Open the filing on EDGAR32301 Woodward Ave.Royal Oak, MI 48073www.agreerealty.com FOR IMMEDIATE RELEASE
Agree Realty Corporation Reports First Quarter 2026 Results
Raised Approximately $660 Million of Forward Equity via ATM Program
Balance Sheet Fortified with Approximately $2.3 Billion of Liquidity
Royal Oak, MI, April 21, 2026 -- Agree Realty Corporation (NYSE: ADC) (the “Company”) today announced results for the quarter ended March 31, 2026. All per share amounts included herein are on a diluted per common share basis unless otherwise stated.
First Quarter 2026 Financial and Operating Highlights:
- Invested approximately $424 million in 100 retail net lease properties
- 15 development or Developer Funding Platform ("DFP") projects completed or under construction with anticipated total costs of approximately $112 million
- Net Income per share attributable to common stockholders increased 19.1% to $0.50
- Core Funds from Operations (“Core FFO”) per share increased 8.1% to $1.13
- Adjusted Funds from Operations (“AFFO”) per share increased 7.9% to $1.14
- Declared an increased monthly dividend of $0.267 per common share for April, a 4.3% year-over-year increase
- Sold 8.7 million shares of common stock via the forward component of the Company's at-the-market equity ("ATM") program for anticipated net proceeds of approximately $658 million
- Balance sheet well positioned at 3.2 times proforma net debt to recurring EBITDA; 5.1 times excluding unsettled forward equity
- Ended the quarter with approximately $2.3 billion of liquidity including availability on the revolving credit facility, outstanding forward equity, undrawn term loan capacity, and cash on hand
Financial Results
Net Income Attributable to Common Stockholders
Net Income for the three months ended March 31, 2026 increased 33.4% to $60.2 million, compared to $45.1 million for the comparable period in 2025. Net Income per share for the three months ended March 31 increased 19.1% to $0.50, compared to $0.42 for the comparable period in 2025.
Core FFO
Core FFO for the three months ended March 31, 2026 increased 21.0% to $136.3 million, compared to $112.7 million for the comparable period in 2025. Core FFO per share for the three months ended March 31 increased 8.1% to $1.13, compared to $1.04 for the comparable period in 2025.
AFFO
AFFO for the three months ended March 31, 2026 increased 20.7% to $137.6 million, compared to $114.0 million for the comparable period in 2025. AFFO per share for the three months ended March 31 increased 7.9% to $1.14, compared to $1.06 for the comparable period in 2025.
Dividend
In the first quarter, the Company declared monthly cash dividends of $0.262 per common share for each of January, February and March 2026. The monthly dividends declared during the first quarter reflect an annualized dividend amount of $3.144 per common share, representing a 3.6% increase over the annualized dividend amount of $3.036 per common share from the first quarter of 2025. The dividends represent payout ratios of approximately 70% of Core FFO per share and 69% of AFFO per share, respectively.
Subsequent to quarter end, the Company declared an increased monthly cash dividend of $0.267 per common share for April 2026. The April monthly dividend reflects an annualized dividend amount of $3.204 per common share, representing a 4.3% increase over the annualized dividend amount of $3.072 per common share from the second quarter of 2025. The April dividend is payable on May 14, 2026 to stockholders of record at the close of business on April 30, 2026.
Additionally, subsequent to quarter end, the Company declared a monthly cash dividend on its 4.25% Series A Cumulative Redeemable Preferred Stock of $0.08854 per depositary share, which is equivalent to $1.0625 per annum. The dividend is payable on May 1, 2026 to stockholders of record at the close of business on April 21, 2026.
Earnings Guidance
The table below provides estimates for significant components of our 2026 earnings guidance.
| Prior 2026 | Revised 2026 |
|---|
| Guidance | Guidance |
|---|
| AFFO per share(1)(2) | $4.54 to $4.58 | $4.54 to $4.58 |
| Investment volume | $1.4 to $1.6 billion | $1.4 to $1.6 billion |
| Disposition volume | $25 to $75 million | $25 to $75 million |
| General and administrative expenses (% of adjusted revenue)(3)(4) | 5.3% to 5.6% | 5.3% to 5.6% |
| Non-reimbursable real estate expenses (% of adjusted revenue) | 1.0% to 1.5% | 1.0% to 1.5% |
| Income and other tax expense | $2 to $3 million | $2 to $2.5 million |
| Treasury stock method dilution | Approximately $0.01 | $0.02 to $0.04 |
The Company’s 2026 guidance is subject to risks and uncertainties more fully described in this press release and in the Company’s filings with the Securities and Exchange Commission (the “SEC”).
(1)The Company does not provide guidance with respect to the most directly comparable GAAP financial measure or provide reconciliations to GAAP from its forward-looking non-GAAP financial measure of AFFO per share guidance due to the inherent difficulty of forecasting the effect, timing and significance of certain amounts in the reconciliation that would be required by Item 10(e)(1)(i)(B) of Regulation S-K. Examples of these amounts include impairments of assets, gains and losses from sales of assets, and depreciation and amortization from new acquisitions or developments. In addition, certain non-recurring items may also significantly affect net income but are generally adjusted for in AFFO. Based on our historical experience, the dollar amounts of these items could be significant and could have a material impact on the Company’s GAAP results for the guidance period.
