Increases 2023 Acquisition Guidance to At Least $1.2 Billion
BLOOMFIELD HILLS, Mich., May 4, 2023 Agree Realty Corporation (NYSE: ADC) (the "Company") today announced results for the quarter ended March 31, 2023. All per share amounts included herein are on a diluted per common share basis unless otherwise stated.
First Quarter 2023 Financial and Operating Highlights:
Financial Results
Net Income Attributable to Common Stockholders
Net Income for the three months ended March 31, 2023 increased 16.1% to $39.8 million, compared to $34.3 million for the comparable period in 2022. Net Income per share for the three months ended March 31, 2023 decreased 8.6% to $0.44, compared to $0.48 per share for the comparable period in 2022.
Core FFO
Core FFO for the three months ended March 31, 2023 increased 27.6% to $89.0 million, compared to Core FFO of $69.7 million for the comparable period in 2022. Core FFO per share for the three months ended March 31, 2023 increased 0.6% to $0.98, compared to Core FFO per share of $0.97 for the comparable period in 2022.
AFFO
AFFO for the three months ended March 31, 2023 increased 28.7% to $89.1 million, compared to AFFO of $69.2 million for the comparable period in 2022. AFFO per share for the three months ended March 31, 2023 increased 1.5% to $0.98, compared to AFFO per share of $0.97 for the comparable period in 2022.
Dividend
In the first quarter, the Company declared monthly cash dividends of $0.240 per common share for each of January, February and March 2023. The monthly dividends during the first quarter reflected an annualized dividend amount of $2.880 per common share, representing a 5.7% increase over the annualized dividend amount of $2.724 per common share from the first quarter of 2022. The dividends represent payout ratios of approximately 74% of Core FFO per share and 73% of AFFO per share, respectively.
Subsequent to quarter end, the Company declared a monthly cash dividend of $0.243 per common share for April 2023. The monthly dividend reflects an annualized dividend amount of $2.916 per common share, representing a 3.8% increase over the annualized dividend amount of $2.808 per common share from the second quarter of 2022. The April dividend is payable May 12, 2023 to stockholders of record at the close of business on April 28, 2023.
Additionally, subsequent to quarter end, the Company declared a monthly cash dividend on its 4.25% Series A Cumulative Redeemable Preferred Stock of $0.08854 per depositary share, which is equivalent to $1.0625 per annum. The dividend was paid on May 1, 2023 to stockholders of record at the close of business on April 24, 2023.
CEO Comments
"We are very pleased with our strong start to the year as we stayed disciplined in our investment strategy and now have visibility into at least $1.2 billion acquired for the year," said Joey Agree, President and Chief Executive Officer. "Our balance sheet remains in a fortified position with more than $360 million of forward equity and over $800 million of capacity on our revolving credit facility at quarter end."
Portfolio Update
As of March 31, 2023, the Company's portfolio consisted of 1,908 properties located in all 48 continental states and contained approximately 40.1 million square feet of gross leasable area.
At quarter end, the portfolio was 99.7% leased, had a weighted-average remaining lease term of approximately 8.8 years, and generated 68.0% of annualized base rents from investment grade retail tenants.
Ground Lease Portfolio
During the first quarter, the Company acquired two ground leases for an aggregate purchase price of approximately $18.9 million, representing 6.5% of annualized base rents acquired.
As of March 31, 2023, the Company's ground lease portfolio consisted of 208 leases located in 32 states and totaled approximately 5.6 million square feet of gross leasable area. Properties ground leased to tenants represented 12.1% of annualized base rents.
At quarter end, the ground lease portfolio was fully occupied, had a weighted-average remaining lease term of approximately 11.1 years, and generated 87.0% of annualized base rents from investment grade retail tenants.
Acquisitions
Total acquisition volume for the first quarter was approximately $302.3 million and included 66 properties net leased to leading retailers operating in sectors including tire and auto service, home improvement, grocery stores, auto parts, dollar stores, and farm and rural supply. The properties are located in 24 states and leased to tenants operating in 16 sectors.
The properties were acquired at a weighted-average capitalization rate of 6.7% and had a weighted-average remaining lease term of approximately 13.1 years. Approximately 74.9% of annualized base rents acquired were generated from investment grade retail tenants.
