Agree Realty (ADC) Shows Strong Growth and Robust Financial Position

Agree Realty Corporation (NYSE: ADC) has recently declared a monthly cash dividend of $0.247 per common share for February, marking a 2.9% year-over-year increase. In Q4 2023, the company acquired $187 million of high-quality retail net lease assets at a weighted average cap rate of 7.2%, with approximately 70.5% of base rents derived from investment-grade retailers. Additionally, approximately $200 million of acquisitions closed, under contract, or under a letter of intent year-to-date. The company also raised around $236 million of forward equity during Q4 2023 at a net forward price of approximately $61.50 per share.

Agree Realty's forward equity accounted for about 85% of all net lease issuance over the past two years. The company has maintained a fortress-like balance sheet with over $1.0 billion of total liquidity as of December 31, 2023. Furthermore, it announced the appointment of Linglong He to the company's Board of Directors. The company's net debt to recurring EBITDA stood at 4.3x as of December 31, 2023.

Since 2012, Agree Realty has acquired over 100 locations, and Tractor Supply Company (TSCO) is now its 2nd largest tenant. Additionally, ADC has built a preferred development relationship with Gerber Collision, developing over 20 locations, which has made Gerber Collision its 15th largest tenant with over 70 locations. Moreover, Agree Realty has leveraged all three external growth platforms to make Sunbelt Rentals its 14th largest tenant with 50 locations. The company has also acquired 50 TJX locations since 2012, and TJX is now its 6th largest tenant.

Agree Realty has maintained a disciplined approach to its portfolio, with the top three sector concentrations accounting for 96% of annualized base rent. The company's WACC calculation showed a WACC of 6.4%, with a peer WACC calculation at 5.0%. Additionally, Agree Realty's net debt to EBITDA stood at 4.3x as of 4Q23, showcasing its strong balance sheet.

For the full picture, make sure to review Agree Realty's 8-K report.

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