Agree Realty Corporation Reports First Quarter 2025 Results
Agree Realty (NYSE: ADC) reported Q1 2025 results with significant growth in investments and improved guidance. The company invested approximately $377 million in 69 retail net lease properties and commenced four development projects worth $24 million.
Financial highlights include a 5.0% increase in Net Income to $45.1 million, though Net Income per share decreased 2.0% to $0.42. Core FFO per share rose 3.1% to $1.04, while AFFO per share increased 3.0% to $1.06. The company declared an increased monthly dividend of $0.256 per share for April 2025.
The company's portfolio consisted of 2,422 properties across all 50 states, with 99.2% occupancy and 68.3% of annualized base rents from investment-grade retail tenants. Given strong performance, ADC raised its 2025 investment guidance to $1.3-$1.5 billion and increased AFFO per share guidance to $4.27-$4.30.
Agree Realty (NYSE: ADC) ha riportato i risultati del primo trimestre 2025 con una crescita significativa negli investimenti e una guida migliorata. La società ha investito circa 377 milioni di dollari in 69 proprietà retail in affitto netto e ha avviato quattro progetti di sviluppo per un valore di 24 milioni di dollari.
I punti salienti finanziari includono un aumento del 5,0% del reddito netto a 45,1 milioni di dollari, anche se il reddito netto per azione è diminuito del 2,0% a 0,42 dollari. Il Core FFO per azione è cresciuto del 3,1% a 1,04 dollari, mentre l'AFFO per azione è aumentato del 3,0% a 1,06 dollari. La società ha dichiarato un dividendo mensile aumentato di 0,256 dollari per azione per aprile 2025.
Il portafoglio della società comprendeva 2.422 proprietà in tutti e 50 gli stati, con un'occupazione del 99,2% e il 68,3% degli affitti base annualizzati provenienti da inquilini retail con rating investment-grade. Data la forte performance, ADC ha aumentato la guida agli investimenti per il 2025 a 1,3-1,5 miliardi di dollari e ha incrementato la previsione dell'AFFO per azione a 4,27-4,30 dollari.
Agree Realty (NYSE: ADC) reportó resultados del primer trimestre de 2025 con un crecimiento significativo en inversiones y una guía mejorada. La compañía invirtió aproximadamente 377 millones de dólares en 69 propiedades comerciales con arrendamiento neto y comenzó cuatro proyectos de desarrollo por un valor de 24 millones de dólares.
Los aspectos financieros destacados incluyen un aumento del 5.0% en el ingreso neto hasta 45.1 millones de dólares, aunque el ingreso neto por acción disminuyó un 2.0% hasta 0.42 dólares. El Core FFO por acción subió un 3.1% hasta 1.04 dólares, mientras que el AFFO por acción aumentó un 3.0% hasta 1.06 dólares. La empresa declaró un dividendo mensual incrementado de 0.256 dólares por acción para abril de 2025.
La cartera de la compañía consistía en 2,422 propiedades en los 50 estados, con una ocupación del 99.2% y el 68.3% de las rentas base anualizadas provenientes de inquilinos comerciales con calificación investment-grade. Dado el sólido desempeño, ADC elevó su guía de inversión para 2025 a 1.3-1.5 mil millones de dólares y aumentó la guía de AFFO por acción a 4.27-4.30 dólares.
Agree Realty (NYSE: ADC)는 2025년 1분기 실적을 발표하며 투자 성장과 가이던스 개선을 보였습니다. 회사는 약 3억 7,700만 달러를 69개의 소매 순임대 부동산에 투자했으며, 2,400만 달러 규모의 4개 개발 프로젝트를 시작했습니다.
재무 주요 내용으로는 순이익이 5.0% 증가하여 4,510만 달러를 기록했으나, 주당 순이익은 2.0% 감소하여 0.42달러였습니다. 주당 Core FFO는 3.1% 상승한 1.04달러, 주당 AFFO는 3.0% 증가한 1.06달러를 기록했습니다. 회사는 2025년 4월을 위한 주당 월 배당금을 0.256달러로 인상했습니다.
회사의 포트폴리오는 50개 주 전역에 걸쳐 2,422개 부동산으로 구성되었으며, 점유율은 99.2%, 투자등급 소매 임차인으로부터의 연간 기본 임대료 비중은 68.3%였습니다. 강력한 실적에 힘입어 ADC는 2025년 투자 가이던스를 13억~15억 달러로 상향 조정하고, 주당 AFFO 가이던스를 4.27~4.30달러로 올렸습니다.
Agree Realty (NYSE : ADC) a publié ses résultats du premier trimestre 2025, montrant une croissance significative des investissements et une amélioration des prévisions. La société a investi environ 377 millions de dollars dans 69 propriétés commerciales en location nette et a lancé quatre projets de développement d’une valeur de 24 millions de dollars.
Les points financiers clés incluent une augmentation de 5,0 % du revenu net à 45,1 millions de dollars, bien que le revenu net par action ait diminué de 2,0 % à 0,42 dollar. Le FFO de base par action a augmenté de 3,1 % à 1,04 dollar, tandis que l’AFFO par action a progressé de 3,0 % à 1,06 dollar. La société a déclaré un dividende mensuel augmenté à 0,256 dollar par action pour avril 2025.