The Company's outlook for acquisition volume for the full-year 2023 has been increased to at least $1.2 billion, from at least $1.0 billion previously.
Development and PCS
During the first quarter, the Company commenced five development and PCS projects, with total anticipated costs of approximately $19.3 million. Construction continued during the quarter on 21 projects with anticipated costs totaling approximately $85.9 million. The Company completed three projects during the quarter, which included Gerber Collision developments in Murrieta, California as well as Ocala and Venice, Florida.
For the three months ended March 31, 2023, the Company had 29 development or PCS projects completed or under construction. Anticipated total costs are approximately $115.4 million, including $59.1 million of costs incurred as of quarter end.
The following table presents the Company's 29 development or PCS projects as of March 31, 2023:
Tenant | Location | Lease | Lease | Actual or | Status | |||||||
Gerber Collision | Murrieta, CA | Build-to-Suit | 15 years | Q1 2023 | Complete | |||||||
Gerber Collision | Ocala, FL | Build-to-Suit | 15 years | Q1 2023 | Complete | |||||||
Gerber Collision | Venice, FL | Build-to-Suit | 15 years | Q1 2023 | Complete | |||||||
Gerber Collision | Fort Wayne, IN | Build-to-Suit | 15 years | Q2 2023 | Under Construction | |||||||
Gerber Collision | Johnson City, NY | Build-to-Suit | 15 years | Q2 2023 | Under Construction | |||||||
Gerber Collision | Joplin, MO | Build-to-Suit | 15 years | Q2 2023 | Under Construction | |||||||
Gerber Collision | Lake Charles, LA | Build-to-Suit | 15 years | Q2 2023 | Under Construction | |||||||
Gerber Collision | Lake Park, FL | Build-to-Suit | 15 years | Q2 2023 | Under Construction | |||||||
Gerber Collision | Springfield, MO | Build-to-Suit | 15 years | Q2 2023 | Under Construction | |||||||
Gerber Collision | Toledo, OH | Build-to-Suit | 15 years | Q2 2023 | Under Construction | |||||||
Gerber Collision | Winterville, NC | Build-to-Suit | 15 years | Q2 2023 | Under Construction | |||||||
Gerber Collision | Woodstock, IL | Build-to-Suit | 15 years | Q2 2023 | Under Construction | |||||||
HomeGoods | South Elgin, IL | Build-to-Suit | 10 years | Q2 2023 | Under Construction | |||||||
Old Navy | Searcy, AR | Build-to-Suit | 7 years | Q2 2023 | Under Construction | |||||||
Sunbelt Rentals | St. Louis, MO | Build-to-Suit | 7 years | Q2 2023 | Under Construction | |||||||
Gerber Collision | Blue Springs, MO | Build-to-Suit | 15 years | Q3 2023 | Under Construction | |||||||
Gerber Collision | Huntley, IL | Build-to-Suit | 15 years | Q3 2023 | Under Construction | |||||||
Five Below | Onalaska, WI | Build-to-Suit | 10 years | Q3 2023 | Under Construction | |||||||
HomeGoods | Onalaska, WI | Build-to-Suit | 10 years | Q3 2023 | Under Construction | |||||||
Sierra Trading Post | Onalaska, WI | Build-to-Suit | 10 years | Q3 2023 | Under Construction | |||||||
TJ Maxx | Onalaska, WI | Build-to-Suit | 10 years | Q3 2023 | Under Construction | |||||||
Ulta Beauty | Onalaska, WI | Build-to-Suit | 11 years | Q3 2023 | Under Construction | |||||||
Sunbelt Rentals | Wentzville, MO | Build-to-Suit | 12 years | Q3 2023 | Under Construction | |||||||
Burlington | Brenham, TX | Build-to-Suit | 10 years | Q4 2023 | Under Construction | |||||||
Ulta Beauty | Brenham, TX | Build-to-Suit | 10 years | Q4 2023 | Under Construction | |||||||
Gerber Collision | Lawrence, PA | Build-to-Suit | 15 years | Q4 2023 | Under Construction | |||||||
Gerber Collision | McDonough, GA | Build-to-Suit | 15 years | Q4 2023 | Under Construction | |||||||
Gerber Collision | Muskegon, MI | Build-to-Suit | 15 years | Q4 2023 | Under Construction | |||||||
Gerber Collision | Odessa, FL | Build-to-Suit | 15 years | Q4 2023 | Under Construction | |||||||
Gerber Collision | Peachtree, GA | Build-to-Suit | 15 years | Q4 2023 | Under Construction | |||||||
Gerber Collision | Warner Robbins, NC | Build-to-Suit | 15 years | Q4 2023 | Under Construction | |||||||
Gerber Collision | Yorkville, IL | Build-to-Suit | 15 years | Q4 2023 | Under Construction | |||||||
Sunbelt Rentals | Ashwaubenon, WI | Build-to-Suit | 12 years | Q4 2023 | Under Construction | |||||||
Sunbelt Rentals | Broken Arrow, OK | Build-to-Suit | 12 years | Q4 2023 | Under Construction | |||||||
Leasing Activity and Expirations
During the first quarter, the Company executed new leases, extensions or options on approximately 511,000 square feet of gross leasable area throughout the existing portfolio.
