Slide 1: Agree Realty Retail October 2024
AGREE REALTY RETAIL OCTOBER 2024
Slide 2: Agree Realty Overview (NYSE: ADC)
Agree Realty Overview (NYSE: ADC) NET LEASE REIT FOCUSED ON THE ACQUISITION & DEVELOPMENT OF HIGH-QUALITY RETAIL PROPERTIES Founded in Public on $10.8 billion(1) 2,271 retail Investment OUR 1971 by the NYSE retail net properties grade issuer COMPANY Executive since 1994 lease REIT totaling ratings o
Slide 3: consistency
consistency [ kuh n-sis-tuh n-see ] noun steadfast adherence to the same principles, course, or form © 2024 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTIAL. 2
Slide 4: Recent Highlights
Recent Highlights Raised lower end of 2024 AFFO per share guidance to $4.12 to $4.14, representing Fortress balance sheet with total approximately 4.6% growth at the midpoint(1) liquidity of over $1.9 billion(3) Increased 2024 acquisition guidance Approximately $725 million of to approximately $850
Slide 5: ADC's Retail Thought Leadership
ADC’s Retail Thought Leadership Launched acquisition platform in 2010 with a focus on e-commerce resistance Launched RETHINK RETAIL campaign to challenge misperceptions about the future of brick & mortar Published proprietary ADC White Papers highlighting omnichannel retail trends Avoided or
Slide 6: Omni-Channel Vision
Omni-Channel Vision IDENTIFIED CRITICAL ROLE OF NET LEASE IN DRIVING OMNI-CHANNEL STRATEGY “So, I think as retailers look forward in “COVID reaffirmed our belief that, 2016 and beyond and they're one, we're heading toward a world looking in the omni-channel world, where all retailers are omni- how i
Slide 7: Investment Foresight (Tractor Supply)
Investment Foresight A DEEPER DIVE ON ADC’S THOUGHT LEADERSHIP & TRACK RECORD OF EXECUTION Q3 2018 “We have a fantastic relationship with their real estate team. October 2020 Q1 2017 The business is really thriving. Rated BBB by S&P “…it's a great company, They have no national competition. it's got
Slide 8: Investment Foresight (Gerber Collision)
Investment Foresight A DEEPER DIVE ON ADC’S THOUGHT LEADERSHIP & TRACK RECORD OF EXECUTION Q1 2022 “…identifying early on a Q4 2018 retailer that we thought Q1 2018 “…We think they're the was in a tremendous “Now you see Gerber premier auto collision position to access a Collision in the operator in
Slide 9: Investment Foresight (Sunbelt Rentals)
Investment Foresight A DEEPER DIVE ON ADC’S THOUGHT LEADERSHIP & TRACK RECORD OF EXECUTION Q1 2022 “Our decision to invest in Sunbelt Rentals was recently reinforced by their upgraded BBB rating by Fitch.” Q4 2019 “… the only investment-grade operator in the country. If you look at the equipment own
Slide 10: Investment Foresight (TJX)
Investment Foresight A DEEPER DIVE ON ADC’S THOUGHT LEADERSHIP & TRACK RECORD OF EXECUTION Q4 2023 “the off-price retailers, it's all the TJX Q4 2017 concepts…These operators have the “the TJX Companies …is desire to continue to expand across now our #5 tenant. We all of their different flags.” have
Slide 11: Investment Foresight (Walgreens and CVS)
Investment Foresight A DEEPER DIVE ON ADC’S THOUGHT LEADERSHIP & TRACK RECORD OF EXECUTION 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 30% 27% 22% 17% 12% 8% 5% 3% 2% 1% 1% 1% 1% Q1 2019 Q1 2021 2023 2024 “I think the “With this Downgraded Downgraded pharmacy space, transaction,
Slide 12: Capital Markets Leader
Capital Markets Leader INNOVATIVE BALANCE SHEET MANAGEMENT A ADC was the first net A Since 2018, $31B A Lowest cost A Closed market- lease REIT to issue of forward equity preferred equity leading 5.5-year term forward equity in has been raised issuance in net loan at a fixed rate March 2018 in t
Slide 13: Disciplined Capital Allocator
Disciplined Capital Allocator CONSERVATIVE WACC CALCULATION DRIVES CONSISTENT & SUPERIOR EARNINGS GROWTH NET LEASE INVESTMENT SPREADS Cost of equity is based on forward 150+ bps – Pedal to the Metal! 12-month consensus AFFO per share 100 - 150 bps – Investments Generate Healthy Accretion Cost of
Slide 14: The Country's Leading Retail Portfolio
