and as these contingencies become more clearly defined and reasonably estimable. As of December 31, 2007, the Company had regulatory approval for remediation action plans in place for two hundred-sixty-three (93%) of the two hundred eighty-two properties for which it continues to retain environmental responsibility and the remaining nineteen properties (7%) remain in the assessment phase. In addition, the Company has nominal post-closure compliance obligations at 28 properties where it has received “no further action” letters.

As of December 31, 2007, 2006, 2005 and 2004, the Company had accrued $18,523,000, $17,201,000, $17,350,000 and $20,626,000 respectively, as management’s best estimate of the fair value of reasonably estimable environmental remediation costs. As of December 31, 2007, 2006, 2005 and 2004, the Company had also recorded $4,652,000, $3,845,000, $4,264,000 and $5,437,000, respectively, as management’s best estimate for recoveries from state UST remediation funds, net of allowance, related to environmental obligations and liabilities. The net environmental liabilities of $13,356,000, $13,086,000 and $15,189,000 as of December 31, 2006, 2005 and 2004, respectively, were subsequently accreted for the change in present value due to the passage of time and, accordingly, $974,000, $923,000 and $925,000 of net accretion expense, substantially all of which is included in environmental expenses for the years ended December 31, 2007, 2006 and 2005, respectively.

In view of the uncertainties associated with environmental contingencies related to Marketing and the Marketing Leases, however, the Company believes it is possible that the fair value of future actual net expenditures could be substantially higher than amounts currently recorded by the Company. See footnote 3 for contingencies related to Marketing and the Marketing Leases. Adjustments to accrued liabilities for environmental remediation costs will be reflected in the Company’s financial statements as they become probable and a reasonable estimate of fair value can be made. Future environmental expenses could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends and stock price.

6. INCOME TAXES

Net cash paid for income taxes for the years ended December 31, 2007, 2006 and 2005 of $488,000, $576,000 and $582,000, respectively, includes amounts related to state and local income taxes for jurisdictions that do not follow the federal tax rules, which are provided for in rental property expenses in the Company’s consolidated statements of operations.

Earnings and profits (as defined in the Internal Revenue Code) is used to determine the tax attributes of dividends paid to stockholders and will differ from income reported for financial statement purposes due to the effect of items which are reported for income tax purposes in years different from that in which they are recorded for financial statement purposes. Earnings and profits were $41,147,000, $39,486,000 and $38,200,000 for the years ended December 31, 2007, 2006 and 2005, respectively. The federal tax attributes of the common dividends for the years ended December 31, 2007, 2006 and 2005 were: ordinary income of 90.3%, 88.0% and 88.8%; capital gain distributions of (0.0%), 0.2% and 0.04% and non-taxable distributions of 9.7%, 11.8% and 11.2%, respectively.

In order to qualify as a REIT, among other items, the Company must pay out substantially all of its earnings and profits in cash distributions to shareholders each year. Should the Internal Revenue Service successfully assert that the Company’s earnings and profits were greater than the amount distributed, the Company may fail to qualify as a REIT; however, the Company may avoid losing its REIT status by paying a deficiency dividend to eliminate any remaining earnings and profits. The Company may have to borrow money or sell assets to pay such a deficiency dividend. The Company accrues for this and certain other tax matters when appropriate based on information currently available. The accrual for uncertain tax positions is adjusted as circumstances change and as the uncertainties become more clearly defined, such as when audits are settled or exposures expire. Accordingly, an income tax benefit of $700,000 and $1,494,000 was recorded in the third quarters of 2006 and 2005, respectively, due to the elimination of, or net reduction in, the amount accrued for uncertain tax positions since the Company believes that the uncertainties regarding these exposures have been resolved or that it is no longer likely that the exposure will result in a liability upon review. However, the ultimate resolution of these matters may have a significant impact on the results of operations for any single fiscal year or interim period.

