<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark one)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended MARCH 31, 2006

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 001-13777

                               GETTY REALTY CORP.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                          <C>
           MARYLAND                                              11-3412575
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)
</TABLE>

                         125 JERICHO TURNPIKE, SUITE 103
                             JERICHO, NEW YORK 11753
                    (Address of principal executive offices)
                                   (Zip Code)

                                (516) 478 - 5400
              (Registrant's telephone number, including area code)

    _________________________________________________________________________
              (Former name, former address and former fiscal year,
                          if changed since last report)

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 [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [ ]   Accelerated Filer [X]   Non-Accelerated Filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

Registrant had outstanding 24,719,465 shares of Common Stock, par value $.01 per
share, as of May 1, 2006.

<PAGE>

                               GETTY REALTY CORP.

                                      INDEX

<TABLE>
<CAPTION>
                                                                     Page Number
                                                                     -----------
<S>                                                                  <C>
Part I. FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited)

Consolidated Balance Sheets as of March 31, 2006 and
   December 31, 2005                                                       1

Consolidated Statements of Operations for the
   Three Months ended March 31, 2006 and 2005                              2

Consolidated Statements of Cash Flows for the
   Three months ended March 31, 2006 and 2005                              3

Notes to Consolidated Financial Statements                                 4

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                              10

Item 3.  Quantitative and Qualitative Disclosures about Market Risk       20

Item 4.  Controls and Procedures                                          21

Part II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                22

Item 1A. Risk Factors                                                     22

Item 6.  Exhibits                                                         22

Signatures                                                                23
</TABLE>
<PAGE>

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

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

<TABLE>
<CAPTION>
                                                               March 31,   December 31,
                                                                  2006         2005
                                                               ---------   ------------
<S>                                                            <C>         <C>
Assets:
Real Estate:
   Land                                                        $ 179,932    $ 171,839
   Buildings and improvements                                    204,501      198,656
                                                               ---------    ---------
                                                                 384,433      370,495
   Less - accumulated depreciation and amortization             (111,597)    (109,800)
                                                               ---------    ---------
      Real estate, net                                           272,836      260,695
Deferred rent receivable                                          30,110       29,287
Cash and equivalents                                               2,105        1,247
Recoveries from state underground storage tank funds, net          4,339        4,264
Mortgages and accounts receivable, net                             3,519        3,129
Prepaid expenses and other assets                                  1,091        1,359
                                                               ---------    ---------
      Total assets                                             $ 314,000    $ 299,981
                                                               =========    =========
Liabilities and Shareholders' Equity:
Debt                                                           $  49,216    $  34,224
Environmental remediation costs                                   17,285       17,350
Dividends payable                                                 11,264       11,009
Accounts payable and accrued expenses                              8,999        9,515
                                                               ---------    ---------
      Total liabilities                                           86,764       72,098
                                                               ---------    ---------
Commitments and contingencies
Shareholders' equity:
   Common stock, par value $.01 per share; authorized
      50,000,000 shares; issued 24,719,465 at March 31, 2006
      and 24,716,614 at December 31, 2005                            247          247
   Paid-in capital                                               257,852      257,766
   Dividends paid in excess of earnings                          (30,863)     (30,130)
                                                               ---------    ---------
      Total shareholders' equity                                 227,236      227,883
                                                               ---------    ---------
      Total liabilities and shareholders' equity               $ 314,000    $ 299,981
                                                               =========    =========
</TABLE>

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


                                        1

<PAGE>

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

<TABLE>
<CAPTION>
                                                 Three months
                                               ended March 31,
                                              -----------------
                                                2006      2005
                                              -------   -------
<S>                                           <C>       <C>
Revenues from rental properties               $18,067   $17,396
Expenses:
   Rental property expenses                     2,484     2,624
   Environmental expenses, net                  1,101        63
   General and administrative expenses          1,407     1,311
   Depreciation and amortization expense        1,987     1,949
                                              -------   -------
      Total operating expenses                  6,979     5,947
                                              -------   -------
Operating income                               11,088    11,449
      Other income, net                            82       136
      Interest expense                           (639)     (149)
                                              -------   -------
Net earnings                                  $10,531    11,436
                                              =======   =======
Net earnings per share:
   Basic                                      $   .43   $   .46
   Diluted                                    $   .43   $   .46
Weighted average shares outstanding:
   Basic                                       24,717    24,700
   Stock options and restricted stock units        28        14
                                              -------   -------
   Diluted                                     24,745    24,714
                                              =======   =======
Dividends declared per share:                 $  .455   $  .435
</TABLE>