(2)The Company's AFFO per share guidance utilizes the current forward SOFR curve to forecast interest expense related to any outstanding commercial paper notes and revolver borrowings during the year.
(3)Adjusted revenue equates to “Total Revenues” as presented in our consolidated statements of operations and comprehensive income, excluding the amortization of above and below market lease intangibles.
(4)Cash G&A expense is expected to be in a range of 3.7% to 4.0% of adjusted revenue. Cash G&A is defined as “General and administrative” expenses as presented in our consolidated statements of operations and comprehensive income, less stock-based compensation expense.
(5)Represents the estimated dilutive impact of the Company’s outstanding forward equity calculated in accordance with the treasury stock method, which is included in the AFFO per share guidance range.
CEO Comments
“Our first quarter results reflect a strong start to the year. Our balance sheet is fortified, our pipeline is strong and our Team is laser focused," said Joey Agree, President and Chief Executive Officer. “We are extremely well-positioned to execute on our Operating Strategy for the remainder of the year and beyond.”
Portfolio Update
As of March 31, 2026, the Company’s portfolio consisted of 2,756 properties located in all 50 states and contained approximately 57.5 million square feet of gross leasable area. At quarter end, the portfolio was approximately 99.7% leased, had a weighted-average lease term of approximately 7.8 years, and generated approximately 65.4% of annualized base rents from investment grade retail tenants.
Ground Lease Portfolio
During the first quarter, the Company acquired nine ground leases for an aggregate purchase price of approximately $28.4 million, representing 7.5% of annualized base rents acquired.
As of March 31, 2026, the Company’s ground lease portfolio consisted of 261 leases located in 39 states and totaled approximately 7.0 million square feet of gross leasable area. Properties ground leased to tenants represented 10.1% of annualized base rents.
At quarter end, the ground lease portfolio was fully occupied, had a weighted-average lease term of approximately 9.1 years, and generated 84.0% of annualized base rents from investment grade retail tenants.
Acquisitions
Total acquisition volume for the first quarter was approximately $402.5 million and included 85 properties net leased to leading retailers operating in sectors including auto parts, grocery stores, home improvement, farm and rural supply, convenience stores, and crafts and novelties. The properties are located in 32 states and leased to tenants operating in 21 sectors.
The properties were acquired at a weighted-average capitalization rate of 7.1% and had a weighted-average lease term of approximately 11.3 years. Approximately 59.3% of annualized base rents acquired were generated from investment grade retail tenants.
Dispositions
During the first quarter, the Company sold seven properties for gross proceeds of approximately $10.6 million. The dispositions were completed at a weighted-average capitalization rate of 6.8%.
The Company's disposition guidance for 2026 is between $25 million and $75 million.
Development and Developer Funding Platform
During the first quarter, the Company commenced two development or DFP projects, with total anticipated costs of approximately $18.0 million. Construction continued during the quarter on nine projects with anticipated costs totaling approximately $71.4 million. The Company completed four projects during the quarter with total costs of approximately $22.5 million.
For the three months ended March 31, 2026, the Company had 15 development or DFP projects completed or under construction with anticipated total costs of approximately $112.0 million. The projects are leased to leading retailers including TJX Companies, Burlington, 7-Eleven, Boot Barn, Starbucks, Gerber Collision, and Sunbelt Rentals.
The following table presents estimated costs for the Company's active or completed development and DFP projects for the three months ended March 31, 2026:
| | | | Anticipated |
|---|
| Anticipated | Number of | Costs Funded | Remaining | Total Project |
| Quarter of Delivery | Projects | to Date | Funding Costs | Costs |
| Q1 2026 | 4 | $22,534 | $ - | $22,534 |
| Q2 2026 | 5 | 30,375 | 11,814 | 42,189 |
| Q3 2026 | 2 | 8,855 | 4,495 | 13,350 |
| Q4 2026 | 2 | 4,653 | 11,340 | 15,993 |
| Q1 2027 | 1 | 3,312 | 7,247 | 10,559 |
| Q2 2027 | 1 | 3,327 | 4,050 | 7,377 |
| Total | 15 | $73,056 | $38,946 | $112,002 |
Development and DFP project costs are in thousands; any differences are the result of rounding. Costs Funded to Date may include adjustments related to completed projects to arrive at the correct Anticipated Total Project Costs.
Leasing Activity and Expirations
During the first quarter, the Company executed new leases, extensions or options on approximately 876,000 square feet of gross leasable area throughout the existing portfolio. Notable new leases, extensions or options included a 100,000-square foot Walmart Supercenter in Whitewater, Wisconsin, a 100,000-square foot Home Depot in Orange, Connecticut, and a 20,000-square foot TJ Maxx in Mason City, Iowa.