The Country’s Leading Retail Portfolio
Slide 15: Agree Realty Snapshot
Agree Realty Snapshot Company Overview Top Tenants ($ in millions) ANNUALIZED Share Price(1) $75.58 TENANT / CONCEPT BASE RENT % OF TOTAL $37.7 6.3% Equity Market Capitalization(1)(2) $7.9 Billion 28.2 4.7% Property Count 2,271 27.6 4.6% 20.4 3.4% Net Debt to EBITDA 4.9x / 3.6x(3) 19.1 3.2% Investme
Slide 16: Strong Investment Grade Portfolio
Strong Investment Grade Portfolio BEST-IN-CLASS RETAILERS WITH CONSERVATIVE BALANCE SHEETS 67% INVESTMENT GRADE(1) Retail Credit Type (%ABR) 17% 16% SUB-INVESTMENT GRADE NOT RATED As of September 30, 2024. Any differences are a result of rounding. (1) Based on ABR derived from tenants, or parent ent
Slide 17: National and Super-Regional Retailers
National and Super-Regional Retailers INDUSTRY-LEADERS OPERATING IN E-COMMERCE RESISTANT SECTORS 87% NATIONAL Retail Tenant Type (%ABR) 2% 11% FRANCHISE SUPER-REGIONAL As of September 30, 2024. Any differences are a result of rounding. © 2024 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTI
Slide 18: Ground Lease Portfolio Breakdown
Ground Lease Portfolio Breakdown FEE SIMPLE OWNERSHIP + SIGNIFICANT TENANT INVESTMENT Ground Lease Portfolio Overview Top Ground Lease Tenants (% ABR) 10.9% 9.8 14% 223 of total years weighted- Leases portfolio average ABR lease term 12% 12% 6% 87% 6% INVESTMENT GRADE(1) 6% Ground Lease Credit Overv
Slide 19: Ground Lease Value Creation
Ground Lease Value Creation FIRST EXPIRATION HIGHLIGHTS EMBEDDED VALUE WITH 159% RECAPTURE RATE Chase Bank - Stockbridge, GA Prior Lease New Lease Rent Per Square Foot $29.26 Rent Per Square Foot $46.54 Remaining Lease Term(1) 0.1 years New Lease Term 15 Years Rental Increases None Remaining Rental
Slide 20: Disciplined Investment Strategy & Active Portfolio Management
Disciplined Investment Strategy & Active Portfolio Management
Slide 21: Our Investment Strategy
Our Investment Strategy Agree leverages its three distinct investment platforms to target industry-leading THREE-PRONGED retailers in e-commerce and GROWTH STRATEGY recession resistant sectors COMPREHENSIVE REAL ESTATE SOLUTIONS FOR LEADING RETAILERS DEVELOPER FUNDING ACQUISITIONS DEVELOPMENT PLATFO
Slide 22: What Has ADC Been Investing In?
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 investment criteria, with a focus on four core principles: OMNI-CHANNEL RECESSIO
Slide 23: Large & Fragmented Opportunity Set
Large & Fragmented Opportunity Set TOP-DOWN FOCUS ON LEADING RETAILERS IN THE U.S. PAIRED WITH A BOTTOMS-UP REAL ESTATE ANALYSIS ADC reviewed over $88 billion of opportunities since 2018 MARKET RENTS • Rents ≤ market • Fungibility of building COMPETITION • Limited competition • Strong market presenc
Slide 24: Sandbox Offers Runway for Growth
Sandbox Offers Runway for Growth 168,000+ NET LEASE OPPORTUNITIES AND GROWING WITH BEST-IN-CLASS RETAILERS 10,900+ 9,000+ 5,600+ 27,400+ 36,700+ Grocery Home Tire & Auto Convenience Dollar Stores Improvement Stores Service Stores Stores Stores 6,400+ 23,700+ 7,000+ 2,200+ 1,300+ Off-Price Auto Parts
Slide 25: Track Record of Execution
Track Record of Execution ADC HAS INVESTED $9.3 BILLION IN HIGH-QUALITY RETAIL NET LEASE PROPERTIES SINCE 2010 Investment Activity ($ in millions) $ 2,000 1,800 $118.5 1,600 $1.59B $40.0 1,400 $43.2 $1.39B $1.31B $149.9 1,200 $1.19B 1,000 $134.8 800 $32.4 $74.4 $701.4 600 $607.0 400 ~$850 $62.7 $336
Slide 26: Active Portfolio Management
Active Portfolio Management FOCUSED ON NON-CORE ASSET SALES & CAPITAL RECYCLING Total Dispositions 2010-2024: $526 million MICHIGAN (3) BELTON, MO AURORA, CO CORAL GABLES, FL UPLAND, CA MAPLEWOOD, MN JACKSONVILLE BEACH, FL SC (1) & MN (1) PENSACOLA, FL APOPKA, FL FLOWOOD, MS KIRKLAND, WA JACKSONVILL
Slide 27: Fortified Balance Sheet
Fortified Balance Sheet
Slide 28: Leading With Our Fortress Balance Sheet
Leading With Our Fortress Balance Sheet NO MATERIAL DEBT MATURITIES UNTIL 2028 $600 Debt Maturities ($ in millions) $500 $450 $475 $450 $400 $410 $300 $300 $300 $200 $100 $125 $50 $2 $50 $42 $0 $0 $0 (1) 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 UNSECURED SECURED CAPITALIZATION STATISTI
