Agree Realty Corporation Reports Second Quarter 2024 Results
Agree Realty (NYSE: ADC) reported strong Q2 2024 results, with notable increases in key financial metrics. Net Income per share rose 25.6% to $0.52, while AFFO per share increased 6.4% to $1.04. The company invested approximately $203 million in 70 retail net lease properties and raised its 2024 AFFO per share guidance to $4.11-$4.14. ADC also increased its 2024 acquisition guidance to approximately $700 million.
Other highlights include a public bond offering of $450 million, the sale of 3.2 million shares via ATM program, and commitments to expand its credit facility to $1.25 billion. The company's balance sheet remains strong with 4.1 times proforma net debt to recurring EBITDA. ADC declared a July monthly dividend of $0.250 per common share, representing a 2.9% year-over-year increase.
Agree Realty (NYSE: ADC) ha riportato risultati forti per il secondo trimestre del 2024, con aumenti notevoli nei principali indicatori finanziari. Il reddito netto per azione è aumentato del 25,6% a $0,52, mentre l'AFFO per azione è cresciuto del 6,4% a $1,04. L'azienda ha investito circa $203 milioni in 70 proprietà commerciali a locazione netta e ha alzato la sua previsione di AFFO per azione per il 2024 a $4,11-$4,14. ADC ha anche aumentato la sua previsione di acquisizioni per il 2024 a circa $700 milioni.
Altri punti salienti includono un'offerta di obbligazioni pubbliche di $450 milioni, la vendita di 3,2 milioni di azioni tramite programma ATM e impegni ad espandere la sua linea di credito a $1,25 miliardi. Il bilancio dell'azienda rimane solido con un rapporto debito netto proforma su EBITDA ricorrente di 4,1 volte. ADC ha dichiarato un dividendo mensile di luglio di $0,250 per azione ordinaria, rappresentando un aumento del 2,9% rispetto all'anno precedente.
Agree Realty (NYSE: ADC) reportó resultados sólidos para el segundo trimestre de 2024, con aumentos notables en los principales indicadores financieros. El ingreso neto por acción aumentó un 25,6% a $0,52, mientras que el AFFO por acción creció un 6,4% a $1,04. La empresa invirtió aproximadamente $203 millones en 70 propiedades comerciales con arrendamiento neto y elevó su guía de AFFO por acción para 2024 a $4,11-$4,14. ADC también aumentó su guía de adquisiciones para 2024 a aproximadamente $700 millones.
Otros aspectos destacados incluyen una oferta pública de bonos de $450 millones, la venta de 3,2 millones de acciones a través de un programa ATM y compromisos para expandir su línea de crédito a $1,25 mil millones. El balance de la empresa sigue siendo sólido, con una relación de deuda neta proforma a EBITDA recurrente de 4,1 veces. ADC declaró un dividendo mensual de julio de $0,250 por acción común, lo que representa un aumento del 2,9% en comparación con el año anterior.
Agree Realty (NYSE: ADC)는 2024년 2분기 강력한 실적을 보고하였으며, 주요 재무 지표에서 눈에 띄는 증가를 보였습니다. 주당 순이익은 25.6% 증가한 $0.52로, 주당 AFFO는 6.4% 증가한 $1.04에 도달했습니다. 회사는 70개의 소매 순 임대 부동산에 약 2억 3백만 달러를 투자하였고, 2024년 주당 AFFO 가이던스를 $4.11-$4.14로 상향 조정했습니다. ADC는 또한 2024년 인수 가이던스를 약 7억 달러로 증가시켰습니다.
기타 주요 사항으로는 4억 5천만 달러 규모의 공모채 발행, ATM 프로그램을 통한 320만 주의 주식 매각, 12억 5천만 달러로 신용시설 확장에 대한 약속이 포함됩니다. 회사의 재무 상태는 4.1배의 프로포르마 순 부채 대비 반복 EBITDA로 여전히 탄탄합니다. ADC는 7월 한 달 동안 보통주에 대해 주당 $0.250의 배당금을 선언했으며, 이는 전년 대비 2.9% 증가한 수치입니다.
