<PAGE>   1



================================================================================


                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D. C.  20549

                                  FORM 10-Q

                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                   THE SECURITIES AND EXCHANGE ACT OF 1934



For quarter ended July 31, 1997                   Commission file number 1-8059
                  -------------                                          ------


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

                                                
          Delaware                                                  11-2232705
---------------------------------                                   ----------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

125 Jericho Turnpike, Jericho, New York                                  11753  
----------------------------------------                                 -----  
(Address of principal executive offices)                              (Zip Code)

                                      
                               (516) 338 - 2600
                               ----------------
             (Registrant's telephone number, including area code)

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
                                              ---   ---

Registrant has 13,260,275 shares of Common Stock, par value $.10 per share,
outstanding as of July 31, 1997.


================================================================================

<PAGE>   2

                              GETTY REALTY CORP.

                                    INDEX


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

Item 1.  Financial Statements

 Consolidated Balance Sheets as of July 31, 1997 and
  January 31, 1997                                                               1

 Consolidated Statements of Operations for the three and
  six months ended July 31, 1997 and 1996                                        2

 Consolidated Statements of Cash Flows for the
  six months ended July 31, 1997 and 1996                                        3

 Notes to Consolidated Financial Statements                                  4 - 7

Item 2.  Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                          8 - 11

Part II.  OTHER INFORMATION
---------------------------

Item 6.  Exhibits and Reports on Form 8-K                                       12

Signatures                                                                      12
</TABLE>


<PAGE>   3

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

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                                            July 31,               January 31,
---------------------------------------------------------------------------------------------------------------
Assets:                                                                      1997                     1997
---------------------------------------------------------------------------------------------------------------
                                                                          (unaudited)

 <S>                                                                       <C>                     <C>
 Real Estate:
  Land                                                                     $ 40,949                 $ 40,647        
  Buildings                                                                  59,271                   59,229        
  Equipment                                                                  19,928                   16,180        
  Leasehold improvements                                                     31,417                   31,703        
  Assets recorded under                                                                                             
   capital leases                                                            51,084                   51,233        
                                                                           --------                 --------
                                                                            202,649                  198,992        
  Less, accumulated depreciation                                                                                    
   and amortization                                                         104,826                  101,058        
                                                                           --------                 --------    
   Real estate, net                                                          97,823                   97,934        
 Cash and equivalents                                                         8,443                   11,385        
 Accounts receivable, net                                                     1,857                    2,731        
 Mortgages receivable                                                         6,654                    6,602        
 Recoveries from state                                                                                              
  underground storage tank funds                                             14,940                   16,217        
 Deferred income taxes                                                       20,996                   18,485        
 Prepaid expenses and other assets                                            5,662                    4,010        
 Assets of Getty Petroleum                                                                                          
  Marketing Inc.                                                                  -                  135,500        
                                                                           --------                 --------    
    Total assets                                                           $156,375                 $292,864        
                                                                           ========                 ========
                                                                                                                    
---------------------------------------------------------------------------------------------------------------     
Liabilities and Stockholders' Equity:                                                                               
---------------------------------------------------------------------------------------------------------------      
                                                                                                                    
 Mortgages payable                                                         $ 16,515                 $ 18,882         
 Obligations under capital leases                                            19,678                   22,710        
 Accounts payable and accrued expenses                                       20,457                   22,281        
 Environmental remediation costs                                             41,887                   46,134        
 Income taxes payable                                                             -                    1,426        
 Liabilities of Getty Petroleum Marketing Inc.                                    -                   80,959        
                                                                                                                    
 Stockholders' equity:                                                                                              
 Preferred stock, par value $1.00 per share; authorized                                                             
  10,000,000 shares for issuance in series (none of which is issued)              -                        -        
 Common stock, par value $.10 per share; authorized                                                                 
  30,000,000 shares; issued 14,143,691 at July 31, 1997                                                             
  and 13,582,394 at January 31, 1997                                          1,414                    1,358        
 Paid-in capital                                                             73,180                  120,293        
 Retained deficit                                                            (2,834)                  (7,215)       
 Treasury stock, at cost (883,416 shares at July 31, 1997                                                           
  and 885,893 shares at January 31, 1997)                                   (13,922)                 (13,964)       
                                                                           --------                 --------     
    Total stockholders' equity                                               57,838                  100,472        
                                                                           --------                 --------   
    Total liabilities and stockholders' equity                             $156,375                 $292,864        
                                                                           ========                 ========
</TABLE>

                           See accompanying notes.