As of March 31, 2023, the Company's 2023 lease maturities represented 0.8% of annualized base rents. The following table presents contractual lease expirations within the Company's portfolio as of March 31, 2023, assuming no tenants exercise renewal options:
Year | Leases | Annualized | Percent of | Gross Leasable Area | Percent of Gross | ||||
2023 | 16 | 3,722 | 0.8 % | 389 | 1.0 % | ||||
2024 | 47 | 12,556 | 2.6 % | 1,485 | 3.7 % | ||||
2025 | 71 | 17,584 | 3.6 % | 1,688 | 4.2 % | ||||
2026 | 115 | 25,074 | 5.1 % | 2,656 | 6.6 % | ||||
2027 | 134 | 31,014 | 6.3 % | 2,906 | 7.3 % | ||||
2028 | 157 | 39,842 | 8.1 % | 3,686 | 9.2 % | ||||
2029 | 164 | 47,324 | 9.6 % | 4,536 | 11.3 % | ||||
2030 | 255 | 52,457 | 10.7 % | 4,001 | 10.0 % | ||||
2031 | 170 | 39,571 | 8.0 % | 2,901 | 7.2 % | ||||
2032 | 205 | 40,163 | 8.2 % | 3,155 | 7.9 % | ||||
Thereafter | 729 | 182,764 | 37.0 % | 12,638 | 31.6 % | ||||
Total Portfolio | 2,063 | $492,071 | 100.0 % | 40,041 | 100.0 % |
The contractual lease expirations presented above exclude the effect of replacement tenant leases that had been executed as of March 31, 2023 but that had not yet commenced. Annualized Base Rent and gross leasable area (square feet) are in thousands; any differences are the result of rounding.
(1) Annualized Base Rent represents the annualized amount of contractual minimum rent required by tenant lease agreements as of March 31, 2023, computed on a straight-line basis. Annualized Base Rent is not, and is not intended to be, a presentation in accordance with generally accepted accounting principles ("GAAP"). The Company believes annualized contractual minimum rent is useful to management, investors, and other interested parties in analyzing concentrations and leasing activity.
Top Tenants
The following table presents annualized base rents for all tenants that represent 1.5% or greater of the Company's total annualized base rent as of March 31, 2023:
Tenant | Annualized | Percent of Annualized Base Rent | ||
Walmart | $32,638 | 6.6 % | ||
Dollar General | 23,750 | 4.8 % | ||
Tractor Supply | 21,809 | 4.4 % | ||
Best Buy | 19,515 | 4.0 % | ||
Kroger | 16,315 | 3.3 % | ||
Dollar Tree | 15,885 | 3.2 % | ||
TJX Companies | 14,377 | 2.9 % | ||
O'Reilly Auto Parts | 14,315 | 2.9 % | ||
CVS | 14,118 | 2.9 % | ||
Hobby Lobby | 12,495 | 2.5 % | ||
Lowe's | 12,210 | 2.5 % | ||
Burlington | 11,408 | 2.3 % | ||
Sherwin-Williams | 10,850 | 2.2 % | ||
Sunbelt Rentals | 10,492 | 2.1 % | ||
Wawa | 9,668 | 2.0 % | ||
Home Depot | 8,880 | 1.8 % | ||
TBC Corporation | 8,609 | 1.7 % | ||
Gerber Collision | 8,540 | 1.7 % | ||
AutoZone | 7,747 | 1.6 % | ||
Goodyear | 7,522 | 1.5 % | ||
Other(2) | 210,928 | 43.1 % | ||
Total Portfolio | $492,071 | 100.0 % |
Annualized Base Rent is in thousands; any differences are the result of rounding.