7. SHAREHOLDERS’ EQUITY

A summary of the changes in shareholders’ equity for the years ended December 31, 2007, 2006 and 2005 is as follows (in thousands, except per share amounts):


							DIVIDENDS			ACCUMULATED
							PAID			OTHER
	COMMON STOCK				PAID-IN		IN EXCESS			COMPREHENSIVE
	SHARES		AMOUNT		CAPITAL		OF EARNINGS			LOSS			TOTAL
BALANCE, DECEMBER 31, 2004		24,694	$	247	$	257,295	$	(32,039	)	$	—		$	225,503

Net earnings								45,448						45,448
Dividends — $1.76 per common share								(43,539	)					(43,539	)
Stock-based compensation						134								134
Stock options exercised		23		—		337								337

BALANCE, DECEMBER 31, 2005		24,717		247		257,766		(30,130	)		—			227,883

Net earnings								42,725						42,725
Dividends — $1.82 per common share								(45,094	)					(45,094	)
Stock-based compensation						186								186
Net unrealized loss on interest rate swap											(821	)		(821	)
Stock options exercised		48		1		695								696

BALANCE, DECEMBER 31, 2006		24,765		248		258,647		(32,499	)		(821	)		225,575

Net earnings								33,894						33,894
Dividends — $1.85 per common share								(45,900	)					(45,900	)
Stock-based compensation						87								87
Net unrealized loss on interest rate swap											(1,478	)		(1,478	)

BALANCE, DECEMBER 31, 2007		24,765	$	248	$	258,734	$	(44,505)	(a)	$	(2,299	)	$	212,178

(a)

Net of $103,803 transferred from retained earnings to common stock and paid-in capital as a result of accumulated stock dividends.

The Company is authorized to issue 20,000,000 shares of preferred stock, par value $.01 per share, for issuance in series, of which none were issued as of December 31, 2007, 2006, 2005 and 2004.

8. SEVERANCE AGREEMENT AND EMPLOYEE BENEFIT PLANS

General and administrative expenses include a provision of $447,000 recorded in the quarter ended December 31, 2007 primarily due to the payment of severance and the accelerated vesting of 14,250 restricted stock units which were unvested and scheduled to vest five years from the date of each grant in conjunction with the resignation of Mr. Andy Smith, the former President and Chief Legal Officer of the Company.

The Company has a retirement and profit sharing plan with deferred 401(k) savings plan provisions (the “Retirement Plan”) for employees meeting certain service requirements and a supplemental plan for executives (the “Supplemental Plan”). Under the terms of these plans, the annual discretionary contributions to the plans are determined by the Compensation Committee of the Board of Directors. Also, under the Retirement Plan, employees may make voluntary contributions and the Company has elected to match an amount equal to fifty percent of such contributions but in no event more than three percent of the employee’s eligible compensation. Under the Supplemental Plan, a participating executive may receive an amount equal to ten percent of eligible compensation, reduced by the amount of any contributions allocated to such executive under the Retirement Plan. Contributions, net of forfeitures, under the retirement plans approximated $100,000, $139,000 and $141,000 for the years ended December 31, 2007, 2006 and 2005, respectively. These amounts are included in the accompanying consolidated statements of operations.

The Getty Realty Corp. 2004 Omnibus Incentive Compensation Plan (the “2004 Plan”) provides for the grant of restricted stock, restricted stock units, performance awards, dividend equivalents, stock payments and stock awards to all employees and members of the Board of Directors. The 2004 Plan authorizes the Company to grant awards with respect to an aggregate of 1,000,000 shares of

common stock through 2014. The aggregate maximum number of shares of common stock that may be subject to awards granted under the 2004 Plan during any calendar year is 80,000.

In 2007, 2006, 2005 and 2004, the Company awarded 17,550, 12,550, 12,550 and 10,800 restricted stock units (“RSUs”) and dividend equivalents to employees, respectively. The RSUs are settled subsequent to the termination of employment with the Company. On the settlement date each RSU will have a value equal to one share of common stock and may be settled, at the sole discretion of the Compensation Committee, in cash or by the issuance of one share of common stock. The Compensation Committee elected to settle 14,250 RSUs in cash for $405,000 during 2007. The RSUs do not provide voting or other shareholder rights unless and until the RSU is settled for a share of common stock. The 39,200 RSUs outstanding as of December 31, 2007 vest starting one year from the date of grant, on a cumulative basis at the annual rate of twenty percent of the total number of RSUs covered by the award. The dividend equivalents represent the value of the dividends paid per common share multiplied by the number of RSUs covered by the award. The dividend equivalents awarded in 2004 initially vested over a five year period but the awards were subsequently modified to be fully vested in 2005.