Le portefeuille de la société comprenait 2 422 propriétés réparties dans les 50 États, avec un taux d’occupation de 99,2 % et 68,3 % des loyers de base annualisés provenant de locataires commerciaux de qualité investment-grade. En raison de cette solide performance, ADC a relevé ses prévisions d’investissement pour 2025 à 1,3-1,5 milliard de dollars et augmenté sa prévision d’AFFO par action à 4,27-4,30 dollars.
Agree Realty (NYSE: ADC) meldete die Ergebnisse für das erste Quartal 2025 mit einem deutlichen Wachstum bei den Investitionen und einer verbesserten Prognose. Das Unternehmen investierte rund 377 Millionen US-Dollar in 69 Einzelhandelsobjekte mit Nettomietverträgen und startete vier Entwicklungsprojekte im Wert von 24 Millionen US-Dollar.
Finanzielle Höhepunkte umfassen einen 5,0%igen Anstieg des Nettogewinns auf 45,1 Millionen US-Dollar, obwohl der Gewinn je Aktie um 2,0% auf 0,42 US-Dollar sank. Der Core FFO je Aktie stieg um 3,1% auf 1,04 US-Dollar, während der AFFO je Aktie um 3,0% auf 1,06 US-Dollar zunahm. Das Unternehmen kündigte eine erhöhte monatliche Dividende von 0,256 US-Dollar je Aktie für April 2025 an.
Das Portfolio des Unternehmens umfasste 2.422 Immobilien in allen 50 Bundesstaaten mit einer Auslastung von 99,2% und 68,3% der annualisierten Grundmieten von Investment-Grade-Einzelhandelsmietern. Aufgrund der starken Leistung erhöhte ADC seine Investitionsprognose für 2025 auf 1,3 bis 1,5 Milliarden US-Dollar und hob die AFFO-Prognose je Aktie auf 4,27 bis 4,30 US-Dollar an.
- Portfolio occupancy remains strong at 99.2%
- Increased 2025 investment guidance to $1.3-1.5 billion
- AFFO per share increased 3.0% to $1.06
- 68.3% of base rents from investment grade tenants
- Strong liquidity position of $1.9 billion
- Net Income per share decreased 2.0% to $0.42
- Modest 2.4% dividend growth year-over-year
Insights
Agree Realty raised both investment and AFFO guidance while acquiring properties at attractive 7.3% cap rates with strong portfolio metrics.
Agree Realty's Q1 2025 results reveal strong operational execution and increased guidance. AFFO per share grew
The company deployed
Portfolio fundamentals remain exceptional with
The balance sheet is conservatively positioned at 3.4x net debt to recurring EBITDA, with approximately
The monthly dividend was increased
With higher investment guidance, strong acquisition yields, conservative balance sheet metrics, and a high-quality tenant base, Agree Realty demonstrates excellent execution in the net lease retail REIT sector.
Raises 2025 Investment Guidance to
Increases 2025 AFFO Per Share Guidance to
First Quarter 2025 Financial and Operating Highlights:
- Invested approximately
$377 million - Commenced four development or Developer Funding Platform ("DFP") projects for total committed capital of approximately
$24 million - Net Income per share attributable to common stockholders decreased
2.0% to$0.42 - Core Funds from Operations ("Core FFO") per share increased
3.1% to$1.04 - Adjusted Funds from Operations ("AFFO") per share increased
3.0% to$1.06 - Declared an increased monthly dividend of
$0.25 62.4% year-over-year increase - Sold 2.4 million shares of common stock via the forward component of the Company's at-the-market equity ("ATM") program for anticipated net proceeds of approximately
$181 million - Settled 2.7 million shares of outstanding forward equity for net proceeds of approximately
$183 million - Established a
$625 million - Balance sheet well positioned at 3.4 times proforma net debt to recurring EBITDA; 4.9 times excluding unsettled forward equity
- Ended the quarter with approximately
$1.9 billion
Financial Results
Net Income Attributable to Common Stockholders
Net Income for the three months ended March 31, 2025 increased
Core FFO
Core FFO for the three months ended March 31, 2025 increased
AFFO
AFFO for the three months ended March 31, 2025 increased
Dividend
In the first quarter, the Company declared monthly cash dividends of
Subsequent to quarter end, the Company declared an increased monthly cash dividend of
Additionally, subsequent to quarter end, the Company declared a monthly cash dividend on its
Earnings Guidance
The table below provides estimates for significant components of our 2025 earnings guidance. In addition, the AFFO per share guidance range includes an estimate for the dilutive impact of the Company's outstanding forward equity calculated in accordance with the treasury stock method.
Prior 2025 | Revised 2025 Guidance | ||||
AFFO per share(2) | |||||
General and administrative expenses (% of adjusted revenue)(3) | |||||
Non-reimbursable real estate expenses (% of adjusted revenue)(3) | |||||
Income and other tax expense | |||||
Investment volume | |||||
Disposition volume | |||||
The Company's 2025 guidance is subject to risks and uncertainties more fully described in this press release and in the Company's filings with the Securities and Exchange Commission.
(1) As issued on February 11, 2025.
