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                                  RISK FACTORS

     An investment in our common stock involves risks. Before investing, you
should carefully consider and evaluate all of the information included in or
incorporated by reference in the prospectus and this prospectus supplement,
including the following risk factors.

WE ARE SUBJECT TO RISKS INHERENT IN OWNING AND LEASING REAL ESTATE.

     We are subject to varying degrees of risk generally related to leasing and
owning real estate. In addition to general risks related to owning properties
used in the petroleum marketing industry, risks include, among others, liability
for long-term lease obligations, changes in regional and local economic
conditions, local real estate market conditions, changes in interest rates and
in the availability, cost and terms of financing, the potential for uninsured
casualty and other losses, the impact of present or future environmental
legislation and compliance with environmental laws (as discussed below), and
adverse changes in zoning laws and other regulations, many of which are beyond
our control. Moreover, real estate investments are relatively illiquid, which
means that our ability to vary our portfolio of service station properties in
response to changes in economic and other conditions may be limited.

OUR REVENUES ARE PRIMARILY DEPENDENT ON THE PERFORMANCE OF THE PETROLEUM
MARKETING INDUSTRY AND GETTY PETROLEUM MARKETING INC.

     We rely on leasing service station properties, primarily to Marketing, for
substantially all of our revenues (96% for the eleven months ended December 31,
2000). Accordingly, our revenues will be 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 other lessees may have a material
adverse effect on us. Marketing is wholly owned by a subsidiary of Lukoil.
Although Lukoil is Russia's largest vertically integrated oil company, it has a
limited history of operating in the United States. No assurance can be given
that Lukoil's acquisition of Marketing will not adversely affect the operations
of Marketing. In the event that Marketing were unable to perform its obligations
under its master lease with us, our financial results would be materially
adversely affected. Although Marketing is a wholly owned subsidiary of Lukoil,
no assurance can be given that Lukoil would cause Marketing to fulfill all of
its obligations under the master lease.

     Petroleum products are commodities whose prices depend on numerous factors
that affect the supply of and demand for petroleum products, such as changes in
domestic and foreign economies, political affairs and production levels, the
availability of imported oil, the marketing of competitive fuels, the extent of
government regulation and expected and actual weather conditions. We believe
that Marketing currently relies on various suppliers for the purchase of refined
petroleum products. The prices paid by Marketing and other petroleum marketers
for their products are affected by global, national and regional factors, such
as petroleum pipeline capacity, local market conditions and competition and the
level of operations of refineries. Marketing's earnings and cash flow from
operations depend upon rental income from dealers and the sale of refined
petroleum products at margins in excess of fixed and variable expenses. A large,
rapid increase in petroleum prices would adversely affect Marketing's
profitability and cash flow if the increased cost of petroleum products could
not be passed on to Marketing's customers or if automobile consumption of
gasoline were to significantly decline.

OUR PROPERTIES ARE CONCENTRATED IN THE NORTHEASTERN UNITED STATES, AND ADVERSE
CONDITIONS IN THAT REGION, IN PARTICULAR, COULD NEGATIVELY IMPACT OUR
OPERATIONS.

     A significant portion of the properties we own and lease are located in the
northeastern United States. Because of the concentration of our properties in
that region, in the event of adverse economic conditions in that region, we
would likely experience higher risk of default on payment of rent payable to us
(including under the master lease) than if our properties were more
geographically diversified. Additionally, the rents on our properties may be
subject to a greater risk of default than other properties in the event of
adverse economic, political, or business developments or natural hazards that
may affect the

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northeastern United States and the ability of our lessees to make rent payments.
In the event of any natural disaster, our ability to pay dividends could be
adversely affected.

WE ARE IN A COMPETITIVE BUSINESS.

     The real estate industry is highly competitive. Where we own properties, we
compete for tenants with a large number of real estate property owners.
Principal means of competition are rents charged and attractiveness of location.
In addition, we expect other major real estate investors with significant
capital will compete with us for attractive investment opportunities. These
competitors include petroleum manufacturing, distributing and marketing
companies, other REITs, investment banking firms and private institutional
investors. This competition has increased prices for commercial properties and
may impair our ability to make suitable property acquisitions on favorable terms
in the future.

OUR FUTURE CASH FLOW IS DEPENDENT ON RENEWAL OF LEASES AND RELETTING OF OUR
SPACE.

     We are subject to risks that leases may not be renewed, locations may not
be relet or the terms of renewal or reletting (including the cost of required
renovations) may be less favorable than current lease terms. In addition,
numerous properties compete with our properties in attracting tenants to lease
space. The number of competitive properties in a particular area could have a
material adverse effect on our ability to lease our properties or newly acquired
properties and on the rents charged. If we were unable to promptly relet or
renew the leases for all or a substantial portion of these locations, or if the
rental rates upon such renewal or reletting were significantly lower than
expected, our cash flow could be adversely affected. The master lease has an
initial term expiring in December 2015, and generally provides Marketing with
renewal options extending to 2048 that may be exercised only on an "all or
nothing" basis.

