Increases 2022 Acquisition Guidance to
$1.5 Billion to $1.7 Billion;
Raises 2022 Development and PCS Guidance to
$75 Million to $125 Million Commenced
BLOOMFIELD HILLS, Mich., Aug. 2, 2022
/PRNewswire/ -- Agree Realty Corporation (NYSE: ADC) (the
"Company") today announced results for the quarter ended
June 30, 2022. All per share
amounts included herein are on a diluted per common share basis
unless otherwise stated.
Second Quarter 2022 Financial and Operating
Highlights:
- Invested approximately $430
million in 121 retail net lease properties
- Commenced five development or Partner Capital Solutions ("PCS")
projects
- Net Income per share attributable to common stockholders
increased 31.7% to $0.45
- Core Funds from Operations ("Core FFO") per share increased
9.7% to $0.98
- Adjusted Funds from Operations ("AFFO") per share increased
10.4% to $0.97
- Declared a July monthly dividend of $0.234 per share, a 7.8% year-over-year
increase
- Completed a forward equity offering of 5,750,000 shares of
common stock, including the underwriters' option to purchase
additional shares, raising anticipated net proceeds of
approximately $388 million
- Sold 1,885,880 shares of common stock via the forward component
of the Company's at-the-market equity ("ATM") program for
anticipated net proceeds of approximately $127 million
- Settled 4,667,850 shares of outstanding forward equity for net
proceeds of approximately $300
million
- Balance sheet positioned for growth at 3.8 times proforma net
debt to recurring EBITDA; 5.0 times excluding unsettled forward
equity
First Half 2022 Financial and Operating Highlights:
- Invested a record of approximately $860
million in 228 retail net lease properties
- Committed a record of $74 million
to 23 development or PCS projects completed or under
construction
- Net Income per share attributable to common stockholders
increased 13.7% to $0.93
- Core FFO per share increased 12.5% to $1.95
- AFFO per share increased 13.3% to $1.94
- Settled 8,459,814 shares of outstanding forward equity for net
proceeds of approximately $551
million
- Declared dividends of $1.383 per
share, an 8.7% year-over-year increase
Financial Results
Net Income Attributable to Common Stockholders
Net Income for the three months ended June 30, 2022 increased 52.7% to $34.1 million, compared to $22.3 million for the comparable period in 2021.
Net Income per share for the three months ended June 30, 2022 increased 31.7% to $0.45, compared to $0.34 per share for the comparable period in
2021.
Net Income for the six months ended June
30, 2022 increased 30.3% to $68.4
million, compared to $52.5
million for the comparable period in 2021. Net Income per
share for the six months ended June 30,
2022 increased 13.7% to $0.93,
compared to $0.82 per share for the
comparable period in 2021.
Core FFO
Core FFO for the three months ended June
30, 2022 increased 27.1% to $74.5
million, compared to Core FFO of $58.6 million for the comparable period in 2021.
Core FFO per share for the three months ended June 30, 2022 increased 9.7% to $0.98, compared to Core FFO per share of
$0.89 for the comparable period in
2021.
Core FFO for the six months ended June
30, 2022 increased 28.9% to $144.2
million, compared to Core FFO of $111.9 million for the comparable period in 2021.
Core FFO per share for the six months ended June 30, 2022 increased 12.5% to $1.95, compared to Core FFO per share of
$1.74 for the comparable period in
2021.
AFFO
AFFO for the three months ended June 30,
2022 increased 27.9% to $73.7
million, compared to AFFO of $57.6
million for the comparable period in 2021. AFFO per share
for the three months ended June 30,
2022 increased 10.4% to $0.97,
compared to AFFO per share of $0.88
for the comparable period in 2021.
AFFO for the six months ended June 30,
2022 increased 29.8% to $142.9
million, compared to AFFO of $110.1
million for the comparable period in 2021. AFFO per share
for the six months ended June 30,
2022 increased 13.3% to $1.94,
compared to AFFO per share of $1.71
for the comparable period in 2021.
Dividend
In the second quarter, the Company declared monthly cash
dividends of $0.234 per common share
for each of April, May and June 2022.
The monthly dividends reflected an annualized dividend amount of
$2.808 per common share, representing
a 7.8% increase over the annualized dividend amount of $2.604 per common share from the second quarter
of 2021. The dividends represent payout ratios of approximately 72%
of both Core FFO per share and AFFO per share.
For the six months ended June 30,
2022, the Company declared monthly cash dividends totaling
$1.383 per common share, an 8.7%
increase over the dividends of $1.272
per common share declared for the comparable period in 2021. The
dividends represent payout ratios of approximately 71% of both Core
FFO per share and AFFO per share.
Subsequent to quarter end, the Company declared a monthly cash
dividend of $0.234 per common share
for July 2022. The monthly dividend
reflects an annualized dividend amount of $2.808 per common share, representing a 7.8%
increase over the annualized dividend amount of $2.604 per common share from the third quarter of
2021. The dividend is payable August 12,
2022 to stockholders of record at the close of business on
July 29, 2022.
CEO Comments
"We are extremely pleased with our performance during the first
half of the year," said Joey Agree, President and Chief Executive
Officer. "With our record year-to-date investment activity, strong
pipeline and superior cost of capital, we are increasing our
full-year acquisition guidance to a range of $1.5 billion to $1.7
billion. While increasing our acquisition guidance, we will
continue to maintain our rigorous underwriting standards and focus
on superior real estate leased to leading retailers. Given our
strong balance sheet position and vast liquidity, we remain poised
to take advantage of opportunities in a dynamic market."