Agree Realty (NYSE: ADC) a annoncé de solides résultats pour le deuxième trimestre de 2024, avec des augmentations notables dans les principaux indicateurs financiers. Le revenu net par action a augmenté de 25,6% à $0,52, tandis que l'AFFO par action a augmenté de 6,4% à $1,04. L'entreprise a investi environ 203 millions de dollars dans 70 propriétés commerciales en location nette et a relevé ses prévisions d'AFFO par action pour 2024 à $4,11-$4,14. ADC a également augmenté ses prévisions d'acquisition pour 2024 à environ 700 millions de dollars.
Parmi les autres points saillants, on trouve une offre obligataire publique de 450 millions de dollars, la vente de 3,2 millions d'actions via un programme ATM, et des engagements pour élargir sa ligne de crédit à 1,25 milliard de dollars. Le bilan de l'entreprise reste solide avec un ratio de 4,1 fois la dette nette pro forma par rapport à l'EBITDA récurrent. ADC a déclaré un dividende mensuel de juillet de 0,250 $ par action ordinaire, représentant une augmentation de 2,9% par rapport à l'année précédente.
Agree Realty (NYSE: ADC) hat starke Ergebnisse für das zweite Quartal 2024 gemeldet, mit bemerkenswerten Zuwächsen bei den wichtigsten finanziellen Kennzahlen. Der Nettogewinn pro Aktie stieg um 25,6% auf $0,52, während AFFO pro Aktie um 6,4% auf $1,04 anstieg. Das Unternehmen investierte rund 203 Millionen US-Dollar in 70 Einzelhandelsimmobilien mit Nettomiete und erhöhte seine Prognose für den AFFO pro Aktie für 2024 auf $4,11-$4,14. ADC hob auch seine Akquisitionsprognose für 2024 auf rund 700 Millionen US-Dollar an.
Weitere Höhepunkte sind ein öffentliches Anleiheangebot über 450 Millionen US-Dollar, der Verkauf von 3,2 Millionen Aktien über ein ATM-Programm und Verpflichtungen zur Erhöhung seiner Kreditfazilität auf 1,25 Milliarden US-Dollar. Die Bilanz des Unternehmens bleibt stark mit einem Verhältnis von 4,1-fachem Netto-Proforma-Schulden zu wiederkehrendem EBITDA. ADC erklärte eine monatliche Dividende von $0,250 pro Stammaktie für Juli, was einem Anstieg von 2,9% im Vergleich zum Vorjahr entspricht.
- Net Income per share increased 25.6% to $0.52 in Q2 2024
- AFFO per share rose 6.4% to $1.04 in Q2 2024
- Invested $203 million in 70 retail net lease properties
- Raised 2024 AFFO per share guidance to $4.11-$4.14
- Increased 2024 acquisition guidance to approximately $700 million
- Completed $450 million public bond offering
- Expanded credit facility to $1.25 billion
- Strong balance sheet with 4.1 times proforma net debt to recurring EBITDA
- Declared monthly dividend of $0.250 per share, a 2.9% year-over-year increase
- None.
Insights
The second quarter results from Agree Realty Corporation are indeed impressive and point to robust operational health. An increase in AFFO per share guidance to $4.11-$4.14 indicates growing profitability and reliable revenue streams. This upward revision, coupled with a 25.6% increase in Net Income per share, underlines the company's strong financial performance. Furthermore, the significant investment in retail net lease properties and development projects reflects a strategic expansion in their asset base, likely enhancing future revenue. A noteworthy highlight is the expansion of the company's credit facility to $1.25 billion, extending its maturity until 2029, which provides ample liquidity and financial flexibility.
From an investor’s perspective, these numbers signal a promising short-term performance and a solid foundation for long-term growth. The company’s dividend increase and consistent payout ratio demonstrate shareholder-friendly policies. The issuance of $450 million of senior unsecured notes and the sale of common stock also indicate a proactive approach to capital management, balancing debt and equity to maintain financial stability. Investors should feel confident in the company's strategic direction and its capacity to generate value.
Agree Realty Corporation's decision to raise its acquisition guidance to approximately $700 million indicates an aggressive growth strategy. The retail net lease market is particularly appealing due to its stable cash flows and long-term leases, making these investments less volatile. This strategy could amplify the company's revenue stream, especially if they target high-quality tenants. The company's balance sheet, with a proforma net debt to recurring EBITDA ratio of 4.1 times, indicates prudent leverage management, providing a cushion against market fluctuations.