                                     -1-

<PAGE>   4

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

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                                           Three months ended  July 31,         Six months ended July 31,      
--------------------------------------------------------------------------------------------------------------------------
                                                               1997             1996                  1997        1996             
--------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>            <C>                     <C>         <C>
Revenues:
 Revenues from rental property                                $14,932          $8,796                $29,878     $17,777   
 Net sales of petroleum products                                5,263         219,515                 13,644     423,799   
 Other income                                                   1,439           1,881                  1,893       2,584   
                                                              -----------------------                -------------------
                                                               21,634         230,192                 45,415     444,160   

Equity in earnings of Getty Petroleum Marketing Inc.                -               -                  2,931           -   
                                                              -----------------------                -------------------
                                                               21,634         230,192                 48,346     444,160   
                                                              -----------------------                -------------------   
Cost of sales of petroleum products 
 (excluding depreciation and amortization)                      5,019         192,436                 12,418     383,607   
Rental property expenses                                        3,572           5,332                  6,882      10,669   
Environmental and maintenance expenses                          2,331           6,219                  3,571      10,672   
Selling, general and administrative expenses                    3,886           6,804                  7,230      13,141   
Change of control charge                                            -               -                  2,166           -   
Litigation charge                                                   -             127                      -       7,585   
Depreciation and amortization                                   2,419           5,743                  4,806      11,412   
Interest expense                                                1,309           1,758                  2,689       3,613   
                                                              -----------------------                -------------------   
                                                               18,536         218,419                 39,762     440,699   
                                                              -----------------------                -------------------   
Earnings before provision for                                                                                              
 income taxes                                                   3,098          11,773                  8,584       3,461   
Provision for income taxes                                      1,148           4,604                  3,427       1,457   
                                                              -----------------------                -------------------      
Net earnings                                                  $ 1,950          $7,169                 $5,157      $2,004   
                                                              =======================                ===================
Net earnings per share                                          $0.15           $0.57                  $0.40       $0.16   
                                                              =======================                ===================   
Weighted average shares outstanding                            13,118          12,676                 12,944      12,672   
                                                              =======================                ===================
</TABLE>







                           See accompanying notes.

                                      -2-
<PAGE>   5

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

<TABLE>
<CAPTION>
                                                                                           Six months ended
                                                                                               July 31,
                                                                                  ---------------------------------
                                                                                       1997                  1996
                                                                                       ----                  ----
<S>                                                                                   <C>                   <C>
Cash flows from operating activities:
Net earnings                                                                          $5,157                $2,004         
Adjustments to reconcile net earnings to                                                                                   
  net cash provided by  (used in) operating activities:                                                                    
  Depreciation and amortization                                                        4,806                11,412         
  Deferred income taxes                                                               (2,511)                   (3)        
  Gain on dispositions of real estate                                                   (692)               (1,260)        
  Equity in net earnings of Getty Petroleum Marketing Inc.                            (1,731)                    -        
Changes in assets and liabilities:                                                                                         
  Accounts receivable                                                                    874                 2,383         
  Mortgages receivable                                                                   (52)                    -        
  Recoveries from state underground storage tank funds                                 1,277                     -         
  Prepaid expenses and other assets                                                   (1,686)               (2,131)        
  Accounts payable and accrued expenses                                               (1,824)                9,810        
  Environmental remediation costs                                                     (4,247)                    -        
  Income taxes payable                                                                (1,426)                   24        
                                                                                  ---------------------------------      
     Net cash provided by (used in) operating activities                              (2,055)               22,239        
                                                                                  ---------------------------------     
Cash flows from investing activities:                                                                                      
  Capital expenditures                                                                (4,189)              (10,734)        
  Property acquisitions                                                               (1,027)                 (753)        
  Proceeds from dispositions of real estate                                            1,247                 1,871         
                                                                                  ---------------------------------    
     Net cash used in investing activities                                            (3,969)               (9,616)        
                                                                                  ---------------------------------    
Cash flows from financing activities:                                                                                      
  Mortgage borrowings                                                                    165                     -         
  Repayment of mortgages payable                                                      (2,532)               (2,409)        
  Payments under capital lease obligations                                            (3,032)               (2,630)        
  Cash dividends                                                                        (776)                 (760)        
  Stock options and treasury stock, net                                                9,257                   206         
                                                                                  ---------------------------------     
     Net cash provided by (used in) financing activities                               3,082                (5,593)         
                                                                                  ---------------------------------     
Net increase (decrease) in cash and equivalents                                       (2,942)                7,030        
Cash and equivalents at beginning of period                                           11,385                19,808         
                                                                                  ---------------------------------      
Cash and equivalents at end of period                                                 $8,443               $26,838         
                                                                                  =================================   
                                                                                                                           