(2) The Company does not provide guidance with respect to the most directly comparable GAAP financial measure or provide reconciliations to GAAP from its forward-looking non-GAAP financial measure of AFFO per share guidance due to the inherent difficulty of forecasting the effect, timing and significance of certain amounts in the reconciliation that would be required by Item 10(e)(1)(i)(B) of Regulation S-K. Examples of these amounts include impairments of assets, gains and losses from sales of assets, and depreciation and amortization from new acquisitions or developments. In addition, certain non-recurring items may also significantly affect net income but are generally adjusted for in AFFO. Based on our historical experience, the dollar amounts of these items could be significant and could have a material impact on the Company's GAAP results for the guidance period.
(3) Adjusted revenue excludes the impact of the amortization of above and below market lease intangibles.
CEO Comments
"We are extremely pleased with our strong start to the year as we invested over
Portfolio Update
As of March 31, 2025, the Company's portfolio consisted of 2,422 properties located in all 50 states and contained approximately 50.3 million square feet of gross leasable area. At quarter end, the portfolio was
Ground Lease Portfolio
During the first quarter, the Company acquired two ground leases for an aggregate purchase price of approximately
As of March 31, 2025, the Company's ground lease portfolio consisted of 231 leases located in 37 states and totaled approximately 6.4 million square feet of gross leasable area. Properties ground leased to tenants represented
At quarter end, the ground lease portfolio was fully occupied, had a weighted-average remaining lease term of approximately 9.5 years, and generated
Acquisitions
Total acquisition volume for the first quarter was approximately
The properties were acquired at a weighted-average capitalization rate of
Dispositions
During the first quarter, the Company sold one property for gross proceeds of approximately
Development and Developer Funding Platform
During the first quarter, the Company commenced four development or DFP projects, with total anticipated costs of approximately
For the three months ended March 31, 2025, the Company had 24 development or DFP projects completed or under construction with anticipated total costs of approximately
The following table presents estimated costs for the Company's active or completed development and DFP projects for the quarter ended March 31, 2025:
Quarter of Delivery | Number of | Costs Funded to Date | Remaining | Anticipated | ||||
Q1 2025 | 6 | |||||||
Q2 2025 | 5 | 12,155 | 6,222 | 18,377 | ||||
Q3 2025 | 9 | 26,193 | 41,593 | 67,786 | ||||
Q4 2025 | 1 | 1,432 | 6,587 | 8,019 | ||||
Q2 2026 | 1 | 1,509 | 1,141 | 2,650 | ||||
Q3 2026 | 2 | 4,739 | 2,236 | 6,975 | ||||
Total | 24 |
Development and DFP project costs are in thousands. Any differences are the result of rounding. Costs Funded to Date in Q1 2025 may include adjustments related to completed projects to arrive at the correct Anticipated Total Project Costs.
Leasing Activity and Expirations
During the first quarter, the Company executed new leases, extensions or options on approximately 584,000 square feet of gross leasable area throughout the existing portfolio. Notable new leases, extensions or options included a 123,000-square foot Walmart Supercenter in
As of March 31, 2025, the Company's 2025 lease maturities represented
Year | Leases | Annualized Base | Percent of | Gross Leasable Area | Percent of Gross | ||||
2025 | 30 | 0.9 % | 626 | 1.3 % | |||||
2026 | 100 | 22,927 | 3.5 % | 2,280 | 4.6 % | ||||
2027 | 167 | 38,142 | 5.9 % | 3,544 | 7.1 % | ||||
2028 | 175 | 46,173 | 7.1 % | 4,051 | 8.1 % | ||||
2029 | 209 | 66,283 | 10.2 % | 6,293 | 12.6 % | ||||
2030 | 306 | 65,902 | 10.2 % | 5,337 | 10.7 % | ||||
2031 | 195 | 46,840 | 7.2 % | 3,530 | 7.1 % | ||||
2032 | 241 | 50,300 | 7.8 % | 3,630 | 7.3 % | ||||
2033 | 217 | 49,623 | 7.6 % | 3,903 | 7.8 % | ||||
2034 | 206 | 46,811 | 7.2 % | 3,054 | 6.1 % | ||||
Thereafter | 757 | 209,911 | 32.4 % | 13,670 | 27.3 % | ||||
Total Portfolio | 2,603 | 100.0 % | 49,918 | 100.0 % |
The contractual lease expirations presented above exclude the effect of replacement tenant leases that had been executed as of March 31, 2025, but that had not yet commenced. Annualized Base Rent and gross leasable area (square feet) are in thousands; any differences are the result of rounding.
(1) Annualized Base Rent represents the annualized amount of contractual minimum rent required by tenant lease agreements as of March 31, 2025, computed on a straight-line basis. Annualized Base Rent is not, and is not intended to be, a presentation in accordance with generally accepted accounting principles ("GAAP"). The Company believes annualized contractual minimum rent is useful to management, investors, and other interested parties in analyzing concentrations and leasing activity.
