Agree Realty Corporation (ADC) Bundle
A Brief History of Agree Realty Corporation
Company Overview
Agree Realty Corporation (ADC) is a real estate investment trust (REIT) specializing in retail net lease properties. As of September 30, 2024, the Company owned 2,271 properties with a total gross leasable area (GLA) of approximately 47.2 million square feet. The net real estate investments totaled $7.13 billion.
Financial Performance
For the three months ended September 30, 2024, the Company reported rental income of $154.3 million, a 13% increase from $136.8 million in the same period in 2023. The net income attributable to common stockholders was $42.5 million, also reflecting a 7% increase year-over-year.
For the nine months ended September 30, 2024, the rental income reached $456.1 million, marking a 16% increase from $393.3 million for the same period in 2023. The net income for this period was $123.5 million.
Acquisitions and Property Development
During the three months ended September 30, 2024, ADC acquired 66 retail net lease assets for approximately $216.0 million. Year-to-date, the Company purchased 144 retail net lease assets for a total of $531.4 million.
As of September 30, 2024, ADC had 21 development or Developer Funding Platform (DFP) projects under construction, with anticipated total costs of approximately $92.7 million.
Debt and Financial Obligations
As of September 30, 2024, the Company had total gross indebtedness of $2.70 billion, which included $44.2 million of mortgage notes payable, $350.0 million of unsecured term loans, and $2.26 billion of senior unsecured notes. The weighted average interest rate on the mortgage notes payable was 3.74%.
Dividend History
For the quarter ended September 30, 2024, ADC declared monthly dividends of $0.250 per common share, maintaining a consistent payout across July, August, and September. The annualized common stock dividend declared during this quarter represents a 2.9% increase over the previous year.
Market Position and Strategy
Agree Realty focuses on acquiring properties leased to high-quality tenants across diverse retail sectors, with an emphasis on long-term leases. The weighted average lease term for properties acquired in the nine months ended September 30, 2024, was approximately 9.2 years.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Rental Income | $154.3 million | $136.8 million | 13% |
| Net Income | $42.5 million | $39.7 million | 7% |
| Net Real Estate Investments | $7.13 billion | $6.74 billion | 5.8% |
| Total Indebtedness | $2.70 billion | N/A | N/A |
| Dividend per Common Share | $0.250 | $0.243 | 2.9% |
As of September 30, 2024, the Company had $328.8 million of availability under its $1 billion ATM program. The strategic focus on retail net lease properties continues to position Agree Realty Corporation favorably within the REIT sector.
A Who Owns Agree Realty Corporation (ADC)
Ownership Structure
As of September 30, 2024, Agree Realty Corporation operates through its subsidiary, Agree Limited Partnership, where it holds a 99.7% common equity interest. The remaining 0.3% is held by non-controlling interests, primarily the company's founder and Executive Chairman, Richard Agree.
Major Shareholders
As of the same date, key institutional and individual shareholders include:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| Richard Agree | 0.3% | Non-controlling interest |
| Vanguard Group, Inc. | 9.1% | Institutional |
| BlackRock, Inc. | 8.5% | Institutional |
| State Street Corporation | 7.2% | Institutional |
| Invesco Ltd. | 5.0% | Institutional |
Market Capitalization and Stock Performance
As of September 30, 2024, the market capitalization of Agree Realty Corporation was approximately $7.82 billion, based on a closing stock price of $75.33 per share. The company's stock has shown resilience, with a year-to-date return of approximately 12%.
Dividend Information
Agree Realty Corporation declared a monthly dividend of $0.250 per common share for July, August, and September 2024, amounting to an annualized dividend of $3.000 per share, reflecting a 2.9% increase from the previous year.
Preferred Stock Holdings
The company has issued 7,000,000 depositary shares representing its Series A Preferred Stock, each with a liquidation preference of $25,000 per share. The annual dividend rate for these preferred shares is 4.25%.
Debt Structure
As of September 30, 2024, Agree Realty Corporation had total gross indebtedness of $2.70 billion, which includes:
- Mortgage Notes Payable: $44.2 million
- Unsecured Term Loan: $350 million
- Senior Unsecured Notes: $2.26 billion
- Revolving Credit Facility: $49 million
Real Estate Portfolio
As of September 30, 2024, the company owned 2,271 properties with a total gross leasable area (GLA) of approximately 47.2 million square feet. The net real estate investments totaled $7.13 billion.
Tenant Quality
Approximately 67.5% of the company’s annualized base rent was derived from tenants with an investment-grade credit rating, reflecting the stability and reliability of its revenue stream.