Portfolio Update
As of June 30, 2022, the Company's
portfolio consisted of 1,607 properties located in 48 states and
contained approximately 33.8 million square feet of gross leasable
area.
At quarter-end, the portfolio was 99.6% leased and had a
weighted-average remaining lease term of approximately 9.0 years.
Investment grade retailers represented 67.5% of annualized base
rents.
Ground Lease Portfolio
During the quarter, the Company acquired eight ground leases for
an aggregate purchase price of approximately $22.6 million, representing 5.1% of annualized
base rents acquired.
As of June 30, 2022, the Company's
ground lease portfolio consisted of 193 leases located in 32 states
and totaled approximately 5.1 million square feet of gross leasable
area. Properties ground leased to tenants represented approximately
13.0% of annualized base rents.
At quarter end, the ground lease portfolio was fully occupied
and had a weighted-average remaining lease term of approximately
11.8 years. Investment grade retailers represented 88.7% of
annualized base rents.
Acquisitions
Acquisition volume for the second quarter totaled $420.4 million and included 99 properties net
leased to leading retailers operating in sectors including general
merchandise, tire and auto service, home improvement, consumer
electronics, and auto parts. The acquired properties are
located in 33 states and leased to tenants operating in 21
sectors.
The properties were acquired at a weighted-average
capitalization rate of 6.2% and had a weighted-average remaining
lease term of 10.0 years. Approximately 54.5% of annualized base
rents acquired were generated from investment grade retail
tenants.
For the six months ended June 30,
2022, total acquisition volume was $827.6 million. The 205 acquired properties are
located in 40 states and leased to tenants who operate in 25 retail
sectors. The properties were acquired at a weighted-average
capitalization rate of 6.1% and had a weighted-average remaining
lease term of approximately 9.6 years. Approximately 65.8% of
annualized base rents were generated from investment grade retail
tenants.
The Company's outlook for acquisition volume for the full-year
2022 is being increased to a range of $1.5
billion to $1.7 billion of
high-quality retail net lease properties, from a previous range of
$1.4 billion to $1.6 billion.
Dispositions
During the three months ended June 30,
2022, the Company sold four properties for gross proceeds of
approximately $16.6 million. The
dispositions were completed at a capitalization rate of 7.0% and
included the previously disclosed LA Fitness in Houston, Texas. During the six months ended
June 30, 2022, the Company sold five
properties for total gross proceeds of $24.8
million. The weighted-average capitalization rate of the
dispositions was 6.0%.
The Company's disposition guidance for 2022 remains between
$25 million and $75 million.
Development and PCS
During the quarter, the Company commenced five development and
PCS projects, with total anticipated costs of approximately
$16.5 million. The projects include a
Sunbelt Rentals in Roxana,
Illinois and three Gerber Collision projects in Huntley, Illinois; Johnson City, New York; and Springfield, Missouri.
The Company completed its development with Gerber Collision in
Pooler, Georgia, while
construction continued on the Sunbelt Rentals in St. Louis, Missouri; the Burlington in Turnersville, New Jersey; and 14
geographically diverse Gerber Collision projects.
For the six months ended June 30,
2022, the Company had a record 23 development or PCS
projects completed or under construction. Anticipated total costs
are approximately $74.0 million,
including $39.5 million of costs
incurred to date. For the full-year 2022, the Company anticipates
commencing between $75 million and
$125 million of development and PCS
projects, up from a previous range of $50
million to $100 million.
The following table presents the Company's 23 development or PCS
projects as of June 30, 2022:
Tenant
|
|
Location
|
|
Lease
Structure
|
|
Lease
Term
|
|
Actual or
Anticipated Rent
Commencement
|
|
Status
|
|
|
|
|
|
|
|
|
|
|
|
7-Eleven
|
|
Saginaw, MI
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2022
|
|
Complete
|
Gerber
Collision
|
|
Pooler, GA
|
|
Build-to-Suit
|
|
15 years
|
|
Q2 2022
|
|
Complete
|
Gerber
Collision
|
|
Janesville,
WI
|
|
Build-to-Suit
|
|
15 years
|
|
Q3 2022
|
|
Under
Construction
|
Gerber
Collision
|
|
Lake Park,
FL
|
|
Build-to-Suit
|
|
15 years
|
|
Q3 2022
|
|
Under
Construction
|
Gerber
Collision
|
|
New Port Richey,
FL
|
|
Build-to-Suit
|
|
15 years
|
|
Q3 2022
|
|
Under
Construction
|
Gerber
Collision
|
|
Johnson City,
NY
|
|
Build-to-Suit
|
|
15 years
|
|
Q4 2022
|
|
Under
Construction
|
Gerber
Collision
|
|
Ocala, FL
|
|
Build-to-Suit
|
|
15 years
|
|
Q4 2022
|
|
Under
Construction
|
Sunbelt
Rentals
|
|
Roxana, IL
|
|
Build-to-Suit
|
|
10 years
|
|
Q4 2022
|
|
Under
Construction
|
Sunbelt
Rentals
|
|
St. Louis,
MO
|
|
Build-to-Suit
|
|
7 years
|
|
Q4 2022
|
|
Under
Construction
|
Burlington
|
|
Turnersville,
NJ
|
|
Build-to-Suit
|
|
10 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Fort Wayne,
IN
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Joplin, MO
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Kimberly, WI
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Lake Charles,
LA
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
McDonough,
GA
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Toledo, OH
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Venice, FL
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Winterville,
NC
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Woodstock,
IL
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Yorkville,
IL
|
|
Build-to-Suit
|
|
15 years
|
|
Q1 2023
|
|
Under
Construction
|
Old Navy
|
|
Searcy, AR
|
|
Build-to-Suit
|
|
7 years
|
|
Q1 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Huntley, IL
|
|
Build-to-Suit
|
|
15 years
|
|
Q2 2023
|
|
Under
Construction
|
Gerber
Collision
|
|
Springfield,
MO
|
|
Build-to-Suit
|
|
15 years
|
|
Q2 2023
|
|
Under
Construction
|
Leasing Activity and Expirations
During the second quarter, the Company executed new leases,
extensions or options on approximately 102,000 square feet of gross
leasable area throughout the existing portfolio.
