Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (July 2016)
31 slides from Agree Realty's investor presentation, July 2016
Slide 1: DEVELOP | ACQUIRE | PARTNER
DEVELOP | ACQUIRE | PARTNER JULY 2016
Slide 2: Safe Harbor
Safe Harbor This presentation contains certain statements that are the Company’s and Management’s hopes, intentions, beliefs, expectations, or projections of the future and might be considered forward-looking statements under Federal Securities laws. Prospective investors are cautioned that any such
Slide 3: Agree Realty Corporation (NYSE: ADC)
Agree Realty Corporation (NYSE: ADC) Retail net lease REIT focused on growth through the acquisition and development of high-quality retail properties Our Company $1.5 billion retail net lease REIT headquartered in Bloomfield Hills, MI and listed on the NYSE under ticker ADC 328 retail propertie
Slide 4: Recent Highlights
Recent Highlights Consistent execution has led to enhanced shareholder value Sector leading total shareholder return of 48.1% year-to-date Announced $100 million of long-term, unsecured, fixed rate debt Acquired $79.5 million California-centric portfolio in June 2016 Over 50% of net operating inco
Slide 5: Investment Strategy
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Slide 6: Unique Real Estate Investment Strategy
Unique Real Estate Investment Strategy Leverage real estate acumen and naturally overlapping investment platforms to identify best risk-adjusted retail net lease opportunities ADC’s three investment platforms adhere to the same core principles while pursuing opportunities along the full spectrum of
Slide 7: Emphasis on Tenant Real Estate Solutions
Emphasis on Tenant Real Estate Solutions Unique dual capabilities drive opportunistic value-add partnerships with retailers nationwide DEVELOPMENT SALE-LEASEBACK Spearheading retailer Track record of execution expansion programs for over as acquirer and real estate four decades partner • In-hous
Slide 8: Track Record of Execution
Track Record of Execution Since 2010, ADC has invested over $800 million in high-quality retail net lease properties Investment Activity $ in millions $300.0 $250.0 $14.9 $220.1 $200.0 $17.7 $150.0 $147.5 $100.0 $28.4 $81.5 $73.3 $50.0 $38.6 $0.0 2011 2012 2013 2014 2015 2016 Acquisitions Developmen
Slide 9: Accelerating Growth
Accelerating Growth Established real estate capabilities and growing market presence driving increased investment opportunities # of Properties Annualized Base Rent (“ABR”) $ in millions 330 $90.0 297 328 $86.5 300 $80.0 270 279 $72.4 240 $70.0 210 209 $60.0 180 $56.5 150 $50.0 120 130 $45.1 $40.0 1
Slide 10: Active Portfolio Management
Active Portfolio Management Our focus on real estate fundamentals guides non-core asset sales and capital recycling Total Dispositions 2011-2015: $71.6M $15.9M $12.9M $29.0M Chippewa Commons North Lakeland Plaza Columbus, OH Chippewa Falls, WI Lakeland, FL $8.3M Plymouth Commons Petoskey Town Center
Slide 11: Portfolio Summary
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Slide 12: Portfolio Transformation
Portfolio Transformation Execution has led to increased portfolio diversification and improved quality of rental income Property Type (% ABR) Top 3 Tenant Concentration (% ABR) 6% Tenant 75.0% Ground Leases Retail Retail 70.0% Net Lease Net Lease 60.0% 71% 98% 45.0% Shopping Centers 30.0% 29% 8% 22.
Slide 13: Q1 2016 Portfolio Snapshot
Q1 2016 Portfolio Snapshot Tenants Lease Expirations $ in millions $ in millions Annualized Tenant / Concept Base Rent(1) % of Total $41.1 $40.0 $12.3 16.5% 3.9 5.2% $30.0 2.5 3.3% $20.0 2.5 3.3% 2.0 2.7% $10.0 $6.5 $5.9 $4.3 $4.8 $3.8 $2.5 $2.8 1.9 2.5% $0.0 $1.7 $1.4 $0.0 1.8 2.5% 1.8 2.4% Retail
Slide 14: National and Super-Regional Retailers
National and Super-Regional Retailers Industry leading brands and retailers operating in e-commerce resistant sectors Retail Tenant Type (% ABR) National 75% z Super-Regional 16% Franchise 9% z z As of July 8, 2016. 13
Slide 15: Leading, Pure-Play Retail Net Lease REIT
Leading, Pure-Play Retail Net Lease REIT Diversified portfolio of high-quality retail properties occupied by superior credit tenants under long term leases Retail % of Total Portfolio Investment Grade Tenants 100.0% 50.0% 100% 100% 48% 90% 45.0% 75.0% 79% 44% 40.0% 42% 61% 50.0% 57% 35.0% Undisclose
Slide 16: Executing Growth Through Strategic Investments
Executing Growth Through Strategic Investments 11 Property Portfolio Purchase Price: $79.5 million Over 50% concentration in California Weighted average remaining lease term of 11.4 years Nearly 40% of net operating income from investment grade tenants E-commerce resistant sectors: Grocery
