Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (January 2020)
32 slides from Agree Realty's investor presentation, January 2020
Slide 1: DEVELOP | ACQUIRE | PARTNER
DEVELOP | ACQUIRE | PARTNER January 2020
Slide 2: Agree Realty Corporation Overview (NYSE: ADC)
Agree Realty Corporation Overview (NYSE: ADC) Net lease growth REIT focused on the acquisition and development of high-quality retail properties Our Company ▪ $4.1 billion retail net lease REIT headquartered in Bloomfield Hills, Michigan(1) ▪ 821 retail properties totaling approximately 14.6 million
Slide 3: consistency
consistency [ kuh n-sis-tuh n-see ] noun steadfast adherence to the same principles, course, or form
Slide 4: Recent Highlights
Recent Highlights Announced 2020 acquisition guidance of $600 million to $700 million(1) ✓ 186 retail net lease properties acquired in 2019 for $701.4 million ✓ 76.7% of annualized base rent acquired in 2019 derived from investment grade retailers (2) ✓ Investment grade exposure increased 680 basis
Slide 5: Agree Realty Today
Agree Realty Today Company Overview Tenants $ in millions Annualized Tenant / Concept Base Rent % of Total Share Price(1) $70.17 $10.0 5.1% 8.5 4.3% Equity Market $3.2 Billion 7.4 3.7% Capitalization(1)(2) 7.3 3.7% Property Count(1) 821 properties 5.9 3.0% 5.7 2.9% Top 3 Tenant 13.1% 5.6 2.9% Concen
Slide 6: Agree Realty 2016
Agree Realty 2016 Company Overview Tenants $ in millions Annualized Share Price $33.99 Tenant / Concept Base Rent % of Total $12.3 17.2% Equity Market 3.9 5.5% $713 Million Capitalization(1) 2.5 3.4% 2.5 3.4% Property Count 278 properties 2.0 2.8% Top 3 Tenant 1.9 2.6% 26.1% Concentration 1.8 2.6% N
Slide 7: Total Shareholder Return
Total Shareholder Return ADC has outperformed its net lease peers on a short, medium and long-term basis Total Shareholder Return 240% 200% 176% 160% 143% 120% 80% 75% 68% 63% 40% 47% 46% 43% 30% 23% 0% Last Twelve Months 2-Year 3-Year 4-Year 5-Year ADC Peer Average(1) Per KeyBanc Capital Markets “T
Slide 8: Investment Strategy
a Investment Strategy
Slide 9: Creating Value Across the Real Estate Spectrum
Creating Value Across the Real Estate Spectrum ADC works with leading retailers creating unique risk-adjusted opportunities DEVELOP | ACQUIRE | PARTNER Development Acquisition Blend & Extend ▪ 48-year track record ▪ Third-party sellers ▪ Leverage our retailer partnerships to negotiate ▪ Preferred de
Slide 10: Investing in Retail Real Estate Today
Investing in Retail Real Estate Today ▪ 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: ▪ E-commerce
Slide 11: Recession Resistance
E-commerce & Recession Resistance Analysis High Grocery Dollar Stores Stores Auto Parts General Restaurants Merchandise - Quick Service Recession Resistance Off-Price Convenience Tire & Retail Stores Auto Service Warehouse Clubs Medium Pharmacy Health & Fitness Crafts & Farm & Rural Novelties Supply
Slide 12: Top Sectors Overview
Top Sectors Overview Since January 1, 2018 % E-Commerce Recession Private Equity Real Estate Sector Top Tenants Comments ABR(1) % Investment Change in Resistance Resistance Sponsorship Attributes Activity(2) Exposure Risk mitigation through Home 10.2% 19.8% High No Limited Varies ground leases & sma
Slide 13: Top Sectors Overview
Top Sectors Overview Since January 1, 2018 % E-Commerce Recession Private Equity Real Estate Sector Top Tenants Comments ABR(1) % Investment Change in Resistance Resistance Sponsorship Attributes Activity(2) Exposure Focus on large format. Convenience F&B sales continue to 6.2% 9.2% High Yes Acceler
Slide 14: Top Sectors Overview
Top Sectors Overview Since January 1, 2018 % E-Commerce Recession Private Equity Real Estate Sector Top Tenants Comments ABR(1) % Investment Change in Resistance Resistance Sponsorship Attributes Activity(2) Exposure Tractor Supply (NYSE: Farm and Rural TSCO) continues to 3.6% 4.7% High No Limited S
Slide 15: Track Record of Execution
Track Record of Execution
Slide 16: Ramping Investment Activity
Ramping Investment Activity ADC has invested approximately $2.8 billion in high-quality retail net lease properties since 2010 Investment Activity $ in millions $32.4 $700.0 $701.4 $74.4 $600.0 $607.0 $500.0 $400.0 $62.7 $38.0 $336.8 $300.0 $295.8 $14.9 $200.0 $220.1 $17.7 $147.5 $100.0 $0.0 2014 20
Slide 17: Accelerating Portfolio Growth
Accelerating Portfolio Growth Established capabilities and growing market presence driving increased investment opportunities # of Properties Annualized Base Rent (“ABR”) $ in millions 850 $200.0 $196.8 800 821 $190.0 750 $180.0 700 $170.0 $160.0 650 645 $157.6 $150.0 600 $140.0 550 $130.0 500 $120.