WE MAY ACQUIRE OR DEVELOP NEW PROPERTIES, AND THIS MAY CREATE RISKS.

     We may acquire or develop properties or acquire other real estate companies
when we believe that an acquisition or development matches our business
strategies. We might not succeed in consummating desired acquisitions or in
completing developments on time or within our budget. We also might not succeed
in leasing newly developed or acquired properties at rents sufficient to cover
their costs of acquisition or development and operations.

WE ARE SUBJECT TO LOSSES THAT MAY NOT BE COVERED BY INSURANCE.

     Marketing, as the lessee of substantially all of the properties leased by
us, is required to provide insurance for such properties, including casualty,
liability, fire and extended coverage in amounts and on other terms as set forth
in the master lease. There are certain types of losses (such as certain
environmental liabilities, earthquakes, hurricanes, floods and civil disorders)
which are either uninsurable or not economically insurable in our judgment. The
destruction of, or significant damage to, properties due to an uninsured cause
would result in an economic loss and could result in us losing both our
investment in, and anticipated profits from, such properties. When a loss is
insured, the coverage may be insufficient in amount or duration, or a lessee's
customers may be lost, such that the lessee cannot resume its business after the
loss at prior levels or at all, resulting in reduced rent or a default under its
lease. Any such loss relating to a large number of properties could have a
material adverse effect on our financial condition. We carry insurance against
certain risks and in such amount as we believe is customary for businesses of
our kind. However, as the costs and availability of insurance change, we may
decide not to be covered against certain losses where, in the judgment of
management, the insurance is not warranted due to cost or availability of
coverage or the remoteness of perceived risk. There is no assurance that our
insurance against loss will be sufficient.

COMPLIANCE WITH ENVIRONMENTAL REGULATIONS MAY BE COSTLY.

     The real estate business and the petroleum products industry are subject to
numerous federal, state and local laws and regulations relating to the
protection of the environment. Under certain environmental

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laws, a current or previous owner or operator of real estate may be liable for
contamination resulting from the presence or discharge of hazardous or toxic
substances or petroleum products at, on or under such property, and may be
required to investigate and clean-up such contamination. Such laws typically
impose liability and clean-up responsibility without regard to whether the owner
or operator knew of or caused the presence of the contaminants, and the
liability under such laws has been interpreted to be joint and several unless
the harm is divisible and there is a reasonable basis for allocation of
responsibility. For example, liability may arise as a result of the historical
use of a site or from the migration of contamination from adjacent or nearby
properties. Any such contamination or liability may also reduce the value of the
property. In addition, the owner or operator of a site may be subject to claims
by third parties based on injury, damage and/or costs, including investigation
and clean-up costs, resulting from environmental contamination present at or
emanating from a site. The properties owned or controlled by us are leased
primarily as gasoline service stations, and therefore may also contain, or may
have contained, underground storage tanks for the storage of petroleum products
and other hazardous or toxic substances, which creates a potential for the
release of such products or substances. Some of the properties may be adjacent
to or near properties that have contained or currently contain underground
storage tanks used to store petroleum products or other hazardous or toxic
substances. In addition, certain of the properties are on, adjacent to or near
properties upon which others have engaged or may in the future engage in
activities that may release petroleum products or other hazardous or toxic
substances. We have agreed to provide limited environmental indemnification to
Marketing with respect to six leased terminals, and limited indemnification
relating to compliance of properties with local laws. Our aggregate
indemnification liability to Marketing for these items is capped at a maximum of
$5.6 million. Under the master lease, we continue to have additional ongoing
environmental remediation obligations for scheduled sites.

     As of March 31, 2001, we had accrued $22.5 million as management's best
estimate for probable and reasonably estimable environmental remediation costs
and had recorded $11.4 million as management's best estimate for recoveries from
state underground storage tank remediation funds related to environmental
obligations and liabilities. In view of the uncertainties associated with
environmental expenditures, however, we believe it is possible that such
expenditures could be substantially higher. These and other environmental costs
may have a significant impact on results of operations for any single fiscal
year or interim period.

IF WE ELECT REIT STATUS, A SUBSEQUENT FAILURE TO QUALIFY AS A REIT WOULD HAVE
ADVERSE CONSEQUENCES TO OUR STOCKHOLDERS.

     If this offering is completed, we intend to elect to be taxed as a REIT
under the Internal Revenue Code beginning with the current fiscal year. If we
qualify for taxation as a REIT and elect REIT status, we plan to continue to
meet the requirements for taxation as a REIT. We cannot, however, guarantee that
we would continue to qualify in the future as a REIT. We cannot give any
assurance that new legislation, regulations, administrative interpretations or
court decisions will not significantly change the requirements relating to our
qualification. If we fail to qualify as a REIT after electing REIT status, we
would again be subject to federal income tax at regular corporate rates. Also,
unless the Internal Revenue Service granted us relief, we would remain
disqualified as a REIT for four years following the year in which we failed to
qualify. In the event that we failed to qualify as a REIT, we would be required
to pay significant income taxes and would have less money available for our
operations and distributions to stockholders. This would likely have a
significant adverse effect on the value of our securities.

