Agree Realty Corporation · NYSE:ADC
Agree Realty — Investor Presentation (May 2016)
31 slides from Agree Realty's investor presentation, May 10, 2016
Slide 1: Develop | Acquire | Partner
DEVELOP | ACQUIRE | PARTNER MAY 2016
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 growth company focused on the acquisition and development of high-quality retail properties Our Company $1.3 billion retail net lease REIT headquartered in Bloomfield Hills, MI and listed on the NYSE under ticker ADC 301 retail properties tot
Slide 4: Recent Highlights
Recent Highlights Consistent execution has led to enhanced shareholder value Increased Q1 2016 FFO per share by 8.5% and Q1 2016 AFFO per share by 7.9% Invested in 13 retail net lease assets for an aggregate investment of $38.3 million in Q1 2016 Q1 2016 acquisition weighted-average cap rate of 7.
Slide 5: Portfolio Summary
Portfolio Summary
Slide 6: Accelerating Growth
Accelerating Growth Established real estate capabilities and growing market presence driving increased investment opportunities # of Properties Annualized Base Rent (“ABR”) $ millions 310 $80.0 297 301 $77.3 279 $72.4 260 $70.0 210 $60.0 209 $56.5 160 $50.0 $45.1 130 110 $40.0 109 $38.1 $36.4 87 81
Slide 7: Active Portfolio Management
Active Portfolio Management Our focus on real estate fundamentals guides non-core asset sales and capital recycling Total Dispositions 2010-2015: $86.0M $15.9M $12.9M $29.0M Chippewa Commons North Lakeland Plaza Columbus, OH Chippewa Falls, WI Lakeland, FL $14.4M $8.3M Plymouth Commons Petoskey Town
Slide 8: 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 80.0% Ground Leases Retail Retail Net Lease Net Lease 70.0% 60.0% 71% 98% Shopping 40.0% Centers 29% 2% 8% 20.0%
Slide 9: 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 Investment Grade Tenants 100.0% 52.0% 100% 100% 47.0% 50% 90% 75.0% 79% 42.0% 44% 42% 61% 37.0% 50.0% 57% 32.0% Undi
Slide 10: Investment Strategy
Investment Strategy
Slide 11: Unique Real Estate Investment Strategy
Unique Real Estate Investment Strategy Leverage real estate acumen and naturally overlapping investment platforms to identify best risk-adjusted retail net lease opportunities ADC’s three investment platforms adhere to the same principles while pursuing opportunities along the full spectrum of net l
Slide 12: 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 77% z Super-Regional Franchise 13% 10% z z As of May 9, 2016. 11
Slide 13: Emphasis on Tenant Real Estate Solutions
Emphasis on Tenant Real Estate Solutions Unique dual capabilities drive opportunistic value-add partnerships with retailers nationwide DEVELOPMENT SALE-LEASEBACK Spearheading retailer Track record of execution expansion programs for over as acquirer and real estate 3 decades partner • In-house e
Slide 14: Track Record of Execution
Track Record of Execution Since 2010, ADC has invested over $700 million in high-quality retail net lease properties Investment Activity $ millions $250.0 $14.9 $220.1 $200.0 $17.7 $150.0 $147.5 $100.0 $28.4 $81.5 $73.3 $50.0 $14.1 $36.8 $38.6 $0.0 2010 2011 2012 2013 2014 2015 Acquisitions Developm
Slide 15: High-Quality Retail Real Estate: Ann Arbor, Michigan
High-Quality Retail Real Estate = Stronger Residual Values Ann Arbor, Michigan Redevelopment of 1937 historic building into flagship campus store Off-market transaction Centrally located on the hard corner directly across from the Diag on the University of Michigan’s Central Campus 14
Slide 16: High-Quality Retail Real Estate: Lake Zurich, Illinois
High-Quality Retail Real Estate = Stronger Residual Values Lake Zurich, Illinois Completed off-market acquisition from repeat seller Located at signalized intersection within dominant retail corridor Benefits from strong demographics and traffic counts 15
Slide 17: High-Quality Retail Real Estate: Charlotte, North Carolina