The fair values of the RSUs were determined based on the closing market price of the Company’s stock on the date of grant. The fair value of the 2004 award was initially discounted for the value of the dividends that would not have been paid during the vesting period of the dividend equivalents. The average fair values of the RSUs granted in 2007, 2006 and 2005 were estimated at $28.75, $28.80 and $26.95 per unit on the date of grant with an aggregate fair value estimated at $505,000, $361,000 and $338,000, respectively. The fair value of the grants is recognized as compensation expense ratably over the five year vesting period of the RSUs. The modification to the 2004 award increased its fair value by $3.02 per unit or $33,000. The fair value of the modification is recognized as compensation expense ratably over the then remaining fifty-one month vesting period of the 2004 award. As of December 31, 2007, there was $662,000 of total unrecognized compensation cost related to RSUs granted under the 2004 Plan.

The fair value of the 22,090, 3,320 and 1,560 RSUs which vested during the years ended December 31, 2007, 2006 and 2005 was $602,000, $83,000 and $36,000, respectively. The aggregate intrinsic value of the 39,200 outstanding RSUs and the 12,720 vested RSUs as of December 31, 2007 was $1,046,000 and $339,000, respectively. For the years ended December 31, 2007, 2006 and 2005, dividend equivalents aggregating approximately $85,000, $65,000 and $41,000, respectively, were charged against retained earnings when common stock dividends were declared.

The Company has a stock option plan (the “Stock Option Plan”). The Company’s authorization to grant options to purchase shares of the Company’s common stock under the Stock Option Plan expired in January 2008. No options were granted in 2008. Stock options vest starting one year from the date of grant, on a cumulative basis at the annual rate of twenty-five percent of the total number of options covered by the award. As of December 31, 2007, there was $15,000 of unrecognized compensation cost related to non-vested options granted in May 2007 under the Stock Option Plan with an estimated fair value of $18,000, or $3.51 per option. The total fair value of the options vested during the years ended December 31, 2006 and 2005 was $8,000 and $35,000, respectively. As of December 31, 2007, there were 1,750, 11,000 and 5,000 options outstanding which were exercisable at prices of $16.15, $18.30 and $27.68 with a remaining contractual life of four, five and ten years, respectively.

The following is a schedule of stock option prices and activity relating to the Stock Option Plan:


	YEAR ENDED DECEMBER 31,
	2007								2006					2005
					WEIGHTED-
			WEIGHTED-		AVERAGE		AGGREGATE					WEIGHTED-					WEIGHTED-
			AVERAGE		REMAINING		INTRINSIC					AVERAGE					AVERAGE
	NUMBER		EXERCISE		CONTRACTUAL		VALUE		NUMBER			EXERCISE		NUMBER			EXERCISE
	OF SHARES		PRICE		TERM		(IN THOUSANDS)		OF SHARES			PRICE		OF SHARES			PRICE
Outstanding at beginning of year		12,750	$	18.00						84,378		$	19.48		110,549		$	18.64
Issued		5,000		27.68						—			—		—			—
Exercised (a)		—		—						(71,628	)		19.74		(23,374	)		15.50
Cancelled		—		—						—			—		(2,797	)		19.94

Outstanding at end of year		17,750	$	20.73		6.3	$	111		12,750		$	18.00		84,378		$	19.48

Exercisable at end of year (b)		12,750	$	18.00		4.9	$	111		12,750		$	18.00		69,503		$	19.73

(a)

The total intrinsic value of the options exercised during the years ended December 31, 2006 and 2005 was $704,000 and $276,000, respectively.

(b)

No options vested during the year ended December 31, 2007, 29,375 options vested in 2005 and 14,875 options vested in 2006.