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


                                        2

<PAGE>

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

<TABLE>
<CAPTION>
                                                                Three months ended
                                                                    March 31,
                                                               -------------------
                                                                 2006       2005
                                                               --------   --------
<S>                                                            <C>        <C>
Cash flows from operating activities:
Net earnings                                                   $ 10,531   $ 11,436
Adjustments to reconcile net earnings to
   net cash provided by operating activities:
   Depreciation and amortization expense                          1,987      1,949
   Deferred rental revenue                                         (823)      (900)
   Gain on dispositions of real estate                              (34)       (72)
   Accretion expense                                                167        193
   Stock-based employee compensation expense                         38         26
Changes in assets and liabilities:
   Recoveries from state underground storage tank funds, net          9        (40)
   Mortgages and accounts receivable, net                          (423)       (85)
   Prepaid expenses and other assets                                197       (159)
   Environmental remediation costs                                 (316)      (499)
   Accounts payable and accrued expenses                           (516)    (1,637)
                                                               --------   --------
      Net cash provided by operating activities                  10,817     10,212
                                                               --------   --------
Cash flows from investing activities:
   Property acquisitions and capital expenditures               (14,254)   (28,964)
   Collection (issuance) of mortgages receivable, net                33       (141)
   Proceeds from dispositions of real estate                        231        777
                                                               --------   --------
      Net cash used in investing activities                     (13,990)   (28,328)
                                                               --------   --------
Cash flows from financing activities:
   Cash dividends paid                                          (11,009)   (10,495)
   Borrowings under credit agreement, net                        15,000     14,500
   Repayment of mortgages payable                                    (8)      (264)
   Proceeds from stock issued                                        48        278
                                                               --------   --------
      Net cash provided by financing activities                   4,031      4,019
                                                               --------   --------
Net increase (decrease) in cash and equivalents                     858    (14,097)
Cash and equivalents at beginning of period                       1,247     15,700
                                                               --------   --------
Cash and equivalents at end of period                          $  2,105   $  1,603
                                                               ========   ========
Supplemental disclosures of cash flow information
   Cash paid (refunded) during the period for:
      Interest                                                 $    565   $    165
      Income taxes, net                                             185        116
      Recoveries from state underground storage tank funds         (341)      (274)
      Environmental remediation costs                               976        887
</TABLE>

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


                                        3
<PAGE>

                       GETTY REALTY CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1. General:

     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 intercompany accounts and transactions have been
eliminated.

     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. While 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 funds, environmental remediation costs, real estate, depreciation
and amortization, impairment of long-lived assets, litigation, accrued expenses,
income taxes and exposure to paying an earnings and profits deficiency dividend.

     The consolidated financial statements are unaudited but, in the opinion of
management, reflect all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation. These statements should be read in
conjunction with the consolidated financial statements and related notes, which
appear in the Company's Annual Report on Form 10-K for the year ended December
31, 2005.

2. Earnings Per Share:

     Basic earnings per share is computed by dividing net earnings by the
weighted average number of common shares outstanding during the period. Diluted
earnings per share also give effect to the potential dilution from the issuance
of common shares in settlement of stock option and restricted stock unit awards.

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 or federal agency discount notes.


                                        4

<PAGE>

     As of March 31, 2006, the Company leased nine hundred thirty-seven of its
one thousand seventy-four properties on a long-term net basis to Getty Petroleum
Marketing Inc. ("Marketing") under a master lease ("Master Lease") and a
coterminous supplemental lease for one property (collectively the "Marketing
Leases") (see note 2 to the consolidated financial statements which appear in
the Company's Annual Report on Form 10-K for the year ended December 31, 2005).
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, one of Russia's largest
oil companies. 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
obligations under the Marketing Leases. Substantially all of the deferred rental
revenue of $30,110,000 recorded as of March 31, 2006 is due to recognition of
rental revenue on a straight-line basis under the Marketing Leases. Marketing's
financial results depend largely on retail petroleum marketing margins and
rental income from its dealers. 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.

     Under the Master Lease, the Company has 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. Under the agreement, Marketing will 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 will pay all
additional costs and expenses over $10,000,000. The Company has accrued $300,000
as of March 31, 2006 and December 31, 2005 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 all pre-spin-off legal proceedings and claims relating to the
petroleum marketing business. As of March 31, 2006 and December 31, 2005 the
Company had accrued $2,742,000 and $2,667,000, respectively, for certain of
these matters which it believes were appropriate based on information then
currently available. The ultimate resolution of these matters is not expected to
have a material adverse effect on the Company's financial condition or results
of operations.

     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 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.


                                        5

<PAGE>

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 2005 the Company was notified that the
Company was made party to thirty-eight 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 March 31, 2006 and
December 31, 2005, the Company's consolidated balance sheets included, in
accounts payable and accrued expenses, $291,000 relating to 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
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.
Although future loss reserve adjustments may have a significant impact on
results of operations for any single fiscal year or interim period, the Company
currently believes that such costs will not have a material adverse effect on
the Company's long-term financial position. Since the spin-off, the Company has
maintained insurance coverage subject to certain deductibles.