Slide 17: Executing Growth Through Strategic Investments
Executing Growth Through Strategic Investments Unique opportunity to invest in a highly diversified portfolio with over 50% of the portfolio’s net operating income derived from California 1% 50% 7% 6% 35% 16
Slide 18: High-Quality Retail Real Estate = Stronger Residual Values
High-Quality Retail Real Estate = Stronger Residual Values Sunnyvale, California Corporate guarantee from Lowe’s Companies, Inc. (S&P: A-) In the heart of Silicon Valley, only 1.5 miles from Apple’s new corporate headquarters Terrific demographics $127K median household income within a 3-mil
Slide 19: Executing Growth Through Strategic Relationships
Executing Growth Through Strategic Relationships Multi-State Portfolio Purchase Price: $32.3 million 5 Properties Texas, Maine, Iowa and Ohio E-commerce resistant sectors: Grocery, Warehouse Clubs, Casual Dining and Specialty Retail Executed two early lease extensions with relationship ten
Slide 20: High-Quality Retail Real Estate = Stronger Residual Values
High-Quality Retail Real Estate = Stronger Residual Values Ann Arbor, Michigan Redevelopment of 1937 historic building into flagship campus store Off-market transaction Centrally located on the hard corner directly across from the Diag on the University of Michigan’s Central Campus Strong de
Slide 21: High-Quality Retail Real Estate = Stronger Residual Values
High-Quality Retail Real Estate = Stronger Residual Values Lake Zurich, Illinois Completed off-market acquisition from repeat seller Located at signalized intersection within dominant retail corridor Benefits from strong demographics and traffic counts Excellent demographics with $124K media
Slide 22: High-Quality Retail Real Estate = Stronger Residual Values
High-Quality Retail Real Estate = Stronger Residual Values Charlotte, North Carolina Acquisition of ground floor retail condominium Located within downtown Charlotte, near upper income condominium and multi- family developments Small format urban grocery component of a larger mixed-use develop
Slide 23: High-Quality Retail Real Estate = Stronger Residual Values
High-Quality Retail Real Estate = Stronger Residual Values New Lenox, Illinois Partner Capital Solutions project Acquired land post-permit & pre- commencement and then completed construction Inorganic development opportunity achieved superior yield & credit Healthy demographics with $101K me
Slide 24: Representative Acquisitions
Representative Acquisitions Single Tenant Net Lease Lowes KeyBank H-E-B AutoZone Portfolio (14) Concord, NC Elyria, OH Brenham, TX 6 states Multi-Tenant Net Lease Mattress Firm / ULTA Beauty Academy Sports + Outdoors / Michaels / PetSmart Bed Bath & Beyond / Michaels Columbus, MS Jo-Ann Fabrics / Or
Slide 25: Recent Development and PCS Projects
Recent Development and PCS Projects Starbucks Chick-fil-A Wawa Lakeland, FL Frankfort, KY Orlando, FL Burger King Cash & Carry Smart Foodservice Hobby Lobby Burger King Devil’s Lake, ND Salem, OR Springfield, OH Farr West, UT Cash & Carry Smart Foodservice Buffalo Wild Wings McDonald’s Burlington, W
Slide 26: Financial Overview
Financial Overview
Slide 27: Balance Sheet Positioned for Growth
Balance Sheet Positioned for Growth Pro Forma Capitalization(1) Debt Maturities(1) $ in millions Principal $ in millions Debt Amt. $150.0 (3) $75.0 Newly Announced Long-Term Debt $ 100.0 $69.1 $65.0 $60.0 $60.0 Mortgage Payable $ 92.3 Unsecured Term Loans 100.0 $50.0 $50.0 $44.7 Senior Unsecured Not
Slide 28: Consistent Performance
Consistent Performance Management is focused on delivering consistent earnings and dividend growth FFO per Share AFFO per Share $2.40 $2.40 $2.39 $2.38 $2.30 $2.30 $2.20 $2.20 $2.22 $2.18 $2.10 $2.10 $2.13 $2.10 $2.09 $2.00 $2.04 $2.00 $1.90 $1.90 2012 2013 2014 2015 2012 2013 2014 2015 Dividends pe
Slide 29: Attractive Relative Value
Attractive Relative Value ADC offers a well covered dividend and valuation opportunity Current Dividend Yield 2016E AFFO Payout Ratio 4.00% 85.0% 3.9% 83.4% 3.75% 80.0% 3.50% 75.0% 76.0% 3.4% 72.8% 3.4% 3.25% 70.0% NNN O ADC O ADC NNN 2016E FFO Multiple 2016E AFFO Multiple 25.0x 25.0x 24.3x 24.3x 23
Slide 30: Investment Summary Highlights
Investment Summary Highlights Highest quality retail real estate Most secure cash flows Strongest balance sheet Proven track record of execution Consistent dividend growth Robust growth trajectory 29
Slide 31: Agree Realty Corporation
AGREE REALTY CORPORATION DEVELOP | ACQUIRE | PARTNER ADC NYSE