Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (November 2018)
26 slides from Agree Realty's investor presentation, Nov 1, 2018
Slide 1: DEVELOP | ACQUIRE | PARTNER
DEVELOP | ACQUIRE | PARTNER November 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements This presentation may contain certain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminolo
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) $2.6 billion retail net lease REIT headquartered in Bloomfield Hills, MI and listed on the NYSE under ticker ADC ▪ 520 retail prope
Slide 4: Recent Highlights
Recent Highlights Consistent execution has led to enhanced shareholder value ▪ 96 retail net lease properties acquired year-to-date for a record $351.1 million ▪ 13 development and PCS projects completed or under construction totaling $59.6 million ▪ 17 properties sold year-to-date for total gross p
Slide 5: Investment Strategy
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Slide 6: Scaling Three-Pronged Investment Strategy
Scaling Three-Pronged Investment Strategy Leverage real estate acumen and three investment platforms to identify best risk-adjusted retail net lease opportunities ADC’s synergistic investment platforms adhere to the same core principles while pursuing opportunities along the full spectrum of net lea
Slide 7: ADC's Unique Dual Capabilities
ADC’s Unique Dual Capabilities Emphasis on comprehensive real estate solutions drive multi-faceted partnerships DEVELOPMENT SALE-LEASEBACK ✓ Spearheading retailer ✓ Track record of execution expansion programs for over as acquirer and real estate four decades partner • In-house expertise • Ability t
Slide 8: Track Record of Execution
Track Record of Execution ADC anticipates investing over $500 million in 2018 Investment Activity $ in millions $500.0 $59.6 $450.0 $400.0 $62.7 $38.0 $336.8 $300.0 $295.8 $14.9 $200.0 $220.1 $17.7 $147.5 $100.0 $28.4 $73.3 $0.0 2013 2014 2015 2016 2017 2018 Acquisitions (1) Development & PCS (2) (1
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 297 $141.7 520 500 $130.0 450 436 $119.2 400 $110.0 350 366 $90.0 $94.3 300 279 250 $70.0 $72.4 200 209 $56.5 $50
Slide 10: Active Portfolio Management
Active Portfolio Management Our focus on real estate fundamentals guides non-core asset sales and capital recycling Total Dispositions 2010-2018: $223 million(1) $61.9M(1) Mauston, WI $45.8M Upland, CA Atlantic Beach, FL Apopka, FL Minnesota (3) $12.9M $29.0M $29.7M Plainfield, IN Chippewa Commons N
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% Net Lease Net Lease 60.0% 71% 99% 45.0% Shopping Centers 30.0% 29% 1% 8% 15
Slide 13: Portfolio Transformation
Portfolio Transformation January 2015 Current Pharmacy 29.7% Pharmacy 9.7% Top QSRs 7.5% Tire & Auto Service 8.0% Sectors Apparel 6.1% Grocery 7.0% 21.9% 6.2% Top Tenants 4.4% 3.9% 4.4% 3.6% # of 209 properties 520 properties Properties Enterprise $0.8 billion $2.6 billion(1) Value As of September 3
Slide 14: Portfolio Snapshot
Portfolio Snapshot Tenants Lease Expirations $ in millions Annualized 60% Tenant / Concept Base Rent(1) % of Total 55% 50% $8.8 6.2% 40% 5.6 3.9% 30% 5.1 3.6% 20% 4.5 3.2% 8% 10% 7% 6% 8% 4% 5% 2% 2% 3% 4.3 3.1% .2% 0% 4.2 3.0% 3.4 2.4% Retail Sectors 3.2 2.2% $ in millions Annualized Tenant Sector
