Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (September 2017)
26 slides from Agree Realty's investor presentation, Sep 6, 2017
Slide 1: Develop | Acquire | Partner – September 2017
DEVELOP | ACQUIRE | PARTNER SEPTEMBER 2017
Slide 2: Safe Harbor
Safe Harbor This presentation contains certain statements that are the Company’s and Management’s hopes, intentions, beliefs, expectations, or projections of the future and might be considered forward-looking statements under Federal Securities laws. Prospective investors are cautioned that any such
Slide 3: Agree Realty Corporation (NYSE: ADC)
Agree Realty Corporation (NYSE: ADC) Retail net lease REIT focused on growth through the acquisition and development of high-quality retail properties Our Company ▪ $1.9 billion retail net lease REIT headquartered in Bloomfield Hills, MI and listed on the NYSE under ticker ADC(1) ▪ 413 retail proper
Slide 4: Recent Highlights
Recent Highlights Consistent execution has led to enhanced shareholder value Increased the low end of 2017 disposition guidance to a range of $30 million to $50 million Raised 2017 acquisition guidance by 25% to a range of $250 million to $275 million Completed June 2017 follow-on equity offering fo
Slide 5: Investment Strategy
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Slide 6: Differentiated Real Estate Investment Strategy
Differentiated Real Estate Investment Strategy Leverage real estate acumen and three investment platforms to identify best risk-adjusted retail net lease opportunities ADC’s synergistic investment platforms adhere to the same core principles while pursuing opportunities along the full spectrum of ne
Slide 7: ADC's Unique Dual Capabilities
ADC’s Unique Dual Capabilities Emphasis on comprehensive real estate solutions drive multi-faceted partnerships DEVELOPMENT SALE-LEASEBACK ✓ Spearheading retailer ✓ Track record of execution expansion programs for over as acquirer and real estate four decades partner • In-house expertise • Ability t
Slide 8: Track Record of Execution
Track Record of Execution Since 2010, ADC has invested more than $1.2 billion in high-quality retail net lease properties Investment Activity $ in millions $350.0 $38.0 $300.0 $295.8 $250.0 $14.9 $220.1 $200.0 $17.7 $150.0 $147.5 $100.0 $28.4 $81.5 $73.3 $50.0 $38.6 $0.0 2011 2012 2013 2014 2015 201
Slide 9: Accelerating Growth
Accelerating Growth Established real estate capabilities and growing market presence driving increased investment opportunities # of Properties Annualized Base Rent (“ABR”) $ in millions 420 $110.0 297 413 $108.1 366 348 $95.0 $94.3 276 $80.0 279 $72.4 204 209 $65.0 $56.5 132 $50.0 130 109 $45.1 $38
Slide 10: Active Portfolio Management
Active Portfolio Management Our focus on real estate fundamentals guides non-core asset sales and capital recycling Total Dispositions 2011-2017: $124M $30M - $50M $12.9M $29.0M $29.7M Chippewa Commons North Lakeland Plaza Chippewa Falls, WI Lakeland, FL Ocala, FL Petoskey Town Center Ferris Commons
Slide 11: Portfolio Summary
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Slide 12: Portfolio Transformation
Portfolio Transformation Execution has led to increased portfolio diversification and improved quality of rental income Property Type (% ABR) Top 3 Tenant Concentration (% ABR) 6% Tenant Ground Leases 70.0% Retail Retail 70.0% Net Lease Net Lease 71% 98% 55.0% Shopping 40.0% Centers 29% 2% 7% 25.0%
Slide 13: Portfolio Transformation
Portfolio Transformation January 2015 June 2017 Pharmacy 29.7% Pharmacy 13.7% Top QSRs 7.5% Grocery 7.3% Sectors Apparel 6.1% QSRs 6.3% 21.9% 8.8% Top Tenants 4.4% 3.9% 4.4% 3.4% # of 209 properties 413 properties Properties Enterprise $0.8 billion $1.9 billion(1) Value (1) As of September 7, 2017.