     In order to qualify as a REIT, among other items, the Company paid a
$64,162,000 special one-time "earnings and profits" (as defined in the Internal
Revenue Code) cash distribution to shareholders in August 2001. Determination of
accumulated earnings and profits for federal income tax purposes is extremely
complex. Should the Internal Revenue Service successfully assert that the
Company's accumulated 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 accumulated earnings and profits. The Company may have to borrow money
or sell assets to pay such a deficiency dividend. As of March 31, 2006 and
December 31, 2005 the Company had accrued $1,100,000 for this and certain other
tax matters which it believes was appropriate based on information then
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.


                                        6

<PAGE>

4. 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 building
containing hazardous material, UST's and other equipment. Environmental expenses
are primarily 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. 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. For the
three months ended March 31, 2006 and 2005, the aggregate of the net changes in
estimated remediation costs and accretion expense included in environmental
expenses in the Company's consolidated statements of operations were $495,000
and $267,000, respectively, which amounts were net of changes in estimated
recoveries from state underground storage tank ("UST") remediation funds.
Environmental expenses also include project management fees, legal fees and
provisions for environmental litigation loss reserves.

     In accordance with 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 tenants. Generally, the liability for the
retirement and decommissioning or removal of UST's and other equipment is the
responsibility of the tenants. The Company is contingently liable for these
obligations in the event that the tenants do not satisfy their responsibilities.
A liability has not been recognized for obligations that are the responsibility
of the tenants. Of the nine hundred thirty seven properties leased to Marketing
as of March 31, 2006, 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 thirty-five properties that are scheduled in the
Master Lease and have not achieved Closure. 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.

     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 the Company's liability for
probable and


                                        7

<PAGE>

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 March 31, 2006, the Company has remediation action
plans in place for 296 (93%) of the 318 properties for which it retained
environmental responsibility and has not received a no further action letter and
the remaining 22 properties (7%) remain in the assessment phase.

     As of March 31, 2006, December 31, 2005 and December 31, 2004 the Company
had accrued $17,285,000, $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 March 31, 2006, December 31, 2005 and
December 31, 2004, the Company had also recorded $4,339,000, $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. Accrued environmental remediation costs and
recoveries from state UST remediation funds have been accreted for the change in
present value due to the passage of time and, accordingly, $167,000 and $193,000
of net accretion expense is included in environmental expenses for the three
months ended March 31, 2006 and 2005, respectively.

     In view of the uncertainties associated with environmental expenditures,
however, the Company believes it is possible that the fair value of future
actual net expenditures could be substantially higher than these estimates.
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. Although future environmental
expenses may have a significant impact on results of operations for any single
fiscal year or interim period, the Company currently believes that such costs
will not have a material adverse effect on the Company's long-term financial
position.

5. Shareholders' Equity:

     A summary of the changes in shareholders' equity for the three months ended
March 31, 2006 is as follows (in thousands, except share amounts):


<TABLE>
<CAPTION>
                                                                     Dividends
                                        Common Stock                  Paid In
                                    -------------------    Paid-in   Excess Of
                                      Shares     Amount    Capital    Earnings     Total
                                    ----------   ------   --------   ---------   --------
<S>                                 <C>          <C>      <C>        <C>         <C>
Balance, December 31, 2005          24,716,614    $247    $257,766   $(30,130)   $227,883
Net earnings                                                           10,531      10,531
Dividends                                                             (11,264)    (11,264)
Stock-based employee compensation
   expense                                                      38                     38
Stock issued                             2,851                  48                     48
                                    ----------    ----    --------   --------    --------
Balance, March 31, 2006             24,719,465    $247    $257,852   $(30,863)   $227,236
                                    ==========    ====    ========   ========    ========
</TABLE>


                                        8

<PAGE>

     The Company is authorized to issue 20,000,000 shares of preferred stock,
par value $.01 per share, of which none were issued as of December 31, 2005 or
March 31, 2006.

6. Acquisitions

     On February 28, 2006, the Company acquired eighteen retail motor fuel and
convenience store properties located in Western New York for $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.

     On March 25, 2005 the Company acquired twenty-three convenience store and
retail motor fuel properties in Virginia for $28,960,000. 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.

7. Subsequent Event

     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 hedge the Company's exposure to market interest rate risk by
effectively fixing, at 5.4%, the LIBOR component of the interest rate determined
under its existing credit agreement or other LIBOR based borrowing arrangements
that may be entered into prior to the expiration of the interest rate swap. The
Company's borrowings under its credit agreement bear interest at a rate equal to
the sum of a base rate or a LIBOR rate plus an applicable margin based on the
Company's leverage ratio and ranging from 0.25% to 1.75%. Effective May 1, 2006,
$45,000,000 of the Company's LIBOR based borrowings under the credit agreement
bear interest at a 6.7% effective rate.