(1) Refer to footnote 1 on page 4 for the Company's definition of Annualized Base Rent.
(2) Includes tenants generating less than 1.5% of Annualized Base Rent.
Retail Sectors
The following table presents annualized base rents for all the Company's retail sectors as of March 31, 2023:
Sector | Annualized | Percent of Base Rent | ||
Grocery Stores | $51,743 | 10.5 % | ||
Home Improvement | $45,176 | 9.2 % | ||
Tire and Auto Service | $43,134 | 8.8 % | ||
Dollar Stores | $38,170 | 7.8 % | ||
Convenience Stores | $36,032 | 7.3 % | ||
General Merchandise | $31,092 | 6.3 % | ||
Off-Price Retail | $28,944 | 5.9 % | ||
Auto Parts | $27,992 | 5.7 % | ||
Farm and Rural Supply | $23,537 | 4.8 % | ||
Consumer Electronics | $21,724 | 4.4 % | ||
Pharmacy | $20,853 | 4.2 % | ||
Crafts and Novelties | $14,773 | 3.0 % | ||
Discount Stores | $11,842 | 2.4 % | ||
Equipment Rental | $10,818 | 2.2 % | ||
Warehouse Clubs | $10,197 | 2.1 % | ||
Health Services | $9,659 | 2.0 % | ||
Health and Fitness | $8,083 | 1.6 % | ||
Restaurants - Quick Service | $7,931 | 1.6 % | ||
Dealerships | $6,506 | 1.3 % | ||
Specialty Retail | $6,501 | 1.3 % | ||
Restaurants - Casual Dining | $5,243 | 1.1 % | ||
Sporting Goods | $4,939 | 1.0 % | ||
Home Furnishings | $4,898 | 1.0 % | ||
Financial Services | $4,618 | 0.9 % | ||
Theaters | $3,848 | 0.8 % | ||
Pet Supplies | $3,402 | 0.7 % | ||
Beauty and Cosmetics | $2,338 | 0.5 % | ||
Entertainment Retail | $2,323 | 0.5 % | ||
Shoes | $2,206 | 0.4 % | ||
Apparel | $1,574 | 0.3 % | ||
Miscellaneous | $1,180 | 0.2 % | ||
Office Supplies | $795 | 0.2 % | ||
Total Portfolio | $492,071 | 100.0 % |
Annualized Base Rent is in thousands; any differences are the result of rounding.
(1) Refer to footnote 1 on page 4 for the Company's definition of Annualized Base Rent.
Geographic Diversification
The following table presents annualized base rents for all states that represent 2.5% or greater of the Company's total annualized base rent as of March 31, 2023:
State | Annualized | Percent of Annualized | |||
Texas | $36,244 | 7.4 % | |||
Florida | 27,743 | 5.6 % | |||
Ohio | 27,705 | 5.6 % | |||
Michigan | 27,173 | 5.5 % | |||
Illinois | 26,435 | 5.4 % | |||
North Carolina | 25,100 | 5.1 % | |||
Pennsylvania | 23,909 | 4.9 % | |||
New Jersey | 22,203 | 4.5 % | |||
California | 21,371 | 4.3 % | |||
New York | 19,231 | 3.9 % | |||
Georgia | 17,837 | 3.6 % | |||
Wisconsin | 14,871 | 3.0 % | |||
Virginia | 14,565 | 3.0 % | |||
Missouri | 12,770 | 2.6 % | |||
Connecticut | 12,618 | 2.6 % | |||
Other(2) | 162,296 | 33.0 % | |||
Total Portfolio | $492,071 | 100.0 % |
Annualized Base Rent is in thousands; any differences are the result of rounding.
