GICS Sector : Real Estate
Agree Realty Corporation is a publicly traded real estate investment trust primarily engaged in the acquisition and development of properties net leased to industry-leading retail tenants.As of September 30, 2020, the Company owned and operated a portfolio of 1,027 properties, located in 45 states and containing approximately 21.0 million square feet of gross leasable area.The Company's common stock is listed on the New York Stock Exchange under the symbol "ADC". Show Full description
Agree Realty Corporation reported a stellar third quarter 2025, with core FFO per share reaching $1.09, an 8.4% increase from the same period last year, and AFFO per share rising 7.2% year-over-year to $1.11, slightly beating analyst estimates of $1.08. The company's actual EPS came out at $1.1. The strong performance was driven by a record investment volume of over $450 million across all three platforms, bringing the total investment guidance for 2025 to a new range of $1.5 to $1.65 billion, a 65% increase from the previous year.
Publication Date: Oct -23
The acquisitions had a weighted average cap rate of 7.2% and a weighted average lease term of 10.7 years, with 70% of the annualized base rent acquired from investment-grade retailers. The company's investment volume jumped in the third quarter, and it expects to invest $1.6 billion in 2025. The company has grown its investment team and continues to invest in technology, including AI, to improve its processes.
The company raised its AFFO per share guidance to a new range of $4.31 to $4.33 for the year, representing approximately 4.4% year-over-year growth. The company's guidance for credit losses has tightened to 25 basis points, reflecting the portfolio's strong performance. Analysts estimate next year's revenue growth at 12.0%, indicating a positive outlook for the company.
The company's liquidity profile remains strong, with over $1.9 billion of liquidity and no material debt maturities until 2028. Subsequent to quarter end, the company secured commitments for a $350 million five-and-a-half-year delayed draw term loan that will mature in 2031. The company has now locked in attractively priced equity and debt capital to fund its growth well into 2026.
With a P/E Ratio of 43.73 and a Dividend Yield of 4.06%, the company's valuation appears to be reasonable, considering its strong growth prospects and stable dividend payments. The company's ROIC is 40.04%, indicating efficient use of capital. The Net Debt / EBITDA ratio is 5.81, suggesting a manageable debt burden.
The company is optimistic about its growth prospects, citing a strong pipeline of development projects and acquisition opportunities. Joey Agree emphasized that the company's business model is differentiated from other net lease companies, with a focus on creating a real estate company that can effectuate growth across multiple platforms.
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Rental income from Agree Realty Corporation is driven by increasing demand for net lease retail properties, particularly in the United States. Growing e-commerce and omnichannel retailing are fueling demand for logistics and distribution centers, while the rise of experiential retail is boosting demand for retail spaces.
Agree Realty's non-core operations, including investments and miscellaneous items, are expected to grow steadily driven by increasing diversification of revenue streams, strategic investments, and opportunistic acquisitions.
Agree Realty Corporation acquires and develops single-tenant net lease properties, primarily in the retail sector, providing a steady income stream to investors.
The company owns and operates a portfolio of retail properties, including shopping centers, strip centers, and freestanding stores, generating rental income.
Agree Realty Corporation offers development and redevelopment services, transforming underutilized properties into thriving retail destinations.
The company provides acquisition and disposition services, facilitating the buying and selling of net lease properties and retail assets.
The threat of substitutes for Agree Realty Corporation is moderate, as there are alternative options for investors seeking real estate investment trusts (REITs) with similar investment objectives.
The bargaining power of customers is low, as Agree Realty Corporation's properties are diversified across various industries and tenants, reducing dependence on a single customer.
The bargaining power of suppliers is low, as Agree Realty Corporation has a diversified portfolio of properties, reducing reliance on a single supplier.
The threat of new entrants is high, as the REIT industry is relatively easy to enter, and new companies can easily raise capital to invest in real estate.
The intensity of rivalry is moderate, as Agree Realty Corporation operates in a competitive industry with several established players, but has a diversified portfolio and a strong management team to mitigate the impact of competition.
| Value | |
|---|---|
| Debt Weight | 31.68% |
| Debt Cost | 3.95% |
| Equity Weight | 68.32% |
| Equity Cost | 6.57% |
| WACC | 5.74% |
| Leverage | 46.37% |
Value: 4.2
Growth: 5.2
Quality: 7.9
Yield: 8.0
Momentum: 5.0
Volatility: 9.0
1-Year Total Return ->
Value: 2.9
Growth: 4.3
Quality: 6.7
Yield: 8.0
Momentum: 5.0
Volatility: 10.0
1-Year Total Return ->
Value: 2.8
Growth: 4.8
Quality: 6.7
Yield: 7.0
Momentum: 4.0
Volatility: 10.0
1-Year Total Return ->
Value: 4.1
Growth: 5.9
Quality: 4.8
Yield: 8.0
Momentum: 3.0
Volatility: 9.0
1-Year Total Return ->
Value: 2.6
Growth: 4.6
Quality: 6.6
Yield: 7.0
Momentum: 5.0
Volatility: 9.0
1-Year Total Return ->
Value: 3.3
Growth: 3.3
Quality: 6.5
Yield: 8.0
Momentum: 4.0
Volatility: 9.3
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