On the market front, such strong financial metrics can boost investor confidence, potentially leading to a positive stock performance. The increased guidance and robust second quarter results position Agree Realty favorably against its peers. This outlook is particularly strong given the current economic conditions where stable, income-producing assets are highly valued. Additionally, the commitment to expand their credit facility underscores the company's solid financial standing, which could drive further acquisition opportunities and, consequently, growth.
Increases 2024 AFFO Per Share Guidance to
Raises 2024 Acquisition Guidance to Approximately
Receives Commitments to Expand Credit Facility to
Second Quarter 2024 Financial and Operating Highlights:
- Invested approximately
$203 million - Commenced five development or Developer Funding Platform ("DFP") projects for total committed capital of approximately
$19 million - Net Income per share attributable to common stockholders increased
25.6% to$0.52 - Core Funds from Operations ("Core FFO") per share increased
5.7% to$1.03 - Adjusted Funds from Operations ("AFFO") per share increased
6.4% to$1.04 - Declared a July monthly dividend of
$0.25 02.9% year-over-year increase - Completed a public bond offering of
$450 million 5.625% senior unsecured notes due 2034 - Sold 3.2 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
$195 million - Approximately
$1.7 billion $1.25 billion - Balance sheet well positioned at 4.1 times proforma net debt to recurring EBITDA; 4.9 times excluding unsettled forward equity
First Half 2024 Financial and Operating Highlights:
- Invested approximately
$343 million - Committed over
$101 million - Net Income per share attributable to common stockholders increased
11.3% to$0.95 - Core FFO per share increased
4.6% to$2.05 - AFFO per share increased
5.5% to$2.07 - Declared dividends of
$1.49 12.9% year-over-year increase
Financial Results
Net Income Attributable to Common Stockholders
Net Income for the three months ended June 30, 2024 increased
Net Income for the six months ended June 30, 2024 increased
Core FFO
Core FFO for the three months ended June 30, 2024 increased
Core FFO for the six months ended June 30, 2024 increased
AFFO
AFFO for the three months ended June 30, 2024 increased
AFFO for the six months ended June 30, 2024 increased
Dividend
In the second quarter, the Company declared monthly cash dividends of
For the six months ended June 30, 2024, the Company declared monthly cash dividends totaling
Subsequent to quarter end, the Company declared a monthly cash dividend of
Additionally, subsequent to quarter end, the Company declared a monthly cash dividend on its
Earnings Guidance
Prior 2024 Guidance(1) | Revised 2024 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 | ||
Acquisition volume | Approximately | Approximately |
Disposition volume |
The Company's 2024 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 April 23, 2024. |
(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 very pleased with our performance during the first half of the year," said Joey Agree, President and Chief Executive Officer. "During the quarter, we raised nearly
Portfolio Update
As of June 30, 2024, the Company's portfolio consisted of 2,202 properties located in 49 states and contained approximately 45.8 million square feet of gross leasable area. At quarter end, the portfolio was
Ground Lease Portfolio
As of June 30, 2024, the Company's ground lease portfolio consisted of 223 leases located in 35 states and totaled approximately 6.1 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 10.0 years, and generated
Acquisitions
Total acquisition volume for the second quarter was approximately
The properties were acquired at a weighted-average capitalization rate of
For the six months ended June 30, 2024, total acquisition volume was approximately
The Company's outlook for acquisition volume for the full year 2024 is being increased to approximately
Dispositions
During the second quarter, the Company sold 10 properties for gross proceeds of approximately
During the six months ended June 30, 2024, the Company sold 16 properties for gross proceeds of approximately
The Company is increasing the lower end of its full-year 2024 disposition guidance range from
Development and DFP
During the second quarter, the Company commenced five development or DFP projects, with total anticipated costs of approximately
For the six months ended June 30, 2024, the Company had 25 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 or DFP projects as of June 30, 2024:
Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | |||||
Number of Projects | 23 | 25 | ||||
Costs Funded During Q2 2024 | ||||||
Costs Funded Prior to Q2 2024 | 40,784 | 48,977 | ||||
Remaining Funding Costs | 35,322 | 35,322 | ||||
Anticipated Total Project Costs |
Development and DFP project costs are in thousands. Any differences are the result of rounding. Costs Funded During Q2 2024 exclude any costs associated with projects that were completed in prior quarters. Remaining Funding Costs exclude any costs associated with projects that were completed in Q2 2024. Costs Funded Prior to Q2 2024 may include adjustments related to completed projects to arrive at the correct Anticipated Total Project Costs. |
Leasing Activity and Expirations
During the second quarter, the Company executed new leases, extensions or options on approximately 302,000 square feet of gross leasable area throughout the existing portfolio. Notable new leases, extensions or options included a 25,000-square foot Ross Dress for Less in
For the six months ended June 30, 2024, the Company executed new leases, extensions or options on approximately 707,000 square feet of gross leasable area throughout the existing portfolio.