As of March 31, 2026, the Company’s 2026 lease maturities represented 0.9% of annualized base rents. The following table presents contractual lease expirations within the Company’s portfolio as of March 31, 2026, assuming no tenants exercise renewal options:
| | Annualized Base Rent | Gross Leasable Area |
|---|
| Year | Number of Leases | Dollars | % of Total | Square Feet | % of Total |
| 2026 | 29 | $6,567 | 0.9% | 600,160 | 1.0% |
| 2027 | 155 | 33,140 | 4.3% | 3,081,500 | 5.4% |
| 2028 | 181 | 47,545 | 6.2% | 4,172,420 | 7.3% |
| 2029 | 224 | 69,230 | 9.1% | 6,505,470 | 11.4% |
| 2030 | 344 | 75,963 | 9.9% | 6,382,140 | 11.1% |
| 2031 | 270 | 68,409 | 9.0% | 5,357,160 | 9.3% |
| 2032 | 263 | 58,262 | 7.6% | 4,184,540 | 7.3% |
| 2033 | 234 | 53,798 | 7.0% | 4,071,160 | 7.1% |
| 2034 | 238 | 54,717 | 7.2% | 3,687,600 | 6.4% |
| 2035 | 221 | 59,764 | 7.8% | 4,127,080 | 7.2% |
| Thereafter | 827 | 236,454 | 31.0% | 15,138,850 | 26.5% |
| Total Portfolio | 2,986 | $763,849 | 100.0% | 57,308,080 | 100.0% |
The contractual lease expirations presented above exclude the effect of replacement tenant leases that had been executed as of March 31, 2026, but that had not yet commenced. Annualized Base Rent and gross leasable area (square feet) are in thousands; any differences are the result of rounding.
(1)Refer to the Glossary for the Company's definition of Annualized Base Rent.
Top Tenants
The following table presents annualized base rents for all tenants that represent 1.5% or greater of the Company’s total annualized base rent as of March 31, 2026:
| Annualized | Percent of |
|---|
| Tenant | Base Rent | Annualized Base Rent |
| Walmart | $43,786 | 5.7% |
| Tractor Supply | 36,230 | 4.7% |
| Dollar General | 29,081 | 3.8% |
| Hobby Lobby | 25,818 | 3.4% |
| TJX Companies | 23,125 | 3.0% |
| O'Reilly Auto Parts | 22,806 | 3.0% |
| Best Buy | 22,133 | 2.9% |
| CVS | 21,501 | 2.8% |
| Gerber Collision | 21,323 | 2.8% |
| Kroger | 21,021 | 2.8% |
| Lowe's | 20,974 | 2.7% |
| 7-Eleven | 19,547 | 2.6% |
| Sunbelt Rentals | 17,224 | 2.3% |
| Sherwin-Williams | 16,315 | 2.1% |
| Burlington | 15,545 | 2.0% |
| Home Depot | 14,948 | 2.0% |
| Wawa | 12,813 | 1.7% |
| Dollar Tree | 12,301 | 1.6% |
| Genuine Parts Company | 12,172 | 1.6% |
| Other | 355,186 | 46.5% |
| Total Portfolio | $763,849 | 100.0% |
Annualized Base Rent is in thousands; any differences are the result of rounding.
(2) Includes tenants generating less than 1.5% of Annualized Base Rent.
Retail Sectors
The following table presents annualized base rents for all the Company’s retail sectors as of March 31, 2026:
| Annualized | Percent of |
|---|
| Sector | Base Rent | Annualized Base Rent |
| Grocery Stores | $79,291 | 10.4% |
| Home Improvement | 69,969 | 9.2% |
| Convenience Stores | 59,583 | 7.8% |
| Tire & Auto Service | 58,854 | 7.7% |
| Auto Parts | 50,045 | 6.5% |
| Dollar Stores | 47,813 | 6.3% |
| Off-Price Retail | 45,176 | 5.9% |
| Farm And Rural Supply | 38,039 | 5.0% |
| General Merchandise | 36,643 | 4.8% |
| Crafts And Novelties | 28,211 | 3.7% |
| Pharmacy | 26,453 | 3.5% |
| Consumer Electronics | 26,239 | 3.4% |
| Discount Stores | 21,417 | 2.8% |
| Health Services | 18,976 | 2.5% |
| Warehouse Clubs | 18,379 | 2.4% |
| Equipment Rental | 18,279 | 2.4% |
| Restaurants - Quick Service | 16,973 | 2.2% |
| Health & Fitness | 16,522 | 2.2% |
| Dealerships | 15,078 | 2.0% |
| Sporting Goods | 13,814 | 1.8% |
| Financial Services | 10,285 | 1.3% |
| Specialty Retail | 9,259 | 1.2% |
| Restaurants - Casual Dining | 7,386 | 1.0% |
| Shoes | 6,339 | 0.8% |
| Home Furnishings | 5,212 | 0.7% |
| Pet Supplies | 4,813 | 0.6% |
| Theaters | 3,976 | 0.5% |
| Beauty And Cosmetics | 3,892 | 0.5% |
| Entertainment Retail | 2,642 | 0.3% |
| Apparel | 2,402 | 0.3% |
| Miscellaneous | 1,265 | 0.2% |
| Office Supplies | 624 | 0.1% |
| Total Portfolio | $763,849 | 100.0% |
Annualized Base Rent is in thousands; any differences are the result of rounding.