Conclusion on Ownership
Agree Realty Corporation’s ownership is characterized by a strong institutional presence, with significant holdings by major investment firms, alongside a non-controlling interest held by its founder. The company maintains a robust financial position, supported by a diversified real estate portfolio and a solid tenant base.
Agree Realty Corporation (ADC) Mission Statement
Mission Statement Overview
Agree Realty Corporation (ADC) focuses on being a leading real estate investment trust (REIT) specializing in the acquisition, development, and management of retail net lease properties. Their mission emphasizes providing long-term value to their shareholders through disciplined investment strategies and a commitment to operational excellence.
Core Values
- Integrity: Upholding the highest standards of honesty in all dealings.
- Accountability: Taking responsibility for actions and outcomes.
- Innovation: Continually seeking new ways to enhance operational efficiency and portfolio growth.
- Partnership: Fostering strong relationships with tenants and stakeholders to ensure mutual success.
Financial Performance
As of September 30, 2024, Agree Realty Corporation reported a net income of $144.5 million for the nine months ended, which represents a 16% increase compared to $124.4 million for the same period in the previous year. The company achieved a total revenue of $456.4 million for the nine months ended September 30, 2024, compared to $393.3 million for the same period in 2023.
Investment Portfolio
As of September 30, 2024, Agree Realty owned 2,271 properties with a total gross leasable area (GLA) of approximately 47.2 million square feet. The net real estate investments totaled $7.13 billion, an increase from $6.74 billion as of December 31, 2023.
| Metric | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Properties Owned | 2,271 | 2,135 |
| Total GLA (Million sq ft) | 47.2 | 44.2 |
| Net Real Estate Investments ($ Billion) | 7.13 | 6.74 |
| Net Income ($ Million) | 144.5 | 124.4 |
| Total Revenue ($ Million) | 456.4 | 393.3 |
Acquisitions and Dispositions
During the nine months ended September 30, 2024, Agree Realty acquired 144 retail net lease assets for approximately $531.4 million, with properties located in 37 states. The weighted average lease term for these acquisitions was approximately 9.2 years. Additionally, the company disposed of 18 assets for net proceeds of $63.6 million during the same period.
Dividend Policy
For the quarter ended September 30, 2024, Agree Realty declared a monthly dividend of $0.250 per common share, reflecting a 2.9% increase from the $0.729 per share declared in the same period of 2023. The company’s total dividends paid during the nine months ended September 30, 2024, amounted to $225.3 million.
Capital Structure
As of September 30, 2024, Agree Realty had total gross indebtedness of $2.70 billion, which includes $44.2 million of mortgage notes payable and $2.26 billion of senior unsecured notes. The company’s total enterprise value was approximately $10.69 billion.
Liquidity and Funding
As of September 30, 2024, the company had $13.2 million in cash and cash equivalents and a remaining borrowing capacity of $1.20 billion under its revolving credit facility, which matures in August 2028.
Future Outlook
Agree Realty continues to pursue growth opportunities in the retail net lease sector, leveraging its strong balance sheet and operational capabilities to enhance shareholder value over the long term.
How Agree Realty Corporation (ADC) Works
Business Model
Agree Realty Corporation (ADC) operates as a fully integrated real estate investment trust (REIT) primarily focused on the ownership, acquisition, development, and management of retail properties that are net leased to industry-leading tenants. The company was founded in 1971 and is publicly traded on the New York Stock Exchange.
Financial Performance
As of September 30, 2024, the company reported a net income of $144.5 million for the nine months ended, compared to $124.4 million for the same period in 2023, representing a 16% increase. The net income attributable to common stockholders increased to $138.4 million, a 17% rise from $118.4 million year-over-year.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Income | $144.5 million | $124.4 million | $20.1 million | 16% |
| Net Income Attributable to Common Stockholders | $138.4 million | $118.4 million | $20.0 million | 17% |
Real Estate Portfolio
As of September 30, 2024, Agree Realty owned 2,271 properties with a total gross leasable area (GLA) of approximately 47.2 million square feet. The net real estate investments amounted to approximately $7.13 billion, up from $6.74 billion at the end of 2023.
| Portfolio Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Number of Properties | 2,271 | 2,135 |
| Gross Leasable Area (GLA) | 47.2 million sq. ft. | 44.2 million sq. ft. |
| Net Real Estate Investments | $7.13 billion | $6.74 billion |
Acquisition and Development Activity
During the nine months ended September 30, 2024, Agree Realty acquired 144 retail net lease assets for approximately $531.4 million, with a weighted average lease term of about 9.2 years. The company also commenced 17 development projects during the same period.