Top Tenants
The following table presents annualized base rents for all tenants that represent
Tenant | Annualized Base Rent(1) | Percent of Annualized Base Rent | ||
Walmart | 5.9 % | |||
Tractor Supply | 31,839 | 4.9 % | ||
Dollar General | 28,417 | 4.4 % | ||
Best Buy | 21,682 | 3.3 % | ||
Kroger | 20,534 | 3.2 % | ||
TJX Companies | 19,971 | 3.1 % | ||
CVS | 19,936 | 3.1 % | ||
Dollar Tree | 18,338 | 2.8 % | ||
O'Reilly Auto Parts | 18,263 | 2.8 % | ||
Hobby Lobby | 18,198 | 2.8 % | ||
Lowe's | 17,884 | 2.8 % | ||
Gerber Collision | 15,180 | 2.3 % | ||
Sunbelt Rentals | 14,964 | 2.3 % | ||
7-Eleven | 14,205 | 2.2 % | ||
14,019 | 2.2 % | |||
Sherwin-Williams | 12,439 | 1.9 % | ||
Home Depot | 11,387 | 1.8 % | ||
Wawa | 10,410 | 1.6 % | ||
Other(2) | 302,576 | 46.6 % | ||
Total Portfolio | 100.0 % |
Annualized Base Rent is in thousands; any differences are the result of rounding.
(1) Refer to footnote 1 on page 5 for the Company's definition of Annualized Base Rent.
(2) Includes tenants generating less than
Retail Sectors
The following table presents annualized base rents for all the Company's retail sectors as of March 31, 2025:
Sector | Annualized | Percent of | ||
Grocery Stores | 10.1 % | |||
Home Improvement | 59,016 | 9.1 % | ||
Convenience Stores | 50,546 | 7.8 % | ||
Tire and Auto Service | 50,526 | 7.8 % | ||
Dollar Stores | 45,409 | 7.0 % | ||
Auto Parts | 40,567 | 6.2 % | ||
Off-Price Retail | 39,572 | 6.1 % | ||
General Merchandise | 33,934 | 5.2 % | ||
Farm and Rural Supply | 33,611 | 5.2 % | ||
Consumer Electronics | 25,162 | 3.9 % | ||
Pharmacy | 24,887 | 3.8 % | ||
Crafts and Novelties | 20,516 | 3.2 % | ||
Warehouse Clubs | 16,793 | 2.6 % | ||
Health Services | 16,091 | 2.5 % | ||
Equipment Rental | 16,020 | 2.5 % | ||
Dealerships | 15,078 | 2.3 % | ||
Discount Stores | 14,663 | 2.3 % | ||
Restaurants - Quick Service | 12,536 | 1.9 % | ||
Health and Fitness | 12,325 | 1.9 % | ||
Specialty Retail | 9,357 | 1.4 % | ||
Sporting Goods | 8,482 | 1.3 % | ||
Financial Services | 7,000 | 1.1 % | ||
Restaurants - Casual Dining | 5,704 | 0.9 % | ||
Home Furnishings | 3,969 | 0.6 % | ||
Shoes | 3,955 | 0.6 % | ||
Theaters | 3,854 | 0.6 % | ||
Pet Supplies | 3,782 | 0.6 % | ||
Beauty and Cosmetics | 3,493 | 0.5 % | ||
Entertainment Retail | 2,323 | 0.4 % | ||
Apparel | 2,016 | 0.3 % | ||
Miscellaneous | 1,261 | 0.2 % | ||
Office Supplies | 624 | 0.1 % | ||
Total Portfolio | 100.0 % |
Annualized Base Rent is in thousands; any differences are the result of rounding.
(1) Refer to footnote 1 on page 5 for the Company's definition of Annualized Base Rent.
Geographic Diversification
The following table presents annualized base rents for all states that represent
State | Annualized Base Rent(1) | Percent of Annualized Base Rent | ||
7.1 % | ||||
35,691 | 5.5 % | |||
35,511 | 5.5 % | |||
33,241 | 5.1 % | |||
33,181 | 5.1 % | |||
32,419 | 5.0 % | |||
31,930 | 4.9 % | |||
30,203 | 4.7 % | |||
27,850 | 4.3 % | |||
25,594 | 3.9 % | |||
24,069 | 3.7 % | |||
18,470 | 2.8 % | |||
18,400 | 2.8 % | |||
18,135 | 2.8 % | |||
15,884 | 2.4 % | |||
15,668 | 2.4 % | |||
15,553 | 2.4 % | |||
15,502 | 2.4 % | |||
13,575 | 2.1 % | |||
13,211 | 2.0 % | |||
12,705 | 2.0 % | |||
12,365 | 1.9 % | |||
12,239 | 1.9 % | |||
11,118 | 1.7 % | |||
9,737 | 1.5 % | |||
Other(2) | 90,417 | 14.1 % | ||
Total Portfolio | 100.0 % |
Annualized Base Rent is in thousands; any differences are the result of rounding.
(1) Refer to footnote 1 on page 5 for the Company's definition of Annualized Base Rent.