Geographic Diversification
The following table presents annualized base rents for all states that represent 1.5% or greater of the Company’s total annualized base rent as of March 31, 2026:
| Annualized | Percent of |
|---|
| State | Base Rent | Annualized Base Rent |
| Texas | $54,726 | 7.2% |
| Illinois | 46,303 | 6.1% |
| Ohio | 39,843 | 5.2% |
| Michigan | 38,190 | 5.0% |
| Pennsylvania | 37,279 | 4.9% |
| Florida | 36,938 | 4.8% |
| New York | 36,295 | 4.8% |
| North Carolina | 35,448 | 4.6% |
| California | 32,579 | 4.3% |
| Georgia | 31,409 | 4.1% |
| New Jersey | 26,609 | 3.5% |
| Missouri | 21,168 | 2.8% |
| Louisiana | 20,990 | 2.7% |
| Wisconsin | 20,503 | 2.7% |
| Virginia | 18,585 | 2.4% |
| Mississippi | 18,248 | 2.4% |
| South Carolina | 17,684 | 2.3% |
| Minnesota | 17,370 | 2.3% |
| Kansas | 16,090 | 2.1% |
| Indiana | 15,311 | 2.0% |
| Connecticut | 14,777 | 1.9% |
| Alabama | 14,461 | 1.9% |
| Tennessee | 13,950 | 1.8% |
| Massachusetts | 13,607 | 1.8% |
| Oklahoma | 11,727 | 1.5% |
| Other | 113,759 | 14.9% |
| Total Portfolio | $763,849 | 100.0% |
Annualized Base Rent is in thousands; any differences are the result of rounding.
(2) Includes states generating less than 1.5% of Annualized Base Rent.
Capital Markets, Liquidity and Balance Sheet
Capital Markets
In March 2026, the Company drew $250.0 million under the $350.0 million 2031 Unsecured Term Loan. Including the impact of forward starting swaps, the all-in interest rate on the 2031 Unsecured Term Loan is fixed at 4.02% until maturity in May 2031. The remaining $100.0 million is available to be drawn at the Company's election until November 2026.
During the first quarter, the Company entered into forward sale agreements in connection with its ATM program to sell an aggregate of 8.7 million shares of common stock for anticipated net proceeds of $658.0 million.
The following table presents the Company’s outstanding forward equity offerings as of March 31, 2026:
| | | | | Anticipated Net |
|---|
| Forward Equity | Shares | Shares | Shares | Net Proceeds | Proceeds |
| Offerings | Sold | Settled | Remaining | Received | Remaining |
| Q4 2024 ATM Forward Offerings | 739,013 | 570,736 | 168,277 | $42,200,880 | $12,795,127 |
| Q1 2025 ATM Forward Offerings | 2,408,201 | - | 2,408,201 | - | 180,105,715 |
| Q2 2025 ATM Forward Offerings | 362,021 | - | 362,021 | - | 27,193,128 |
| April 2025 Forward Offering | 5,175,000 | - | 5,175,000 | - | 384,490,080 |
| Q4 2025 ATM Forward Offerings | 1,505,746 | - | 1,505,746 | - | 109,043,688 |
| Q1 2026 ATM Forward Offerings | 8,738,029 | - | 8,738,029 | - | 657,984,474 |
| Total Forward Equity Offerings | 18,928,010 | 570,736 | 18,357,274 | $42,200,880 | $1,371,612,212 |
Liquidity
As of March 31, 2026, the Company had total liquidity of approximately $2.3 billion, which includes $780.4 million of availability under its revolving credit facility after adjusting for outstanding commercial paper notes, $1.37 billion of outstanding forward equity, $100.0 million of capacity under the 2031 Unsecured Term Loan, and $31.2 million of cash on hand. The Company’s $1.25 billion revolving credit facility includes an accordion option that allows the Company to request additional lender commitments of up to a total of $2.0 billion.
Balance Sheet
As of March 31, 2026, the Company’s net debt to recurring EBITDA was 5.1 times. The Company’s proforma net debt to recurring EBITDA was 3.2 times when deducting the $1.37 billion of anticipated net proceeds from the outstanding forward equity offerings from the Company’s net debt of approximately $3.7 billion as of March 31, 2026. The Company’s fixed charge coverage ratio was 4.2 times at quarter end. The Company’s net debt to enterprise value was 28.5% as of March 31, 2026.
For the three months ended March 31, 2026, the Company's fully diluted weighted-average shares outstanding were 120.4 million. The basic weighted-average shares outstanding for the three months ended March 31, 2026 were 119.9 million.