Slide 18: Development and PCS Projects
Development and PCS Projects 10 projects completed or under construction totaling $32.4 million (1) Under Construction Capital Plaza (ALDI, Big Lots, Harbor Freight Tools) Tractor Supply Frankfort, KY Hart, MI Recently Completed Mister Car Wash Mister Car Wash Sunbelt Rentals (2) Orlando, FL Tavares
Slide 19: Active Portfolio Management
Active Portfolio Management Focused on non-core asset sales & capital recycling Total Dispositions 2010-2019: $296 million(1) $67.6M(1) $67.2M Michigan (3) Belton, MO $45.8M Upland, CA Maplewood, MN Atlantic Beach, FL Apopka, FL Flowood, MS $29.0M $29.7M Minnesota (3) LA (1) & PA (1) Tyler, TX Lakel
Slide 20: The Country's Leading Retail Portfolio
The Country’s Leading Retail Portfolio
Slide 21: National and Super-Regional Retailers
National and Super-Regional Retailers Industry-leaders operating in e-commerce resistant sectors Retail Tenant Type (% ABR) National National 83% Super-Regional Franchise Super-Regional 4% 13% z As of September 30, 2019. Any differences are a result of rounding. 20
Slide 22: Strong Investment Grade Portfolio
Strong Investment Grade Portfolio Best-in-class retailers with conservative balance sheets Retail Credit Type (% ABR) National Investment Grade(1) 58% Sub-Investment Not Rated Grade 24% Super-Regional 18% Franchise z As of December 31, 2019. Any differences are a result of rounding. (1) Based on ABR
Slide 23: Best-in-Class Retail Net Lease Portfolio
Best-in-Class Retail Net Lease Portfolio Unique Urban Street Retail Leading Ground Leases Walgreens Harris Teeter Lowe’s Costco Ann Arbor, MI Charlotte, NC Concord, NC Newport News, VA CVS Wawa Walmart Wawa Greenwich, CT Philadelphia, PA Manassas, VA Cocoa, FL Dominant Outlots High-Quality Multi-Ten
Slide 24: Ground Lease Portfolio Breakdown
Ground Lease Portfolio Breakdown Fee simple ownership + significant tenant investment (1) Ground Lease Portfolio Overview Leading Tenants ▪ 60 properties ▪ 8.6% of total ADC portfolio ABR ▪ 10.9 years weighted-average lease term Credit Overview (% ABR) Top Ground Lease Tenants (% ABR) 20% (1) Invest
Slide 25: Ground Lease Examples
Ground Lease Examples Reversionary interest in the improvements provide superior risk-adjusted returns (1) Walmart – Manassas, VA Home Depot – Farmington, NM $6.73 RPSF $4.69 RPSF Wawa – St. Petersburg, FL Lowe’s – Concord, NC $33.53 RPSF $4.18 RPSF As of September 30, 2019. 24
Slide 26: High-Quality Retail Real Estate = Stronger Residual Values
High-Quality Retail Real Estate = Stronger Residual Values Greenwich, CT ▪ $30 million acquisition ▪ Irreplaceable real estate on Greenwich Avenue ▪ Remaining term of almost 19 years ▪ Investment grade credit ratings of Baa2 from Moody’s and BBB from S&P Independence Hall ▪ Excellent Demographics: L
Slide 27: Leading, Pure-Play Retail Net Lease REIT
Leading, Pure-Play Retail Net Lease REIT Diversified portfolio of high-quality retail properties occupied by investment grade tenants under long-term leases Retail % of Total Portfolio Investment Grade Tenants 100.0% 100% 100% 60.0% 58% 80.0% 83% 83% 50.0% 49% 60.0% 65% 61% 40.0% 40% 40.0% 30.0% 20.
Slide 28: Financial Overview
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Slide 29: Leading With Our Balance Sheet
Leading With Our Balance Sheet Debt Maturities(1) (2) $ in millions $500.0 $120.0 $125.0 $125.0 $100.0 $100.0 $100.0 $100.0 $80.0 $40.0 $60.0 $60.0 $50.0 $50.0 $40.0 $28.4 $20.0 $2.8 $5.9 $0.0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Revolving Credit Facility Unsecured Secured Cap
Slide 30: Investment Summary Highlights
Investment Summary Highlights ➢ Highest-quality retail real estate ➢ Fortified balance sheet ➢ Investment grade credit rating ➢ Multi-year track record of execution ➢ Consistent & growing dividend ➢ Robust growth trajectory 29
Slide 31: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures Forward-Looking Statements This presentation may contain certain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by u
Slide 32: DEVELOP | ACQUIRE | PARTNER
AGREE REALTY CORPORATION DEVELOP | ACQUIRE | PARTNER ADC NYSE