"This is not a good sign and one that could result in the beginning of reworking of the leases underlying the Getty Petroleum Marketing master lease," noted JPMorgan analyst Anthony Paolone. Paolone downgraded Getty Realty shares to underweight, from neutral, and lowered his price target on the REIT stock by $4 to $22. Getty Realty was told that Getty Petroleum Marketing's rental payment, which was due on March 1, will be received on or before March 7. Getty Realty said it "cannot provide any assurance that Marketing will meet its rental, environmental or other obligations under the Master Lease." That caused alarm among investors, who bid Getty Realty shares 19.6% lower in afternoon trading Wednesday amid heavy volume. Nearly 2.5 million shares were in play with over two hours left in the session, compared with their average daily volume of just 482,000. Paolone noted that Getty Petroleum Marketing is Getty Realty's largest tenant, responsible for around 60% of its revenue. "While very little information is known at this point, we roughly estimate the earnings hit from renegotiating the leases could be 9% or more," he said. "Until the situation is resolved, we think the shares will face a significant headwind and external growth initiatives are likely to be hampered." -- Written by Miriam Marcus Reimer in New York. >To contact the writer of this article, click here: Miriam Reimer. >To follow the writer on Twitter, go to http://twitter.com/miriamsmarket. >To submit a news tip, send an email to: firstname.lastname@example.org.
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