(1) Refer to footnote 1 on page 4 for the Company's definition of Annualized Base Rent.
(2) Includes states generating less than 2.5% of Annualized Base Rent.
Capital Markets, Liquidity and Balance Sheet
Capital Markets
During the first quarter, the Company settled approximately 2.9 million shares under existing forward sale agreements for net proceeds of $195.2 million. At quarter end, the Company had approximately 5.3 million shares remaining to be settled under existing forward sale agreements, which are anticipated to raise net proceeds of $362.1 million after deducting fees and expenses and making certain other adjustments as provided in the equity distribution agreements.
The following table presents the Company's outstanding forward equity offerings as of March 31, 2023:
Forward Equity Offerings | Shares Sold | Shares | Shares | Net | Anticipated | ||||
September 2022 Forward Offering | 5,750,000 | 4,545,000 | 1,205,000 | $301,350,417 | $79,582,056 | ||||
Q4 2022 ATM Forward Offerings | 4,104,641 | - | 4,104,641 | $ - | $282,543,245 | ||||
Total Forward Equity Offerings | 9,854,641 | 4,545,000 | 5,309,641 | $301,350,417 | $362,125,301 |
Liquidity
As of March 31, 2023, the Company had total liquidity of approximately $1.2 billion, which includes $804.0 million of availability under its revolving credit facility, $362.1 million of outstanding forward equity, and $12.9 million of cash on hand.
Balance Sheet
As of March 31, 2023, the Company's net debt to recurring EBITDA was 4.5 times. The Company's proforma net debt to recurring EBITDA was 3.7 times when deducting the $362.1 million of anticipated net proceeds from the outstanding forward equity offerings from the Company's net debt of $2.0 billion as of March 31, 2023. The Company's fixed charge coverage ratio was 5.1 times as of the end of the first quarter.
The Company's total debt to enterprise value was 23.8% as of March 31, 2023. Enterprise value is calculated as the sum of net debt, the liquidation value of the Company's preferred stock, and the market value of the Company's outstanding shares of common stock, assuming conversion of Agree Limited Partnership (the "Operating Partnership" or "OP") common units into common stock of the Company.
For the three months ended March 31, 2023, the Company's fully diluted weighted-average shares outstanding were 90.5 million. The basic weighted-average shares outstanding for the three months ended March 31, 2023 were 90.0 million.
For the three months ended March 31, 2023, the Company's fully diluted weighted-average shares and units outstanding were 90.9 million. The basic weighted-average shares and units outstanding for the three months ended March 31, 2023 were 90.4 million.
The Company's assets are held by, and its operations are conducted through, the Operating Partnership, of which the Company is the sole general partner. As of March 31, 2023, there were 347,619 Operating Partnership common units outstanding and the Company held a 99.6% common interest in the Operating Partnership.
Conference Call/Webcast
The Company will host its quarterly analyst and investor conference call on Friday, May 5, 2023 at 9:00 AM ET. To participate in the conference call, please dial (866) 363-3979 approximately ten minutes before the call begins.
Additionally, a webcast of the conference call will be available through the Company's website. To access the webcast, visit www.agreerealty.com ten minutes prior to the start time of the conference call and go to the Investors section of the website. A replay of the conference call webcast will be archived and available online through the Investors section of www.agreerealty.com.
