Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (November 2021)
31 slides from Agree Realty's investor presentation, Nov 9, 2021
Slide 1: Agree Realty Retail November 2021
AGREE REALTY RETAIL NOVEMBER 2021
Slide 2: Agree Realty Overview (NYSE: ADC)
1 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Agree Realty Overview (NYSE: ADC) OUR COMPANY Net lease growth REIT focused on the acquisition and development of high - quality retail properties Founded in 1971 by Executive Chairman, Richard Agree Public on the NYSE since 199
Slide 3: Rethinking Retail
2 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. RE THINKING RETAIL
Slide 4: Consistency
3 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. consistency noun steadfast adherence to the same principles, course, or form [ kuh n - sis - tuh n - see ]
Slide 5: Recent Highlights
4 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Recent Highlights Raised 2021 acquisition guidance by 4% at the midpoint to $1.3 billion to $1.4 billion (1) As of September 30, 2021, unless otherwise noted. (1) Reflects increased full - year 2021 acquisition guidance provided
Slide 6: The Country's Leading Retail Portfolio
The Country’s Leading Retail Portfolio
Slide 7: Agree Realty at September 30, 2021
6 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Agree Realty at September 30, 2021 TENANT SECTOR ANNUALIZED BASE RENT % OF TOTAL Grocery $37.4 10.6% Home Improvement 33.4 9.4% Convenience Stores 27.7 7.8% Tire and Auto Service 27.6 7.8% General Merchandise 23.5 6.6% Auto Part
Slide 8: Best-in-Class Retailers with Conservative Balance Sheets
7 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. BEST - IN - CLASS RETAILERS WITH CONSERVATIVE BALANCE SHEETS Strong Investment Grade Portfolio 17% SUB - INVESTMENT GRADE 16% NOT RATED 67% INVESTMENT GRADE (1) As of September 30, 2021. Any differences are a result of rounding.
Slide 9: Industry Leaders Operating in E-Commerce Resistant Sectors
8 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. INDUSTRY - LEADERS OPERATING IN E - COMMERCE RESISTANT SECTORS National and Super - Regional Retailers 1% FRANCHISE 14% SUPER - REGIONAL 85% NATIONAL As of September 30, 2021. Any differences are a result of rounding. Retail Ten
Slide 10: Fee Simple Ownership + Significant Tenant Investment
9 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. As of September 30, 2021. (1) Refer to footnote 1 on slide 7 for the Company’s definition of Investment Grade. FEE SIMPLE OWNERSHIP + SIGNIFICANT TENANT INVESTMENT Ground Lease Portfolio Breakdown Ground Lease Credit Overview (%
Slide 11: Retailer credit ratings and cost of debt
10 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. As of September 30, 2021, unless otherwise noted. (1) Retailer credit ratings are weighted by annualized base rent as of Sept emb er 30, 2021. The weighted - average credit rating is determined by factoring in each Company’s un
Slide 12: Limited Exposure to Sectors Impacted by COVID
11 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Limited Exposure to Sectors Impacted by COVID SECTOR % ABR CHANGE IN EXPOSURE SINCE 1/1/2018 (2) NOTABLE TENANTS E - COMMERCE RESISTANCE RECESSION RESISTANCE PRIVATE EQUITY SPONSORSHIP REAL ESTATE ATTRIBUTES COMMENTS Health & F
Slide 13: Disciplined Investment Strategy & Active Portfolio Management
Disciplined Investment Strategy & Active Portfolio Management
Slide 14: Our Investment Strategy
13 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Our Investment Strategy Agree leverages its three distinct investment platforms to target industry - leading retailers in e - commerce and recession resistant sectors Engage in consistent dialogue to understand store performanc
Slide 15: What Has ADC Been Investing In?