As of June 30, 2024, the Company's 2024 lease maturities represented
Year | Leases | Annualized | Percent of | Gross Leasable Area | Percent of Gross | ||||
2024 | 5 | 0.1 % | 38 | 0.1 % | |||||
2025 | 65 | 15,062 | 2.6 % | 1,530 | 3.3 % | ||||
2026 | 123 | 27,334 | 4.7 % | 2,799 | 6.1 % | ||||
2027 | 160 | 35,439 | 6.1 % | 3,252 | 7.1 % | ||||
2028 | 177 | 47,342 | 8.2 % | 4,376 | 9.6 % | ||||
2029 | 200 | 60,777 | 10.5 % | 5,884 | 12.9 % | ||||
2030 | 276 | 57,927 | 10.0 % | 4,423 | 9.7 % | ||||
2031 | 186 | 44,287 | 7.6 % | 3,277 | 7.2 % | ||||
2032 | 243 | 49,925 | 8.6 % | 3,680 | 8.1 % | ||||
2033 | 202 | 46,259 | 8.0 % | 3,543 | 7.8 % | ||||
Thereafter | 745 | 194,119 | 33.6 % | 12,874 | 28.1 % | ||||
Total Portfolio | 2,382 | 100.0 % | 45,676 | 100.0 % |
The contractual lease expirations presented above exclude the effect of replacement tenant leases that had been executed as of June 30, 2024, 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 June 30, 2024, 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
As of June 30, 2024, BJ's Wholesale Club is no longer among the Company's top tenants. The following table presents annualized base rents for all tenants that represent
Tenant | Annualized | Percent of Annualized Base Rent | ||
Walmart | 5.8 % | |||
Tractor Supply | 28,155 | 4.9 % | ||
Dollar General | 27,042 | 4.7 % | ||
Best Buy | 20,378 | 3.5 % | ||
CVS | 18,836 | 3.3 % | ||
Dollar Tree | 18,211 | 3.1 % | ||
TJX Companies | 18,025 | 3.1 % | ||
Kroger | 16,802 | 2.9 % | ||
O'Reilly Auto Parts | 16,684 | 2.9 % | ||
Lowe's | 16,025 | 2.8 % | ||
Hobby Lobby | 15,856 | 2.7 % | ||
7-Eleven | 13,830 | 2.4 % | ||
13,361 | 2.3 % | |||
Sunbelt Rentals | 13,134 | 2.3 % | ||
Sherwin-Williams | 11,525 | 2.0 % | ||
Gerber Collision | 11,087 | 1.9 % | ||
Wawa | 9,916 | 1.7 % | ||
Home Depot | 9,591 | 1.7 % | ||
Other(2) | 266,594 | 46.0 % | ||
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 June 30, 2024:
Sector | Annualized | Percent of Base Rent | ||
Grocery Stores | 9.6 % | |||
Home Improvement | 53,342 | 9.2 % | ||
Tire and Auto Service | 46,327 | 8.0 % | ||
Convenience Stores | 46,076 | 8.0 % | ||
Dollar Stores | 44,336 | 7.7 % | ||
Off-Price Retail | 35,554 | 6.1 % | ||
Auto Parts | 32,934 | 5.7 % | ||
General Merchandise | 32,331 | 5.6 % | ||
Farm and Rural Supply | 29,883 | 5.2 % | ||
Pharmacy | 24,283 | 4.2 % | ||
Consumer Electronics | 22,508 | 3.9 % | ||
Crafts and Novelties | 18,134 | 3.1 % | ||
Discount Stores | 14,151 | 2.4 % | ||
Equipment Rental | 13,614 | 2.4 % | ||
Health Services | 13,247 | 2.3 % | ||
Warehouse Clubs | 12,782 | 2.2 % | ||
Dealerships | 12,411 | 2.1 % | ||
Health and Fitness | 10,498 | 1.8 % | ||
Restaurants - Quick Service | 10,032 | 1.7 % | ||
Sporting Goods | 7,459 | 1.3 % | ||
Specialty Retail | 7,165 | 1.2 % | ||