For the six months ended June 30,
2022, the Company executed new leases, extensions or options
on approximately 460,000 square feet of gross leasable area
throughout the existing portfolio.
As of June 30, 2022, the Company's
2022 lease maturities represented 0.1% of annualized base rents.
The following table presents contractual lease expirations,
assuming no tenants exercise their renewal options, within the
Company's portfolio as of June 30,
2022:
Year
|
Leases
|
|
Annualized
Base Rent (1)
|
|
% of
ABR
|
|
Gross Leasable
Area ("GLA")
|
|
% of
GLA
|
|
|
|
|
|
|
|
|
|
|
2022
|
4
|
|
501
|
|
0.1 %
|
|
24
|
|
0.1 %
|
2023
|
48
|
|
8,715
|
|
2.1 %
|
|
1,009
|
|
3.0 %
|
2024
|
44
|
|
13,572
|
|
3.2 %
|
|
1,581
|
|
4.7 %
|
2025
|
65
|
|
15,452
|
|
3.7 %
|
|
1,510
|
|
4.5 %
|
2026
|
108
|
|
23,495
|
|
5.6 %
|
|
2,485
|
|
7.3 %
|
2027
|
118
|
|
27,346
|
|
6.5 %
|
|
2,472
|
|
7.3 %
|
2028
|
122
|
|
32,149
|
|
7.6 %
|
|
2,834
|
|
8.4 %
|
2029
|
152
|
|
42,697
|
|
10.1 %
|
|
4,210
|
|
12.4 %
|
2030
|
242
|
|
50,585
|
|
12.0 %
|
|
3,837
|
|
11.3 %
|
2031
|
153
|
|
37,053
|
|
8.8 %
|
|
2,718
|
|
8.0 %
|
Thereafter
|
679
|
|
170,296
|
|
40.3 %
|
|
11,158
|
|
33.0 %
|
Total
Portfolio
|
1,735
|
|
$421,861
|
|
100.0 %
|
|
33,838
|
|
100.0 %
|
|
|
|
The contractual lease
expirations presented above exclude the effect of replacement
tenant leases that had been executed as of June 30, 2022 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
("ABR") represents the annualized amount of contractual minimum
rent required by tenant lease agreements as of June 30, 2022,
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
As of June 30, 2022, LA Fitness is
no longer among the Company's top tenants. The Company added
Goodyear to its top tenants during the second quarter of 2022. 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 June 30, 2022:
Tenant
|
|
Annualized
Base
Rent(1)
|
|
% of
ABR
|
|
|
|
|
|
Walmart
|
|
$30,281
|
|
7.2 %
|
Tractor
Supply
|
|
17,954
|
|
4.3 %
|
Dollar
General
|
|
16,629
|
|
3.9 %
|
Best Buy
|
|
16,588
|
|
3.9 %
|
TJX
Companies
|
|
13,047
|
|
3.1 %
|
O'Reilly Auto
Parts
|
|
12,419
|
|
2.9 %
|
CVS
|
|
12,240
|
|
2.9 %
|
Hobby Lobby
|
|
11,498
|
|
2.7 %
|
Lowe's
|
|
10,852
|
|
2.6 %
|
Kroger
|
|
10,798
|
|
2.6 %
|
Sherwin-Williams
|
|
10,739
|
|
2.5 %
|
Burlington
|
|
10,435
|
|
2.5 %
|
Dollar Tree
|
|
9,927
|
|
2.4 %
|
Wawa
|
|
9,636
|
|
2.3 %
|
Sunbelt
Rentals
|
|
9,275
|
|
2.2 %
|
Home Depot
|
|
8,877
|
|
2.1 %
|
TBC
Corporation
|
|
8,291
|
|
2.0 %
|
Goodyear
|
|
7,578
|
|
1.8 %
|
AutoZone
|
|
7,297
|
|
1.7 %
|
Other(2)
|
|
187,500
|
|
44.4 %
|
Total
Portfolio
|
|
$421,861
|
|
100.0 %
|
|
|
|
Annualized Base Rent is
in thousands; any differences are the result of
rounding.
|
|
Bolded and italicized
tenants represent additions for the three months ended June 30,
2022.
