Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (September 2016)
30 slides from Agree Realty's investor presentation, September 2016
Slide 1: Develop | Acquire | Partner
DEVELOP | ACQUIRE | PARTNER SEPTEMBER 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 $1.6 billion retail net lease REIT headquartered in Bloomfield Hills, MI and listed on the NYSE under ticker ADC 341 retail propertie
Slide 4: Recent Highlights
Recent Highlights Consistent execution has led to enhanced shareholder value Announced the appointment of Merrie S. Frankel to the Company’s Board of Directors Invested in 49 high-quality retail net lease assets for aggregate investment volume of $192 million in the first half of 2016 Weighted-ave
Slide 5: Investment Strategy
> e)) 0) —_— c —_— Y) —_— S 0) c — N 0) > &
Slide 6: Differentiated Real Estate Investment Strategy
Differentiated Real Estate 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 ne
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 Since 2010, ADC has invested over $850 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 $90.0 340 297 341 $89.5 300 $80.0 279 260 $72.4 $70.0 220 209 $60.0 180 $56.5 $50.0 140 130 $45.1 $40.0 100 109 $
Slide 10: Active Portfolio Management
Active Portfolio Management Our focus on real estate fundamentals guides non-core asset sales and capital recycling Total Dispositions 2011-2016: $88.3M $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
Portfolio Summary me geen PeARMALY tee = a oer i . off 5
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 Ground Leases 70.0% Retail Retail 70.0% Net Lease Net Lease 71% 98% 55.0% Shopping 40.0% Centers 29% 2% 8% 25.0%
Slide 13: Portfolio Transformation
Portfolio Transformation January 2015 September 2016 Pharmacy 29.7% Pharmacy 17.9% Top QSRs 7.5% Grocery 6.8% Sectors Apparel 6.1% QSRs 6.8% 21.9% 13.0% Top Tenants 4.4% 4.7% 4.4% 3.5% # of 209 properties 341 properties Properties Enterprise $0.8 billion $1.6 billion Value As of September 25, 2016.
Slide 14: Current Portfolio Snapshot
Current Portfolio Snapshot Tenants Lease Expirations $ in millions $ in millions Annualized $48.9 Tenant / Concept Base Rent (1) % of Total $40.0 $11.7 13.0% 4.2 4.7% $30.0 3.1 3.5% $20.0 2.7 3.0% $10.0 $8.8 $6.9 2.6 2.9% $4.3 $5.7 $4.9 $4.2 $0.9 $2.3 $2.6 $0.0 2.5 2.8% $0.0 2.5 2.8% 2.2 2.4% Retail
Slide 15: 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 September 25, 2016. 14
Slide 16: 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% 87% 45.0% 46% 75.0% 79% 44% 40.0% 43% 60% 50.0% 56% 35.0% 30.0% 25.0
Slide 17: 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 18: 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% 17
Slide 19: 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 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 3-mile po
Slide 21: 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 22: High-Quality Real Estate = Embedded Opportunities
High-Quality Real Estate = Embedded Opportunities Expansion 15,500 SF Boynton Beach, Florida Existing Off Broadway space: 20,745 square feet Expansion Area: allows for up to 15,500 square feet Off Broadway Cash ABR = $259,300 51,000 combined vehicles per day Premier retail location in Southeast Fl
Slide 23: Recent Development and PCS Projects
Recent Development and PCS Projects Committed capital totaled more than $20 million in the first half of 2016 Under Construction Starbucks Chick-fil-A Lakeland, FL Frankfort, KY Wawa Orlando, FL Texas Roadhouse Camping World Burger King Mount Pleasant, MI Tyler, TX Devil’s Lake, ND Recently Complete
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 / Jo-Ann / Orscheln Michaels / PetSmart Bed Bath & Beyond / Michaels Columbus, MS Topeka, KS A
Slide 25: Financial Overview
Financial Overview
Slide 26: Capital Structure, Financial Ratios
Capital Structure, Financial Ratios Debt Maturities(1) $ in millions (2) $150.0 $75.0 $69.0 $65.0 $60.0 $60.0 $50.0 $50.0 $45.0 $43.9 $30.0 $25.0 $20.4 $15.0 $8.2 $0.0 $0.0 2016 $0.0 2017 2018 2019 2020 2021 $0.0 2022 2023 $0.0 2024 2025 2026 2027 2028 Revolving Credit Facility Mortgage/Unsecured De
Slide 27: 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 28: 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% 84.3% 3.9% 3.80% 80.0% 3.60% 75.0% 76.2% 75.8% 3.6% 3.5% 3.40% 70.0% NNN O ADC O ADC NNN 2016E FFO Multiple 2016E AFFO Multiple 24.0x 24.0x 23.9x 23.7x 22
Slide 29: 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 28
Slide 30: Agree Realty Corporation
AGREE REALTY CORPORATION DEVELOP | ACQUIRE | PARTNER ADC NYSE
Agree Realty — Investor Presentation (September 2016) on 6ix