                                        9

<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

     This discussion and analysis of financial condition and results of
operations should be read in conjunction with the sections entitled "Part I,
Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations," which appear in our
Annual Report on Form 10-K for the year ended December 31, 2005, and the
unaudited consolidated financial statements and related notes which appear in
this Quarterly Report on Form 10-Q.

Recent Developments

     On February 28, 2006, we acquired eighteen retail motor fuel and
convenience store properties located in Western New York for approximately $13.4
million. 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 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.

General

     We are a real estate investment trust specializing in the ownership and
leasing of retail motor fuel and convenience store properties and petroleum
distribution terminals. We elected to be taxed 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.

     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
March 31, 2006, we leased nine hundred thirty-seven of our one thousand
seventy-four properties on a long-term basis under a master lease (the "Master
Lease") and a coterminous supplemental lease for one property, (collectively the
"Marketing Leases") to Getty Petroleum Marketing Inc. ("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 OAO Lukoil
("Lukoil"), one of Russia's largest integrated oil companies.

     Substantially all of our revenues (87% for the three months ended March 31,
2006), are derived from the Marketing Leases. 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 other lessees may have a material adverse effect on our financial condition
and results of operations. Marketing's financial results depend largely on
retail petroleum marketing margins and rental income from subtenants who operate
our properties. The petroleum


                                       10

<PAGE>

marketing industry has been and continues to be volatile and highly competitive.
Factors that could adversely affect Marketing or our other lessees include those
described under "Part I, Item 1A. Risk Factors", in our Annual Report on Form
10-K. In the event that Marketing cannot or will not perform its monetary
obligations under the Marketing Leases with us, our financial condition and
results of operations would be materially adversely affected. Although Marketing
is wholly owned by a subsidiary of Lukoil, no assurance can be given that Lukoil
will cause Marketing to fulfill any of its monetary obligations under the
Marketing Leases.

     We periodically receive and review Marketing's financial statements and
other financial data. We receive this information from Marketing pursuant to the
terms of the Master Lease. Certain of this information is not publicly available
and 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. The financial performance of
Marketing may deteriorate, and Marketing may ultimately default on its monetary
obligations to us before we receive financial information from Marketing that
would indicate the deterioration or before we would have the opportunity to
advise our shareholders of any increased risk of default.

     Certain financial and other information concerning Marketing is available
from Dun & Bradstreet and may be accessed by their web site (www.dnb.com) upon
payment of their fee.

     The audited consolidated financial statements of Marketing for their fiscal
year ended December 31, 2005 have been provided to us, but Marketing's selected
financial data is not yet publicly available. The most recent selected financial
data of Marketing that is publicly available has been provided in "Part II,
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations," which appears in our Annual Report on Form 10-K for the year
ended December 31, 2005.

     Based on our review of the financial statements and other financial data
Marketing has provided to us to date, we believe that Marketing has the
liquidity and financial ability to continue to pay timely its monetary
obligations under the Marketing Leases, as it has since the inception of the
Master Lease in 1997.

     As part of a periodic review by the Division of Corporation Finance of the
Securities and Exchange Commission ("SEC") of our Annual Report on Form 10-K for
the year ended December 31, 2003, we received and responded to a number of
comments. The only comment that remains unresolved pertains to the SEC's
position that we must include the financial statements and summarized financial
data of Marketing in our periodic filings. The SEC subsequently 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


                                       11
<PAGE>

offers and sales of our securities under existing registration statement 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 that, even if it were, we believe that we should be
entitled to certain relief from compliance with such requirements. Marketing
subleases our properties to approximately nine hundred independent, individual
service station/convenience store operators (subtenants), most of whom were our
tenants when Marketing was spun-off to our shareholders. Consequently, we
believe that we, as the owner of these properties and the Getty brand, and our
prior experience with Marketing's tenants, could relet these properties to the
existing subtenants or others at market rents. Because of this particular aspect
of our landlord-tenant relationship with Marketing, we do not believe that the
inclusion of Marketing's financial statements in our filings is necessary to
evaluate our financial condition. Our position was included in a written
response to the SEC. To date, the SEC has not accepted our position regarding
the inclusion of Marketing's financial statements in our filings. We are
endeavoring to achieve a resolution of this issue that will be acceptable to the
SEC. We can not accurately predict the consequences if we are ultimately
unsuccessful in achieving an acceptable resolution.

     We do not believe that offers or sales of our securities made pursuant to
existing registration statements that did not or do not contain the financial
statements of Marketing constitute, by reason of such omission, a violation of
the Securities Act of 1933, as amended or the Exchange Act. Additionally, we
believe that, if there ultimately is a determination that such offers or sales,
by reason of such omission, resulted in a violation of those securities laws, we
would not have any material liability as a consequence of any such
determination.