Financial Services | 6,716 | 1.2 % | ||
Restaurants - Casual Dining | 5,818 | 1.0 % | ||
Theaters | 3,854 | 0.7 % | ||
Home Furnishings | 3,702 | 0.6 % | ||
Pet Supplies | 3,697 | 0.6 % | ||
Beauty and Cosmetics | 3,482 | 0.6 % | ||
Shoes | 3,166 | 0.6 % | ||
Entertainment Retail | 2,323 | 0.4 % | ||
Apparel | 1,742 | 0.3 % | ||
Miscellaneous | 1,251 | 0.2 % | ||
Office Supplies | 784 | 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 | Percent of Annualized Base Rent | |||
7.1 % | |||||
32,477 | 5.6 % | ||||
32,320 | 5.6 % | ||||
31,380 | 5.4 % | ||||
31,191 | 5.4 % | ||||
30,350 | 5.2 % | ||||
26,441 | 4.6 % | ||||
23,981 | 4.1 % | ||||
23,523 | 4.1 % | ||||
23,195 | 4.0 % | ||||
21,585 | 3.7 % | ||||
16,488 | 2.8 % | ||||
16,474 | 2.8 % | ||||
15,754 | 2.7 % | ||||
14,184 | 2.5 % | ||||
14,120 | 2.4 % | ||||
13,947 | 2.4 % | ||||
13,346 | 2.3 % | ||||
12,653 | 2.2 % | ||||
12,289 | 2.1 % | ||||
11,351 | 2.0 % | ||||
10,375 | 1.8 % | ||||
9,545 | 1.6 % | ||||
9,421 | 1.6 % | ||||
8,905 | 1.5 % | ||||
8,687 | 1.5 % | ||||
Other(2) | 74,119 | 13.0 % | |||
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 May 2024, the Company completed a
In July 2024, the Company received commitments to increase its Credit Facility to
During the second quarter, the Company entered into forward sale agreements in connection with its ATM program to sell an aggregate of 3.2 million shares of common stock for net proceeds of
The following table presents the Company's outstanding forward equity offerings as of June 30, 2024:
Forward Equity | Shares | Shares | Shares | Net Proceeds | Anticipated Net | |||||
Q4 2023 ATM Forward Offerings | 3,833,871 | - | 3,833,871 | - | ||||||
Q1 2024 ATM Forward Offerings | 20,743 | - | 20,743 | - | ||||||
Q2 2024 ATM Forward Offerings | 3,235,964 | - | 3,235,964 | - | ||||||
Total Forward Equity Offerings | 7,090,578 | - | 7,090,578 | - |
Liquidity
As of June 30, 2024, the Company had total liquidity of over
Balance Sheet
As of June 30, 2024, the Company's net debt to recurring EBITDA was 4.9 times. The Company's proforma net debt to recurring EBITDA was 4.1 times when deducting the
The Company's total debt to enterprise value was
For the three months and six months ended June 30, 2024, the Company's fully diluted weighted-average shares outstanding were 100.5 million and 100.4 million, respectively. There were 100.3 million basic weighted-average shares outstanding for both the three months and six months ended June 30, 2024.
For both the three months and six months ended June 30, 2024, the Company's fully diluted weighted-average shares and units outstanding were 100.8 million. There were 100.7 million basic weighted-average shares and units outstanding for both the three and six months ended June 30, 2024.