|
(1)
|
Refer to footnote 1
on page 5 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 of
the Company's retail sectors as of June 30,
2022:
Sector
|
|
Annualized
Base Rent(1)
|
|
% of
ABR
|
|
|
|
|
|
Tire and Auto
Service
|
|
$39,737
|
|
9.4 %
|
Grocery
Stores
|
|
39,488
|
|
9.4 %
|
Home
Improvement
|
|
38,912
|
|
9.2 %
|
Convenience
Stores
|
|
31,133
|
|
7.4 %
|
General
Merchandise
|
|
28,864
|
|
6.8 %
|
Off-Price
Retail
|
|
25,706
|
|
6.1 %
|
Dollar
Stores
|
|
25,266
|
|
6.0 %
|
Auto Parts
|
|
24,456
|
|
5.8 %
|
Farm and Rural
Supply
|
|
20,067
|
|
4.8 %
|
Pharmacy
|
|
18,906
|
|
4.5 %
|
Consumer
Electronics
|
|
18,388
|
|
4.4 %
|
Crafts and
Novelties
|
|
13,728
|
|
3.3 %
|
Equipment
Rental
|
|
9,602
|
|
2.3 %
|
Warehouse
Clubs
|
|
9,412
|
|
2.2 %
|
Health
Services
|
|
8,787
|
|
2.1 %
|
Restaurants - Quick
Service
|
|
7,929
|
|
1.9 %
|
Discount
Stores
|
|
7,924
|
|
1.9 %
|
Health and
Fitness
|
|
7,248
|
|
1.7 %
|
Dealerships
|
|
6,475
|
|
1.5 %
|
Home
Furnishings
|
|
6,322
|
|
1.5 %
|
Restaurants - Casual
Dining
|
|
4,731
|
|
1.1 %
|
Specialty
Retail
|
|
4,517
|
|
1.1 %
|
Sporting
Goods
|
|
4,257
|
|
1.0 %
|
Financial
Services
|
|
4,062
|
|
1.0 %
|
Theaters
|
|
3,854
|
|
0.9 %
|
Pet
Supplies
|
|
2,604
|
|
0.6 %
|
Entertainment
Retail
|
|
2,323
|
|
0.5 %
|
Beauty and
Cosmetics
|
|
2,208
|
|
0.5 %
|
Shoes
|
|
1,628
|
|
0.4 %
|
Apparel
|
|
1,335
|
|
0.3 %
|
Miscellaneous
|
|
1,132
|
|
0.2 %
|
Office
Supplies
|
|
860
|
|
0.2 %
|
Total
Portfolio
|
|
$421,861
|
|
100.0 %
|
|
|
|
Annualized Base Rent is
in thousands; any differences are the result of
rounding.
|
(1)
|
Refer to footnote 1
on page 5 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 June 30,
2022:
State
|
|
Annualized
Base Rent(1)
|
|
% of
ABR
|
|
|
|
|
|
Texas
|
|
$29,291
|
|
6.9 %
|
North
Carolina
|
|
24,087
|
|
5.7 %
|
Florida
|
|
23,809
|
|
5.6 %
|
Ohio
|
|
23,448
|
|
5.6 %
|
Illinois
|
|
22,520
|
|
5.3 %
|
Michigan
|
|
21,911
|
|
5.2 %
|
New Jersey
|
|
21,249
|
|
5.0 %
|
Pennsylvania
|
|
20,470
|
|
4.9 %
|
California
|
|
17,088
|
|
4.1 %
|
New York
|
|
16,788
|
|
4.0 %
|
Georgia
|
|
14,143
|
|
3.4 %
|
Virginia
|
|
13,196
|
|
3.1 %
|
Connecticut
|
|
12,430
|
|
2.9 %
|
Wisconsin
|
|
11,383
|
|
2.7 %
|
Other(2)
|
|
150,048
|
|
35.6 %
|
Total
Portfolio
|
|
$421,861
|
|
100.0 %
|
|
|
|
Annualized Base Rent
is in thousands; any differences are the result of
rounding.
|
(1)
|
Refer to footnote 1 on
page 5 for the Company's definition of Annualized Base
Rent.
|
(2)
|
Includes states
generating less than 2.5% of Annualized Base Rent.
|
Capital Markets and Balance Sheet
Capital Markets
In May 2022, the Company completed
a follow-on public offering of 5,750,000 shares of common stock,
including the full exercise of the underwriters' option to purchase
additional shares, in connection with forward sale agreements. Upon
settlement, the offering is anticipated to raise net proceeds of
approximately $388.0 million after
deducting fees and expenses and making certain other adjustments as
provided in the equity distribution agreements. To date, the
Company has not received any proceeds from the sale of shares of
its common stock by the forward purchasers.
During the second quarter, the Company also entered into forward
sale agreements in connection with its ATM program to sell an
aggregate of 1,885,880 shares of common stock for anticipated net
proceeds of approximately $127.1
million.
The Company settled 4,667,850 shares under existing forward sale
agreements and received net proceeds of approximately $300.3 million during the second quarter. At
quarter end, the Company had 7,051,362 shares remaining to be
settled under existing forward sale agreements, which are
anticipated to raise net proceeds of approximately $475.8 million upon settlement.
The following table presents the Company's outstanding forward
equity offerings as of June 30,
2022:
Forward
Equity
Offerings
|
Shares
Sold
|
|
Shares
Settled
|
|
Shares
Remaining
|
|
Net
Proceeds
Received
|
|
Anticipated
Net
Proceeds
Remaining
|
|
|
|
|
|
|
|
|
|
|
Q2 2022 ATM Forward
Offerings
|
1,885,880
|
|
584,518
|
|
1,301,362
|
|
39,277,710
|
|
$87,775,202
|
May 2022 Forward
Offering
|
5,750,000
|
|
-
|
|
5,750,000
|
|
-
|
|
$387,993,325
|
Total Forward Equity
Offerings
|
7,635,880
|
|
584,518
|
|
7,051,362
|
|
39,277,710
|
|
$475,768,527
|
Balance Sheet
As of June 30, 2022, the Company's
net debt to recurring EBITDA was 5.0 times. The Company's proforma
net debt to recurring EBITDA was 3.8 times when deducting the
$475.8 million of anticipated net
proceeds from the outstanding forward equity offerings from the
Company's net debt of $1.9 billion at
quarter end. The Company's fixed charge coverage ratio was 5.1
times as of the end of the second quarter.