14 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. What Has ADC Been Investing In? The retail landscape continues to dynamically evolve as market forces cause disruption and change. To mitigate risk in a period of continued disruption, the Company adheres to a number of investm
Slide 16: Top-Down Focus on Leading Retailers Paired with Bottoms-Up Analysis
15 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. TOP - DOWN FOCUS ON LEADING RETAILERS IN THE U.S. PAIRED WITH A BOTTOMS - UP REAL ESTATE ANALYSIS Large & Fragmented Opportunity Set REAL ESTATE FUNDAMENTALS • Rents ≤ market • Fungibility of building MARKET RENTS • Limited com
Slide 17: 150,000+ Net Lease Opportunities
16 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. As of September 30, 2021. Stores counts obtained from company filings and third - party sources including Progressive Grocer, Conv enience Store News & Petroleum and Restaurant Business Magazine. 150,000+ NET LEASE OPPORTUNITIE
Slide 18: ADC Has Invested $5.3 Billion in Retail Net Lease Properties
17 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. ADC HAS INVESTED $5.3 BILLION IN HIGH - QUALITY RETAIL NET LEASE PROPERTIES SINCE 2010 Ramping Investment Activity As of September 30, 2021, unless otherwise noted. (1) Reflects increased full - year 2021 acquisition guidance p
Slide 19: Non-Core Asset Sales & Capital Recycling
18 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. FOCUSED ON NON - CORE ASSET SALES & CAPITAL RECYCLING Active Portfolio Management As of September 30, 2021. Graph is representative and does not include all dispositions. (1) Includes Meijer’s exercise of a pur chase option tot
Slide 20: Fortified Balance Sheet
Fortified Balance Sheet
Slide 21: Leading With Our Fortress Balance Sheet
20 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Leading With Our “Fortress” Balance Sheet CAPITALIZATION STATISTICS Equity Market Capitalization (2) $4.9 Billion Enterprise Value (2)(3) $6.6 Billion Total Debt to Enterprise Value 24.6% CREDIT METRICS Fixed Charge Coverage Ra
Slide 22: Capital Markets Track Record
21 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. $100 $100 $100 $225 ( 30% ) $125 ( 22% ) $350 ( 26% ) $650 ( 43% ) $40 $237 $229 $531 ( 70% ) $433 ( 78% ) $988 ( 74% ) $689 ( 46% ) $175 ( 12% ) $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2015 2016 2017 2018 2019 2020
Slide 23: Low Leverage = Strong Positioning
22 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. ADC HAS BEEN AT OR BELOW 4.2X PROFORMA NET DEBT TO RECURRING EBITDA SINCE 2018 Low Leverage = Strong Positioning As of September 30, 2021. Proforma Net Debt to Recurring EBTIDA deducts the Company’s outstanding forward equity o
Slide 24: Dedicated to Sustainability and Good Corporate Citizenship
23 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. DEDICATED TO SUSTAINABILITY AND GOOD CORPORATE CITIZENSHIP Agree Realty’s ESG Practices Embraces responsibility to be a good steward of the environment and to use natural resources carefully Focus on industry leading, national
Slide 25: Investment Summary Highlights
24 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Investment Summary Highlights FORTIFIED BALANCE SHEET HIGHEST - QUALITY RETAIL REAL ESTATE INVESTMENT GRADE ISSUER RATINGS Robust growth trajectory MULTI - YEAR TRACK RECORD OF EXECUTION Well - covered & consistent dividend
Slide 26: Appendix
25 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. APPENDIX
Slide 27: Forward-Looking Statements
26 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Forward - Looking Statements This presentation contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange
Slide 28: Non-GAAP Financial Measures
27 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Non - GAAP Financial Measures This presentation includes a non - GAAP financial measure, Net Debt to Recurring EBITDA, which is presented on an actual and profo rma basis. A reconciliation of this non - GAAP financial measure t
Slide 29: Net Debt to Recurring EBITDA Reconciliation
28 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Net Debt to Recurring EBITDA Reconciliation Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Net Income $18,516 $18,722 $20,781 $22,744 $21,370 $25,424 $21,416 $23,760 $30,278 $22,461 $36,
Slide 30: Diversified Portfolio of High-Quality Retail Properties
29 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. DIVERSIFIED PORTFOLIO OF HIGH - QUALITY RETAIL PROPERTIES OCCUPIED BY INVESTMENT GRADE TENANTS UNDER LONG - TERM LEASES Leading Pure - Play Retail Net Lease REIT Retail % Of Total Portfolio Occupancy Investment Grade Tenants We
Slide 31: Contact
30 © 20 21 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. CONTACT PETER COUGHENOUR Interim Chief Financial Officer (248) 737 - 4190 peter@agreerealty.com