9. QUARTERLY FINANCIAL DATA

The following is a summary of the quarterly results of operations for the years ended December 31, 2007 and 2006 (unaudited as to quarterly information) (in thousands, except per share amounts):


	THREE MONTHS ENDED									YEAR ENDED
YEAR ENDED DECEMBER 31, 2007 (a)	MARCH 31,		JUNE 30,		SEPTEMBER 30,		DECEMBER 31,			DECEMBER 31,
Revenues from rental properties	$	17,870	$	20,405	$	20,135	$	20,052		$	78,462
Earnings (loss) from continuing operations (b)(c)		10,326		8,552		9,983		(758	)		28,103
Net earnings (b)(c)		10,437		10,024		12,846		587			33,894
Diluted earnings (loss) per common share:
Earnings (loss) from continuing operations (b)(c)		.42		.35		.40		(.03	)		1.13
Net earnings (b)(c)		.42		.40		.52		.02			1.37


	THREE MONTHS ENDED								YEAR ENDED
YEAR ENDED DECEMBER 31, 2006	MARCH 31,		JUNE 30,		SEPTEMBER 30,		DECEMBER 31,		DECEMBER 31,
Revenues from rental properties	$	17,943	$	18,055	$	17,975	$	17,931	$	71,904
Earnings from continuing operations		10,441		11,002		11,201		9,676		42,320
Net earnings		10,531		11,112		11,276		9,806		42,725
Diluted earnings per common share:
Earnings from continuing operations		.42		.44		.45		.39		1.71
Net earnings		.43		.45		.46		.40		1.73

(a)

Includes (from the date of the acquisition) the effect of the $84.6 million acquisition of convenience stores and gas station properties from FF-TSY Holding Company II LLC (successor to Trustreet Properties, Inc.) which was substantially completed by the end of the first quarter of 2007 (see footnote 10).

(b)

The quarter ended December 31, 2007 includes the effect of a $10.5 million non-cash reserve for the full amount of the deferred rent receivable recorded as of December 31, 2007 related to approximately 40% of the properties under leases with Marketing, (see footnote 3).

(c)

The quarter ended December 31, 2007 includes a net expense of $447,000 related to Mr. Andy Smith’s resignation (see footnote 8).

10. PROPERTY ACQUISITIONS

On March 25, 2005, the Company acquired twenty-three convenience store and retail motor fuel properties in Virginia for approximately $29,000,000. All of the properties are triple-net-leased to a single tenant who previously leased the properties from the seller and operates the locations under its proprietary convenience store brand in its network of over 200 locations. The lease provides for annual rentals at a competitive rate and provides for escalations thereafter. The lease has an initial term of fifteen years and provides the tenant options for three renewal terms of five years each. The lease also provides that the tenant is responsible for all existing and future environmental conditions at the properties.

On February 28, 2006, the Company completed the acquisition of eighteen retail motor fuel and convenience store properties located in Western New York for approximately $13,389,000. Simultaneous with the closing on the acquisition, the Company entered

into a triple-net lease with a single tenant for all of the properties. The lease provides for annual rentals at a competitive rate and provides for escalations thereafter. The lease has an initial term of fifteen years and provides the tenant options for three renewal terms of five years each. The lease also provides that the tenant is responsible for all existing and future environmental conditions at the properties.

Effective March 31, 2007, the Company acquired fifty-nine convenience store and retail motor fuel properties in ten states for approximately $79,335,000 from various subsidiaries of FF-TSY Holding Company II, LLC (the successor to Trustreet Properties, Inc.) (“Trustreet”), a subsidiary of General Electric Capital Corporation, for cash with funds drawn under its Credit Agreement. Effective April 23, 2007, the Company acquired five additional properties from Trustreet for approximately $5,200,000. The aggregate cost of the acquisitions, including $1,131,000 of transaction costs, is approximately $84,535,000. Substantially all of the properties are triple-net-leased to tenants who previously leased the properties from the seller. The leases generally provide that the tenants are responsible for substantially all existing and future environmental conditions at the properties.

The purchase price has been allocated between assets, liabilities and intangible assets based on the estimates of fair value. The Company estimated the fair value of acquired tangible assets (consisting of land, buildings and improvements) “as if vacant” and identified intangible assets and liabilities (consisting of leasehold interests, above-market and below-market leases and in-place leases). Based on these estimates, the Company allocated $89,908,000, $5,351,000 and $10,724,000 of the purchase price to acquired tangible assets; identified intangible assets; and identified intangible liabilities, respectively.