For the three months ended March 31, 2026, the Company's fully diluted weighted-average shares and units outstanding were 120.7 million. The basic weighted-average shares and units outstanding for the three months ended March 31, 2026 were 120.2 million.
The Company’s assets are held by, and its operations are conducted through, the Operating Partnership, of which the Company is the sole general partner. As of March 31, 2026, there were 347,619 Operating Partnership common units outstanding, and the Company held a 99.7% common interest in the Operating Partnership.
Conference Call/Webcast
The Company will host its quarterly analyst and investor conference call on Wednesday, April 22, 2026 at 9:00 AM ET. To participate in the conference call, please dial (800) 715-9871 approximately ten minutes before the call begins.
Additionally, a webcast of the conference call will be available via the Company’s website. To access the webcast, visit www.agreerealty.com five minutes prior to the start of the conference call and go to the Investors section of the website. A replay of the conference call webcast will be archived and available online through the Investors section of www.agreerealty.com.
About Agree Realty Corporation
Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of March 31, 2026, the Company owned and operated a portfolio of 2,756 properties, located in all 50 states and containing approximately 57.5 million square feet of gross leasable area. The Company’s common stock is listed on the New York Stock Exchange under the symbol “ADC”. For additional information on the Company and RETHINKING RETAIL, please visit www.agreerealty.com.
Forward-Looking Statements
Forward-looking statements notice
This press release 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 Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” “may,” “will,” “seek,” “could,” “project” or other similar words or expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could materially affect the Company’s results of operations, financial condition, cash flows, performance or future achievements or events. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, the factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, including those set forth under the headings “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and subsequent quarterly reports filed with the SEC. The forward-looking statements included in this press release are made as of the date hereof. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, changes in the Company’s expectations or assumptions or otherwise.
For further information about the Company’s business and financial results, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company’s website at www.agreerealty.com.
Glossary
AFFO Payout Ratio is calculated as common dividends per share divided by AFFO per share for the same period. The Company believes this measure is a useful supplemental indicator of dividend coverage and the sustainability of its dividend policy. This measure is not a substitute for measures prepared in accordance with GAAP, and the Company’s calculation may differ from similarly titled measures used by other companies.
Annualized Base Rent (“ABR”) represents the annualized amount of contractual minimum rent required by tenant lease agreements as of March 31, 2026, computed on a straight-line basis. Annualized Base Rent is not, and is not intended to be, a presentation in accordance with GAAP. The Company believes annualized contractual minimum rent is useful to management, investors, and other interested parties in analyzing concentrations and leasing activity.
Enterprise Value is calculated as the sum of net debt, the liquidation value of the Company’s preferred stock, and the market value of the Company’s outstanding shares of common stock, assuming the conversion of Agree Limited Partnership common units into common stock.
Investment Grade (“IG”) refers to ABR derived from tenants, or parent or subsidiary entities thereof, that have an investment grade credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings, or the National Association of Insurance Commissioners (“NAIC”).
Net Debt to Enterprise Value represents the ratio of the Company’s net debt to its Enterprise Value and is used to evaluate the Company’s capital structure and balance sheet leverage.
Occupancy equals the sum of leased square feet divided by gross leasable area. Excludes properties under redevelopment.
Weighted-Average Capitalization Rate for acquisitions and dispositions, it is defined as the sum of contractual fixed annual rents computed on a straight-line basis over the primary lease terms and anticipated annual net tenant recoveries, divided by the purchase and sale prices for occupied properties.
Weighted-Average Lease Term (“WALT”) represents the remaining contractual lease term of in‑place leases, weighted by ABR, and excludes vacant properties and lease extension options.
References to “Core FFO” and “AFFO” in this press release are representative of Core FFO attributable to OP common unitholders and AFFO attributable to OP common unitholders. Detailed calculations for these measures are shown in the Reconciliation of Net Income to FFO, Core FFO and Adjusted FFO table as “Core Funds From Operations - OP Common Unitholders” and “Adjusted Funds from Operations - OP Common Unitholders”.