(2) Includes states generating less than
Capital Markets, Liquidity and Balance Sheet
Capital Markets
In March 2025, the Company established its inaugural commercial paper program. The program allows the Company, through its subsidiary, Agree Limited Partnership, to issue up to
During the first quarter, the Company entered into forward sale agreements in connection with its ATM program to sell an aggregate of 2.4 million shares of common stock for net proceeds of
The following table presents the Company's outstanding forward equity offerings as of March 31, 2025:
Forward Equity | Shares | Shares | Shares | Net Proceeds | Anticipated Net | |||||
Q2 2024 ATM | 3,235,964 | 3,203,496 | 32,468 | |||||||
Q3 2024 ATM | 6,602,317 | 2,238,000 | 4,364,317 | |||||||
Q4 2024 ATM | 739,013 | - | 739,013 | - | ||||||
October 2024 | 5,060,000 | - | 5,060,000 | - | ||||||
Q1 2025 ATM | 2,408,201 | - | 2,408,201 | - | ||||||
Total Forward | 18,045,495 | 5,441,496 | 12,603,999 |
Liquidity
As of March 31, 2025, the Company had total liquidity of approximately
Balance Sheet
As of March 31, 2025, the Company's net debt to recurring EBITDA was 4.9 times. The Company's proforma net debt to recurring EBITDA was 3.4 times when deducting the
The Company's total debt to enterprise value was
For the three months ended March 31, 2025, the Company's fully diluted weighted-average shares outstanding were 107.5 million. The basic weighted-average shares outstanding for the three months ended March 31, 2025 were 107.0 million.
For the three months ended March 31, 2025, the Company's fully diluted weighted-average shares and units outstanding were 107.9 million. The basic weighted-average shares and units outstanding for the three months ended March 31, 2025 were 107.4 million.
The Company's assets are held by, and its operations are conducted through, the Operating Partnership, of which the Company is the sole general partner. As of March 31, 2025, there were 347,619 Operating Partnership common units outstanding, and the Company held a
Conference Call/Webcast
The Company will host its quarterly analyst and investor conference call on Wednesday, April 23, 2025 at 9:00 AM ET. To participate in the conference call, please dial (800) 836-8184 approximately ten minutes before the call begins.
Additionally, a webcast of the conference call will be available via the Company's website. To access the webcast, visit www.agreerealty.com ten minutes prior to the start time of the conference call and go to the Investors section of the website. A replay of the conference call webcast will be archived and available online through the Investors section of www.agreerealty.com.
About Agree Realty Corporation
Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of March 31, 2025, the Company owned and operated a portfolio of 2,422 properties, located in all 50 states and containing approximately 50.3 million square feet of gross leasable area. The Company's common stock is listed on the New York Stock Exchange under the symbol "ADC". For additional information on the Company and RETHINKING RETAIL, please visit www.agreerealty.com.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about projected financial and operating results, within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may,", "can", "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "assume," "plan," "outlook" or other similar words or expressions. Forward-looking statements, including our updated 2025 guidance, are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Although these forward-looking statements are based on good faith beliefs, reasonable assumptions and the Company's best judgment reflecting current information, you should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and which could materially affect the Company's results of operations, financial condition, cash flows, performance or future achievements or events. Currently, some of the most significant factors, include the potential adverse effect of ongoing worldwide economic uncertainties and increased inflation and interest rates on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets. The extent to which these conditions will impact the Company and its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence. Moreover, investors are cautioned to interpret many of the risks identified in the risk factors discussed in the Company's Annual Report on Form 10-K and subsequent quarterly reports filed with the Securities and Exchange Commission (the "SEC"), as well as the risks set forth below, as being heightened as a result of the ongoing and numerous adverse impacts of the macroeconomic environment. Additional important factors, among others, that may cause the Company's actual results to vary include the general deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, the Company's continuing ability to qualify as a REIT and other factors discussed in the Company's reports filed with the SEC. The forward-looking statements included in this press release are made as of the date hereof. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, changes in the Company's expectations or assumptions or otherwise.
For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company's website at www.agreerealty.com.
The Company defines the "weighted-average capitalization rate" for acquisitions and dispositions as the sum of contractual fixed annual rents computed on a straight-line basis over the primary lease terms and anticipated annual net tenant recoveries, divided by the purchase and sale prices for occupied properties.
The Company defines the "all-in rate" as the interest rate that reflects the straight-line amortization of the terminated swap agreements and original issuance discount, as applicable.
References to "Core FFO" and "AFFO" in this press release are representative of Core FFO attributable to OP common unitholders and AFFO attributable to OP common unitholders. Detailed calculations for these measures are shown in the Reconciliation of Net Income to FFO, Core FFO and Adjusted FFO table as "Core Funds From Operations – OP Common Unitholders" and "Adjusted Funds from Operations – OP Common Unitholders".
