Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (August 2020)
28 slides from Agree Realty's investor presentation, August 2020
Slide 1: DEVELOP | ACQUIRE | PARTNER
DEVELOP | ACQUIRE | PARTNER August 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements This presentation contains forward-looking statements 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
Slide 3: Agree Realty Corporation Overview (NYSE: ADC)
Agree Realty Corporation Overview (NYSE: ADC) Net lease growth REIT focused on the acquisition and development of high-quality retail properties Our Company ▪ Founded in 1971 by Executive Chairman, Richard Agree; public on the NYSE since 1994 ▪ $4.7 billion(1) retail net lease REIT headquartered in
Slide 4: Consistency
consistency [ kuh n-sis-tuh n-see ] noun steadfast adherence to the same principles, course, or form
Slide 5: Consistent Performance Results Through COVID-19
Consistent Performance Results Through COVID-19 Raised 2020 acquisition guidance to $900 million to $1.1 billion(1) ▪ Closed $350 million inaugural bond offering of 2.900% senior unsecured notes due 2030 (2) ▪ $827.7 million of gross equity proceeds raised in the first half of 2020 ▪ 1.6x Proforma N
Slide 6: Agree Realty at June 30, 2020
Agree Realty at June 30, 2020 Company Overview Tenants $ in millions Annualized Tenant / Concept Base Rent % of Total Share Price (1) $68.79 $17.9 7.6% Equity Market 10.0 4.3% $3.7 Billion Capitalization(1)(2) 9.3 4.0% 9.0 3.8% Property Count 936 properties 8.2 3.5% Top 3 Tenant 8.0 3.4% 15.8% Conce
Slide 7: The Country's Leading Retail Portfolio
The Country’s Leading Retail Portfolio
Slide 8: Strong Investment Grade Portfolio
Strong Investment Grade Portfolio Best-in-class retailers with conservative balance sheets Retail Credit Type (% ABR) National Investment Grade(1) 61% Sub-Investment Grade Not Rated Super-Regional 23% 16% Franchise z As of June 30, 2020. Any differences are a result of rounding. (1) Based on ABR der
Slide 9: National and Super-Regional Retailers
National and Super-Regional Retailers Industry-leaders operating in e-commerce resistant sectors Retail Tenant Type (% ABR) National National 85% Super-Regional Franchise13% Super-Regional 2% z As of June 30, 2020. Any differences are a result of rounding. 8
Slide 10: Ground Lease Portfolio Breakdown
Ground Lease Portfolio Breakdown Fee simple ownership + significant tenant investment (1) Ground Lease Portfolio Overview Leading Ground Lease Tenants ▪ 69 properties ▪ 8.0% of total ADC portfolio ABR ▪ 10.4 years weighted-average lease term Ground Lease Credit Overview (% ABR) Top Ground Lease Tena
Slide 11: Limited Exposure to At-Risk Sectors
Limited Exposure to At-Risk Sectors Since January 1, 2018 Private % E-Commerce Recession Real Estate Sector Notable Tenants Equity Comments ABR(1) Resistance Resistance Attributes Change in Sponsorship Exposure(2) Private equity sponsorship, proliferation of low Health & Fitness 3.2% High Yes High W
Slide 12: Leading, Pure-Play Retail Net Lease REIT
Leading, Pure-Play Retail Net Lease REIT Diversified portfolio of high-quality retail properties occupied by investment grade tenants under long-term leases Retail % of Total Portfolio Investment Grade Tenants 100.0% 100% 100% 60.0% 80.0% 61% 84% 81% 50.0% 60.0% 66% 48% 58% 40.0% 40.0% 37% 30.0% 20.
Slide 13: Disciplined Investment Strategy & Active Portfolio Management
Disciplined Investment Strategy & Active Portfolio Management
Slide 14: Our Investment Strategy
Our Investment Strategy Agree leverages its three distinct investment platforms to target industry-leading retailers in e-commerce and recession resistant sectors Three-Pronged Growth Strategy ▪ Utilize acquisitions, development and partner capital solutions platforms to provide comprehensive real e
Slide 15: What Has ADC Been Investing In?