Slide 15: Portfolio Breakdown
Portfolio Breakdown Top Tenants Walmart Lease Type (% ABR) $ in millions # of % of Rank Tenant / Concept Assets ABR(1) Total 1 24 $8.8 6.2% Net Lease 2 5 $5.6 3.9% Ground 60% 3 6 $5.1 3.6% Lease 4 12 $4.5 3.2% 40% 5 20 $4.3 3.1% 6 5 $4.2 3.0% 7 11 $3.4 2.4% ▪ Diversified portfolio comprised of Walma
Slide 16: High-Quality Retail Real Estate = Stronger Residual Values
High-Quality Retail Real Estate = Stronger Residual Values Manassas, VA ▪ $22 million transaction ▪ Credit Rating: S&P: AA / Moody’s: Aa2 ▪ Washington, DC MSA ▪ Strong demographics: ▪ 5-mile population of 174K ▪ 5-mile HH income of $100K ▪ Ground lease structure with reversionary interest in real es
Slide 17: Portfolio Breakdown
Portfolio Breakdown Top Tenants Wawa Lease Type (% ABR) $ in millions # of % of Rank Tenant / Concept Assets ABR(1) Total 1 24 $8.8 6.2% 2 5 $5.6 3.9% Ground Master 3 6 $5.1 3.6% Lease Net Lease 4 12 $4.5 3.2% 58% 42% 5 20 $4.3 3.1% 6 5 $4.2 3.0% 7 11 $3.4 2.4% 12 9 $2.7 1.9% ▪ Geographically divers
Slide 18: Portfolio Breakdown
Portfolio Breakdown Top Tenants $ in millions # of % of Rank Tenant / Concept Assets ABR(1) Total 1 24 $8.8 6.2% 2 5 $5.6 3.9% 3 6 $5.1 3.6% 4 12 $4.5 3.2% 5 20 $4.3 3.1% 6 5 $4.2 3.0% 7 11 $3.4 2.4% ▪ Diversified portfolio comprised of six TJ Maxx, five HomeGoods and one Nashua, NH Marshalls/HomeGo
Slide 19: 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 National 78% Super-Regional Super-Regional 16% Franchise Franchise 6% z As of September 30, 2018. 18
Slide 20: 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 Retail Tenants 100.0% 50.0% 100% 100% 47% 46% 85% 75.0% 81% 40.0% 37% 65% 64% 50.0% 30.0% 25.0% 20.
Slide 21: Embedded Redevelopment Opportunities
Embedded Redevelopment Opportunities Mount Pleasant, Michigan Frankfort, Kentucky ▪ Legacy shopping center located on main retail corridor ▪ Legacy shopping center located in Frankfort’s across from Central Michigan University’s campus dominant retail trade area ▪ Kmart Cash ABR: $175K gross ▪ Kmart
Slide 22: Development and PCS Projects
Development and PCS Projects 13 projects completed or under construction totaling $59.6 million Under Construction Hobby Lobby Mister Car Wash Mister Car Wash Sunbelt Rentals (2) Mt. Pleasant, MI Orlando, FL Tavares, FL Batavia, OH & Maumee, OH Recently Completed Burlington Coat Factory Camping Worl
Slide 23: Financial Overview
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Slide 24: Capital Structure, Credit Metrics
Capital Structure, Credit Metrics Debt Maturities $ in millions $325.0 (1) $120.0 $125.0 $100.0 $100.0 $100.0 $80.0 $68.6 $60.0 $60.0 $50.0 $50.0 $40.0 $40.2 $20.0 $5.2 $6.8 $0.0 $0.0 2018 2019 2020 $0.0 2021 $0.0 2022 2023 2024 2025 2026 2027 2028 2029 2030 Revolving Credit Facility Mortgage/Unsecu
Slide 25: Investment Summary Highlights
Investment Summary Highlights ➢ Investment grade credit rating ➢ Highest-quality retail real estate ➢ Most secure cash flows ➢ Strongest balance sheet ➢ Proven track record of execution ➢ Consistent dividend growth ➢ Robust growth trajectory 24
Slide 26: DEVELOP | ACQUIRE | PARTNER
AGREE REALTY CORPORATION DEVELOP | ACQUIRE | PARTNER ADC NYSE