     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, non-FFO items reported in discontinued operations and 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


                                       12

<PAGE>

revenue) on our recognition of revenues from rental properties, which results
primarily from fixed rental increases scheduled under certain leases with our
tenants. In accordance with GAAP, the aggregate minimum rent due over the
initial term of these leases are recognized on a straight-line basis rather than
when due. GAAP net earnings and FFO may also include an income tax provision or
benefit recognized due to adjustments 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 and income taxes. Income taxes did not have a significant impact on our
earnings for the periods presented, and accordingly, do not appear as a separate
item in our statement of operations or reconciliation of AFFO from net earnings.
In management's view, AFFO provides a more accurate depiction than FFO of the
impact of scheduled rent increases under these leases and our election to be
taxed as a REIT 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.

     A reconciliation of net earnings to FFO and AFFO for the three months ended
March 31, 2006 and 2005 is as follows (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                               Three months ended March 31,
                                               ----------------------------
                                                      2006      2005
                                                    -------   -------
<S>                                            <C>            <C>
Net earnings                                        $10,531   $11,436
                                                    -------   -------
Depreciation and amortization of real estate
   assets (*)                                         1,916     1,949
Gains on dispositions of real estate                    (34)      (72)
                                                    -------   -------
Funds from operations                                12,413    13,313
Deferred rental revenue (straight-line rent)           (823)     (900)
                                                    -------   -------
Adjusted funds from operations                      $11,590   $12,413
                                                    =======   =======
Diluted per share amounts
   Earnings per share                               $   .43   $   .46
   Funds from operation per share                   $   .50   $   .54
   Adjusted funds from operations per share         $   .47   $   .50
Diluted weighted average
   shares outstanding                                24,745    24,714
</TABLE>

(*)  Depreciation and amortization expense as reflected in our Consolidated
     Statements of Operations also includes depreciation on non-real estate
     assets.


                                       13
<PAGE>

Results of operations

Three months ended March 31, 2006 compared to the three months ended March 31,
2005

     Revenues from rental properties were $18.1 million for the three months
ended March 31, 2006 compared to $17.4 million for the three months ended March
31, 2005. We received approximately $15.1 million in the three months ended
March 31, 2006 and $14.9 million in the three months ended March 31, 2005, from
properties leased to Marketing under the Marketing Leases. We also received rent
of $2.2 million in the three months ended March 31, 2006 and $1.6 million in the
three months ended March 31, 2005 from other tenants. The increase in rent
received was primarily due to rent from properties acquired in March 2005 and
February 2006 and rent escalations, partially offset by the effect of property
dispositions. In addition, revenues from rental properties include deferred
rental revenues of $0.8 million for the three months ended March 31, 2006 and
$0.9 million for the three months ended March 31, 2005, recorded as required by
GAAP, related to the fixed rent increases scheduled under certain leases with
tenants. The aggregate minimum rent due over the initial term of these leases
are recognized on a straight-line basis rather than when due.

     Rental property expenses, which are primarily comprised of rent expense and
real estate and other state and local taxes, were $2.5 million for the three
months ended March 31, 2006, which was comparable to $2.6 million recorded for
the three months ended March 31, 2005.

     Environmental expenses, net for the three months ended March 31, 2006 were
$1.1 million as compared to $63,000 for the three months ended March 31, 2005.
The increase was due to a $0.2 million increase in the change in estimated
environmental costs, net of estimated recoveries, and accretion expense as well
as a $0.8 million increase in environmental litigation expense as compared to
the prior year period. Environmental litigation expense was $0.4 million for the
three months ended March 31, 2006 compared to a credit of $0.4 million for 2005,
which prior period includes a net reduction in litigation loss reserve
estimates.

     General and administrative expenses for the three months ended March 31,
2006 were $1.4 million which was comparable to the $1.3 million recorded for the
three months ended March 31, 2005.

     Depreciation and amortization expense for the three months ended March 31,
2006 was $2.0 million which was comparable to the $1.9 million recorded for the
three months ended March 31, 2005.

     As a result, total operating expenses increased by approximately $1.0
million for the three months ended March 31, 2006, as compared to the three
months ended March 31, 2005.

     Other income, net was $0.1 million for the three months ended March 31,
2006 and 2005.