What Has ADC Been Investing In? ▪ The retail landscape continues to dynamically evolve as market forces cause disruption and change ▪ To mitigate risk in a period of continued disruption, the Company adheres to a number of investment criteria, with a focus on four core principles: ▪ E-commerce resis
Slide 16: Large & Fragmented Opportunity Set
Large & Fragmented Opportunity Set Focused on the leading retail operators in the United States ADC reviewed more than $30 billion in opportunities since 2018 Rents ≤ market Market Rents Fungibility of building Limited competition Competition Strong market presence Access Real Estate Visibility Fund
Slide 17: Ramping Investment Activity
Ramping Investment Activity ADC has invested more than $3.3 billion in high-quality retail net lease properties since 2010 Investment Activity $ in millions $1,100.0 $19.1 $1,000.0 $900 to $900.0 $1.1B $800.0 $32.4 $700.0 $74.4 $701.4 $600.0 $607.0 $500.0 $400.0 $62.7 $300.0 $38.0 $336.9 $14.9 $295.
Slide 18: Active Portfolio Management
Active Portfolio Management Focused on non-core asset sales & capital recycling Total Dispositions 2010-2020: $340 million(1) $67.6M(1) $67.2M Michigan (3) Belton, MO $45.8M Upland, CA Maplewood, MN $44.1M Atlantic Beach, FL Apopka, FL Flowood, MS Indianapolis, IN $29.7M Minnesota (3) LA (1) & PA (1
Slide 19: Fortified Balance Sheet
ee eee Fortified Balance Sheet
Slide 20: Leading With Our "Fortress" Balance Sheet
Leading With Our “Fortress” Balance Sheet Debt Maturities $ in millions $500.0(1) $475.0(2) $140.0 $120.0 $125.0 $100.0 $100.0 $100.0 $100.0 $80.0 $40.0 $60.0 $60.0 $50.0 $50.0 $40.0 $28.3 $20.0 $5.6 $0.0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Revolving Credit Facility Unsecured
Slide 21: Capital Markets Track Record
Capital Markets Track Record Strong capital markets execution has provided ample liquidity; $3.8 billion in activity since 2010 $ millions Capital Markets Activity $828 $1,200 $828 $1,000 $800 $531 $600 $433 $400 $237 $229 $350 $200 $225 $77 $40 $100 $125 $100 $100 $65 $0 $22 2014 2015 2016 2017 201
Slide 22: Low Leverage = Strong Positioning
Low Leverage = Strong Positioning ADC has been at or below 4x Proforma Net Debt to Recurring EBITDA since 2018 5.4x 5.1x 5.0x 4.8x 4.8x 4.7x 4.7x 4.4x 4.5x 4.0x 4.0x 3.7x 3.7x 3.5x 3.4x 3.3x 3.2x 3.2x 2.5x 1.6x Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Net Debt to Recurri
Slide 23: Conclusion
ee Conclusion
Slide 24: Agree Realty's ESG Practices
Agree Realty’s ESG Practices Dedicated to sustainability and good corporate citizenship Environmental Practices ✓ Embraces responsibility to be a good steward of the environment and to use natural resources carefully ✓ Focus on industry leading, national & super-regional retailers provides for a rel
Slide 25: Investment Summary Highlights
Investment Summary Highlights ➢ Fortified balance sheet ➢ Highest-quality retail real estate ➢ Investment grade issuer ratings ➢ Multi-year track record of execution ➢ Well-covered & consistent dividend ➢ Robust growth trajectory 24
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes a non-GAAP financial measure, Net Debt to Recurring EBITDA, which is presented on an actual and proforma basis. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure appears on the following page. The c
Slide 27: Net Debt to Recurring EBITDA Reconciliation
Net Debt to Recurring EBITDA Reconciliation Net Income Interest expense, net Income tax expense Depreciation of rental real estate assets Amortization of leasing costs Amortization of lease intangibles - in-place leases and leasing costs Non-real estate depreciation Provision for impairment (Gain) l
Slide 28: DEVELOP | ACQUIRE | PARTNER
AGREE REALTY CORPORATION DEVELOP | ACQUIRE | PARTNER ADC NYSE