Slide 29: Capital Markets Track Record
Capital Markets Track Record STRONG CAPITAL MARKETS EXECUTION HAS PROVIDED AMPLE LIQUIDITY; $9.3 BILLION OF ACTIVITY SINCE 2010 Capital Markets Activity ($ in millions) $2,000 $175 $1,750 $42 $1,500 $1,250 $1,095 $1,000 $1,322 $988 $672 $750 $371 $500 $531 $22 $433 $650 $250 $450 $229 $350 $300 $350
Slide 30: Low Leverage = Strong Positioning
Low Leverage = Strong Positioning ADC HAS BEEN AT OR BELOW 4.5X PROFORMA NET DEBT TO RECURRING EBITDA SINCE 2018 5.0x 5.0x 4.9x 4.9x 4.9x 4.7x 4.8x 4.5x 4.5x 4.5x 4.5x 4.4x 4.4x 4.3x 4.3x 4.3x 4.1x 4.1x 4.0x 3.8x 3.7x 3.7x 3.6x 3.4x 3.1x 3.1x Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q
Slide 31: Growing, Well-Covered Monthly Dividend
Growing, Well-Covered Monthly Dividend 152 CONSECUTIVE COMMON DIVIDENDS PAID; AVERAGE AFFO PAYOUT RATIO OF 76% OVER PAST 10 YEARS $3.10 $2.90 Annual Dividends Declared Per Share $2.70 $2.50 $2.30 $2.10 $1.90 $1.70 $1.50 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 As of October 18, 2024. R
Slide 32: Agree Realty's ESG Practices
Agree Realty’s ESG Practices DEDICATED TO SUSTAINABILITY AND GOOD CORPORATE CITIZENSHIP ENVIRONMENTAL SOCIAL CORPORATE PRACTICES RESPONSIBILITY GOVERNANCE Focus on industry leading, The Agree Wellness program ADC’s Board has 10 directors, national & super-regional focuses on Health Wellness & eight
Slide 33: Investment Summary Highlights
Investment Summary Highlights trajectory growth Robust Well-covered FORTIFIED BALANCE SHEET ÷nd consistent HIGHEST-QUALITY RETAIL REAL ESTATE MULTI-YEAR INVESTMENT GRADE TRACK RECORD OF EXECUTION ISSUER RATINGS © 2024 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTIAL. 32
Slide 34: Appendix
APPENDIX © 2024 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTIAL. 33
Slide 35: Earnings Guidance
Earnings Guidance Prior 2024 Revised 2024 Guidance(1) Guidance (2) AFFO per share $4.11 to $4.14 $4.12 to $4.14 (3) General and administrative expense (% of adjusted revenue) 5.7% to 6.0% 5.7% to 5.9% (3) Non-reimbursable real estate expenses (% of adjusted revenue) 1.0% to 1.5% 1.0% to 1.4% Income
Slide 36: Debt Summary
Debt Summary Total Debt Outstanding All-in Interest Rate Maturity as of September 30, 2024 Senior Unsecured Revolving Credit Facility (1) Revolving Credit Facility 5.66% August 2028 $49,000 Total Credit Facility 5.66% $49,000 Unsecured Term Loan (2) 2029 Unsecured Term Loan 4.52% January 2029 $350,0
Slide 37: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Mortgage notes payable, net $32,607 $32,429 $32,249 $71,824 $71,721 $47,971 $47,842 $47,701 $42,952 $42,811 $42,666 $42,518 $42,366 Unsecured term loa
Slide 38: Reconciliation of Net Income to FFO, Core FFO and AFFO
Reconciliation of Net Income to FFO, Core FFO and AFFO 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Net Income $20,190 $18,913 $39,762 $45,797 $58,790 $58,798 $80,763 $91,972 $122,876 $153,035 $170,547 Series A Preferred Stock Dividends 0 0 0 0 0 0 0 0 (2,148) (7,437) (7,437) Net Income at
Slide 39: Forward-Looking Statements
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 Act of 1934, as amended (the “Exchange Act”). The Company intends such forwar
Slide 40: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes a non-GAAP financial measure, Net Debt to Recurring EBITDA, which is presented on an actual and proforma basis. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure is included in the following pages.
Slide 41: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation also includes the non-GAAP measures of Annualized Base Rent (“ABR”), Annualized Net Income, Weighted-Average Capitalization Rate, Funds From Operations (“FFO” or “Nareit FFO”), Core Funds From Operations (“Core FFO”) and Adjusted Funds From Operations (“
Slide 42: Contact
CONTACT PETER COUGHENOUR Chief Financial Officer (248) 737-4190 investors@agreerealty.com © 2024 AGREE REALTY CORPORATION. ALL RIGHTS RESERVED. CONFIDENTIAL. 41