About Agree Realty Corporation
Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of March 31, 2023, the Company owned and operated a portfolio of 1,908 properties, located in all 48 continental states and containing approximately 40.1 million square feet of gross leasable area. The Company's common stock is listed on the New York Stock Exchange under the symbol "ADC". For additional information on the Company and RETHINKING RETAIL, please visit www.agreerealty.com.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about projected financial and operating results, 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 forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "assume," "plan," "outlook" or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Although these forward-looking statements are based on good faith beliefs, reasonable assumptions and the Company's best judgment reflecting current information, you should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and which could materially affect the Company's results of operations, financial condition, cash flows, performance or future achievements or events. Currently, some of the most significant factors, include the potential adverse effect of ongoing worldwide economic uncertainties, the current pandemic of the novel coronavirus, or COVID-19, and increased inflation and interest rates on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets. The extent to which these conditions will impact the Company and its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence. Moreover, investors are cautioned to interpret many of the risks identified in the risk factors discussed in the Company's Annual Report on Form 10-K and subsequent quarterly reports filed with the Securities and Exchange Commission (the "SEC"), as well as the risks set forth below, as being heightened as a result of the ongoing and numerous adverse impacts of the macroeconomic environment and COVID-19. Additional important factors, among others, that may cause the Company's actual results to vary include the general deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, the Company's continuing ability to qualify as a REIT and other factors discussed in the Company's reports filed with the SEC. The forward-looking statements included in this press release are made as of the date hereof. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, changes in the Company's expectations or assumptions or otherwise.
For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company's website at www.agreerealty.com.
The Company defines the "weighted-average capitalization rate" for acquisitions and dispositions as the sum of contractual fixed annual rents computed on a straight-line basis over the primary lease terms and anticipated annual net tenant recoveries, divided by the purchase and sale prices for occupied properties.
References to "Core FFO" and "AFFO" in this press release are representative of Core FFO attributable to OP common unitholders and AFFO attributable to OP common unitholders. Detailed calculations for these measures are shown in the Reconciliation of Net Income to FFO, Core FFO and Adjusted FFO table as "Core Funds From Operations – OP Common Unitholders" and "Adjusted Funds from Operations – OP Common Unitholders".
Agree Realty Corporation | |||
Consolidated Balance Sheet | |||
($ in thousands, except share and per-share data) | |||
(Unaudited) | |||
March 31, 2023 | December 31, 2022 | ||
Assets: | |||
Real Estate Investments: | |||
Land | $ 2,005,606 | $ 1,941,599 | |
Buildings | 4,281,164 | 4,054,679 | |
Accumulated depreciation | (347,778) | (321,142) | |
Property under development | 73,123 | 65,932 | |
Net real estate investments | 6,012,115 | 5,741,068 | |
Cash and cash equivalents | 11,809 | 27,763 | |
Cash held in escrows | 1,131 | 1,146 | |
Accounts receivable - tenants, net | 71,089 | 65,841 | |
Lease Intangibles, net of accumulated amortization of $286,748 and $263,011 | 803,654 | 799,448 | |
Other assets, net | 86,629 | 77,923 | |
Total Assets | $ 6,986,427 | $ 6,713,189 | |
Liabilities: | |||
Mortgage notes payable, net | $ 47,842 | $ 47,971 | |
Senior unsecured notes, net | 1,792,611 | 1,792,047 | |