The Company's total debt to enterprise value was 24.8% as of
June 30, 2022. 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 and six months ended June
30, 2022, the Company's fully diluted weighted-average
shares outstanding were 75.6 million and 73.5 million,
respectively. The basic weighted-average shares outstanding for the
three and six months ended June 30,
2022 were 75.0 million and 73.1 million, respectively.
For the three and six months ended June
30, 2022, the Company's fully diluted weighted-average
shares and units outstanding were 75.9 million and 73.8 million,
respectively. The basic weighted-average shares and units
outstanding for the three and six months ended June 30, 2022 were 75.4 million and 73.5 million,
respectively.
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 June 30,
2022, 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 Wednesday, August 3,
2022 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 June 30,
2022, the Company owned and operated a portfolio of 1,607
properties, located in all 48 continental states and containing
approximately 33.8 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, one of the
most significant factors, however, is the potential adverse effect
of the current pandemic of the novel coronavirus, or COVID-19, 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
COVID-19 impacts the Company and its tenants will depend on future
developments, which are highly uncertain and cannot be predicted
with confidence, including the scope, severity and duration of the
pandemic, the actions taken to contain the pandemic or mitigate its
impact and the direct and indirect economic effects of the pandemic
and containment measures, among others. 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 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)
|
|
June 30,
2022
|
|
December 31,
2021
|
Assets:
|
|
|
|
Real Estate
Investments:
|
|
|
|
Land
|
$
1,762,244
|
|
$
1,559,434
|
Buildings
|
3,560,694
|
|
3,034,391
|
Accumulated
depreciation
|
(274,323)
|
|
(233,862)
|
Property under
development
|
43,051
|
|
7,148
|
Net real estate
investments
|
5,091,666
|
|
4,367,111
|
Real estate held for
sale, net
|
-
|
|
5,676
|
Cash and cash
equivalents
|
26,267
|
|
43,252
|
Cash held in
escrows
|
840
|
|
1,998
|
Accounts receivable -
tenants, net
|
61,406
|
|
53,442
|
Lease Intangibles, net
of accumulated amortization of $218,540 and $180,532
at June 30, 2022 and December 31, 2021, respectively
|
739,319
|
|
672,020
|
Other assets,
net
|
118,734
|
|
83,407
|
Total
Assets
|
$
6,038,232
|
|
$
5,226,906
|
|
|
|
|
Liabilities:
|
|
|
|
Mortgage notes payable,
net
|
$
71,824
|
|
$
32,429
|
Senior unsecured notes,
net
|
1,496,101
|
|
1,495,200
|
Unsecured revolving
credit facility
|
370,000
|
|
160,000
|
Dividends and
distributions payable
|
19,385
|
|
16,881
|
Accounts payable,
accrued expenses and other liabilities
|
70,338
|
|
70,005
|
Lease intangibles, net
of accumulated amortization of $32,720 and $29,726 at
June 30, 2022 and December 31, 2021, respectively
|
36,344
|
|
33,075
|
Total
Liabilities
|
$
2,063,992
|
|
$
1,807,590
|
|
|
|
|
Equity:
|
|
|
|
Preferred Stock, $.0001
par value per share, 4,000,000 shares authorized, 7,000
shares Series A outstanding, at stated liquidation value of $25,000
per share,
at June 30, 2022 and December 31, 2021
|
175,000
|
|
175,000
|
Common stock, $.0001
par value, 180,000,000 shares authorized, 79,842,743
and 71,285,311 shares issued and outstanding at
June 30, 2022 and December 31, 2021, respectively
|
8
|
|
7
|
Additional paid-in
capital
|
3,948,547
|
|
3,395,549
|
Dividends in excess of
net income
|
(182,518)
|
|
(147,366)
|
Accumulated other
comprehensive income (loss)
|
31,547
|
|
(5,503)
|
Total Equity - Agree
Realty Corporation
|
$
3,972,584
|
|
$
3,417,687
|
Non-controlling
interest
|
1,656
|
|
1,629
|
Total
Equity
|
$
3,974,240
|
|
$
3,419,316
|
Total Liabilities
and Equity
|
$
6,038,232
|
|
$
5,226,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agree Realty
Corporation
|
Consolidated
Statements of Operations and Comprehensive Income
|
($ in thousands,
except share and per share-data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
|
Rental
Income
|
$
104,793
|
|
$
82,494
|
|
$
203,105
|
|
$
160,253
|
Other
|
83
|
|
52
|
|
113
|
|
121
|
Total
Revenues
|
$
104,876
|
|
$
82,546
|