High-Quality Retail Real Estate = Stronger Residual Values Charlotte, North Carolina Acquisition of ground floor retail condominium Located within downtown Charlotte, near upper income condominium and multi- family developments Small format urban grocery component of a larger mixed-use develop
Slide 18: High-Quality Retail Real Estate: Grand Chute, Wisconsin
High-Quality Retail Real Estate = Stronger Residual Values Grand Chute, Wisconsin Completed acquisition from liquidating non-traded REIT 78,977 square foot multi-tenant net lease asset located at signalized intersection Located within the dominant retail corridor of Appleton, Wisconsin 17
Slide 19: High-Quality Retail Real Estate: Brooklyn, Ohio
High-Quality Retail Real Estate = Stronger Residual Values Brooklyn, Ohio Acquired off-market from private owner High performing store; recently underwent multi-million dollar renovation by Sam’s Club In addition to their base rent, Sam’s Club paid over $180K in percentage rent for 2015 (omitt
Slide 20: High-Quality Retail Real Estate: New Lenox, Illinois
High-Quality Retail Real Estate = Stronger Residual Values New Lenox, Illinois Partner Capital Solutions project Acquired land post-permit & pre- commencement Inorganic development opportunity achieved superior yield & credit 19
Slide 21: Financial Overview
Financial Overview
Slide 22: Demonstrated Access to Capital
Demonstrated Access to Capital Expanding relationships and new sources of capital support portfolio growth objectives Capital Markets Activity Revolving Line of Credit $ millions $ millions # Lenders $200.0 $275.0 7 $92.5 $180.0 $250.0 $100.0 $100.0 $100.0 6 $225.0 $160.0 $95.8 $200.0 5 $140.0 $76.8
Slide 23: Balance Sheet Positioned for Growth
Balance Sheet Positioned for Growth Pro Forma Capitalization and Leverage(1) Debt Maturities $ millions Principal $ millions Debt Amt. $150.0 (3) $75.0 Mortgage Payable $ 92.3 $65.0 Unsecured Term Loans 100.0 $60.0 $50.0 $50.0 Senior Term Loans 100.0 $44.7 $45.0 Credit Facility 98.0 Total Debt $ 390
Slide 24: Consistent Performance
Consistent Performance Management is focused on delivering consistent earnings and dividend growth FFO per Share AFFO per Share $2.40 $2.40 $2.39 $2.38 $2.30 $2.30 $2.20 $2.20 $2.22 $2.18 $2.10 $2.10 $2.13 $2.10 $2.09 $2.00 $2.04 $2.00 $1.90 $1.90 2012 2013 2014 2015 2012 2013 2014 2015 Dividends pe
Slide 25: Attractive Relative Value
Attractive Relative Value ADC offers a well covered dividend and valuation opportunity Current Dividend Yield 2016E AFFO Payout Ratio 6.00% 81.0% 5.8% 5.50% 79.0% 79.2% 5.00% 77.0% 4.50% 4.5% 76.3% 75.0% 4.00% 3.8% 74.1% 3.50% 73.0% (1) NNN · O · STOR(1) All ADC NNN · O · STOR All ADC Net Lease Net
Slide 26: 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 25
Slide 27: Appendix
Appendix 26
Slide 28: Q1 2016 Portfolio Snapshot
Q1 2016 Portfolio Snapshot Overview Lease Expirations $ millions Properties 291 $41.1 $40.0 Gross Leasable Area 5.4M SF Occupancy 99.5% $30.0 States 42 $20.0 Tenants 120 Retail Sectors 25+ $10.0 $6.5 $5.9 $4.3 $4.8 $3.8 $1.7 $2.5 $2.8 Investment Grade % (1) 50.3% $1.4 $0.0 $0.0 Weighted-Average Leas
Slide 29: Representative Acquisitions
Representative Acquisitions Single Tenant Net Lease Lowes KeyBank H-E-B AutoZone Portfolio (14) Concord, NC Elyria, OH Brenham, TX 6 states Multi-Tenant Net Lease Mattress Firm / ULTA Beauty Academy Sports + Outdoors / Michaels / PetSmart Michaels / Dollar Tree / PetSense Columbus, MS Jo-Ann Fabrics
Slide 30: Recent Development and PCS Projects
Recent Development and PCS Projects SITE Chick-fil-A Starbucks Wawa Frankfort, KY Lakeland, FL Orlando, FL Cash & Carry Smart Foodservice Hobby Lobby Salem, OR Springfield, OH Cash & Carry Smart Foodservice Buffalo Wild Wings McDonald’s Wawa Burlington, WA St. Augustine, FL East Palatka, FL St. Pete
Slide 31: Agree Realty Corporation
AGREE REALTY CORPORATION DEVELOP | ACQUIRE | PARTNER ADC NYSE