Supplemental disclosures of cash flow information                                                                          
  Cash paid during the period for:                                                                                         
    Interest                                                                          $2,686                $3,616         
    Income taxes, net                                                                  2,891                 1,435         

</TABLE>

                           See accompanying notes.

                                     -3-


<PAGE>   6


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

     The accompanying consolidated financial statements include the accounts of
Getty Realty Corp., known prior to March 31, 1997 as Getty Petroleum Corp., and
its wholly-owned subsidiaries (the "Company") (See Note 2).  The consolidated
financial statements have been prepared in conformity with generally accepted
accounting principles and include amounts that are based on management's best
estimates and judgments.  While all available information has been considered,
actual amounts could differ from those estimates.  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 fiscal year ended January 31,
1997.

     Certain reclassifications have been made in the financial statements as of
January 31, 1997 and for the periods ended July 31, 1996, to conform to the
July 31, 1997 presentation.

2.   Spin-off:

     On March 21, 1997, the Company effected the spin-off of Getty Petroleum
Marketing Inc. ("Marketing") to its stockholders.  Stockholders of record of
the Company on March 21, 1997 received a tax-free dividend of one share of
Marketing common stock for each share of common stock of the Company.

     Prior to the spin-off, the Company transferred to Marketing the assets and
liabilities of the petroleum marketing business and the New York Mid-Hudson
Valley home heating oil business previously conducted by a subsidiary of the
Company.  The Company has retained its fee and leased properties, including
service stations and supply terminals, substantially all of which are leased or
subleased to Marketing on a long-term net basis.  The Company also has retained
the Pennsylvania and Maryland home heating oil business.

     The consolidated statement of operations of the Company for the six months
ended July 31, 1997 include the financial results of the Marketing business
under the caption "Equity in earnings of Getty Petroleum Marketing Inc." for
the period from February 1, 1997 to March 21, 1997, amounting to pre-tax income
of $2.9 million ($1.7 million after-tax). The financial results of the
Marketing business for the quarter and six months ended July 31, 1996 are
included in the consolidated financial results of the Company for the
respective periods and amounted to a pre-tax profit of $7.9 million and $2.2
million, respectively ($4.6 million and $1.3 million after-tax, respectively).


                                     -4-

<PAGE>   7


     The financial results of the real estate and retained heating oil
businesses for the quarters and six months ended July 31, 1997 and 1996 are set
forth below.  The following financial information does not include the
financial results of Marketing and is presented for informational purposes only
and is not necessarily indicative of the financial results that would have
occurred had the real estate and heating oil businesses been operated as
separate, stand-alone entities during such periods, nor are they necessarily
indicative of future results.


<TABLE>
<CAPTION>
                                   Quarter ended July 31, 1997    Quarter ended July 31, 1996
                                   ---------------------------    ---------------------------
                                    Real   Heating                    Real   Heating           
                                   Estate      Oil    Total          Estate      Oil    Total  
                                  -------  -------  -------         -------  -------  -------  
<S>                               <C>      <C>      <C>             <C>      <C>      <C>      
Revenues from rental property     $14,906      $26  $14,932         $14,541      $51  $14,592  
                                                                                               
Net sales of petroleum products         -    5,263    5,263               -    6,293    6,293  
                                                                                               
Other income (expense)              1,471     (32)    1,439           1,821       18    1,839  
                                  -----------------------------------------------------------
                                                                                               
                                   16,377    5,257   21,634          16,362    6,362   22,724  
                                  -----------------------------------------------------------
                                                                                               
Cost of sales of petroleum                                                                     
 products (excluding depreciation                                                              
 and amortization)                      -    5,019    5,019               -    6,069    6,069  
                                                                                               
Rental property expenses            3,566        6    3,572           3,222        7    3,229  
                                                                                               
Environmental and maintenance                                                                  
 expenses                           2,331        -    2,331           3,987        -    3,987  
                                                                                               
Selling, general and                                                                           
 administrative expenses            3,380      506    3,886           1,001      433    1,434  
                                                                                               