|
$
203,218
|
|
$
160,374
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
Real estate
taxes
|
$
7,979
|
|
$
6,158
|
|
$
15,591
|
|
$
11,855
|
Property operating
expenses
|
4,541
|
|
3,214
|
|
9,018
|
|
6,755
|
Land lease
expense
|
407
|
|
389
|
|
809
|
|
736
|
General and
administrative
|
7,651
|
|
6,241
|
|
15,272
|
|
13,118
|
Depreciation and
amortization
|
31,950
|
|
23,188
|
|
60,510
|
|
44,676
|
Provision for
impairment
|
-
|
|
-
|
|
1,015
|
|
-
|
Total Operating
Expenses
|
$
52,528
|
|
$
39,190
|
|
$
102,215
|
|
$
77,140
|
|
|
|
|
|
|
|
|
Gain (loss) on sale of
assets, net
|
17
|
|
6,767
|
|
2,326
|
|
9,712
|
Gain (loss) on
involuntary conversion, net
|
(25)
|
|
(14)
|
|
(50)
|
|
103
|
|
|
|
|
|
|
|
|
Income from
Operations
|
$
52,340
|
|
$
50,109
|
|
$
103,279
|
|
$
93,049
|
|
|
|
|
|
|
|
|
Other (Expense)
Income
|
|
|
|
|
|
|
|
Interest expense,
net
|
$
(15,512)
|
|
$
(12,549)
|
|
$
(29,442)
|
|
$
(24,202)
|
Income tax (expense)
benefit
|
(698)
|
|
(485)
|
|
(1,418)
|
|
(1,494)
|
Loss on early
extinguishment of term loans and settlement of related interest
rate swaps
|
-
|
|
(14,614)
|
|
-
|
|
(14,614)
|
|
|
|
|
|
|
|
|
Net
Income
|
$
36,130
|
|
$
22,461
|
|
$
72,419
|
|
$
52,739
|
|
|
|
|
|
|
|
|
Less Net Income
Attributable to Non-Controlling Interest
|
157
|
|
114
|
|
333
|
|
280
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Agree Realty Corporation
|
$
35,973
|
|
$
22,347
|
|
$
72,086
|
|
$
52,459
|
|
|
|
|
|
|
|
|
Less Series A Preferred
Stock Dividends
|
1,859
|
|
-
|
|
3,718
|
|
-
|
|
|
|
|
|
|
|
|
Net Income
Attributable to Common Stockholders
|
$
34,114
|
|
$
22,347
|
|
$
68,368
|
|
$
52,459
|
|
|
|
|
|
|
|
|
Net Income Per Share
Attributable to Common Stockholders
|
|
|
|
|
|
|
|
Basic
|
$
0.45
|
|
$
0.34
|
|
$
0.93
|
|
$
0.82
|
Diluted
|
$
0.45
|
|
$
0.34
|
|
$
0.93
|
|
$
0.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive
Income
|
|
|
|
|
|
|
|
Net Income
|
$
36,130
|
|
$
22,461
|
|
$
72,419
|
|
$
52,739
|
Amortization of
interest rate swaps
|
82
|
|
287
|
|
164
|
|
787
|
Change in fair value
and settlement of interest rate swaps
|
16,481
|
|
2,230
|
|
37,062
|
|
27,376
|
Total Comprehensive
Income (Loss)
|
52,693
|
|
24,978
|
|
109,645
|
|
80,902
|
Comprehensive Income
Attributable to Non-Controlling Interest
|
(233)
|
|
(128)
|
|
(509)
|
|
(294)
|
Comprehensive Income
Attributable to Agree Realty Corporation
|
$
52,460
|
|
$
24,850
|
|
$
109,136
|
|
$
80,608
|
|
|
|
|
|
|
|
|
Weighted Average Number
of Common Shares Outstanding - Basic
|
75,037,920
|
|
64,835,984
|
|
73,145,097
|
|
63,838,070
|
Weighted Average Number
of Common Shares Outstanding - Diluted
|
75,570,089
|
|
65,185,604
|
|
73,474,930
|
|
64,079,697
|
|
|
|
|
|
|
|
|
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
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Net Income
|
$ 36,130
|
|
$ 22,461
|
|
$ 72,419
|
|
$ 52,739
|
Less Series A Preferred
Stock Dividends
|
1,859
|
|
-
|
|
3,718
|
|
-
|
Net Income attributable
to OP Common Unitholders
|
34,271
|
|
22,461
|
|
68,701
|
|
52,739
|
Depreciation of rental
real estate assets
|
21,299
|
|
16,127
|
|
40,768
|
|
31,419
|
Amortization of lease
intangibles - in-place leases and leasing costs
|
10,550
|
|
6,905
|
|
19,472
|
|
12,955
|
Provision for
impairment
|
-
|
|
-
|
|
1,015
|
|
-
|
(Gain) loss on sale or
involuntary conversion of assets, net
|
8
|
|
(6,753)
|
|
(2,276)
|
|
(9,815)
|
Funds from Operations -
OP Common Unitholders
|
$ 66,128
|
|
$ 38,740
|
|
$
127,680
|
|
$ 87,298
|
Loss on extinguishment
of debt and settlement of related hedges
|
-
|
|
14,614
|
|
-
|
|
14,614
|
Amortization of above
(below) market lease
intangibles, net and assumed mortgage debt discount
|
8,369
|
|
5,260
|
|
16,547
|
|
10,015
|
Core Funds from
Operations - OP Common Unitholders
|
$ 74,497
|
|
$ 58,614
|
|
$
144,227
|
|
$
111,927
|
Straight-line accrued
rent
|
(3,095)
|
|
(2,967)
|
|
(6,230)
|
|
(5,564)
|
Stock based
compensation expense
|
1,743
|
|
1,617
|
|
3,378
|
|
2,981
|
Amortization of
financing costs
|
492
|
|
221
|
|
1,281
|
|
489
|
Non-real estate
depreciation
|
101
|
|
156
|
|
268
|
|
302
|
Adjusted Funds from
Operations - OP Common Unitholders
|
$ 73,738
|
|
$ 57,641
|
|
$
142,924
|
|
$
110,135
|
|
|
|
|
|
|
|
|
Funds from Operations
Per Common Share and OP Unit - Basic
|
$
0.88
|
|
$
0.59
|
|
$
1.74
|
|
$
1.36
|