Agree Realty Corporation | |||
Consolidated Balance Sheet | |||
($ in thousands, except share and per-share data) | |||
(Unaudited) | |||
March 31, 2025 | December 31, 2024 | ||
Assets: | |||
Real Estate Investments: | |||
Land | $ 2,599,164 | $ 2,514,167 | |
Buildings | 5,648,162 | 5,412,564 | |
Accumulated depreciation | (601,088) | (564,429) | |
Property under development | 50,294 | 55,806 | |
Net real estate investments | 7,696,532 | 7,418,108 | |
Real estate held for sale, net | 1,278 | - | |
Cash and cash equivalents | 7,915 | 6,399 | |
Cash held in escrows | 3,254 | - | |
Accounts receivable - tenants, net | 105,485 | 106,416 | |
Lease Intangibles, net of accumulated amortization of | 897,380 | 864,937 | |
Other assets, net | 88,733 | 90,586 | |
Total Assets | $ 8,800,577 | $ 8,486,446 | |
Liabilities: | |||
Mortgage notes payable, net | 42,050 | 42,210 | |
Unsecured term loans, net | 347,609 | 347,452 | |
Senior unsecured notes, net | 2,238,451 | 2,237,759 | |
Unsecured revolving credit facility | 322,000 | 158,000 | |
Dividends and distributions payable | 28,542 | 27,842 | |
Accounts payable, accrued expenses, and other liabilities | 129,652 | 116,273 | |
Lease intangibles, net of accumulated amortization of | 47,353 | 46,249 | |
Total Liabilities | $ 3,155,657 | $ 2,975,785 | |
Equity: | |||
Preferred Stock, | 175,000 | 175,000 | |
Common stock, | 11 | 10 | |
Additional paid-in-capital | 5,948,156 | 5,765,582 | |
Dividends in excess of net income | (508,059) | (470,622) | |
Accumulated other comprehensive income (loss) | 29,344 | 40,076 | |
Total Equity - Agree Realty Corporation | $ 5,644,452 | $ 5,510,046 | |
Non-controlling interest | 468 | 615 | |
Total Equity | $ 5,644,920 | $ 5,510,661 | |
Total Liabilities and Equity | $ 8,800,577 | $ 8,486,446 | |
Agree Realty Corporation | |||
Consolidated Statements of Operations and Comprehensive Income | |||
($ in thousands, except share and per share-data) | |||
(Unaudited) | |||
Three months ended March 31, | |||
2025 | 2024 | ||
Revenues | |||
Rental Income | $ 169,113 | $ 149,422 | |
Other | 47 | 31 | |
Total Revenues | $ 169,160 | $ 149,453 | |
Operating Expenses | |||
Real estate taxes | $ 11,513 | $ 10,701 | |
Property operating expenses | 8,381 | 7,373 | |
Land lease expense | 485 | 415 | |
General and administrative | 10,771 | 9,515 | |
Depreciation and amortization | 55,755 | 48,463 | |
Provision for impairment | 4,331 | 4,530 | |
Total Operating Expenses | $ 91,236 | $ 80,997 | |
Gain (loss) on sale of assets, net | 772 | 2,096 | |
Gain (loss) on involuntary conversion, net | - | (55) | |
Income from Operations | $ 78,696 | $ 70,497 | |
Other (Expense) Income | |||
Interest expense, net | $ (30,764) | $ (24,451) | |
Income and other tax (expense) benefit | (825) | (1,149) | |
Other (expense) income | 41 | 117 | |
Net Income | $ 47,148 | $ 45,014 | |
Less net income attributable to non-controlling interest | 152 | 155 | |
Net Income Attributable to Agree Realty Corporation | $ 46,996 | $ 44,859 | |
Less Series A Preferred Stock Dividends | 1,859 | 1,859 | |
Net Income Attributable to Common Stockholders | $ 45,137 | $ 43,000 | |
Net Income Per Share Attributable to Common Stockholders | |||
Basic | $ 0.42 | $ 0.43 | |
Diluted | $ 0.42 | $ 0.43 | |
Other Comprehensive Income | |||
Net Income | $ 47,148 | $ 45,014 | |
Amortization of interest rate swaps | (736) | (629) | |
Change in fair value and settlement of interest rate swaps | (10,031) | 11,543 | |
Total Comprehensive Income (Loss) | 36,381 | 55,928 | |
Less comprehensive income attributable to non-controlling interest | 117 | 193 | |
Comprehensive Income Attributable to Agree Realty Corporation | $ 36,264 | $ 55,735 | |
Weighted Average Number of Common Shares Outstanding - Basic | 107,048,557 | 100,284,588 | |
Weighted Average Number of Common Shares Outstanding - Diluted | 107,547,193 | 100,336,600 | |
Agree Realty Corporation | ||||||||||||||||
Reconciliation of Net Income to FFO, Core FFO and Adjusted FFO | ||||||||||||||||
($ in thousands, except share and per-share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended March 31, | ||||||||||||||||
2025 | 2024 | |||||||||||||||
Net Income | $ 47,148 | $ 45,014 | ||||||||||||||
Less Series A Preferred Stock Dividends | 1,859 | 1,859 | ||||||||||||||
Net Income attributable to OP Common Unitholders | $ 45,289 | $ 43,155 | ||||||||||||||
Depreciation of rental real estate assets | 37,164 | 31,966 | ||||||||||||||
Amortization of lease intangibles - in-place leases and leasing costs | 18,064 | 15,996 | ||||||||||||||
Provision for impairment | 4,331 | 4,530 | ||||||||||||||
(Gain) loss on sale or involuntary conversion of assets, net | (772) | (2,041) | ||||||||||||||
Funds from Operations - OP Common Unitholders | $ 104,076 | $ 93,606 | ||||||||||||||
Amortization of above (below) market lease intangibles, net and assumed mortgage | 8,630 | 8,379 | ||||||||||||||
Core Funds from Operations - OP Common Unitholders | $ 112,706 | $ 101,985 | ||||||||||||||
Straight-line accrued rent | (4,009) | (2,847) | ||||||||||||||
Stock based compensation expense | 3,129 | 2,425 | ||||||||||||||
Amortization of financing costs and original issue discounts | 1,612 | 1,186 | ||||||||||||||
Non-real estate depreciation | 527 | 501 | ||||||||||||||
Adjusted Funds from Operations - OP Common Unitholders | $ 113,965 | $ 103,250 | ||||||||||||||
Funds from Operations Per Common Share and OP Unit - Basic | $ 0.97 | $ 0.93 | ||||||||||||||
Funds from Operations Per Common Share and OP Unit - Diluted | $ 0.96 | $ 0.93 | ||||||||||||||
Core Funds from Operations Per Common Share and OP Unit - Basic | $ 1.05 | $ 1.01 | ||||||||||||||
Core Funds from Operations Per Common Share and OP Unit - Diluted | $ 1.04 | $ 1.01 | ||||||||||||||
Adjusted Funds from Operations Per Common Share and OP Unit - Basic | $ 1.06 | $ 1.03 | ||||||||||||||
Adjusted Funds from Operations Per Common Share and OP Unit - Diluted | $ 1.06 | $ 1.03 | ||||||||||||||
Weighted Average Number of Common Shares and OP Units Outstanding - Basic | 107,396,176 | 100,632,207 | ||||||||||||||
Weighted Average Number of Common Shares and OP Units Outstanding - Diluted | 107,894,812 | 100,684,219 | ||||||||||||||
