Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (February 2019)
25 slides from Agree Realty's investor presentation, February 2019
Slide 1: Develop | Acquire | Partner
DEVELOP | ACQUIRE | PARTNER February 2019
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 ▪ $3.2 billion retail net lease REIT headquartered in Bloomfield Hills, MI and listed on the NYSE under ticker ADC(1) ▪ 645 retail proper
Slide 4: 2018 Highlights
2018 Highlights Consistent execution has led to enhanced shareholder value ▪ 225 retail net lease properties acquired in 2018 for a record $607.0 million ▪ 98-property sale-leaseback transaction with Sherwin-Williams totaling more than $142 million ▪ 16 development and PCS projects completed or unde
Slide 5: Investment Strategy
> e)) 0) —_— c —_— Y) —_— S 0) c — N 0) > &
Slide 6: 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 7: Track Record of Execution
Track Record of Execution Record 2018 investment activity of more than $680 million Investment Activity $ in millions $700.0 $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 $28.4 $73.3 $0.0 2013 2014 2015 2016 2017 2018 Acquisitions Developm
Slide 8: Accelerating Growth
Accelerating Growth Established real estate capabilities and growing market presence driving increased investment opportunities # of Properties Annualized Base Rent (“ABR”) $ in millions 650 $165.0 645 600 $155.0 $157.6 $145.0 550 $135.0 500 $125.0 450 $115.0 $119.2 436 400 $105.0 350 366 $95.0 $94.
Slide 9: Active Portfolio Management
Active Portfolio Management Our focus on real estate fundamentals guides non-core asset sales and capital recycling Total Dispositions 2010-2018: $229 million(1) $67.6M(1) Michigan (3) $45.8M Upland, CA Atlantic Beach, FL Apopka, FL Minnesota (3) $12.9M $29.0M $29.7M LA (1) & PA (1) Chippewa Commons
Slide 10: Portfolio Summary
UCLA UUM A EI FPO PLB VPR GL mm rT e+ LE
Slide 11: 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% 9% 15
Slide 12: Portfolio Transformation
Portfolio Transformation January 2015 December 2018 Pharmacy 29.7% Home Improvement 11.1% Top QSRs 7.5% Pharmacy 8.5% Sectors Apparel 6.1% Tire & Auto Service 7.6% 21.9% 6.0% Top Tenants 4.4% 5.4% 4.4% 3.9% # of 209 properties 645 properties Properties Enterprise $0.8 billion $3.2 billion(1) Value A
Slide 13: Portfolio Snapshot
Portfolio Snapshot Tenants Lease Expirations $ in millions Annualized Tenant / Concept Base Rent(1) % of Total 60% 51% $9.5 6.0% 50% 8.4 5.4% 40% 6.1 3.9% 30% 5.1 3.2% 20% 4.5 2.9% 9% 10% 6% 6% 6% 7% 2% 3% 3% 4% 2% 4.3 2.7% 0% 4.2 2.7% 3.4 2.2% Retail Sectors 3.3 2.1% $ in millions Annualized 3.2 2.
Slide 14: Sherwin-Williams Sale-Leaseback Transaction
Sherwin-Williams Sale-Leaseback Transaction Deal Overview Purchase price of more than $142 million 98-property portfolio Long-term NNN leases Closed December 28, 2018 Tenant Overview Global leader in the manufacturing, development & distribution of paint & coatings Investment-grade credit ratings of
Slide 15: Portfolio Breakdown
Portfolio Breakdown Top Tenants Walmart Lease Type (% ABR) $ in millions # of % of Rank Tenant / Concept Assets ABR(1) Total 1 105 $9.5 6.0% 2 23 $8.4 5.4% Net Ground Lease 3 6 $6.1 3.9% Lease 55% 45% 4 6 $5.1 3.2% 5 12 $4.5 2.9% 6 20 $4.3 2.7% 7 5 $4.2 2.7% ▪ Diversified portfolio comprised of Walm
Slide 16: Portfolio Breakdown
Portfolio Breakdown Top Tenants $ in millions # of % of Rank Tenant / Concept Assets ABR(1) Total 1 105 $9.5 6.0% 2 23 $8.4 5.4% 3 6 $6.1 3.9% 4 6 $5.1 3.2% 5 12 $4.5 2.9% 6 20 $4.3 2.7% 7 5 $4.2 2.7% ▪ Diversified portfolio comprised of six TJ Maxx, five HomeGoods and one Nashua, NH Marshalls/HomeG
Slide 17: National and Super-Regional Retailers
National and Super-Regional Retailers Industry-leaders operating in e-commerce resistant sectors Retail Tenant Type (% ABR) National National 80% Super-Regional Franchise Super-Regional Franchise 15% 5% z As of December 31, 2018. 16
Slide 18: Strong Investment Grade Portfolio
Strong Investment Grade Portfolio Best-in-class retailers with conservative balance sheets Retail Credit Type (% ABR) National Investment Grade(1) 51% Sub-Investment Grade Not Rated 20% Super-Regional 29% Franchise z As of December 31, 2018. (1) Based on annualized base rent derived from tenants, or
Slide 19: 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% 100% 100% 50.0% 51% 75.0% 84% 82% 47% 40.0% 63% 60% 50.0% 36% 30.0% 25.0% 20.
Slide 20: 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 ▪ Former Kmart ABR: $175K gross ▪ For
Slide 21: Development and PCS Projects
Development and PCS Projects 16 projects completed or under construction totaling $74.4 million Under Construction Hobby Lobby Mister Car Wash (2) Sunbelt Rentals (3) Gerber Collision Mt. Pleasant, MI Orlando, FL & Tavares, FL KY & OH (2) Round Lake, IL Capital Plaza (ALDI, Big Lots, Harbor Freight
Slide 22: Financial Overview
ew. } 2 fas \iRe O [eo JME: Hip i Financ
Slide 23: Capital Structure, Credit Metrics
Capital Structure, Credit Metrics Debt Maturities $ in millions $325.0(1) $120.0 $125.0 $100.0 $106.6 $100.0 $100.0 $80.0 $68.6 $60.0 $60.0 $50.0 $50.0 $40.0 $40.0 $20.0 $0.0 $0.0 $4.8 2019 2020 2021 $0.0 2022 2023 2024 2025 2026 2027 2028 2029 2030 Revolving Credit Facility Mortgage/Unsecured Debt
Slide 24: 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 23
Slide 25: Develop | Acquire | Partner
AGREE REALTY CORPORATION DEVELOP | ACQUIRE | PARTNER ADC NYSE