Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (January 2024)
32 slides from Agree Realty's investor presentation, Jan 3, 2024
Slide 1: Agree Realty Retail January 2024
AGREE REALTY RETAIL JANUARY 2024
Slide 2: Agree Realty Overview
1 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Agree Realty Overview (NYSE: ADC) OUR COMPANY NET LEASE REIT FOCUSED ON THE ACQUISITION & DEVELOPMENT OF HIGH - QUALITY RETAIL PROPERTIES Founded in 1971 by Executive Chairman, Richard Agree Public on the NYSE since 1994 $ 8.9 b
Slide 3: Rethinking Retail
2 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. RE THINKING RETAIL
Slide 4: Consistency
3 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. consistency noun steadfast adherence to the same principles, course, or form [ kuh n - sis - tuh n - see ]
Slide 5: Recent Highlights
4 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. As of December 31, 2023, unless otherwise noted. (1) Includes capital committed to acquisitions, development and Developer Fu ndi ng Platform projects completed or under construction during the twelve months ended December 31, 2
Slide 6: The Country's Leading Retail Portfolio
The Country’s Leading Retail Portfolio
Slide 7: Agree Realty Snapshot
6 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. TENANT / CONCEPT ANNUALIZED BASE RENT % OF TOTAL $33.9 6.2% 26.6 4.9% 25.9 4.8% 19.5 3.6% 17.2 3.2% 16.8 3.1% 16.5 3.0% 16.3 3.0% 15.9 2.9% 14.6 2.7% 13.2 2
Slide 8: Best-in-Class Retailers with Conservative Balance Sheets
7 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. BEST - IN - CLASS RETAILERS WITH CONSERVATIVE BALANCE SHEETS Strong Investment Grade Portfolio 16% SUB - INVESTMENT GRADE 15% NOT RATED 69% INVESTMENT GRADE (1) As of December 31, 2023. Any differences are a result of rounding.
Slide 9: Industry Leaders in E-Commerce Resistant Sectors
8 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. INDUSTRY - LEADERS OPERATING IN E - COMMERCE RESISTANT SECTORS National and Super - Regional Retailers 1% FRANCHISE 11% SUPER - REGIONAL 88% NATIONAL As of December 31, 2023. Any differences are a result of rounding. Retail Tena
Slide 10: Ground Lease Portfolio Breakdown
9 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. 14% 12% 12% 6% 6% 6% 3% 3% 3% 2% As of December 31, 2023. (1) Refer to footnote 1 on slide 7 for the Company’s definition of Investment Grade. Any differences are a result of rounding. FEE SIMPLE OWNERSHIP + SIGNIFICANT TENANT I
Slide 11: Ground Lease Value Creation
10 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. FIRST EXPIRATION HIGHLIGHTS EMBEDDED VALUE WITH 159% RECAPTURE RATE Ground Lease Value Creation Chase Bank - Stockbridge, GA New Lease Rent Per Square Foot $46.54 New Lease Term 15 Years Rental Increases 10% Every 5 Years Optio
Slide 12: Disciplined Investment Strategy & Active Portfolio Management
Disciplined Investment Strategy & Active Portfolio Management
Slide 13: Our Investment Strategy
12 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Engage in consistent dialogue to understand store performance and tenant sustainability Leverage relationships to identify the best risk - adjusted opportunities Our Investment Strategy Agree leverages its three distinct invest
Slide 14: What Has ADC Been Investing In?