Funds from Operations
Per Common Share and OP Unit - Diluted
|
$
0.87
|
|
$
0.59
|
|
$
1.73
|
|
$
1.35
|
|
|
|
|
|
|
|
|
Core Funds from
Operations Per Common Share and OP Unit - Basic
|
$
0.99
|
|
$
0.90
|
|
$
1.96
|
|
$
1.74
|
Core Funds from
Operations Per Common Share and OP Unit - Diluted
|
$
0.98
|
|
$
0.89
|
|
$
1.95
|
|
$
1.74
|
|
|
|
|
|
|
|
|
Adjusted Funds from
Operations Per Common Share and OP Unit - Basic
|
$
0.98
|
|
$
0.88
|
|
$
1.94
|
|
$
1.72
|
Adjusted Funds from
Operations Per Common Share and OP Unit - Diluted
|
$
0.97
|
|
$
0.88
|
|
$
1.94
|
|
$
1.71
|
|
|
|
|
|
|
|
|
Weighted Average Number
of Common Shares and OP Units Outstanding - Basic
|
75,385,539
|
|
65,183,603
|
|
73,492,716
|
|
64,185,689
|
Weighted Average Number
of Common Shares and OP Units Outstanding - Diluted
|
75,917,708
|
|
65,533,223
|
|
73,822,549
|
|
64,427,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
supplemental disclosure
|
|
|
|
|
|
|
|
Scheduled principal
repayments
|
$
211
|
|
$
198
|
|
$
418
|
|
$
393
|
Capitalized
interest
|
150
|
|
88
|
|
262
|
|
163
|
Capitalized building
improvements
|
2,743
|
|
2,280
|
|
3,843
|
|
2,454
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures
|
|
Funds from
Operations ("FFO" or "Nareit FFO")
FFO is defined by the National Association of Real Estate
Investment Trusts, Inc. ("Nareit") to mean net income computed in
accordance with GAAP, excluding gains (or losses) from sales of
real estate assets and/or changes in control, plus real estate
related depreciation and amortization and any impairment charges on
depreciable real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. Historical cost
accounting for real estate assets in accordance with GAAP
implicitly assumes that the value of real estate assets diminishes
predictably over time. Since real estate values instead have
historically risen or fallen with market conditions, most real
estate industry investors consider FFO to be helpful in evaluating
a real estate company's operations. FFO should not be considered an
alternative to net income as the primary indicator of the Company's
operating performance, or as an alternative to cash flow as a
measure of liquidity. Further, while the Company adheres to the
Nareit definition of FFO, its presentation of FFO is not
necessarily comparable to similarly titled measures of other REITs
due to the fact that all REITs may not use the same
definition.
|
|
Core Funds from
Operations ("Core FFO")
The Company defines Core FFO as Nareit FFO with the addback of (i)
noncash amortization of acquisition purchase price related to
above- and below- market lease intangibles and discount on assumed
debt and (ii) certain infrequently occurring items that reduce or
increase net income in accordance with GAAP. Management believes
that its measure of Core FFO facilitates useful comparison of
performance to its peers who predominantly transact in
sale-leaseback transactions and are thereby not required by GAAP to
allocate purchase price to lease intangibles. Unlike many of
its peers, the Company has acquired the substantial majority of its
net-leased properties through acquisitions of properties from third
parties or in connection with the acquisitions of ground leases
from third parties. Core FFO should not be considered an
alternative to net income as the primary indicator of the Company's
operating performance, or as an alternative to cash flow as a
measure of liquidity. Further, the Company's presentation of Core
FFO is not necessarily comparable to similarly titled measures of
other REITs due to the fact that all REITs may not use the same
definition.
|
|
Adjusted Funds from
Operations ("AFFO")
AFFO is a non-GAAP financial measure of operating performance used
by many companies in the REIT industry. AFFO further adjusts FFO
and Core FFO for certain non-cash items that reduce or increase net
income computed in accordance with GAAP. Management considers AFFO
a useful supplemental measure of the Company's performance,
however, AFFO should not be considered an alternative to net income
as an indication of its performance, or to cash flow as a measure
of liquidity or ability to make distributions. The Company's
computation of AFFO may differ from the methodology for calculating
AFFO used by other equity REITs, and therefore may not be
comparable to such other REITs.