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 June 30, 2024, 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, July 24, 2024 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 June 30, 2024, the Company owned and operated a portfolio of 2,202 properties, located in 49 states and containing approximately 45.8 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 2024 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.
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) | |||
June 30, 2024 | December 31, 2023 | ||
Assets: | |||
Real Estate Investments: | |||
Land | $ 2,340,966 | $ 2,282,354 | |
Buildings | 5,061,561 | 4,861,692 | |
Accumulated depreciation | (494,737) | (433,958) | |
Property under development | 44,839 | 33,232 | |
Net real estate investments | 6,952,629 | 6,743,320 | |
Real estate held for sale, net | - | 3,642 | |
Cash and cash equivalents | 9,639 | 10,907 | |
Cash held in escrows | 14,615 | 3,617 | |
Accounts receivable - tenants, net | 94,853 | 82,954 | |
Lease Intangibles, net of accumulated amortization of | 837,991 | 854,088 | |
Other assets, net | 91,111 | 76,308 | |
Total Assets | $ 8,000,838 | $ 7,774,836 | |
Liabilities: | |||
Mortgage notes payable, net | 42,518 | 42,811 | |
Unsecured term loan, net | 347,115 | 346,798 | |
Senior unsecured notes, net | 2,236,223 | 1,794,312 | |
Unsecured revolving credit facility | 43,000 | 227,000 | |
Dividends and distributions payable | 25,863 | 25,534 | |
Accounts payable, accrued expenses and other liabilities | 106,058 | 101,401 | |
Lease intangibles, net of accumulated amortization of | 36,983 | 36,827 | |
Total Liabilities | $ 2,837,760 | $ 2,574,683 | |
Equity: | |||
Preferred Stock, | 175,000 | 175,000 | |
Common stock, | 10 | 10 | |
Additional paid-in-capital | 5,357,143 | 5,354,120 | |
Dividends in excess of net income | (400,809) | (346,473) | |
Accumulated other comprehensive income (loss) | 30,915 | 16,554 | |
Total Equity - Agree Realty Corporation | $ 5,162,259 | $ 5,199,211 | |
Non-controlling interest | 819 | 942 | |
Total Equity | $ 5,163,078 | $ 5,200,153 | |
Total Liabilities and Equity | $ 8,000,838 | $ 7,774,836 | |
Agree Realty Corporation | |||||||
Consolidated Statements of Operations and Comprehensive Income | |||||||
($ in thousands, except share and per share-data) | |||||||
(Unaudited) | |||||||
Three months ended June 30, | Six months ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenues | |||||||
Rental Income | $ 152,424 | $ 129,876 | $ 301,847 | $ 256,485 | |||
Other | 151 | 24 | 182 | 33 | |||
Total Revenues | $ 152,575 | $ 129,900 | $ 302,029 | $ 256,518 | |||
Operating Expenses | |||||||
Real estate taxes | $ 10,721 | $ 9,874 | $ 21,422 | $ 19,305 | |||
Property operating expenses | 6,487 | 5,821 | 13,860 | 12,602 | |||
Land lease expense | 415 | 410 | 830 | 840 | |||
General and administrative | 9,707 | 8,420 | 19,222 | 17,244 | |||
Depreciation and amortization | 50,454 | 42,750 | 98,917 | 83,396 | |||
Provision for impairment | - | 1,315 | 4,530 | 1,315 | |||
Total Operating Expenses | $ 77,784 | $ 68,590 | $ 158,781 | $ 134,702 | |||
Gain (loss) on sale of assets, net | 7,156 | 319 | 9,252 | 319 | |||
Gain (loss) on involuntary conversion, net | 20 | - | (35) | - | |||
Income from Operations | $ 81,967 | $ 61,629 | $ 152,465 | $ 122,135 | |||
Other (Expense) Income | |||||||
Interest expense, net | $ (26,416) | $ (19,948) | $ (50,867) | $ (37,945) | |||