| Acquisition Metric | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Number of Acquisitions | 144 assets | 232 assets |
| Total Acquisition Cost | $531.4 million | $1.01 billion |
| Weighted Average Lease Term | 9.2 years | 11.5 years |
Cash Flow Analysis
Net cash provided by operating activities for the nine months ended September 30, 2024, was $340.6 million, an increase from $293.6 million in 2023.
| Cash Flow Metric | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Cash Provided by Operating Activities | $340.6 million | $293.6 million |
Debt and Liquidity
As of September 30, 2024, the total liabilities amounted to $2.89 billion, with mortgage notes payable at $42.4 million and unsecured term loans at $347.3 million. The company also maintains a $1.25 billion senior unsecured revolving credit facility.
| Debt Metric | Amount |
|---|---|
| Total Liabilities | $2.89 billion |
| Mortgage Notes Payable | $42.4 million |
| Unsecured Term Loans | $347.3 million |
| Revolving Credit Facility | $1.25 billion |
Dividends
For the three months ended September 30, 2024, the Company declared an annualized common stock dividend of $3.00 per share, representing a 2.9% increase from the prior year’s $2.916 per share.
| Dividend Metric | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Annualized Dividend per Share | $3.00 | $2.916 |
How Agree Realty Corporation (ADC) Makes Money
Revenue Sources
Agree Realty Corporation generates its revenue primarily through rental income from its extensive portfolio of retail properties. As of September 30, 2024, the company reported a rental income of $456.1 million, a 16% increase from $393.3 million in the same period of 2023.
Real Estate Investment Portfolio
As of September 30, 2024, Agree Realty owned 2,271 properties with a total gross leasable area (GLA) of approximately 47.2 million square feet. The net real estate investments totaled $7.13 billion, reflecting growth from $6.74 billion as of December 31, 2023.
Acquisitions
During the nine months ended September 30, 2024, the company acquired 144 retail net lease assets for approximately $531.4 million, with a weighted average lease term of approximately 9.2 years. The acquisitions included allocations of $140.2 million to land, $337.6 million to buildings and improvements, and $53.5 million to lease intangibles.
| Period | Properties Acquired | Total Cost (in millions) | Average Lease Term (years) |
|---|---|---|---|
| Q3 2024 | 66 | 216.0 | 9.8 |
| 9 Months 2024 | 144 | 531.4 | 9.2 |
| 9 Months 2023 | 232 | 1,010.2 | 11.5 |
Development Projects
Agree Realty also engages in development projects. As of September 30, 2024, the company had 21 development projects under construction, with anticipated total costs of approximately $92.7 million. During the nine months ended September 30, 2024, the company commenced 17 projects and completed 12 projects.
Dispositions
In terms of asset management, during the nine months ended September 30, 2024, Agree Realty disposed of 18 assets for net proceeds of $63.6 million, recognizing a net gain of $11.1 million.
Operating Expenses
For the nine months ended September 30, 2024, total operating expenses were $240.5 million, up from $208.4 million in the same period of 2023. Key expenses included:
- Real estate tax expense: $33.4 million
- Property operating expenses: $19.9 million
- Depreciation and amortization: $150.4 million
Interest and Financing Costs
As of September 30, 2024, the company had total gross mortgage indebtedness of $44.2 million with a weighted average interest rate of 3.74%. Interest expense increased to $79.8 million for the nine months ended September 30, 2024, a significant increase from $58.7 million for the same period in 2023.
Net Income
Net income attributable to common stockholders for the nine months ended September 30, 2024, was $138.4 million, up from $118.4 million in 2023, marking a 17% increase.
Dividends
The company declared monthly dividends of $0.250 per common share for July, August, and September 2024, representing an annualized dividend of $3.000 per common share, up 2.9% from the previous year.
Cash Flow Analysis
Net cash provided by operating activities for the nine months ended September 30, 2024, was $340.6 million, compared to $293.6 million for the same period in 2023. This increase was largely driven by higher rental income.
| Cash Flow Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Cash from Operating Activities | 340.6 | 293.6 |
| Net Cash Used in Investing Activities | (537.1) | (1,083.7) |
| Net Cash from Financing Activities | (572.4) | (1,056.0) |
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Article updated on 8 Nov 2024
Resources:
- Agree Realty Corporation (ADC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Agree Realty Corporation (ADC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Agree Realty Corporation (ADC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.