The following unaudited pro forma condensed consolidated financial information has been prepared utilizing the historical financial statements of Getty Realty Corp. and the historical financial information of the properties acquired in 2007 which was derived from the consolidated books and records of Trustreet. The unaudited pro forma condensed consolidated financial information assumes that the acquisitions had occurred as of the beginning of each of the periods presented, after giving effect to certain adjustments including (a) rental income adjustments resulting from (i) the straight-lining of scheduled rent increases and (ii) the net amortization of the intangible assets relating to above-market leases and intangible liabilities relating to below-market leases over the remaining lease terms which average eleven years and (b) depreciation and amortization adjustments resulting from (i) the depreciation of real estate assets over their useful lives which average seventeen years and (ii) the amortization of intangible assets relating to leases in place over the remaining lease terms. The following unaudited pro forma condensed consolidated financial information also gives effect to the additional interest expense resulting from the assumed increase in borrowing outstanding drawn under the Credit Agreement to fund the acquisition.

The unaudited pro forma condensed financial information the years ended December 31, 2007 and 2006 is not indicative of the results of operations that would have been achieved had the acquisition from Trustreet reflected herein been consummated on the dates indicated or that will be achieved in the future and is as follows (in thousands, except per share amounts):


	2007		2006
Revenues from rental properties	$	81,344	$	81,724

Net earnings	$	34,348	$	43,900

Net earnings per share
Basic	$	1.39	$	1.77
Diluted	$	1.39	$	1.77

In addition, in 2007, the Company exercised its fixed price purchase option for seven leased properties, purchased two properties and redeveloped one property by purchasing land adjacent to it and building a new convenience store on the existing site.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

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 herein.

CAPITAL STOCK, STOCK PERFORMANCE GRAPH AND CERTIFICATIONS

CAPITAL STOCK

Our common stock is traded on the New York Stock Exchange (symbol: “GTY”). There were approximately 15,000 shareholders of our common stock as of March 17, 2008, of which approximately 1,300 were holders of record. The price range of our common stock and cash dividends declared with respect to each share of common stock during the years ended December 31, 2007 and 2006 was as follows:


					CASH
	PRICE RANGE				DIVIDENDS
PERIOD ENDED	HIGH		LOW		PER SHARE
December 31, 2007	$	29.23	$	25.21	$	.4650
September 30, 2007		28.72		23.80		.4650
June 30, 2007		30.33		26.17		.4650
March 31, 2007		32.10		27.80		.4550

December 31, 2006	$	33.85	$	28.84	$	.4550
September 30, 2006		30.43		27.16		.4550
June 30, 2006		29.10		25.42		.4550
March 31, 2006		29.99		26.12		.4550

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” for a discussion of potential limitations on our ability to pay future dividends.

STOCK PERFORMANCE GRAPH

We have chosen as our Peer Group the following companies: Commercial Net Lease Realty, Entertainment Properties Trust, Realty Income Corp. and Hospitality Properties Trust. We have chosen these companies as our Peer Group because a substantial segment of each of their businesses is owning and leasing commercial properties. We cannot assure you that our stock performance will continue in the future with the same or similar trends depicted in the graph above. We do not make or endorse any predictions as to future stock performance.

The composition of our peer group has been changed from last year (the “Old Peer Group”) as follows: Trustreet Properties, Inc. (“Trustreet”), which is no longer publicly traded, was replaced by Entertainment Properties Trust. The graph for the “Old Peer Group” may not be meaningful because there is no 2007 data available for Trustreet and the data presented in the “Old Peer Group” may not be comparably balanced when compared to prior years. The stock price performance shown on the graph is not necessarily indicative of future price performance.