Unsecured revolving credit facility | 196,000 | 100,000 | |
Dividends and distributions payable | 23,071 | 22,345 | |
Accounts payable, accrued expenses and other liabilities | 92,733 | 83,722 | |
Lease intangibles, net of accumulated amortization of $37,494 and $35,992 at | 36,326 | 36,714 | |
Total Liabilities | $ 2,188,583 | $ 2,082,799 | |
Equity: | |||
Preferred Stock, $.0001 par value per share, 4,000,000 shares authorized, 7,000 | 175,000 | 175,000 | |
Common stock, $.0001 par value, 180,000,000 shares authorized, 93,198,079 | 9 | 9 | |
Additional paid-in-capital | 4,852,927 | 4,658,570 | |
Dividends in excess of net income | (254,316) | (228,132) | |
Accumulated other comprehensive income (loss) | 22,924 | 23,551 | |
Total Equity - Agree Realty Corporation | $ 4,796,544 | $ 4,628,998 | |
Non-controlling interest | 1,300 | 1,392 | |
Total Equity | $ 4,797,844 | $ 4,630,390 | |
Total Liabilities and Equity | $ 6,986,427 | $ 6,713,189 | |
Agree Realty Corporation | |||
Consolidated Statements of Operations and Comprehensive Income | |||
($ in thousands, except share and per share-data) | |||
(Unaudited) | |||
Three months ended March 31, | |||
2023 | 2022 | ||
Revenues | |||
Rental Income | $ 126,609 | $ 98,312 | |
Other | 9 | 30 | |
Total Revenues | $ 126,618 | $ 98,342 | |
Operating Expenses | |||
Real estate taxes | $ 9,432 | $ 7,611 | |
Property operating expenses | 6,782 | 4,477 | |
Land lease expense | 430 | 402 | |
General and administrative | 8,821 | 7,622 | |
Depreciation and amortization | 40,646 | 28,561 | |
Provision for impairment | - | 1,015 | |
Total Operating Expenses | $ 66,111 | $ 49,688 | |
Gain (loss) on sale of assets, net | - | 2,310 | |
Gain (loss) on involuntary conversion, net | - | (25) | |
Income from Operations | $ 60,507 | $ 50,939 | |
Other (Expense) Income | |||
Interest expense, net | $ (17,998) | $ (13,931) | |
Income tax (expense) benefit | (783) | (719) | |
Other (expense) income | 48 | - | |
Net Income | $ 41,774 | $ 36,289 | |
Less net income attributable to non-controlling interest | 160 | 176 | |
Net Income Attributable to Agree Realty Corporation | $ 41,614 | $ 36,113 | |
Less Series A Preferred Stock Dividends | 1,859 | 1,859 | |
Net Income Attributable to Common Stockholders | $ 39,755 | $ 34,254 | |
Net Income Per Share Attributable to Common Stockholders | |||
Basic | $ 0.44 | $ 0.48 | |
Diluted | $ 0.44 | $ 0.48 | |
Other Comprehensive Income | |||
Net Income | $ 41,774 | $ 36,289 | |
Amortization of interest rate swaps | (629) | 82 | |
Change in fair value and settlement of interest rate swaps | - | 20,581 | |
Total Comprehensive Income (Loss) | 41,145 | 56,952 | |
Less comprehensive income attributable to non-controlling interest | 158 | 276 | |
Comprehensive Income Attributable to Agree Realty Corporation | $ 40,987 | $ 56,676 | |
Weighted Average Number of Common Shares Outstanding - Basic | 90,028,255 | 71,228,930 | |
Weighted Average Number of Common Shares Outstanding - Diluted | 90,548,172 | 71,336,103 | |
Agree Realty Corporation | |||
Reconciliation of Net Income to FFO, Core FFO and Adjusted FFO | |||
($ in thousands, except share and per-share data) | |||
(Unaudited) | |||
Three months ended March 31, | |||
2023 | 2022 | ||
Net Income | $ 41,774 | $ 36,289 | |
Less Series A Preferred Stock Dividends | 1,859 | 1,859 | |
Net Income attributable to OP Common Unitholders | 39,915 | 34,430 | |
Depreciation of rental real estate assets | 26,584 | 19,470 | |
Amortization of lease intangibles - in-place leases and leasing costs | 13,770 | 8,924 | |
Provision for impairment | - | 1,015 | |
(Gain) loss on sale or involuntary conversion of assets, net | - | (2,285) | |
Funds from Operations - OP Common Unitholders | $ 80,269 | $ 61,554 | |
Amortization of above (below) market lease | 8,695 | 8,178 | |
Core Funds from Operations - OP Common Unitholders | $ 88,964 | $ 69,732 | |
Straight-line accrued rent | (3,039) | (3,135) | |
Stock based compensation expense | 1,831 | 1,635 | |
Amortization of financing costs and original issue discounts | 1,029 | 788 | |
Non-real estate depreciation | 292 | 167 | |
Adjusted Funds from Operations - OP Common Unitholders | $ 89,077 | $ 69,187 | |
Funds from Operations Per Common Share and OP Unit - Basic | $ 0.89 | $ 0.86 | |