Litigation charge                       -        -        -             127        -      127  
                                                                                               
Depreciation and amortization       2,288      131    2,419           2,245      127    2,372  
                                                                                               
Interest expense                    1,309        -    1,309           1,633        -    1,633  
                                  -----------------------------------------------------------
                                                                                               
                                   12,874    5,662   18,536          12,215    6,636   18,851  
                                  -----------------------------------------------------------
                                                                                               
Earnings (loss) before provision                                                               
 (credit) for income taxes          3,503     (405)   3,098           4,147     (274)   3,873  
                                                                                               
Provision (credit) for                                                                         
 income taxes                       1,320     (172)   1,148           1,400     (120)   1,280  
                                  -----------------------------------------------------------
                                                                                               
Net earnings (loss)               $ 2,183    ($233) $ 1,950         $ 2,747    ($154) $ 2,593  
                                  ===========================================================
</TABLE>

                                      -5-


<PAGE>   8

<TABLE>
<CAPTION>
                                Six months ended July 31, 1997       Six months ended July 31, 1996
                                ------------------------------       ------------------------------
                                     Real  Heating                         Real  Heating           
                                   Estate      Oil    Total              Estate      Oil    Total  
                                  -------  -------  -------             -------  -------  -------  
<S>                               <C>      <C>      <C>                 <C>      <C>      <C>      
Revenues from rental property     $29,824      $54  $29,878             $29,079     $115  $29,194  
                                                                                                   
Net sales of petroleum products         -   13,644   13,644                   -   15,304   15,304  
                                                                                                   
Other income (expense)              1,898       (5)   1,893               2,440       37    2,477  
                                  -----------------------------------------------------------------
                                                                                                   
                                   31,722   13,693   45,415              31,519   15,456   46,975  
                                  -----------------------------------------------------------------
                                                                                                   
Cost of sales of petroleum                                                                         
 products (excluding depreciation                                                                  
 and amortization)                      -   12,418   12,418                   -   14,107   14,107  
                                                                                                   
Rental property expenses            6,873        9    6,882               6,396       16    6,412  
                                                                                                   
Environmental and maintenance                                                                      
 expenses                           3,571        -    3,571               6,720        -    6,720  
                                                                                                   
Selling, general and                                                                               
 administrative expenses            6,263      967    7,230               1,887      961    2,848  
                                                                                                   
Change of control charge            2,166        -    2,166                   -        -        -  
                                                                                                   
Litigation charge                       -        -        -               7,585        -    7,585  
                                                                                                   
Depreciation and amortization       4,548      258    4,806               4,465      245    4,710  
                                                                                                   
Interest expense                    2,689        -    2,689               3,354        -    3,354  
                                  -----------------------------------------------------------------
                                                                                                   
                                   26,110   13,652   39,762              30,407   15,329   45,736  
                                  -----------------------------------------------------------------
                                                                                                   
Earnings before provision                                                                          
 for income taxes                   5,612       41    5,653               1,112      127    1,239  
                                                                                                   
Provision for                                                                                      
 income taxes                       2,211       16    2,227                 468       54      522  
                                  -----------------------------------------------------------------
                                                                                                   
Net earnings                      $ 3,401      $25  $ 3,426                $644      $73     $717  
                                  =================================================================
</TABLE>



3.   Earnings per share:

     Earnings per share is computed by dividing net earnings by the weighted
average number of shares of common stock outstanding during the period.  Common
stock equivalents are not included in earnings per share computations since
their effect is immaterial.




                                     -6-


<PAGE>   9


4.   Stockholders' equity:

     A summary of the changes in stockholders' equity for the six months ended
July 31, 1997 is as follows (in thousands):

<TABLE>
<CAPTION>
                                    Retained   Treasury      
                   Common   Paid-in  Earnings   Stock,
                    Stock   Capital  (Deficit)  at cost    Total
--------------------------------------------------------------------
<S>                <C>     <C>       <C>        <C>        <C>       
Balance,
 January 31, 1997  $1,358  $120,293   ($7,215)  ($13,964)  $100,472

Distribution to
 Marketing                  (56,272)                        (56,272)

Net earnings                            5,157                 5,157

Cash dividends                           (776)                 (776)

Purchase of
 treasury stock                                       (4)        (4)

Issuance of
 treasury stock                  (1)                  46         45

Stock options          56     9,160                           9,216
                   ------------------------------------------------

Balance,
 July 31, 1997     $1,414  $ 73,180   ($2,834)  ($13,922)  $ 57,838
                   ================================================
</TABLE>


5.   Litigation charge:

     In May 1996, a federal judge in the U.S. District Court for the Eastern
District of New York entered a judgment in the amount of $8.4 million, plus
interest, in favor of Morrison-Knudsen Company, Inc. against the Company's
former construction company subsidiary, Slattery Associates, Inc., which was
sold in 1989.

