Agree Realty Corp. invested a record amount in properties last year.
The seemingly ever-growing Bloomfield Hills-based retail real estate investment trust (NYSE: ADC) said in a Wednesday news release that it spent an all-time high of $1.71 billion in 2022 on properties around the country, primarily through acquisition but also in development.
For President and CEO Joey Agree, it was a continuation of years of growth that has catapulted his company into the upper echelons of the retail REIT community.
Agree said the company now has an enterprise value (its market capitalization plus the value of its debt) of more than $8 billion — up from $6.7 billion just a year ago — and has more than $1.5 billion in liquidity.
That includes $900 million in a revolving line of credit, about $557.4 million in stock sales of about 8.25 million shares pending, plus cash on hand.
“We raised another $280 million-plus in equity in Q4, so now we have over $550 million in forward equity with a balance sheet that is a war chest to take advantage of any opportunities in 2023,” Agree said Thursday. “This is the strongest balance sheet in the country, with no near-term debt maturities and over $1.5 billion in liquidity to take advantage of anything.”
That fourth-quarter equity came from forward-sale agreements for the sale of 4.1 million or so shares of common stock, raising about $282.9 million.
But in addition, in some key metrics like price per funds from operations, or FFO, and price per funds available for distribution, Agree Realty is outperforming peer REITs.
For example, at $70.93 per share on Dec. 30 and FFO coming in at $3.86 per share estimated for 2022 (a multiple of 18.4) and estimated $4.03 for 2023 (a multiple of 17.6), Agree bests several other REITs operating in the same asset class, according to an analyst chart Agree shared.
Agree Realty, which is building out a new headquarters in Royal Oak in the former Art Van Furniture Inc. store on Woodward Avenue for a second-quarter move-in, said that its 2022 investment figure includes 465 properties leased to tenants across 28 retail sectors in 43 states.
In acquisitions alone, the company spent $1.59 billion on 434 properties. About 69.4 percent of the annualized base rents are from investment-grade retail tenants, Agree Realty said in the release.
Previously, Agree Realty’s record overall investment activity came in 2021, with $1.43 billion in acquisition and construction; the overwhelming bulk of that figure came through property purchases, totaling $1.39 billion.
The company has been on a buying spree during the COVID-19 pandemic, scooping up properties with a diverse mix of tenants that have strength in all facets of the retail game, in stores, online and the spaces in between.
In all, as of the end of last year, Agree Realty has a portfolio of 1,839 properties in all 48 continental states with about 38.1 million square feet. Less than three years ago, it had 16.3 million square feet in more than 860 properties across 46 states.
Agree Realty has made a point the last decade or so of diversifying its tenant roster, helping it thrive in the age of e-commerce, which has turned the retail industry on its head and left those who have refused to or been unable to adapt tossed rather unceremoniously in the seemingly ever-growing graveyard of once-mighty chains.
Today, Walmart Inc. is Agree Realty’s largest tenant, as determined on annualized base rent, accounting for 6.9 percent. Its other top tenants include Dollar General Corp., Best Buy Co. Inc., The TJX Companies Inc. (TJ Maxx), O’Reilly Automotive Inc., Kroger Co. and CVS Health Corp.
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