AGREE REALTY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, |
|---|
| 2026 | 2025 |
|---|
| ASSETS | | |
| Real estate investments | | |
| Land | $3,014,791 | | $2,895,495 | |
| Buildings | 6,569,831 | | 6,330,249 | |
| Less accumulated depreciation | (758,519) | | (715,733) | |
| 8,826,103 | | 8,510,011 | |
| Property under development | 60,071 | | 62,690 | |
| Net real estate investments | 8,886,174 | | 8,572,701 | |
| Real estate held for sale, net | 3,077 | | - | |
| Cash and cash equivalents | 25,077 | | 16,295 | |
| Cash held in escrow | 6,128 | | 4,327 | |
| Accounts receivable - tenants, net | 129,617 | | 122,477 | |
| Lease intangibles, net of accumulated amortization of $609,190 and $576,945 at March 31, 2026 and December 31, 2025, respectively | 1,033,309 | | 1,000,967 | |
| Other assets, net | 96,861 | | 80,845 | |
| Total Assets | $10,180,243 | | $9,797,612 | |
| LIABILITIES | | |
| Mortgage notes payable, net | $41,370 | | $41,546 | |
| Unsecured term loans, net | 596,683 | | 348,074 | |
| Senior unsecured notes, net | 2,585,618 | | 2,584,608 | |
| Unsecured revolving credit facility and commercial paper notes | 469,650 | | 320,500 | |
| Dividends and distributions payable | 32,178 | | 32,158 | |
| Accounts payable, accrued expenses, and other liabilities | 154,051 | | 139,384 | |
| Lease intangibles, net of accumulated amortization of $51,365 and $49,797 at March 31, 2026 and December 31, 2025, respectively | 61,765 | | 60,189 | |
| Total Liabilities | $3,941,315 | | $3,526,459 | |
| EQUITY | | |
| Preferred stock, $0.0001 par value per share, 4,000,000 shares authorized, 7,000 shares Series A outstanding, at stated liquidation value of $25,000 per share, at March 31, 2026 and December 31, 2025 | 175,000 | | 175,000 | |
| Common stock, $0.0001 par value, 360,000,000 shares authorized, 120,103,455 and 120,028,406 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively | 12 | | 12 | |
| Additional paid-in-capital | 6,676,618 | | 6,679,142 | |
| Dividends in excess of net income | (653,433) | | (618,675) | |
| Accumulated other comprehensive income | 40,641 | | 35,506 | |
| Total equity - Agree Realty Corporation | 6,238,838 | | 6,270,985 | |
| Non-controlling interest | 90 | | 168 | |
| Total Equity | 6,238,928 | | 6,271,153 | |
| Total Liabilities and Equity | $10,180,243 | | $9,797,612 | |
AGREE REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
| Three Months Ended |
|---|
| March 31, 2026 | March 31, 2025 |
|---|
| Revenues | | |
| Rental income | $200,676 | | $169,113 | |
| Other | 131 | | 47 | |
| Total Revenues | 200,807 | | 169,160 | |
| Operating Expenses | | |
| Real estate taxes | 14,713 | | 11,513 | |
| Property operating expenses | 9,636 | | 8,381 | |
| Land lease expense | 554 | | 485 | |
| General and administrative | 11,477 | | 10,771 | |
| Depreciation and amortization | 66,699 | | 55,755 | |
| Provision for impairment | 1,400 | | 4,331 | |
| Total Operating Expenses | 104,479 | | 91,236 | |
| Gain on sale of assets, net | 1,697 | | 772 | |
| Gain on involuntary conversion, net | 528 | | - | |
| Income from Operations | 98,553 | | 78,696 | |
| Other (Expense) Income | | |
| Interest expense, net | (35,970) | | (30,764) | |
| Income and other tax expense | (500) | | (825) | |
| Other income | 148 | | 41 | |
| Net Income | 62,231 | | 47,148 | |
| Less net income attributable to non-controlling interest | 180 | | 152 | |
| Net income attributable to Agree Realty Corporation | 62,051 | | 46,996 | |
| Less Series A preferred stock dividends | 1,859 | | 1,859 | |
| Net Income Attributable to Common Stockholders | $60,192 | | $45,137 | |
| Net Income Per Share Attributable to Common Stockholders | | |
| Basic | $0.50 | | $0.42 | |
| Diluted | $0.50 | | $0.42 | |
| Other Comprehensive Income | | |
| Net income | $62,231 | | $47,148 | |
| Amortization of interest rate swaps | (1,075) | | (736) | |
| Change in fair value and settlement of interest rate swaps | 6,225 | | (10,031) | |
| Total comprehensive income | 67,381 | | 36,381 | |
| Less comprehensive income attributable to non-controlling interest | $195 | | $117 | |
| Comprehensive Income Attributable to Agree Realty Corporation | $67,186 | | $36,264 | |
| Weighted Average Number of Common Shares Outstanding - Basic | | 119,856,418 | | 107,048,557 |
| Weighted Average Number of Common Shares Outstanding - Diluted | | 120,375,633 | | 107,547,193 |
AGREE REALTY CORPORATION
RECONCILIATION OF NET INCOME TO FFO, CORE FFO, AND AFFO
| Three Months Ended |
|---|
| March 31, 2026 | March 31,2025 |
|---|
| Reconciliation from Net Income to Funds from Operations | | |
| Net income | $62,231 | $47,148 |
| Less Series A preferred stock dividends | 1,859 | 1,859 |
| Net income attributable to Operating Partnership common unitholders | $60,372 | $45,289 |
| Depreciation of rental real estate assets | 44,324 | 37,164 |
| Amortization of lease intangibles - in-place leases and leasing costs | 21,708 | 18,064 |
| Provision for impairment | 1,400 | 4,331 |
| Gain on sale or involuntary conversion of assets, net | (2,225) | (772) |
| Funds from Operations - Operating Partnership common unitholders | $125,579 | $104,076 |
| Amortization of above (below) market lease intangibles, net and assumed mortgage debt discount, net | 10,762 | 8,630 |
| Core Funds from Operations - Operating Partnership common unitholders | $136,341 | $112,706 |
| Straight-line accrued rent | (4,942) | (4,009) |
| Stock-based compensation expense | 3,534 | 3,129 |
| Amortization of financing costs and original issue discounts | 2,004 | 1,612 |
| Non-real estate depreciation | 667 | 527 |
| Adjusted Funds from Operations - Operating Partnership common unitholders | $137,604 | $113,965 |
| Funds from Operations per common share and partnership unit - diluted | $1.04 | $0.96 |