     The case arose out of a joint venture between Slattery Associates and
Morrison-Knudsen which was established to reconstruct a portion of an
expressway in Philadelphia in 1986.  The judgment represents Slattery's share 
of joint venture construction costs which the Court held Slattery owed.         
Slattery had contended that Morrison-Knudsen had mismanaged the project and had
failed to disclose material facts.  Slattery also had contended that certain
costs were improperly charged to the joint venture.

     During the six months ended July 31, 1996, the Company recorded a pre-tax
charge of $7.6 million in addition to a previously established reserve of $3.6
million for this litigation.  The pre-tax charge is included under the caption
"Litigation charge" in the July 31, 1996 consolidated statement of operations.
During the quarter ended October 31, 1996, the Company reversed into income
$1.8 million of this charge as a result of the settlement of this litigation.

                                      -7-


<PAGE>   10

                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

     The accompanying consolidated financial statements include the accounts of
Getty Realty Corp., known prior to March 31, 1997 as Getty Petroleum Corp., and
its wholly-owned subsidiaries (the "Company").

Spin-off

     On March 21, 1997, the Company effected the spin-off of its petroleum
marketing business to its stockholders.  The Company retained its real estate
business and leases most of its properties on a long-term net basis to the
distributed company, which is named Getty Petroleum Marketing Inc.
("Marketing").  The Company also retained the Pennsylvania and Maryland home
heating oil business.  Stockholders of record of the Company on March 21, 1997
received a tax-free dividend of one share of Marketing common stock for each
share of common stock of the Company.

     The consolidated statement of operations of the Company for the six months
ended July 31, 1997 include the financial results of the Marketing business
under the caption "Equity in earnings of Getty Petroleum Marketing Inc." for
the period from February 1, 1997 to March 21, 1997, amounting to pre-tax income
of $2.9 million ($1.7 million after-tax). The financial results of the  
Marketing business for the quarter and six months ended July 31, 1996 are
included in the consolidated financial results of the Company for the
respective periods and amounted to a pre-tax profit of $7.9 million and $2.2
million, respectively ($4.6 million and $1.3 million after-tax, respectively).
For additional information regarding the spin-off, see Note 2 to the
consolidated financial statements.

Results of Operations - Quarter ended July 31, 1997 compared with quarter ended
 July 31, 1996

     Revenues from rental property for the quarter ended July 31, 1997
principally represent rental income from Marketing ($14.3 million) with the
remainder from other lessees and sublessees.  Revenues from rental property for
the quarter ended July 31, 1996 principally represented rental income from
Marketing's dealers prior to the spin-off.

     Net sales for the second fiscal quarter ended July 31, 1997 were $5.3
million, all of which were attributable to the Company's retained heating oil
business (most of which revenues occur in the first and fourth fiscal
quarters), as compared with $219.5 million during the same quarter last year,
which were attributable to the heating oil business and Marketing's business.
After excluding $213.2 million of net sales of the Marketing business for the
quarter ended July 31, 1996, the prior year's quarterly net sales for the
retained heating oil business amounted to $6.3 million.  The decrease in net
sales of $1.0 million was principally due to a decrease in gallonage sold
during the quarter ended July 31, 1997, and lower sales prices, in comparison
to the quarter ended July 31, 1996.  Gross profit for the retained heating oil
business was $.2 million for each of the quarters ended July 31, 1997 and 1996. 
Lower gallonage sales were offset by higher margins during the current period.

                                     -8-

<PAGE>   11


     Other income was $1.4 million for the three months ended July 31, 1997
as compared with $1.9 million for the quarter ended July 31, 1996.  After
excluding $.1 million of other income of Marketing for the quarter ended July
31, 1996, other income amounted to $1.8 million.  The decrease in other income
of $.4 million was principally due to $.4 million of lower gains on asset sales
and $.2 million of lower investment income, offset by $.1 million of expenses
incurred in the quarter ended July 31, 1996 related to the spin-off.