Slide 14: Current Portfolio Snapshot
Current Portfolio Snapshot Tenants Lease Expirations $ in millions Annualized Tenant / Concept Base Rent(1) % of Total 60% 57% $9.6 8.8% 50% 4.2 3.9% 40% 30% 3.7 3.4% 20% 3.1 2.9% 10% 9% 5% 6% 7% 5% 2.7 2.5% 0% 2% 4% 2% 4% 0% 2.7 2.5% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027+ 2.6 2.4%
Slide 15: National and Super-Regional Retailers
National and Super-Regional Retailers Industry-leading brands and retailers operating in e-commerce resistant sectors Retail Tenant Type (% ABR) National 75% z Super-Regional 17% Franchise 8% z z As of June 30, 2017. 14
Slide 16: Leading Pure-Play Retail Net Lease REIT
Leading Pure-Play Retail Net Lease REIT Diversified portfolio of high-quality retail properties occupied by superior credit tenants under long-term leases Retail % of Total Portfolio Retail Investment Grade Tenants 100.0% 50.0% 100% 100% 85% 44% 75.0% 80% 40.0% 39% 65% 63% 50.0% 30.0% 31% Undisclose
Slide 17: Leading E-Commerce Resistant Retailers
Leading E-Commerce Resistant Retailers New Orleans, Louisiana ▪ Acquisition of top-floor urban retail condominium ▪ Subject to a new 15-year net lease with Dave & Buster’s ▪ Purchased at an 8.8% cap rate; more than 200 basis points wide of recent sale-leasebacks ▪ Located within downtown New Orleans
Slide 18: Leading E-Commerce Resistant Retailers
Leading E-Commerce Resistant Retailers Oxford, Alabama ▪ $11 million off-market transaction ▪ Acquired at a 7.4% year-one cap rate ▪ Sourced through a longstanding developer relationship ▪ Located at major freeway interchange within the dominant retail corridor 17
Slide 19: Leading E-Commerce Resistant Retailers
Leading E-Commerce Resistant Retailers Grandview Heights, Ohio ▪ Located within one of the fastest growing areas of the Columbus MSA ▪ Part of Grandview Yard mixed-use development, which includes Nationwide’s new corporate campus with over 3,500 employees ▪ Three-mile daytime population density of 4
Slide 20: Leading E-Commerce Resistant Retailers
Leading E-Commerce Resistant Retailers Cash GAAP Term Cap Rate Cap Rate Before 5.4 7.5% 7.8% Extensions years After 15.0 7.5% 7.9% Extensions years Market 15.0 (1) 5.8% Varies Six-Property Portfolio Comps years ▪ $20 million portfolio of six Tractor Supply stores located in Texas and Louisiana ▪ Neg
Slide 21: Leading E-Commerce Resistant Retailers
Leading E-Commerce Resistant Retailers Corporate Guarantee from Lowe’s Companies, Inc. (S&P: A-) Sunnyvale, California Boynton Beach, Florida ▪ Located in Silicon Valley ▪ Located in Southeast Florida ▪ Acquired as part of the $79.5 million portfolio ▪ Former site of regional shoe retailer currently
Slide 22: Development and PCS Projects
Development and PCS Projects Completed or commenced 7 projects totaling $45.9 million in the first half of 2017 Recently Completed Wawa Chick-fil-A Starbucks Orlando, FL Frankfort, KY North Lakeland, FL Burger King Texas Roadhouse Camping World Heber, UT Mount Pleasant, MI Georgetown, KY Under Const
Slide 23: Financial Overview
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Slide 24: Capital Structure, Financial Ratios
Capital Structure, Financial Ratios Debt Maturities(1) $ in millions (2) $250.0 $100.0 $100.0 $80.0 $68.9 $60.0 $60.0 $50.0 $50.0 $40.0 $20.0 $25.0 $19.7 $7.4 $7.6 $0.0 $0.0 2017 2018 2019 2020 $0.0 2021 $0.0 2022 2023 2024 2025 2026 2027 2028 Revolving Credit Facility Mortgage/Unsecured Debt Capita
Slide 25: Investment Summary Highlights
Investment Summary Highlights ➢ Highest-quality retail real estate ➢ Most secure cash flows ➢ Strongest balance sheet ➢ Proven track record of execution ➢ Consistent dividend growth ➢ Robust growth trajectory 24
Slide 26: Agree Realty Corporation – Develop | Acquire | Partner
AGREE REALTY CORPORATION DEVELOP | ACQUIRE | PARTNER ADC NYSE
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