Getty Petroleum master lease deemed terminated for failure to pay rent

By Caroline Salls

Pittsburgh, Dec. 16 - Getty Petroleum Marketing, Inc.'s master lease with Getty Realty Corp. has been terminated as a result of non-payment of rent, according to an 8-K filed with the Securities and Exchange Commission.

Getty Realty said it intends to protect its interests and seek possession of the unitary premises underlying the master lease, subject to a stay of proceedings and actions imposed by Getty Petroleum's bankruptcy filing.

As a result, Getty Realty said it cannot be sure how the bankruptcy case will affect its efforts to recapture and reposition the master lease.

Getty Realty said Getty Petroleum has not paid November or December rent.

As of Nov. 30, Getty Petroleum leased about 800 properties under the master lease, and the monthly fixed rent due to Getty Realty for November was $4.9 million.

According to the 8-K, the master lease was a "triple-net" lease and Getty Petroleum was responsible for paying taxes, maintenance, repair fees, insurance, environmental and other operating expenses.

The initial term of the master lease would have expired in December 2015, and Getty Petroleum had three 10-year renewal options and a final renewal option of three years and 10 months.

Getty Marketing said it will likely be required to increase its deferred rent receivable reserve, record additional impairment charges, accrue for environmental liabilities and incur significant costs associated with proceedings against Getty Petroleum and a repositioning of the master lease portfolio, according to the 8-K.

Getty Marketing said these developments could significantly hurt its business, financial condition, revenues, operating expenses, results of operations, liquidity, ability to pay dividends or stock prices.

Getty Petroleum, an East Meadow, N.Y., distributor of motor and heating fuels, filed for bankruptcy on Dec. 5 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 11-15606.

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