     Interest expense, primarily related to borrowings used to finance the
acquisition of properties, was $0.6 million for the three months ended March 31,
2006 and was $0.1 million for the three months ended March 31, 2005. Interest
expense increased primarily due to increased borrowings used to finance the
acquisition of properties in March 2005 and February 2006. Interest expense also


                                       14

<PAGE>

increased due to an increase in interest rates which averaged 5.8% for the three
months ended March 31, 2006 as compared to 3.8% for the three months ended March
31, 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 exposure to market interest rate risk by effectively
fixing, at 5.4%, the LIBOR component of the interest rate determined under our
existing credit agreement or other LIBOR based borrowing arrangements that may
be entered into prior to the expiration of the interest rate swap. Our
borrowings under the credit agreement bear interest at a rate equal to the sum
of a base rate or a LIBOR rate plus an applicable margin based on our leverage
ratio and ranging from 0.25% to 1.75%. Effective May 1, 2006, $45.0 million of
our LIBOR based borrowings under the credit agreement bear interest at a 6.7%
effective rate.

     As a result net earnings were $10.5 million for the three months ended
March 31, 2006 as compared to $11.4 million for the comparable prior year
period. Net earnings for the three months ended March 31, 2006 decreased by
7.9%, or $0.9 million, over the three months ended March 31, 2005, due to items
discussed above. FFO was $12.4 million, a decrease of $0.9 million, or 6.8%, and
AFFO was $11.6 million, a decrease of $0.8 million, or 6.6%. FFO decreased more
than AFFO on both a dollar and percentage basis due to a $0.1 million decrease
in deferred rental revenue (which is included in net earnings and FFO but is
excluded from AFFO) recorded for the three months ended March 31, 2006 as
compared to the three months ended March 31, 2005.

     Diluted earnings per share for the three months ended March 31, 2006 was
$0.43 per share, which decreased $0.03 per share or 6.5%, as compared to the
three months ended March 31, 2005. Diluted FFO per share was $0.50 per share,
which decreased $0.04 per share or 7.4% as compared to the three months ended
March 31, 2005 and diluted AFFO per share for the three months ended March 31,
2006 was $0.47, which decreased $0.03 per share, as compared to the three months
ended March 31, 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 matures in 2008 and
available cash and equivalents. Management believes that dividend payments and
cash requirements for our business for the next twelve months, including
environmental remediation expenditures, capital expenditures and debt service,
can be met by cash flows from operations, borrowings under the credit agreement
and available cash and equivalents.

     On June 30, 2005, we entered into an unsecured three-year senior revolving
$100.0 million credit agreement ("Credit Agreement") with a group of six
domestic commercial banks. Subject to the terms of the Credit Agreement, we have
the right to increase the Credit Agreement by $25.0 million and to extend the
term of the Credit Agreement for one additional year. Borrowings under the
Credit Agreement bear interest at a rate equal to the sum of a base rate or a
LIBOR rate plus an applicable margin based on our leverage ratio and ranging
from 0.25% to 1.75%. The annual commitment fee on the unused Credit Agreement
will range from 0.10% to 0.20% based on the amount of borrowings. The Credit
Agreement includes customary terms and conditions, including financial


                                       15

<PAGE>

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 a change of
control and failure to maintain REIT status. We do not believe that these
covenants will limit our current business practices.

     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 exposure to market interest rate risk by effectively
fixing, at 5.4%, the LIBOR component of the interest rate determined under our
existing or other LIBOR based borrowing arrangements that may be entered into
prior to the expiration of the interest rate swap. Effective May 1, 2006, $45.0
million of our LIBOR based borrowings under the Credit Agreement bear interest
at a 6.7% effective rate.

     Total borrowings outstanding under the Credit Agreement at March 31, 2006
were $49.0 million, bearing interest at a rate of 6.0% per annum. Total
borrowings increased to $51.0 million as of May 1, 2006 primarily due to
additional borrowings used to pay $11.0 million of dividends that were accrued
as of March 31, 2006 and paid in April 2006, net of repayments from positive
cash flows provided by rental operations. Accordingly, we had $49.0 million
available under the terms of the Credit Agreement as of May 1, 2006 or $74.0
million available assuming we had exercised our right to increase the by $25.0
million.

     We elected to be taxed 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. Dividends paid to
our shareholders aggregated $11.0 million for the three months ended March 31,
2006 and $10.5 million for the prior year period. We presently intend to pay
common stock dividends of $0.455 per share each quarter ($1.82 per share on an
annual basis), and commenced doing so with the quarterly dividend declared in
February 2006.

     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.

Critical Accounting Policies

     Our accompanying interim consolidated financial statements 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 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.


                                       16

<PAGE>

     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 funds, environmental
remediation costs, real estate, depreciation and amortization, impairment of
long-lived assets, litigation, accrued expenses, income taxes and exposure to
paying an earnings and profits deficiency dividend. 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 to the consolidated financial statements that appear in our
Annual Report on Form 10-K for the year ended December 31, 2005. We believe that
the more critical of our accounting policies relate to revenue recognition,
impairment of long-lived assets, income taxes, environmental costs and
recoveries from state underground storage tank funds and litigation, each of
which is discussed in "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our Annual Report on Form 10-K for the
year ended December 31, 2005.