     In order to meet and maintain qualification as a REIT under the Internal
Revenue Code, we have scheduled a special stockholders' meeting for August 1,
2001 in order to solicit approval of amendments to our charter that would
provide that ownership of any class of our equity securities, including our
series A preferred stock and common stock, by any person or group of related
persons will be limited to 5% of the outstanding shares of that class, unless
special approval is granted by our board. Our board of directors intends to
grant an exemption from the 5% ownership limitation to Messrs. Liebowitz,
Safenowitz and Cooper, each of whom serve as directors of Getty, and their
respective affiliated trusts and partnerships,

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who currently own stock in excess of these proposed ownership limitations. No
assurance can be given that stockholder approval of these limitations will be
obtained.

IN ORDER TO QUALIFY FOR TAXATION AS A REIT, WE ARE REQUIRED TO DISTRIBUTE ALL OF
OUR PRIOR EARNINGS AND PROFITS, BUT WE CANNOT GUARANTEE THAT WE WILL BE ABLE TO
DO SO.

     In order to qualify for taxation as a REIT for 2001, we are required to
distribute to our stockholders, prior to the end of 2001, all of our earnings
and profits that we accumulated prior to 2001. We believe that we will meet this
requirement once we pay the "earnings and profits" distribution. However, it is
very difficult to determine the exact level of our pre-2001 earnings and profits
because the determination depends on many factors. The complexity of the
determination is compounded by the fact that we started accumulating earnings
and profits in 1974. Also, it is difficult to value our distributions which have
not been made in cash, such as the distribution of Marketing common stock we
made in 1997. Therefore, we cannot guarantee that we will meet this requirement.
Latham & Watkins is not providing us with an opinion regarding the amount of our
earnings and profits or whether we meet this requirement. Moreover, for purposes
of their opinion that we qualify as a REIT, they relied on our statement that we
will meet this requirement.

ONCE WE QUALIFY FOR TAXATION AS A REIT, WE WILL BE DEPENDENT ON EXTERNAL SOURCES
OF CAPITAL.

     To qualify as a REIT, we must distribute to our stockholders each year at
least 90% of our net taxable income, excluding any net capital gain. Because of
these distribution requirements, once we make the "earnings and profits"
distribution, it is not likely that we will be able to fund all future capital
needs, including acquisitions, from income from operations. We therefore will
have to rely on third party sources of capital, which may or may not be
available on favorable terms or at all. Our access to third party sources of
capital depends upon a number of factors, including general market conditions,
the market's perception of our growth potential, our current and potential
future earnings and cash distributions and the market price of our common stock.
Moreover, additional equity offerings may result in substantial dilution of
stockholders' interests, and additional debt financing may substantially
increase our leverage.

WE MAY BE UNABLE TO PAY DIVIDENDS AND OUR EQUITY MAY NOT APPRECIATE.

     Under our charter, we may not pay any dividends on shares of our common
stock unless we have paid all cumulative dividends required to be declared on
shares of our series A preferred stock. In addition, under applicable Maryland
law, our ability to pay dividends would be restricted if, after payment of the
dividend, (1) we would not be able to pay indebtedness as it becomes due in the
usual course of business or (2) our total assets would be less than the sum of
our liabilities. No assurance can be given that our financial performance in the
future will permit our payment of any dividends, including dividends on our
series A preferred stock, at the times and in the amounts specified in our
charter. Moreover, no assurance can be given that the value of the shares of our
common stock will increase to levels which make it economically advantageous to
holders of our series A preferred stock to exercise their right to convert such
shares into our common stock. As a result of the factors described above, we may
experience material fluctuations in future operating results on a quarterly or
annual basis, which could materially and adversely affect our business, stock
price and ability to pay dividends.

CERTAIN OF OUR DIRECTORS AND THEIR AFFILIATES WILL CONTINUE TO OWN SUBSTANTIAL
AMOUNTS OF OUR SERIES A PREFERRED STOCK AND COMMON STOCK AND WILL THEREFORE HAVE
SIGNIFICANT INFLUENCE ON THE OUTCOME OF MOST STOCKHOLDER VOTES.

     Messrs. Leo Liebowitz, Howard Safenowitz and Milton Cooper, each a
director, and their affiliates own approximately 47.0% of the voting power of
all outstanding shares of our common stock and series A preferred stock. After
the conclusion of this offering and giving effect to conversion of the series A
preferred stock, Messrs. Liebowitz, Safenowitz and Cooper and their affiliates
will own approximately 31.6% of the voting power of all outstanding shares of
our common stock. As a result, Messrs. Liebowitz, Safenowitz and Cooper,
individually and in conjunction with their affiliates, will be able to
significantly influence the outcome of most corporate actions requiring
stockholder approval.
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