On April 22, 2025, Agree Realty Corp (ADC, Financial) released its 8-K filing detailing its financial performance for the first quarter of 2025. Agree Realty Corp, a real estate investment trust (REIT), focuses on the ownership, acquisition, development, and management of retail properties net leased to industry-leading tenants such as Walmart, 7-Eleven, and Wawa.
Performance Overview
Agree Realty Corp reported a net income per share of $0.42, which fell short of the analyst estimate of $0.43. However, the company's revenue met expectations, reaching $163.88 million, matching the estimated $163.88 million. This mixed performance highlights the challenges and opportunities within the retail real estate sector.
Financial Achievements and Strategic Moves
During the first quarter, Agree Realty Corp invested approximately $377 million in 69 retail net lease properties and initiated four development projects with a total committed capital of $24 million. The company also declared an increased monthly dividend of $0.256 per common share for April, reflecting a 2.4% year-over-year increase.
Income Statement Highlights
Net income attributable to common stockholders increased by 5.0% to $45.1 million compared to the same period in 2024. However, net income per share decreased by 2.0% to $0.42. Core Funds from Operations (Core FFO) per share rose by 3.1% to $1.04, while Adjusted Funds from Operations (AFFO) per share increased by 3.0% to $1.06.
Balance Sheet and Liquidity
Agree Realty Corp ended the quarter with approximately $1.9 billion in total liquidity, including availability on its revolving credit facility, outstanding forward equity, and cash on hand. The company's balance sheet is well-positioned with a proforma net debt to recurring EBITDA ratio of 3.4 times.
CEO Commentary
We are extremely pleased with our strong start to the year as we invested over $375 million of capital across our three external growth platforms, further strengthening our best-in-class portfolio," said Joey Agree, President and Chief Executive Officer. "With total liquidity of approximately $1.9 billion and more than $1.2 billion of hedged capital, our balance sheet remains well positioned to execute on our growth strategy."
Portfolio and Market Position
As of March 31, 2025, Agree Realty Corp's portfolio consisted of 2,422 properties across all 50 states, with a 99.2% lease rate and a weighted-average remaining lease term of approximately 8.0 years. The company acquired two ground leases for $13.5 million and completed six development projects during the quarter.
Analysis and Outlook
Agree Realty Corp's strategic investments and strong liquidity position it well for continued growth in the retail real estate sector. However, the slight miss on EPS highlights the challenges of maintaining profitability amidst economic uncertainties. The company's focus on investment-grade tenants and disciplined asset management should support its long-term performance.
Explore the complete 8-K earnings release (here) from Agree Realty Corp for further details.
