Agree Realty Corporation · NYSE:ADC
Agree Realty — Q3 2022 Earnings Presentation
28 slides from Agree Realty's earnings presentation, Nov 2, 2022
Slide 1: Agree Realty Retail, November 2022
AGREE REALTY RETAIL NOVEMBER 2022
Slide 2: Agree Realty Overview (NYSE: ADC)
Agree Realty Overview (NYSE: ADC) Net lease growth REIT focused on the acquisition and development of high-quality retail properties Founded in Public on $7.9 billion(1) 1,707 retail Investment OUR 1971 by the NYSE retail net properties grade issuer COMPANY Executive since 1994 lease REIT totaling r
Slide 3: Rethinking Retail
RETHINKING RETAIL © 2022 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTIAL. 2
Slide 4: consistency
consistency [ kuh n-sis-tuh n-see ] noun steadfast adherence to the same principles, course, or form © 2022 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTIAL. 3
Slide 5: Recent Highlights
Recent Highlights Raised 2022 acquisition guidance by 3% Fortified balance sheet with over at the midpoint to $1.6 billion to $1.7 $800 million of equity and debt billion of high-quality net lease assets(1) capital raised during Q3 2022 98 properties acquired in Q3 2022 Settled approximately 8.7 mil
Slide 6: The Country's Leading Retail Portfolio
The Country’s Leading Retail Portfolio
Slide 7: Agree Realty Snapshot
Agree Realty Snapshot Company Overview Tenants ($ in millions) ANNUALIZED TENANT / CONCEPT % OF TOTAL Share Price(1) $68.35 BASE RENT $30.8 6.9% Equity Market Capitalization(1)(2) $6.1 Billion (5) 20.0 4.5% 19.3 4.4% Property Count 1,707 properties 18.4 4.1% Net Debt to EBITDA 4.0x / 3.1x(3) 13.3 3.
Slide 8: Strong Investment Grade Portfolio
Strong Investment Grade Portfolio BEST-IN-CLASS RETAILERS WITH CONSERVATIVE BALANCE SHEETS 68% INVESTMENT GRADE(1)(2) Retail Credit Type (%ABR) 16% 16% SUB-INVESTMENT GRADE NOT RATED As of September 30, 2022. Any differences are a result of rounding. (1) Based on ABR derived from tenants, or parent
Slide 9: National and Super-Regional Retailers
National and Super-Regional Retailers INDUSTRY-LEADERS OPERATING IN E-COMMERCE RESISTANT SECTORS 87% NATIONAL Retail Tenant Type (%ABR) 2% 11% FRANCHISE SUPER-REGIONAL As of September 30, 2022. Any differences are a result of rounding. © 2022 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTI
Slide 10: Ground Lease Portfolio Breakdown
Ground Lease Portfolio Breakdown FEE SIMPLE OWNERSHIP + SIGNIFICANT TENANT INVESTMENT Ground Lease Portfolio Overview Top Ground Lease Tenants (% ABR) 12.7% 11.4 13% 13% 201 of total years weighted- Leases portfolio average ABR lease term 12% 12% 12% 12% 7% 7% 88% 7% 7% INVESTMENT GRADE(1) 7% 7% Gro
Slide 11: Disciplined Investment Strategy & Active Portfolio Management
Disciplined Investment Strategy & Active Portfolio Management
Slide 12: Our Investment Strategy
Our Investment Strategy Agree leverages its three distinct investment platforms to target industry-leading THREE-PRONGED retailers in e-commerce and GROWTH STRATEGY recession resistant sectors COMPREHENSIVE REAL ESTATE SOLUTIONS FOR LEADING RETAILERS PARTNER CAPITAL ACQUISITIONS DEVELOPMENT SOLUTION
Slide 13: What Has ADC Been Investing In?