Funds from Operations Per Common Share and OP Unit - Diluted | $ 0.88 | $ 0.86 | |
Core Funds from Operations Per Common Share and OP Unit - Basic | $ 0.98 | $ 0.97 | |
Core Funds from Operations Per Common Share and OP Unit - Diluted | $ 0.98 | $ 0.97 | |
Adjusted Funds from Operations Per Common Share and OP Unit - Basic | $ 0.99 | $ 0.97 | |
Adjusted Funds from Operations Per Common Share and OP Unit - Diluted | $ 0.98 | $ 0.97 | |
Weighted Average Number of Common Shares and OP Units Outstanding - Basic | 90,375,874 | 71,576,549 | |
Weighted Average Number of Common Shares and OP Units Outstanding - Diluted | 90,895,791 | 71,683,722 | |
Additional supplemental disclosure | |||
Scheduled principal repayments | $ 221 | $ 208 | |
Capitalized interest | 539 | 112 | |
Capitalized building improvements | 702 | 1,100 | |
Non-GAAP Financial Measures |
Funds from Operations ("FFO" or "Nareit FFO") |
Core Funds from Operations ("Core FFO") |
Adjusted Funds from Operations ("AFFO") |
Agree Realty Corporation | |||||||
Reconciliation of Net Debt to Recurring EBITDA | |||||||
($ in thousands, except share and per-share data) | |||||||
(Unaudited) | |||||||
Three months ended | |||||||
2023 | |||||||
Net Income | $ 41,774 | ||||||
Interest expense, net | 17,998 | ||||||
Income tax expense | 783 | ||||||
Depreciation of rental real estate assets | 26,584 | ||||||
Amortization of lease intangibles - in-place leases and leasing costs | 13,770 | ||||||
Non-real estate depreciation | 292 | ||||||
EBITDAre | $ 101,201 | ||||||
Run-Rate Impact of Investment, Disposition and Leasing Activity | $ 4,147 | ||||||
Amortization of above (below) market lease intangibles, net | 8,611 | ||||||
Recurring EBITDA | $ 113,959 | ||||||
Annualized Recurring EBITDA | $ 455,836 | ||||||
Total Debt | $ 2,056,173 | ||||||
Cash, cash equivalents and cash held in escrows | (12,940) | ||||||
Net Debt | $ 2,043,233 | ||||||
Net Debt to Recurring EBITDA | 4.5x | ||||||
Net Debt | $ 2,043,233 | ||||||
Anticipated Net Proceeds from September 2022 Forward Offering | (79,582) | ||||||
Anticipated Net Proceeds from ATM Forward Offerings | (282,543) | ||||||
Proforma Net Debt | $ 1,681,108 | ||||||
Proforma Net Debt to Recurring EBITDA | 3.7x | ||||||
Non-GAAP Financial Measures |
EBITDAre |
Recurring EBITDA |
Net Debt |
Forward Offerings |
Agree Realty Corporation | |||
Rental Income | |||
($ in thousands, except share and per share-data) | |||
(Unaudited) | |||
Three months ended | |||
2023 | 2022 | ||
Rental Income Source(1) | |||
Minimum rents(2) | $ 115,790 | $ 91,441 | |
Percentage rents(2) | 1,246 | 635 | |
Operating cost reimbursement(2) | 15,145 | 11,279 | |
Straight-line rental adjustments(3) | 3,039 | 3,135 | |
Amortization of (above) below market lease intangibles(4) | (8,611) | (8,178) | |
Total Rental Income | $ 126,609 | $ 98,312 |
(1) The Company adopted Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 842 "Leases" using the modified retrospective approach as of January 1, 2019. The Company adopted the practical expedient in FASB ASC 842 that alleviates the requirement to separately present lease and non-lease components of lease contracts. As a result, all income earned pursuant to tenant leases is reflected as one line, "Rental Income," in the consolidated statement of operations. The purpose of this table is to provide additional supplementary detail of Rental Income. |
(2) Represents contractual rentals and/or reimbursements as required by tenant lease agreements, recognized on an accrual basis of accounting. The Company believes that the presentation of contractual lease income is not, and is not intended to be, a presentation in accordance with GAAP. The Company believes this information is frequently used by management, investors, analysts and other interested parties to evaluate the Company's performance. |
(3) Represents adjustments to recognize minimum rents on a straight-line basis, consistent with the requirements of FASB ASC 842. |
(4) In allocating the fair value of an acquired property, above- and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition and the Company's estimate of current market lease rates for the property. |
SOURCE Agree Realty Corporation