In This Article:
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Liquidity: Over $2 billion, including $920 million of outstanding forward equity.
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Leverage: 3.3 times pro forma net debt to recurring EBITDA.
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Investment Activity: $371 million invested in 127 retail net lease properties in Q4 2024.
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Acquisitions: 98 assets acquired for over $341 million in Q4 2024.
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Weighted Average Cap Rate: 7.3% for Q4 2024 acquisitions.
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Weighted Average Lease Term: 12.3 years for Q4 2024 acquisitions.
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Investment Grade Exposure: 73% of annualized base rents from acquisitions in Q4 2024.
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Core FFO per Share: $1.02 for Q4 2024; $4.08 for full year 2024.
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AFFO per Share: $1.04 for Q4 2024; $4.14 for full year 2024.
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2025 AFFO Guidance: $4.26 to $4.30 per share, representing approximately 3.5% growth.
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Dividend: $0.253 per common share monthly, equating to an annualized dividend of $3.04 per share.
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Portfolio Size: 2,370 properties across all 50 states.
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Occupancy Rate: 99.6% at year-end 2024.
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Agree Realty Corp (NYSE:ADC) maintained strategic discipline and delivered meaningful AFFO per share growth despite market volatility.
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The company proactively strengthened its balance sheet with $1.1 billion of forward equity, resulting in over $2 billion of liquidity.
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ADC's investment strategy focuses on high-quality retailers, with 73% of annualized base rents from investment-grade retailers.
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The company achieved a record year in development and DSP platforms, with 41 projects completed or under construction.
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ADC's portfolio remains strong with a 99.6% occupancy rate and significant investment-grade exposure.
Negative Points
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The volatile interest rate environment poses challenges for capital allocation and investment strategies.
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Seller pricing expectations remain high, complicating acquisition opportunities in a fragmented market.
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The company faces potential credit loss risks, with 50 basis points of credit loss assumed in 2025 guidance.
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ADC's forward equity position could lead to treasury stock method dilution if stock prices remain high.
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The retail sector faces ongoing challenges from tariffs and macroeconomic factors, impacting consumer spending.
Q & A Highlights
Q: Can you provide insight into the typical renewal process for ground leases and whether there is significant mark-to-market upside? A: Joey Agree, CEO: There is significant mark-to-market upside. The case study mentioned involved a tenant with no remaining options, initially offering to extend at a flat rate. We had offers significantly higher and required the tenant to sign a new 15-year ground lease at market rates. This is indicative of the potential upside when we regain control of the building.