13 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. 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 investm
Slide 15: Large & Fragmented Opportunity Set
14 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. TOP - DOWN FOCUS ON LEADING RETAILERS IN THE U.S. PAIRED WITH A BOTTOMS - UP REAL ESTATE ANALYSIS Large & Fragmented Opportunity Set REAL ESTATE FUNDAMENTALS • Rents ≤ market • Fungibility of building MARKET RENTS • Limited com
Slide 16: Sandbox Offers Runway for Growth
15 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. As of December 31, 2023. Store counts include both leased and owned locations and were obtained from company filings and thir d - p arty sources including CS News, CSP Daily News, CT Insider, and Progressive Grocer. Table is re
Slide 17: Robust Investment Activity
16 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. ADC HAS INVESTED $ 8.7 BILLION IN HIGH - QUALITY RETAIL NET LEASE PROPERTIES SINCE 2010 Robust Investment Activity DEVELOPMENT & DFP (1) ACQUISITIONS Investment Activity ($ in millions) As of December 31, 2023. (1) Represents d
Slide 18: Active Portfolio Management
17 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. $29.7M $45.8M $67.6M $67.2M $49.4M $58.0M $45.8M $3.3M 2016 2017 2018 2019 2020 2021 2022 2023 BERLIN, NJ HOUSTON, TX PORTAGE, MI CANTON, MI FOCUSED ON NON - CORE ASSET SALES & CAPITAL RECYCLING Active Portfolio Management As o
Slide 19: Fortified Balance Sheet
Fortified Balance Sheet
Slide 20: Leading With Our Fortress Balance Sheet
19 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Leading With Our “Fortress” Balance Sheet CAPITALIZATION STATISTICS Equity Market Capitalization (2) $6.3 Billion Enterprise Value (2)(3) $8.9 Billion Total Debt to Enterprise Value 28.2% CREDIT METRICS Fixed Charge Coverage Ra
Slide 21: Capital Markets Track Record
20 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. $100 $100 $225 $125 $350 $650 $300 $350 $237 $229 $531 $433 $988 $1,095 $1,322 $371 $42 $175 $0 $250 $500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 2016 2017 2018 2019 2020 2021 2022 2023 STRONG CAPITAL MARKETS EXECUTION HAS PROV
Slide 22: Low Leverage = Strong Positioning
21 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. (includes outstanding forward equity offerings) ADC HAS BEEN AT OR BELOW 4.5X PROFORMA NET DEBT TO RECURRING EBITDA SINCE 2018 Low Leverage = Strong Positioning As of September 30, 2023. Proforma Net Debt to Recurring EBTIDA de
Slide 23: Growing, Well-Covered Monthly Dividend
22 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. $1.50 $1.70 $1.90 $2.10 $2.30 $2.50 $2.70 $2.90 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Annual Dividends Declared Per Share 142 CONSECUTIVE COMMON DIVIDENDS PAID; AVERAGE AFFO PAYOUT RATIO OF 76% OVER PAST 10 YEA
Slide 24: Agree Realty's ESG Practices
23 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. The Agree Wellness program focuses on Health Wellness & Financial Wellness to enhance employee well - being Ongoing professional development is offered to help all team members advance their careers The Company has recently spo
Slide 25: Investment Summary Highlights
24 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Investment Summary Highlights FORTIFIED BALANCE SHEET HIGHEST - QUALITY RETAIL REAL ESTATE INVESTMENT GRADE ISSUER RATINGS Robust growth trajectory MULTI - YEAR TRACK RECORD OF EXECUTION Well - covered & consistent dividend
Slide 26: Appendix
25 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. APPENDIX
Slide 27: Forward-Looking Statements
26 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. 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
Slide 28: Non-GAAP Financial Measures
27 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Non - GAAP Financial Measures This presentation includes a non - GAAP financial measure, Net Debt to Recurring EBITDA, which is presented on an actual and profo rma basis. A reconciliation of this non - GAAP financial measure t
Slide 29: Non-GAAP Financial Measures
28 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Non - GAAP Financial Measures This presentation also includes the non - GAAP measures of Annualized Base Rent (“ABR”), Funds From Operations (“FFO” or “ Nareit FFO”), Core Funds From Operations (“Core FFO”) and Adjusted Funds F
Slide 30: Reconciliation of Net Debt to Recurring EBITDA
29 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. Reconciliation of Net Debt to Recurring EBITDA Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Net Income $21,416 $23,760 $30,278 $22,461 $36,830 $33,306 $36,289 $36,130 $
Slide 31: Reconciliation of Funds from Operations
30 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net Income $18,604 $20,190 $18,913 $39,762 $45,797 $58,790 $58,798 $80,763 $91,972 $122,876 $153,035 Series A Preferred Stock Dividends 0 0 0 0 0 0 0 0 0 (2,148) (7,437) Ne
Slide 32: Contact
31 © 20 24 AGREE REALTY CORPORATION . ALL RIGHTS RESERVED. CONFIDENTIAL. CONTACT PETER COUGHENOUR Chief Financial Officer (248) 737 - 4190 investors@agreerealty.com