     Rental property expenses, which are comprised of rent expense and real
estate taxes, were $3.6 millon for the quarter ended July 31, 1997 as compared
with $5.3 million for the quarter ended July 31, 1996.  After excluding $2.0
million of real estate taxes payable by Marketing during the quarter ended July
31, 1996, rental property expenses increased $.3 million over the prior year's
comparable quarter.

     Environmental and maintenance expenses for the quarter ended July 31, 1997
were $2.3 million as compared with $6.2 million for the quarter ended July 31,
1996.  After excluding $2.2 million of Marketing expenses for the quarter ended
July 31, 1996 (principally maintenance), the decrease in environmental and
maintenance expense during the current quarterly period amounted to $1.7
million.  The current period charge is principally due to a revision to the
Company's estimate of future remediation costs.  As of July 31, 1997, the
Company had an accrual of $41.9 million representing management's best estimate
for future environmental remediation costs and had recorded $14.9 million as
management's best estimate for recoveries from state underground storage tank
remediation funds.  Such accruals are reviewed on a regular basis and any
revisions thereto will be reflected in the Company's financial statements as
they become known.

     Selling, general and administrative expenses for the quarter ended July
31, 1997 amounted to $3.9 million as compared with $6.8 million for the quarter
ended July 31, 1996.  After excluding $5.4 million of selling, general and
administrative expenses of Marketing for the quarter ended July 31, 1996,
selling, general and administrative expenses increased by $2.5 million
primarily due to $1.9 million of expense relating to stock options resulting
from appreciation of the Company's stock price.

     Depreciation and amortization was $2.4 million for the quarter ended July
31, 1997 as compared with $5.7 million for the quarter ended July 31, 1996.
After excluding $3.4 million of depreciation and amortization of Marketing for
the quarter ended July 31, 1996, depreciation and amortization increased by $.1
million over the prior quarterly period as a result of additions to property
and equipment.

     Interest expense for the three months ended July 31, 1997 amounted to $1.3
million as compared with $1.8 million for the quarter ended July 31, 1996.
After excluding $.1 million of interest expense of Marketing for the quarter
ended July 31, 1996, the decrease in interest expense of $.4 million was
principally due to reduced capitalized lease obligations and debt outstanding
during the quarter ended July 31, 1997.




                                     -9-
                                      

<PAGE>   12

Results of Operations - Six months ended July 31, 1997 compared 
 with six months ended July 31, 1996

     Revenues from rental property for the six months ended July 31, 1997
principally represent rental income from Marketing ($28.5 million) with the
remainder from other lessees and sublessees.  Revenues from rental property for
the six months ended July 31, 1996 principally represented rental income from
Marketing's dealers prior to the spin-off.

     Net sales for the six months ended July 31, 1997 were $13.6 million,
all of which were attributable to the Company's retained heating oil business,
as compared with $423.8 million during the same period last year, which were
attributable to both the heating oil business and Marketing business.  After
excluding $408.5 million of net sales of the Marketing business for the six
months ended July 31, 1996, the prior year's net sales for the retained heating
oil business amounted to $15.3 million.  The decrease in net sales of $1.7
million was due to a decrease in gallonage sold during the six months ended
July 31 1997, due to warmer weather, and lower sales prices, in comparison to
the six months ended July 31, 1996.  Gross profit for the retained heating oil
business was $1.2 million for each of the six month periods ended July 31, 1997
and 1996.  Lower gallonage sales were offset by higher margins during the
current period.

     Other income was $1.9 million for the six months ended July 31, 1997 as
compared with $2.6 million for the six months ended July 31, 1996.  After
excluding $.1 million of other income of Marketing for the six months ended
July 31, 1996, other income amounted to $2.5 million.  The decrease in other
income of $.6 million was principally due to $.5 milion of lower gains on
dispositions of asset sales and $.4 million of lower investment income, offset
by $.3 million of expenses incurred in the six months ended July 31, 1996
related to the spin-off.

     Rental property expenses, which are comprised of rent expense and real
estate taxes, were $6.9 million for the six months ended July 31, 1997 as
compared with $10.7 million for the six months ended July 31, 1996.  After
excluding $4.3 million of real estate taxes payable by Marketing during the six
months ended July 31, 1996, rental property expenses increased $.5 million over
the prior year's comparable period.