	2002		2003		2004		2005		2006		2007
Getty Realty Corp.		100.00		148.32		173.75		169.60		212.14		195.90
Standard & Poors 500		100.00		126.38		137.75		141.88		161.20		166.89
“Old” Peer Group		100.00		127.48		157.62		146.41		188.69		169.03
“New” Peer Group		100.00		130.00		163.24		152.85		201.50		179.34

Assumes $100 invested at the close of trading on 12/02 in Getty Realty Corp. common stock, Standard & Poor’s 500, “Old” Peer Group, and “New” Peer Group.
* Cumulative total return assumes reinvestment of dividends.

EX-21 4 c23886exv21.htm SUBSIDIARIES OF THE COMPANY exv21

EXHIBIT 21. SUBSIDIARIES OF THE COMPANY


		STATE OF
SUBSIDIARY		INCORPORATION
AOC Transport, Inc.		Delaware
GettyMart, Inc.		Delaware
Getty AR Leasing, Inc.		Arkansas
Getty CA Leasing, Inc.		California
Getty CT Leasing, Inc.		New York
Getty HI Indemnity, Inc.		Hawaii
Getty HI Leasing, Inc.		Hawaii
Getty IL Leasing, Inc.		Illinois
Getty Kalakaua Leasing, Inc.		Hawaii
Getty Kingston Corporation		New York
Getty MD Leasing, Inc.		Maryland
Getty MO Leasing, Inc.		Missouri
Getty NC Leasing, Inc.		North Carolina
Getty ND Leasing, Inc.		North Dakota
Getty NH Leasing, Inc.		New Hampshire
Getty NY Leasing, Inc.		New York
Getty Properties Corp.		Delaware
Getty Saugerties Corporation		New York
Getty TM Corp.		Maryland
Getty TX Leasing, Inc.		Texas
Getty VA Leasing, Inc.		New York
Leemilt’s Flatbush Avenue, Inc.		New York
Leemilt’s Petroleum, Inc.		New York
Power Test Realty Company Limited Partnership*		New York
Slattery Group, Inc.		New Jersey


*		ninety-nine percent owned by the Company, representing the limited partner units, and one percent owned by Getty Properties Corp., representing the general partner interest.

EX-23 5 c23886exv23.htm CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM exv23

EXHIBIT 23. CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-115672, 333-45249 and 333-45251) and on Form S-3 (No. 333-114730) of Getty Realty Corp. of our report dated March 17, 2008 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in the Annual Report to Shareholders, which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report dated March 17, 2008 relating to the financial statement schedules, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

New York, New York
March 17, 2008

EX-31.1 6 c23886exv31w1.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER exv31w1

EXHIBIT 31(i).2 RULE 13a-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Leo Liebowitz, certify that:

1. I have reviewed this Annual Report on Form 10-K of Getty Realty Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 17, 2008

By: /s/ LEO LIEBOWITZ
Leo Liebowitz
Chairman and Chief Executive Officer

EX-31.2 7 c23886exv31w2.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER exv31w2

EXHIBIT 31(i).1 RULE 13a-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Thomas J. Stirnweis, certify that:

1. I have reviewed this Annual Report on Form 10-K of Getty Realty Corp.;

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 17, 2008

By: /s/ THOMAS J. STIRNWEIS
Thomas J. Stirnweis
Vice President, Treasurer and
Chief Financial Officer

EX-32.1 8 c23886exv32w1.htm SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER exv32w1

EXHIBIT 32.1 SECTION 1350 CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Getty Realty Corp. (the “Company”) hereby certifies, to such officer’s knowledge, that:

(i) the Annual Report on Form 10-K of the Company for the annual period ended December 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (subject to the Company’s position prevailing in regard to the unresolved SEC comment, as more fully described in the Report); and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 17, 2008

By: /s/ LEO LIEBOWITZ
Leo Liebowitz
Chairman and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Getty Realty Corp. and will be retained by Getty Realty Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2 9 c23886exv32w2.htm SECTION 1350 CERTIFICATION OF CHIEF FINANCIAL OFFICER exv32w2

EXHIBIT 32.2 SECTION 1350 CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Getty Realty Corp.(the “Company”) hereby certifies, to such officer’s knowledge, that:

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 17, 2008

By: /s/ THOMAS J. STIRNWEIS
Thomas J. Stirnweis
Vice President, Treasurer and Chief Financial Officer

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