Income and other tax (expense) benefit | (1,004) | (709) | (2,154) | (1,492) | |||
Other (expense) income | 366 | 43 | 483 | 91 | |||
Net Income | $ 54,913 | $ 41,015 | $ 99,927 | $ 82,789 | |||
Less net income attributable to non-controlling interest | 189 | 147 | 344 | 307 | |||
Net Income Attributable to Agree Realty Corporation | $ 54,724 | $ 40,868 | $ 99,583 | $ 82,482 | |||
Less Series A Preferred Stock Dividends | 1,859 | 1,859 | 3,718 | 3,718 | |||
Net Income Attributable to Common Stockholders | $ 52,865 | $ 39,009 | $ 95,865 | $ 78,764 | |||
Net Income Per Share Attributable to Common | |||||||
Basic | $ 0.53 | $ 0.42 | $ 0.95 | $ 0.86 | |||
Diluted | $ 0.52 | $ 0.42 | $ 0.95 | $ 0.86 | |||
Other Comprehensive Income | |||||||
Net Income | $ 54,913 | $ 41,015 | $ 99,927 | $ 82,789 | |||
Amortization of interest rate swaps | (675) | (630) | (1,305) | (1,259) | |||
Change in fair value and settlement of interest rate swaps | 4,172 | 3,341 | 15,716 | 3,341 | |||
Total Comprehensive Income (Loss) | 58,410 | 43,726 | 114,338 | 84,871 | |||
Less comprehensive income attributable to non-controlling | 201 | 157 | 394 | 315 | |||
Comprehensive Income Attributable to Agree Realty | $ 58,209 | $ 43,569 | $ 113,944 | $ 84,556 | |||
Weighted Average Number of Common Shares Outstanding - | 100,349,943 | 93,053,870 | 100,319,591 | 91,549,390 | |||
Weighted Average Number of Common Shares Outstanding - | 100,454,703 | 93,134,385 | 100,415,466 | 91,862,290 | |||
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 June 30, | Six months ended June 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Net Income | $ 54,913 | $ 41,015 | $ 99,927 | $ 82,789 | ||||
Less Series A Preferred Stock Dividends | 1,859 | 1,859 | 3,718 | 3,718 | ||||
Net Income attributable to OP Common Unitholders | 53,054 | 39,156 | 96,209 | 79,071 | ||||
Depreciation of rental real estate assets | 33,531 | 28,145 | 65,497 | 54,729 | ||||
Amortization of lease intangibles - in-place leases and leasing costs | 16,424 | 14,328 | 32,420 | 28,098 | ||||
Provision for impairment | - | 1,315 | 4,530 | 1,315 | ||||
(Gain) loss on sale or involuntary conversion of assets, net | (7,176) | (319) | (9,217) | (319) | ||||
Funds from Operations - OP Common Unitholders | $ 95,833 | $ 82,625 | $ 189,439 | $ 162,894 | ||||
Amortization of above (below) market lease intangibles, net and assumed mortgage debt discount, net | 8,381 | 8,794 | 16,759 | 17,489 | ||||
Core Funds from Operations - OP Common Unitholders | $ 104,214 | $ 91,419 | $ 206,198 | $ 180,383 | ||||
Straight-line accrued rent | (3,496) | (3,108) | (6,343) | (6,147) | ||||
Stock based compensation expense | 2,789 | 2,177 | 5,213 | 4,008 | ||||
Amortization of financing costs and original issue discounts | 1,302 | 1,029 | 2,488 | 2,057 | ||||
Non-real estate depreciation | 499 | 277 | 1,000 | 569 | ||||
Adjusted Funds from Operations - OP Common Unitholders | $ 105,308 | $ 91,794 | $ 208,556 | $ 180,870 | ||||
Funds from Operations Per Common Share and OP Unit - Basic | $ 0.95 | $ 0.88 | $ 1.88 | $ 1.77 | ||||
Funds from Operations Per Common Share and OP Unit - Diluted | $ 0.95 | $ 0.88 | $ 1.88 | $ 1.77 | ||||
Core Funds from Operations Per Common Share and OP Unit - Basic | $ 1.03 | $ 0.98 | $ 2.05 | $ 1.96 | ||||
Core Funds from Operations Per Common Share and OP Unit - Diluted | $ 1.03 | $ 0.98 | $ 2.05 | $ 1.96 | ||||
Adjusted Funds from Operations Per Common Share and OP Unit - Basic | $ 1.05 | $ 0.98 | $ 2.07 | $ 1.97 | ||||