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 investment criteria, with a focus on four core principles: OMNI-CHANNEL RECESSIO
Slide 14: Large & Fragmented Opportunity Set
Large & Fragmented Opportunity Set TOP-DOWN FOCUS ON LEADING RETAILERS IN THE U.S. PAIRED WITH A BOTTOMS-UP REAL ESTATE ANALYSIS ADC reviewed $52 billion of opportunities since 2018 MARKET RENTS • Rents ≤ market • Fungibility of building COMPETITION • Limited competition • Strong market presence REA
Slide 15: Sandbox Offers Runway for Growth
Sandbox Offers Runway for Growth 160,000 NET LEASE OPPORTUNITIES AND GROWING WITH BEST-IN-CLASS RETAILERS 10,500+ 8,400+ 7,100+ 23,500+ 34,700+ Grocery Home Tire & Auto Convenience Dollar Stores Improvement Stores Service Stores Stores Stores 7,100+ 5,900+ 22,900+ 2,200+ (1) 1,200+ General Off-Price
Slide 16: Ramping Investment Activity
Ramping Investment Activity ADC HAS INVESTED $6.9 BILLION IN HIGH-QUALITY RETAIL NET LEASE PROPERTIES SINCE 2010 Investment Activity ($ in millions) $ 1,900 $85.0 to 1,800 $125.0 1,700 1,600 $1.6B 1,500 to $40.0 $1.7B 1,400 $43.2 $1.39B 1,300 $1.31B 1,200 1,100 1,000 900 800 $32.4 700 $74.4 $701.4 6
Slide 17: Active Portfolio Management
Active Portfolio Management FOCUSED ON NON-CORE ASSET SALES & CAPITAL RECYCLING Total Dispositions 2010-2022: $448 million MICHIGAN (3) BELTON, MO AURORA, CO UPLAND, CA MAPLEWOOD, MN JACKSONVILLE BEACH, FL SC (1) & MN (1) APOPKA, FL FLOWOOD, MS KIRKLAND, WA JACKSONVILLE, FL LA (1) & PA (1) TYLER, TX
Slide 18: Fortified Balance Sheet
Fortified Balance Sheet
Slide 19: Leading With Our "Fortress" Balance Sheet
Leading With Our “Fortress” Balance Sheet 2022 PUBLIC BOND OFFERING EXTENDED WEIGHTED-AVERAGE DEBT MATURITY TO APPROXIMATELY 8 YEARS $500 Debt Maturities ($ in millions) $475 $400 $410 $300 $300 $300 $200 1 c $100 $100 $125 $50 $50 $42 $28 $4 $0 $0 $0 $0 2022 2023 2024 2025 2026 2027 2028 2029 2030
Slide 20: Capital Markets Track Record
Capital Markets Track Record STRONG CAPITAL MARKETS EXECUTION HAS PROVIDED AMPLE LIQUIDITY; $7.2 BILLION OF ACTIVITY SINCE 2010 Capital Markets Activity ($ in millions) $2,000 $175 (9%) $1,750 $1,500 $42 (3%) $1,250 $1,095 (57%) $1,000 $988 $1,037 (74%) (75%) $750 $500 $531 (70%) $433 $650 (78%) (34
Slide 21: Low Leverage = Strong Positioning
Low Leverage = Strong Positioning ADC HAS BEEN AT OR BELOW 4.3X PROFORMA NET DEBT TO RECURRING EBITDA SINCE 2018 5.1x 5.0x 5.0x 4.9x 4.9x 4.8x 4.8x 4.7x 4.5x 4.5x 4.4x 4.3x 4.2x 4.0x 4.0x 4.0x 3.8x 3.7x 3.7x 3.6x 3.5x 3.4x 3.2x 3.1x 2.5x 1.6x (1) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 20
Slide 22: Agree Realty's ESG Practices
Agree Realty’s ESG Practices DEDICATED TO SUSTAINABILITY AND GOOD CORPORATE CITIZENSHIP ENVIRONMENTAL SOCIAL CORPORATE PRACTICES RESPONSIBILITY GOVERNANCE Embraces responsibility The Agree Wellness program ADC’s Board has nine directors, to be a good steward focuses on Health Wellness & seven of who
Slide 23: Investment Summary Highlights
Investment Summary Highlights trajectory growth Robust Well-covered FORTIFIED BALANCE SHEET ÷nd consistent HIGHEST-QUALITY RETAIL REAL ESTATE MULTI-YEAR INVESTMENT GRADE TRACK RECORD OF EXECUTION ISSUER RATINGS © 2022 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTIAL. 22
Slide 24: Appendix
APPENDIX © 2022 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTIAL. 23
Slide 25: Forward-Looking Statements
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 Act of 1934, as amended (the “Exchange Act”). The Company intends such forwar
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes a non-GAAP financial measure, Net Debt to Recurring EBITDA, which is presented on an actual and proforma basis. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure appears on the following page. The c
Slide 27: Net Debt to Recurring EBITDA Reconciliation
Net Debt to Recurring EBITDA Reconciliation Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Net Income $20,781 $22,744 $21,370 $25,424 $21,416 $23,760 $30,278 $22,461 $36,830 $33,306 $36,289 $36,130 $39,577 Interest expense, net 8,352 9,730 9,6
Slide 28: Contact
CONTACT PETER COUGHENOUR Chief Financial Officer (248) 737-4190 peter@agreerealty.com © 2022 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTIAL. 27