| Core Funds from Operations per common share and partnership unit - diluted | $1.13 | $1.04 |
| Adjusted Funds from Operations per common share and partnership unit - diluted | $1.14 | $1.06 |
| Weighted average shares and Operating Partnership common units outstanding | | |
| Basic | 120,204,037 | 107,396,176 |
| Diluted | 120,723,252 | 107,894,812 |
| Additional supplemental disclosure | | |
| Scheduled principal repayments | $267 | $250 |
| Capitalized interest | $476 | $442 |
| Capitalized building improvements | $597 | $600 |
Non-GAAP Financial Measures
Funds from Operations (“FFO” or “Nareit FFO”) FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”) to mean net income computed in accordance with GAAP, excluding gains (or losses) from sales of real estate assets and/or changes in control, plus real estate related depreciation and amortization and any impairment charges on depreciable real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company’s operations. FFO should not be considered an alternative to net income as the primary indicator of the Company’s operating performance, or as an alternative to cash flow as a measure of liquidity. Further, while the Company adheres to the Nareit definition of FFO, its presentation of FFO is not necessarily comparable to similarly titled measures of other REITs due to the fact that all REITs may not use the same definition.
Core Funds from Operations (“Core FFO”) The Company defines Core FFO as Nareit FFO with the addback of (i) noncash amortization of acquisition purchase price related to above- and below- market lease intangibles and discount on assumed debt and (ii) certain infrequently occurring items that reduce or increase net income in accordance with GAAP. Management believes that its measure of Core FFO facilitates useful comparison of performance to its peers who predominantly transact in sale-leaseback transactions and are thereby not required by GAAP to allocate purchase price to lease intangibles. Unlike many of its peers, the Company has acquired the substantial majority of its net-leased properties through acquisitions of properties from third parties or in connection with the acquisitions of ground leases from third parties. Core FFO should not be considered an alternative to net income as the primary indicator of the Company’s operating performance, or as an alternative to cash flow as a measure of liquidity. Further, the Company’s presentation of Core FFO is not necessarily comparable to similarly titled measures of other REITs due to the fact that all REITs may not use the same definition.
Adjusted Funds from Operations (“AFFO”) AFFO is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO further adjusts FFO and Core FFO for certain non-cash items that reduce or increase net income computed in accordance with GAAP. Management considers AFFO a useful supplemental measure of the Company’s performance, however, AFFO should not be considered an alternative to net income as an indication of its performance, or to cash flow as a measure of liquidity or ability to make distributions. The Company’s computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore may not be comparable to such other REITs.
AGREE REALTY CORPORATION
RECONCILIATION OF PROFORMA NET DEBT TO RECURRING EBITDA
| Three Months Ended |
|---|
| March 31, 2026 |
|---|
| Mortgage notes payable, net | $41,370 |
| Unsecured term loan, net | 596,683 |
| Senior unsecured notes, net | 2,585,618 |
| Unsecured revolving credit facility and commercial paper notes | 469,650 |
| Total Debt per the Consolidated Balance Sheet | $3,693,321 |
| Unamortized debt issuance costs and discounts, net | 28,941 |
| Total Debt | $3,722,262 |
| Cash and cash equivalents | $(25,077) |
| Cash held in escrows | (6,128) |
| Net Debt | $3,691,057 |
| Anticipated Net Proceeds from Forward Equity Offerings | (1,371,612) |
| Proforma Net Debt | $2,319,445 |
| Net Income | $62,231 |
| Interest expense, net | 35,970 |
| Income and other tax expense | 500 |
| Depreciation of rental real estate assets | 44,324 |
| Amortization of lease intangibles - in-place leases and leasing costs | 21,708 |
| Non-real estate depreciation | 667 |
| Provision for Impairment | 1,400 |
| (Gain) loss on sale or involuntary conversion of assets, net | (2,225) |
| EBITDAre | $164,575 |
| Run-Rate Impact of Investment, Disposition and Leasing Activity | 5,227 |
| Amortization of above (below) market lease intangibles, net | 10,678 |
| Recurring EBITDA | $180,480 |
| Annualized Recurring EBITDA | $721,920 |
| Total Debt per the Consolidated Balance Sheet to Annualized Net Income | 15.0x |
| Net Debt to Recurring EBITDA | 5.1x |
| Proforma Net Debt to Recurring EBITDA | 3.2x |
Financial Measures
Total Debt and Net Debt The Company defines Total Debt as debt per the consolidated balance sheet excluding unamortized debt issuance costs, original issue discounts and debt discounts. Net Debt is defined as Total Debt less cash, cash equivalents and cash held in escrows. The Company considers the non-GAAP measures of Total Debt and Net Debt to be key supplemental measures of the Company's overall liquidity, capital structure and leverage because they provide industry analysts, lenders and investors useful information in understanding our financial condition. The Company's calculation of Total Debt and Net Debt may not be comparable to Total Debt and Net Debt reported by other REITs that interpret the definitions differently than the Company. The Company presents Net Debt on both an actual and proforma basis, assuming the net proceeds of the Forward Offerings (see below) are used to pay down debt. The Company believes the proforma measure may be useful to investors in understanding the potential effect of the Forward Offerings on the Company's capital structure, its future borrowing capacity, and its ability to service its debt.