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. 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 tenant. We are contingently liable for these obligations
in the event that our tenants do not satisfy their responsibilities. A liability
has not been recognized for obligations that are the responsibility of our
tenants. As of March 31, 2006, we have remediation action plans in place for 296
(93%) of the 318 properties for which we retained environmental responsibility
and the remaining 22 properties (7%) remain in the assessment phase.

     As of March 31, 2006, December 31, 2005 and December 31, 2004, we had
accrued $17.3 million, $17.4 million, and $20.6 million, respectively, as
management's best estimate of the fair value of reasonably estimable
environmental remediation costs. As of March 31, 2006, December 31, 2005 and
December 31, 2004, we had also recorded $4.3 million, $4.3 million and $5.4
million, respectively, as management's best estimate for net recoveries from
state UST remediation funds, net of allowance, related to environmental
obligations and liabilities. The net environmental liabilities of $13.1 million
as of December 31, 2005 and $15.2 million as of December 31, 2004 were
subsequently accreted for the change in present value due to the passage of time
and, accordingly, $0.2 million of accretion expense is included in environmental
expenses for each of the three month periods ended March 31, 2006 and 2005.
Environmental expenditures and recoveries from underground storage tank funds
were $1.0 million, and $0.3 million, respectively, for the three month period
ended March 31, 2006.


                                       17

<PAGE>

     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 $5.5 million. Accordingly, the environmental accrual as of March 31,
2006 was increased by $2.1 million, net of assumed recoveries and before
inflation and present value discount adjustments. The resulting net
environmental accrual as of March 31, 2006 was then further increased by $1.2
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 $2.4 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 March 31,
2006 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 and accretion expense
recorded during the year ended March 31, 2006 would not have changed
significantly if these changes in the assumptions were made effective December
31, 2005.

     In view of the uncertainties associated with environmental expenditures,
however, we believe it is possible that the fair value of future actual net
expenditures could be substantially higher than these estimates. 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. For the three months ended March 31, 2006 and 2005, the
aggregate of the net change in estimated remediation costs and accretion expense
included in our consolidated statement of operations amounted to $0.5 million
and $0.3 million, respectively, which amounts were net of probable recoveries
from state UST remediation funds. Although future environmental costs may have a
significant impact on results of operations for any single fiscal year or
interim period, we believe that such costs will not have a material adverse
effect on our long-term financial position.

     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 underground storage tank
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.

     Our discussion of environmental matters should be read in conjunction with
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations" which appears in the Company's Annual Report on Form 10-K for the
year ended December 31, 2005 and the unaudited consolidated financial statements
and related notes (including notes 3 and 4) which appear in this Quarterly
Report on Form 10-Q.


                                       18

<PAGE>

Forward Looking Statements

     Certain statements in this Quarterly 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" and similar expressions, we intend to identify forward-looking
statements. Examples of forward-looking statements include statements regarding
our expectations regarding future payments from Marketing; 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 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; the impact of the covenants included in the Credit Agreement on
our current business practices; our ability to maintain our REIT status; the
probable outcome of litigation or regulatory actions; our expected recoveries
from underground storage tank funds; our exposure to environmental remediation
expenses; our estimates regarding remediation costs and accretion expense; our
expectations as to the long-term effect of environmental liabilities on our
financial condition; our exposure to interest rate fluctuations; 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 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, 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. Information concerning factors that could cause our
actual results to materially differ from those forward looking results can be
found in "Part I, Item 1A. Risk Factors" of our Annual Report on Form 10-K for
the year ended December 31, 2005, as well as in other filings we make with the
Securities and Exchange Commission and 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; our
expectations as to the cost of completing environmental remediation; the risk of
loss of our management team; the impact of our electing to be taxed as a REIT,
including subsequent failure to qualify as a REIT; risks associated with owning
real estate concentrated in one region of the United States; risks associated
with potential future acquisitions; losses not covered by insurance; future
dependence on external sources of capital; 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 Securities and
Exchange Commission.


                                       19

<PAGE>

     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 to reflect future
events or circumstances or reflect the occurrence of unanticipated events.

Item 3. Quantitative and Qualitative 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 had no
outstanding derivative instruments as of March 31, 2006 or at any time during
the three months then ended. We do not have any foreign operations, and are
therefore not exposed to foreign currency exchange rate risks.

     We are exposed to interest rate risks, primarily as a result of our $100.0
million Credit Agreement. Our Credit Agreement, which expires in June 2008,
bears interest at a rate equal to the sum of a base rate or a LIBOR rate plus an
applicable margin based on our leverage ratio and ranging from 0.25% to 1.75%.
At March 31, 2006, we had borrowings outstanding of $49.0 million under our
Credit Agreement bearing interest at a rate of 6.0% per annum. We use borrowings
under the Credit Agreement to finance acquisitions and for general corporate
purposes.