     Environmental and maintenance expenses for the six months ended July 31,
1997 were $3.6 million as compared with $10.7 million for the six months ended
July 31, 1996.  After excluding $4.0 million of Marketing expenses for the six
months ended July 31, 1996 (principally maintenance), the decrease in
environmental and maintenance expense during the current six month period
amounted to $3.1 million.  The current period charge is principally due to a
revision to the Company's estimate of future remediation costs.

     Selling, general and administrative expenses for the six months ended July
31, 1997 amounted to $7.2 million as compared with $13.1 million for the six
months ended July 31, 1996.  After excluding $10.3 million of selling, general
and administrative expenses of Marketing for the six months ended July 31,
1996, selling, general and administrative expenses increased by $4.4 million
primarily due to $3.7 million of expense relating to stock options resulting
from appreciation of the Company's stock price.


                                     -10-


<PAGE>   13

     The Company recorded a change of control charge for the six months ended
July 31, 1997 of $2.2 million relating to certain "change of control"
agreements related to the spin-off.

     The Company recorded a litigation charge of $7.6 million during the six
months ended July 31, 1996 related to a judgment against Slattery Associates,
Inc., a former construction company subsidiary, which the Company sold in 1989.
During the quarter ended October 31, 1996, the Company reversed into income
$1.8 million of this charge as a result of the settlement of this matter.

     Depreciation and amortization was $4.8 million for the six months ended
July 31, 1997 as compared with $11.4 million for the six months ended July 31,
1996.  After excluding $6.7 million of depreciation and amortization of
Marketing for the six months ended July 31, 1996, depreciation and amortization
increased by $.1 million over the prior period as a result of additions to
property and equipment.

     Interest expense for the six months ended July 31, 1997 amounted to $2.7
million as compared with $3.6 million for the six months ended July 31, 1996.
After excluding $.2 million of interest expense of Marketing for the six months
ended July 31, 1996, the decrease in interest expense of $.7 million was
principally due to reduced capitalized lease obligations and debt outstanding
during the six months ended July 31, 1997.

Liquidity and Capital Resources

     The Company's principal sources of liquidity are cash flows from
operations and its short-term unsecured lines of credit with two banks. 
Management believes that cash requirements for operations, capital expenditures
and debt service can be met by cash flows from operations, available cash and
equivalents and its credit lines.  As of July 31, 1997, such lines of credit
amounted to $25 million, of which $7.6 million was utilized in connection with
outstanding letters of credit.  Borrowings under such lines of credit are       
unsecured and bear interest at the prime rate or, at the Company's option, a
rate tied to the bank's cost of funds or LIBOR plus 1.0% or 1.1%. Each
uncommitted line of credit is subject to renewal at the discretion of each
bank.  Although it is expected that the existing sources of liquidity
will be sufficient to meet its expected operating and debt service requirements,
the Company may be required to obtain additional sources of capital in the
future to fund certain of its capital expenditures and property acquisitions,
which capital sources it believes are available.

     During the six months ended July 31, 1997 and 1996, respectively, the
Company paid quarterly cash dividends in the amount of $.03 per share.

     The Company's capital expenditures for the six months ended July 31,
1997 amounted to $5.2 million, which included $3.7 million for the replacement
of underground storage tanks and vapor recovery facilities at gasoline stations 
and terminals. Capital expenditures with respect to tank replacements required
to meet 1998 federal environmental standards and certain environmental
liabilities and obligations continue to be the responsibility of the Company
after the spin-off. As of July 31, 1997, the Company estimates that in
connection therewith, it will expend approximately $17 million in capital
expenditures and $27 million, net of estimated recoveries, for environmental 
liabilities and obligations.


                                      
                                     -11-


<PAGE>   14

                         PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits:           
                                  
          Designation of Exhibit   
         in this Quarterly Report 
              on Form 10-Q                  Description of Exhibit
              ------------                  ---------------------- 
 
                   27                       Financial Data Schedule
                                  
         Reports on Form 8-K:     
                                  
          None                     


                                  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:  September 11, 1997         BY: /s/ John J. Fitteron
                                      ---------------------
                                         (Signature)
                                      JOHN J. FITTERON
                                       Senior Vice President, Treasurer
                                       and Chief Financial Officer
                                       (Principal Financial and
                                       Accounting Officer)


Dated:  September 11, 1997         BY: /s/ Leo Liebowitz
                                      ---------------------
                                         (Signature)
                                      LEO LIEBOWITZ
                                       President (Chief Executive
                                       Officer)



                                     -12-