Forward Offerings
The Company has 18,357,274 shares remaining to be settled under the Forward Equity Offerings. Upon settlement, the offerings are anticipated to raise net proceeds of approximately $1.4 billion based on the applicable forward sale price as of March 31, 2026. The applicable forward sale price varies depending on the offering. The Company is contractually obligated to settle the offerings by certain dates between June 2026 and March 2028.
EBITDAre
EBITDAre is defined by Nareit to mean net income computed in accordance with GAAP, plus interest expense, income tax expense, depreciation and amortization, any gains (or losses) from sales of real estate assets and/or changes in control, any impairment charges on depreciable real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. The Company considers the non-GAAP measure of EBITDAre to be a key supplemental measure of the Company's performance and should be considered along with, but not as an alternative to, net income or loss as a measure of the Company's operating performance. The Company considers EBITDAre a key supplemental measure of the Company's operating performance because it provides an additional supplemental measure of the Company's performance and operating cash flow that is widely known by industry analysts, lenders and investors. The Company’s calculation of EBITDAre may not be comparable to EBITDAre reported by other REITs that interpret the Nareit definition differently than the Company.
Recurring EBITDA
The Company defines Recurring EBITDA as EBITDAre with the addback of noncash amortization of above- and below- market lease intangibles, and after adjustments for the run-rate impact of the Company's investment and disposition activity for the period presented, as well as adjustments for non-recurring benefits or expenses. The Company considers the non-GAAP measure of Recurring EBITDA to be a key supplemental measure of the Company's performance and should be considered along with, but not as an alternative to, net income or loss as a measure of the Company's operating performance. The Company considers Recurring EBITDA a key supplemental measure of the Company's operating performance because it represents the Company's earnings run rate for the period presented and because it is widely followed by industry analysts, lenders and investors. Our Recurring EBITDA may not be comparable to Recurring EBITDA reported by other companies that have a different interpretation of the definition of Recurring EBITDA. Our ratio of net debt to Recurring EBITDA is used by management as a measure of leverage and may be useful to investors in understanding the Company’s ability to service its debt, as well as assess the borrowing capacity of the Company. Our ratio of net debt to Recurring EBITDA is calculated by taking annualized Recurring EBITDA and dividing it by our net debt per the consolidated balance sheet.
Annualized Net Income
Represents net income for the three months ended March 31, 2026, on an annualized basis.
AGREE REALTY CORPORATION
RENTAL INCOME
| Three Months Ended |
|---|
| March 31, 2026 | March 31, 2025 |
|---|
| Rental Income Source | | |
| Minimum rents | $181,433 | $154,006 |
| Percentage rents | 2,394 | 1,556 |
| Operating cost reimbursement | 22,585 | 18,088 |
| Straight-line rental adjustments | 4,942 | 4,009 |
| Amortization of (above) below market lease intangibles | (10,678) | (8,546) |
| Total Rental Income | $200,676 | $169,113 |
(1)The Company adopted Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) 842 “Leases” using the modified retrospective approach as of January 1, 2019. The Company adopted the practical expedient in FASB ASC 842 that alleviates the requirement to separately present lease and non-lease components of lease contracts. As a result, all income earned pursuant to tenant leases is reflected as one line, “Rental Income,” in the consolidated statement of operations. The purpose of this table is to provide additional supplementary detail of Rental Income.
(2)Represents contractual rentals and/or reimbursements as required by tenant lease agreements, recognized on an accrual basis of accounting. The Company believes that the presentation of contractual lease income is not, and is not intended to be, a presentation in accordance with GAAP. The Company believes this information is frequently used by management, investors, analysts and other interested parties to evaluate the Company’s performance.
(3)Represents adjustments to recognize minimum rents on a straight-line basis, consistent with the requirements of FASB ASC 842.
(4)In allocating the fair value of an acquired property, above- and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition and the Company's estimate of current market lease rates for the property.
Contacts
Peter Coughenour
Chief Financial Officer
Agree Realty Corporation
(248) 737-4190