Adjusted Funds from Operations Per Common Share and OP Unit - Diluted | $ 1.04 | $ 0.98 | $ 2.07 | $ 1.96 | ||||
Weighted Average Number of Common Shares and OP Units Outstanding - Basic | 100,697,562 | 93,401,489 | 100,667,210 | 91,897,009 | ||||
Weighted Average Number of Common Shares and OP Units Outstanding - Diluted | 100,802,322 | 93,482,004 | 100,763,085 | 92,209,909 | ||||
Additional supplemental disclosure | ||||||||
Scheduled principal repayments | $ 239 | $ 224 | $ 474 | $ 445 | ||||
Capitalized interest | 398 | 664 | 701 | 1,203 | ||||
Capitalized building improvements | 3,296 | 2,389 | 3,789 | 3,092 | ||||
Non-GAAP Financial Measures Funds from Operations ("FFO" or "Nareit FFO") Core Funds from Operations ("Core FFO")
Adjusted Funds from Operations ("AFFO") | ||||||||
Agree Realty Corporation | ||||||
Reconciliation of Non-GAAP Financial Measures | ||||||
($ in thousands, except share and per-share data) | ||||||
(Unaudited) | ||||||
Three months ended | ||||||
2024 | ||||||
Mortgage notes payable, net | $ 42,518 | |||||
Unsecured term loan, net | 347,115 | |||||
Senior unsecured notes, net | 2,236,223 | |||||
Unsecured revolving credit facility | 43,000 | |||||
Total Debt per the Consolidated Balance Sheet | $ 2,668,856 | |||||
Unamortized debt issuance costs and discounts, net | 28,537 | |||||
Total Debt | $ 2,697,393 | |||||
Cash and cash equivalents | $ (9,639) | |||||
Cash held in escrows | (14,615) | |||||
Net Debt | $ 2,673,139 | |||||
Anticipated Net Proceeds from ATM Forward Offerings | (431,073) | |||||
Proforma Net Debt | $ 2,242,066 | |||||
Net Income | $ 54,913 | |||||
Interest expense, net | 26,416 | |||||
Income and other tax expense | 1,004 | |||||
Depreciation of rental real estate assets | 33,531 | |||||
Amortization of lease intangibles - in-place leases and leasing costs | 16,424 | |||||
Non-real estate depreciation | 499 | |||||
(Gain) loss on sale or involuntary conversion of assets, net | (7,176) | |||||
EBITDAre | $ 125,611 | |||||
Run-Rate Impact of Investment, Disposition and Leasing Activity | $ 1,890 | |||||
Amortization of above (below) market lease intangibles, net | 8,297 | |||||
Recurring EBITDA | $ 135,798 | |||||
Annualized Recurring EBITDA | $ 543,192 | |||||
Total Debt per the Consolidated Balance Sheet to Annualized Net Income | 12.2x | |||||
Net Debt to Recurring EBITDA | 4.9x | |||||
Proforma Net Debt to Recurring EBITDA | 4.1x | |||||
Total Debt and Net Debt Forward Offerings The Company has 7,090,578 shares remaining to be settled under the ATM Forward 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 June 30, 2024, on an annualized basis.
|
Agree Realty Corporation | ||||||||||
Rental Income | ||||||||||
($ in thousands, except share and per share-data) | ||||||||||
(Unaudited) | ||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||
2024 | 2023 | 2024 | 2023 | |||||||
Rental Income Source(1) | ||||||||||
Minimum rents(2) | $ 140,945 | $ 120,916 | $ 277,979 | $ 236,706 | ||||||
Percentage rents(2) | 337 | 68 | 1,705 | 1,314 | ||||||
Operating cost reimbursement(2) | 15,943 | 14,495 | 32,412 | 29,640 | ||||||
Straight-line rental adjustments(3) | 3,496 | 3,108 | 6,343 | 6,147 | ||||||
Amortization of (above) below market lease intangibles(4) | (8,297) | (8,711) | (16,592) | (17,322) | ||||||
Total Rental Income | $ 152,424 | $ 129,876 | $ 301,847 | $ 256,485 | ||||||
(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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