Additional supplemental disclosure | ||||||||||||||||
Scheduled principal repayments | $ 250 | $ 235 | ||||||||||||||
Capitalized interest | 442 | 304 | ||||||||||||||
Capitalized building improvements | 600 | 493 | ||||||||||||||
Non-GAAP Financial Measures
Funds from Operations ("FFO" or "Nareit FFO")
FFO is defined by the National Association of Real Estate Investment Trusts, Inc. ("Nareit") to mean net income computed in accordance with GAAP, excluding gains (or losses) from sales of real estate assets and/or changes in control, plus real estate related depreciation and amortization and any impairment charges on depreciable real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company's operations. FFO should not be considered an alternative to net income as the primary indicator of the Company's operating performance, or as an alternative to cash flow as a measure of liquidity. Further, while the Company adheres to the Nareit definition of FFO, its presentation of FFO is not necessarily comparable to similarly titled measures of other REITs due to the fact that all REITs may not use the same definition.
Core Funds from Operations ("Core FFO")
The Company defines Core FFO as Nareit FFO with the addback of (i) noncash amortization of acquisition purchase price related to above- and below- market lease intangibles and discount on assumed debt and (ii) certain infrequently occurring items that reduce or increase net income in accordance with GAAP. Management believes that its measure of Core FFO facilitates useful comparison of performance to its peers who predominantly transact in sale-leaseback transactions and are thereby not required by GAAP to allocate purchase price to lease intangibles. Unlike many of its peers, the Company has acquired the substantial majority of its net-leased properties through acquisitions of properties from third parties or in connection with the acquisitions of ground leases from third parties. Core FFO should not be considered an alternative to net income as the primary indicator of the Company's operating performance, or as an alternative to cash flow as a measure of liquidity. Further, the Company's presentation of Core FFO is not necessarily comparable to similarly titled measures of other REITs due to the fact that all REITs may not use the same definition.
Adjusted Funds from Operations ("AFFO")
AFFO is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO further adjusts FFO and Core FFO for certain non-cash items that reduce or increase net income computed in accordance with GAAP. Management considers AFFO a useful supplemental measure of the Company's performance, however, AFFO should not be considered an alternative to net income as an indication of its performance, or to cash flow as a measure of liquidity or ability to make distributions. The Company's computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore may not be comparable to such other REITs.
Agree Realty Corporation | ||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||
($ in thousands, except share and per-share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three months ended | ||||||||||||||||
2025 | ||||||||||||||||
Mortgage notes payable, net | $ 42,050 | |||||||||||||||
Unsecured term loans, net | 347,609 | |||||||||||||||
Senior unsecured notes, net | 2,238,451 | |||||||||||||||
Unsecured revolving credit facility | 322,000 | |||||||||||||||
Total Debt per the Consolidated Balance Sheet | $ 2,950,110 | |||||||||||||||
Unamortized debt issuance costs and discounts, net | 25,544 | |||||||||||||||
Total Debt | $ 2,975,654 | |||||||||||||||
Cash and cash equivalents | $ (7,915) | |||||||||||||||
Cash held in escrows | (3,254) | |||||||||||||||
Net Debt | $ 2,964,485 | |||||||||||||||
Anticipated Net Proceeds from Forward Equity Offerings | (917,114) | |||||||||||||||
Proforma Net Debt | $ 2,047,371 | |||||||||||||||
Net Income | $ 47,148 | |||||||||||||||
Interest expense, net | 30,764 | |||||||||||||||
Income and other tax expense | 825 | |||||||||||||||
Depreciation of rental real estate assets | 37,164 | |||||||||||||||
Amortization of lease intangibles - in-place leases and leasing costs | 18,064 | |||||||||||||||
Non-real estate depreciation | 527 | |||||||||||||||
Provision for impairment | 4,331 | |||||||||||||||
(Gain) loss on sale or involuntary conversion of assets, net | (772) | |||||||||||||||
EBITDAre | $ 138,051 | |||||||||||||||
Run-Rate Impact of Investment, Disposition and Leasing Activity | $ 4,421 | |||||||||||||||
Amortization of above (below) market lease intangibles, net | 8,546 | |||||||||||||||
Recurring EBITDA | $ 151,018 | |||||||||||||||
Annualized Recurring EBITDA | $ 604,072 | |||||||||||||||
Total Debt per the Consolidated Balance Sheet to Annualized Net Income | 15.8x | |||||||||||||||
Net Debt to Recurring EBITDA | 4.9x | |||||||||||||||
Proforma Net Debt to Recurring EBITDA | 3.4x | |||||||||||||||
Non-GAAP Financial Measures
Total Debt and Net Debt
The Company defines Total Debt as debt per the consolidated balance sheet excluding unamortized debt issuance costs, original issue discounts and debt discounts. Net Debt is defined as Total Debt less cash, cash equivalents and cash held in escrows. The Company considers the non-GAAP measures of Total Debt and Net Debt to be key supplemental measures of the Company's overall liquidity, capital structure and leverage because they provide industry analysts, lenders and investors useful information in understanding our financial condition. The Company's calculation of Total Debt and Net Debt may not be comparable to Total Debt and Net Debt reported by other REITs that interpret the definitions differently than the Company. The Company presents Net Debt on both an actual and proforma basis, assuming the net proceeds of the Forward Equity Offerings (see below) are used to pay down debt. The Company believes the proforma measure may be useful to investors in understanding the potential effect of the Forward Offerings on the Company's capital structure, its future borrowing capacity, and its ability to service its debt.
