Getty Realty Corp., of Jericho, has not received the August monthly rental payment from its largest tenant, Getty Petroleum Marketing Inc., which leases properties for gas stations and convenience stores.
The tenant said that due to its “distressed financial position, weakness in operating margins, and cash flow deficiencies, it was unlikely to be able to pay full rent for August,“ and future rent payments are also in doubt, Getty Realty said.
Getty Realty says it issued a default notice to the tenant.
Getty Realty last month disclosed that Getty Petroleum Marketing had lost a dispute with Bionol Clearfield Llc, with the judgment awarding Bionol $230 million.
Getty Petroleum’s leases account for about 55 percent of Getty Realty’s revenues, a J.P. Morgan research report estimated this past month. Getty Realty does not own Getty Petroleum, but does license its name exclusively to the company.
Getty Petroleum has appealed the decision, but many are questioning its ability to pay rent to Getty Realty, analysts said.
“Information has emerged in the last few days that puts the revenue from their largest tenant at greater risk than it was before,” said Anthony Paolone, an analyst at J.P. Morgan.
Earlier this year, Getty Petroleum was sold by its owner, Lukoil, to Cambridge Petroleum Holdings, which made some investors question the company’s ability to pay its rent to Getty Realty without the support of Lukoil, Paolone added.
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