     We manage our exposure to interest rate risks by minimizing, to the extent
feasible, our overall borrowing and monitoring available financing alternatives.
Our interest rate risk as of March 31, 2006 increased due to increased
borrowings under the Credit Agreement as compared to December 31, 2005. Due to
the increased exposure, 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
our exposure to market interest rate risk by effectively fixing, at 5.4%, the
LIBOR component of the interest rate determined under our existing Credit
Agreement or other LIBOR based borrowing arrangements that may be entered into
prior to the expiration of the interest rate swap. Effective May 1, 2006, $45.0
million of our LIBOR based borrowings under the Credit Agreement bear interest
at a 6.7% effective rate. As a result, we 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. We do not foresee any significant changes in our
exposure or in how we manage this exposure in the near future.

     Based on our projected average outstanding borrowings under the Credit
Agreement for 2006, if market interest rates increase by an average of 0.5% more
than the weighted average interest rate of 6.0% as of March 31, 2006, the
additional annualized interest expense caused by market interest rate increases
since December 31, 2005 would decrease 2006 net income and cash flows by
approximately $65,000. This amount is the sum of (i) the actual impact of
increased market interest rates for the three months ended March 31, 2006 and
(ii) the effect of a hypothetical interest rate change on the portion of our
average outstanding borrowings of $50.5 million projected for the remainder of
2006 under our Credit Agreement that is not covered by our interest rate swap.
The portion not covered by the interest rate swap includes (i) $50.5 million for
the period from April 1 through April 30, 2006 (since the $45.0 million interest
rate swap is effective as of May 1, 2005) and (ii) $5.5 million for the period
from May 1 through December 31, 2006. The projected


                                       20

<PAGE>

average outstanding borrowings are 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.
Management believes that the fair value of its debt equals its carrying value at
March 31, 2006 and December 31, 2005. Our exposure to fluctuations in interest
rates will increase or decrease in the future with increases or decreases in the
amount of borrowings outstanding 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 an institutional
money market fund and short-term federal agency discount notes.

Item 4. 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 under the Securities Exchange Act of 1934, as amended, 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 Rule 13a-15(b), the Company 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 quarter
covered by this report. Based on the foregoing, the Company's Chief Executive
Officer and Chief Financial Officer have concluded that the Company's disclosure
controls and procedures were effective at a reasonable assurance level as of
March 31, 2006.

     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.


                                       21

<PAGE>

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     In March 2004, litigation was commenced in the Supreme Court in Nassau
County, New York against us by the owners of a property formerly operated by a
subsidiary of the Company demanding reimbursement for the cost of removing
contaminated soil. Our operations at the property terminated approximately 15
years ago. We filed a motion to dismiss, primarily based upon the three year
Statute of Limitations applicable to such claims and the motion was granted.
Plaintiffs appealed the dismissal and the dismissal was reversed on appeal. The
case is in its initial stages and no decision has been made by the Company as to
whether to appeal the reversal.

     Please refer to "Item 3. Legal Proceedings" of our Annual Report on Form
10-K for the year ended December 31, 2005 and note 3 to our consolidated
financial statements in such Form 10-K and note 3 to our accompanying
consolidated financial statements which appear in this Form 10-Q for additional
information.

Item 1A. Risk Factors

     See "Part I, Item 1A. Risk Factors" of our Annual Report on Form 10-K for
the year ended December 31, 2005 for factors that could affect the Company's
results of operations, financial condition and liquidity. There has been no
material change in such factors since December 31, 2005.

Item 6. Exhibits

<TABLE>
<CAPTION>
Exhibit No.     Description of Exhibit
-----------     ----------------------
<S>           <C>
  31(i).1     Rule 13a-14(a) Certification of Chief Financial Officer
  31(i).2     Rule 13a-14(a) Certification of Chief Executive Officer
  32.1        Certification of Chief Executive Officer pursuant to 18 U.S.C.
              Section 1350 (a)
  32.2        Certifications of Chief Financial Officer pursuant to 18 U.S.C.
              Section 1350 (a)
</TABLE>

(a)  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 Securities Exchange Act of 1934, as amended, 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.


                                       22

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                               GETTY REALTY CORP.
                                  (Registrant)


Dated: May 10, 2006                     BY: /s/ Thomas J. Stirnweis
                                            ------------------------------------
                                            (Signature)
                                            THOMAS J. STIRNWEIS
                                            Vice President, Treasurer and
                                            Chief Financial Officer


Dated: May 10, 2006                     BY: /s/ Leo Liebowitz
                                            ------------------------------------
                                            (Signature)
                                            LEO LIEBOWITZ
                                            Chairman and Chief Executive Officer


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