Forward Equity Offerings
The Company has 12,603,999 shares remaining to be settled under the Forward Equity Offerings. Upon settlement, the offerings are anticipated to raise net proceeds of approximately
EBITDAre
EBITDAre is defined by Nareit to mean net income computed in accordance with GAAP, plus interest expense, income tax expense, depreciation and amortization, any gains (or losses) from sales of real estate assets and/or changes in control, any impairment charges on depreciable real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. The Company considers the non-GAAP measure of EBITDAre to be a key supplemental measure of the Company's performance and should be considered along with, but not as an alternative to, net income or loss as a measure of the Company's operating performance. The Company considers EBITDAre a key supplemental measure of the Company's operating performance because it provides an additional supplemental measure of the Company's performance and operating cash flow that is widely known by industry analysts, lenders and investors. The Company's calculation of EBITDAre may not be comparable to EBITDAre reported by other REITs that interpret the Nareit definition differently than the Company.
Recurring EBITDA
The Company defines Recurring EBITDA as EBITDAre with the addback of noncash amortization of above- and below- market lease intangibles, and after adjustments for the run-rate impact of the Company's investment and disposition activity for the period presented, as well as adjustments for non-recurring benefits or expenses. The Company considers the non-GAAP measure of Recurring EBITDA to be a key supplemental measure of the Company's performance and should be considered along with, but not as an alternative to, net income or loss as a measure of the Company's operating performance. The Company considers Recurring EBITDA a key supplemental measure of the Company's operating performance because it represents the Company's earnings run rate for the period presented and because it is widely followed by industry analysts, lenders and investors. Our Recurring EBITDA may not be comparable to Recurring EBITDA reported by other companies that have a different interpretation of the definition of Recurring EBITDA. Our ratio of net debt to Recurring EBITDA is used by management as a measure of leverage and may be useful to investors in understanding the Company's ability to service its debt, as well as assess the borrowing capacity of the Company. Our ratio of net debt to Recurring EBITDA is calculated by taking annualized Recurring EBITDA and dividing it by our net debt per the consolidated balance sheet.
Annualized Net Income
Represents net income for the three months ended March 31, 2025, on an annualized basis.
Agree Realty Corporation | |||
Rental Income | |||
($ in thousands, except share and per share-data) | |||
(Unaudited) | |||
Three months ended March 31, | |||
2025 | 2024 | ||
Rental Income Source(1) | |||
Minimum rents(2) | $ 154,006 | $ 137,033 | |
Percentage rents(2) | 1,556 | 1,368 | |
Operating cost reimbursement(2) | 18,088 | 16,469 | |
Straight-line rental adjustments(3) | 4,009 | 2,847 | |
Amortization of (above) below market lease intangibles(4) | (8,546) | (8,295) | |
Total Rental Income | $ 169,113 | $ 149,422 | |
(1) The Company adopted Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 842 "Leases" using the modified retrospective approach as of January 1, 2019. The Company adopted the practical expedient in FASB ASC 842 that alleviates the requirement to separately present lease and non-lease components of lease contracts. As a result, all income earned pursuant to tenant leases is reflected as one line, "Rental Income," in the consolidated statement of operations. The purpose of this table is to provide additional supplementary detail of Rental Income.
(2) Represents contractual rentals and/or reimbursements as required by tenant lease agreements, recognized on an accrual basis of accounting. The Company believes that the presentation of contractual lease income is not, and is not intended to be, a presentation in accordance with GAAP. The Company believes this information is frequently used by management, investors, analysts and other interested parties to evaluate the Company's performance.
(3) Represents adjustments to recognize minimum rents on a straight-line basis, consistent with the requirements of FASB ASC 842.
(4) In allocating the fair value of an acquired property, above- and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition and the Company's estimate of current market lease rates for the property.
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SOURCE AGREE REALTY CORPORATION
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