Agree Realty Corporation · NYSE:ADC
Agree Realty — Q2 2022 Earnings Presentation
29 slides from Agree Realty's earnings presentation, Aug 2, 2022
Slide 1: Agree Realty Retail August 2022
AGREE REALTY < RETAIL AUGUST 2022
Slide 2: Agree Realty Overview (NYSE: ADC)
1 © 20 22 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 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. RE THINKING RETAIL
Slide 4: Consistency
3 © 20 22 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 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. As of August 2, 2022, unless otherwise noted. (1) Reflects increased full - year 2022 acquisition guidance provided by the Company on August 2, 2022. (2) Proforma for the settlement of the Company’s outstanding forward equity of
Slide 6: The Country's Leading Retail Portfolio
The Country’s Leading Retail Portfolio
Slide 7: Agree Realty Snapshot
6 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Agree Realty Snapshot TENANT SECTOR ANNUALIZED BASE RENT % OF TOTAL Tire and Auto Service $39.7 9.4% Grocery Stores 39.5 9.4% Home Improvement 38.9 9.2% Convenience Stores 31.1 7.4% General Merchandise 28.9 6.8% Off - Price Reta
Slide 8: Best-in-Class Retailers with Conservative Balance Sheets
7 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. BEST - IN - CLASS RETAILERS WITH CONSERVATIVE BALANCE SHEETS Strong Investment Grade Portfolio 17% SUB - INVESTMENT GRADE 15% NOT RATED 68% INVESTMENT GRADE (1) As of June 30, 2022. Any differences are a result of rounding. (1)
Slide 9: Industry Leaders Operating in E-Commerce Resistant Sectors
8 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. INDUSTRY - LEADERS OPERATING IN E - COMMERCE RESISTANT SECTORS National and Super - Regional Retailers 1% FRANCHISE 12% SUPER - REGIONAL 87% NATIONAL As of June 30, 2022. Any differences are a result of rounding. Retail Tenant T
Slide 10: Fee Simple Ownership + Significant Tenant Investment
9 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. As of June 30, 2022. (1) Refer to footnote 1 on slide 7 for the Company’s definition of Investment Grade. Any differences are a result of rounding. FEE SIMPLE OWNERSHIP + SIGNIFICANT TENANT INVESTMENT Ground Lease Portfolio Brea
Slide 11: Limited Exposure to Sectors Impacted by COVID
10 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Limited Exposure to Sectors Impacted by COVID SECTOR % ABR CHANGE IN EXPOSURE SINCE 2018 (2) NOTABLE TENANTS E - COMMERCE RESISTANCE RECESSION RESISTANCE PRIVATE EQUITY SPONSORSHIP REAL ESTATE ATTRIBUTES COMMENTS Health & Fitne
Slide 12: Disciplined Investment Strategy & Active Portfolio Management
Disciplined Investment Strategy & Active Portfolio Management
Slide 13: Our Investment Strategy
12 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Engage in consistent dialogue to understand store performance and tenant sustainability Leverage relationships to identify the best risk - adjusted opportunities Our Investment Strategy Agree leverages its three distinct invest
Slide 14: What Has ADC Been Investing In?
13 © 20 22 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 15: Top-Down Focus on Leading Retailers Paired with Bottoms-Up Real Estate Analysis
14 © 20 22 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 16: 158,000+ Net Lease Opportunities
15 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. As of June 30, 2022. Stores counts obtained from company filings and third - party sources including Progressive Grocer, Convenien ce Store News, Forbes, Biz Journals & Petroleum and Restaurant Business Magazine. 158,000+ NET L
Slide 17: Ramping Investment Activity
16 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. $220.1 $295.8 $336.8 $607.0 $701.4 $1.31B $1.39B $1.5B to $1.7B $14.9 $38.0 $62.7 $74.4 $32.4 $43.2 $40.0 $75.0 to $125.0 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2015 20
Slide 18: Active Portfolio Management
17 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. $29.7M $45.8M $67.6M $67.2M $49.4M $58.0M $24.8M 2016 2017 2018 2019 2020 2021 2022 FOCUSED ON NON - CORE ASSET SALES & CAPITAL RECYCLING Active Portfolio Management As of June 30, 2022. Graph is representative and does not inc
Slide 19: Fortified Balance Sheet
Fortified Balance Sheet
Slide 20: Leading With Our Fortress Balance Sheet
19 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Leading With Our “Fortress” Balance Sheet CAPITALIZATION STATISTICS Equity Market Capitalization (2) $6.4 Billion Enterprise Value (2)(3) $8.5 Billion Total Debt to Enterprise Value 24.8% CREDIT METRICS Fixed Charge Coverage Ra
Slide 21: Capital Markets Track Record
20 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. STRONG CAPITAL MARKETS EXECUTION HAS PROVIDED AMPLE LIQUIDITY; $6.4 BILLION OF ACTIVITY SINCE 2010 Capital Markets Track Record Reflects gross proceeds for debt and equity raised through June 30, 2022. Forward equity offerings
Slide 22: Low Leverage = Strong Positioning
21 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. (includes outstanding forward equity offerings) ADC HAS BEEN AT OR BELOW 4.3X PROFORMA NET DEBT TO RECURRING EBITDA SINCE 2018 Low Leverage = Strong Positioning As of June 30, 2022. Proforma Net Debt to Recurring EBTIDA deducts
Slide 23: Dedicated to Sustainability and Good Corporate Citizenship
22 © 20 22 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 24: Investment Summary Highlights
23 © 20 22 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 25: Appendix
24 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. APPENDIX
Slide 26: Forward-Looking Statements
25 © 20 22 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 27: Non-GAAP Financial Measures
26 © 20 22 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 28: Net Debt to Recurring EBITDA Reconciliation
27 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Net Debt to Recurring EBITDA Reconciliation Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Net Income $18,722 $20,781 $22,744 $21,370 $25,424 $21,416 $23,760 $30,278 $22,
Slide 29: Contact
28 © 20 22 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. CONTACT PETER COUGHENOUR Chief Financial Officer (248) 737 - 4190 peter@agreerealty.com