|
|
|
|
|
|
|
|
|
Agree Realty
Corporation
|
Reconciliation of
Net Debt to Recurring EBITDA
|
($ in thousands,
except share and per-share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
June 30,
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
|
|
$
36,130
|
Interest expense,
net
|
|
|
|
|
|
|
15,512
|
Income tax
expense
|
|
|
|
|
|
|
698
|
Depreciation of rental
real estate assets
|
|
|
|
|
|
|
21,299
|
Amortization of lease
intangibles - in-place leases and leasing costs
|
|
|
|
10,550
|
Non-real estate
depreciation
|
|
|
|
|
|
|
101
|
(Gain) loss on sale or
involuntary conversion of assets, net
|
|
|
|
8
|
EBITDAre
|
|
|
|
|
|
|
$
84,298
|
|
|
|
|
|
|
|
|
Run-Rate Impact of
Investment, Disposition and Leasing Activity
|
|
|
|
|
|
|
$
4,104
|
Amortization of above
(below) market lease intangibles, net
|
|
|
|
8,311
|
Recurring
EBITDA
|
|
|
|
|
|
|
$
96,713
|
|
|
|
|
|
|
|
|
Annualized Recurring
EBITDA
|
|
|
|
|
|
|
$
386,852
|
|
|
|
|
|
|
|
|
Total Debt
|
|
|
|
|
|
|
$
1,954,467
|
Cash, cash equivalents
and cash held in escrows
|
|
|
|
|
|
(27,107)
|
Net Debt
|
|
|
|
|
|
|
$
1,927,360
|
|
|
|
|
|
|
|
|
Net Debt to
Recurring EBITDA
|
|
|
|
|
|
|
5.0x
|
|
|
|
|
|
|
|
|
Net Debt
|
|
|
|
|
|
|
$
1,927,360
|
Anticipated Net
Proceeds from ATM Forward Offerings
|
|
|
|
|
|
(87,775)
|
Anticipated Net
Proceeds from May 2022 Forward Offering
|
|
|
|
(387,993)
|
Proforma Net
Debt
|
|
|
|
|
|
|
$
1,451,592
|
|
|
|
|
|
|
|
|
Proforma Net Debt to
Recurring EBITDA
|
|
|
|
|
|
|
3.8x
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
EBITDAre
EBITDAre is defined by Nareit to mean net income computed in
accordance with GAAP, plus interest expense, income tax expense,
depreciation and amortization, any gains (or losses) from sales of
real estate assets and/or changes in control, any impairment
charges on depreciable real estate assets, and after adjustments
for unconsolidated partnerships and joint ventures. The Company
considers the non-GAAP measure of EBITDAre to be a key supplemental
measure of the Company's performance and should be considered along
with, but not as an alternative to, net income or loss as a measure
of the Company's operating performance. The Company considers
EBITDAre a key supplemental measure of the Company's operating
performance because it provides an additional supplemental measure
of the Company's performance and operating cash flow that is widely
known by industry analysts, lenders and investors. The Company's
calculation of EBITDAre may not be comparable to EBITDAre reported
by other REITs that interpret the Nareit definition differently
than the Company.
Recurring EBITDA
The Company defines Recurring EBITDA as EBITDAre with the addback
of noncash amortization of above- and below- market lease
intangibles, and after adjustments for the run-rate impact of the
Company's investment and disposition activity for the period
presented, as well as adjustments for non-recurring benefits or
expenses. The Company considers the non-GAAP measure of Recurring
EBITDA to be a key supplemental measure of the Company's
performance and should be considered along with, but not as an
alternative to, net income or loss as a measure of the Company's
operating performance. The Company considers Recurring EBITDA a key
supplemental measure of the Company's operating performance because
it represents the Company's earnings run rate for the period
presented and because it is widely followed by industry analysts,
lenders and investors. Our Recurring EBITDA may not be
comparable to Recurring EBITDA reported by other companies that
have a different interpretation of the definition of Recurring
EBITDA. Our ratio of net debt to Recurring EBITDA is used by
management as a measure of leverage and may be useful to investors
in understanding the Company's ability to service its debt, as well
as assess the borrowing capacity of the Company. Our ratio of
net debt to Recurring EBITDA is calculated by taking annualized
Recurring EBITDA and dividing it by our net debt per the
consolidated balance sheet.
Net Debt
The Company defines Net Debt as total debt less cash, cash
equivalents and cash held in escrows. The Company considers the
non-GAAP measure of Net Debt to be a key supplemental measure of
the Company's overall liquidity, capital structure and leverage.
The Company considers Net Debt a key supplemental measure because
it provides industry analysts, lenders and investors useful
information in understanding our financial condition. The Company's
calculation of Net Debt may not be comparable to Net Debt reported
by other REITs that interpret the definition differently than the
Company. The Company presents Net Debt on both an actual and
proforma basis, assuming the net proceeds of the Forward Offerings
(see below) are used to pay down debt. The Company believes the
proforma measure may be useful to investors in understanding the
potential effect of the Forward Offerings on the Company's capital
structure, its future borrowing capacity, and its ability to
service its debt.
Forward Offerings
The Company has 1,301,362 shares remaining to be settled under the
ATM Forward Offerings. Upon settlement, the offerings are
anticipated to raise net proceeds of approximately $87.8 million
based on the applicable forward sale prices as of June 30, 2022.
The applicable forward sale price varies depending on the offering.
The Company is contractually obligated to settle the ATM Forward
Offerings by certain dates in May 2023. In addition, in May 2022,
the Company completed an underwritten public offering of 5,750,000
shares of common stock, including the full exercise of the
underwriters' option to purchase additional shares, in connection
with forward sale agreements. Upon settlement, the May 2022 Forward
Offering is anticipated to raise net proceeds of approximately
$388.0 million based on the applicable forward sale price as of
June 30, 2022. The Company is contractually obligated to settle the
offering by May 2023.
|
|
|
|
|
|
|
|
|
Agree Realty
Corporation
|
Rental
Income
|
($ in thousands,
except share and per share-data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Rental Income
Source(1)
|
|
|
|
|
|
|
|
Minimum
rents(2)
|
$ 98,239
|
|
$ 76,200
|
|
$
189,680
|
|
$
147,432
|
Percentage
rents(2)
|
88
|
|
6
|
|
723
|
|
491
|
Operating cost
reimbursement(2)
|
11,682
|
|
8,581
|
|
22,961
|
|
16,781
|
Straight-line rental
adjustments(3)
|
3,095
|
|
2,967
|
|
6,230
|
|
5,564
|
Amortization of (above)
below market lease intangibles(4)
|
(8,311)
|
|
(5,260)
|
|
(16,489)
|
|
(10,015)
|
Total Rental
Income
|
$
104,793
|
|
$
82,494
|
|
$
203,105
|
|
$
160,253
|
|
|
|
|
|
|
|
|
(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.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/agree-realty-corporation-reports-second-quarter-2022-results-301598298.html
SOURCE Agree Realty Corporation