Agree Realty Corporation

What they do

The company owns, acquires, develops and manages single-tenant retail properties leased on a net basis, meaning tenants are typically responsible for minimum monthly rent plus property taxes, insurance and maintenance. It operates through Agree Limited Partnership, in which it held a 99.7% common interest as of December 31, 2025, and was founded in 1971 and listed on the NYSE in 1994. Its portfolio totaled roughly 55.5 million square feet of gross leasable area and was approximately 99.7% leased at year-end 2025.

Revenue drivers

• Net leased retail rental income — Rental income is the dominant revenue line, reported at $718.2 million for 2025 versus $616.8 million in 2024, a 16% increase driven by acquisitions, development deliveries and rent escalations.
• Acquisition program — In 2025 the company acquired 305 properties for approximately $1.448 billion across 41 states, at an underwritten weighted-average capitalization rate of 7.2% and a weighted-average lease term of 11.5 years.
• Development and Developer Funding Platform — The company completed 21 development or DFP projects in 2025 at a cost of approximately $131.2 million, commenced 14 projects and had 13 under construction at year-end.
• Investment grade tenancy — Approximately 66.8% of annualized base rent at December 31, 2025 came from tenants, or their parents, with an investment grade credit rating, and the portfolio had a weighted-average remaining lease term of about 7.8 years.

Recent performance

For the second quarter of 2026, net income attributable to common stockholders rose 11.5% to $52.8 million and net income per share increased 2.2% to $0.44. Core FFO per share rose 7.5% to $1.13 and AFFO per share rose 7.4% to $1.14, with Core FFO dollars up 17.3% to $136.0 million. First half 2026 net income was $113.0 million, or $0.94 per share, up 22.2% in dollars and 10.6% per share year over year. Quarterly revenue for the quarter ended June 30, 2026 was $205.1 million, up from $200.8 million in the prior quarter. The company reported investing a record approximately $502 million in 102 retail net lease properties in the second quarter and $925 million in 187 properties for the first half.

Strategy

Management is pursuing growth through acquisitions, development and its Developer Funding Platform, with record investment volume in the first half of 2026. In 2025 the company completed approximately $1.57 billion of investments, including 305 acquisitions and 21 completed development properties, while selling 22 assets for net proceeds of $42.1 million and a $5.4 million net gain. The company is funding growth with equity, including settling 4.3 million forward equity shares for approximately $313 million in the second quarter and raising roughly $686 million of forward equity through its ATM program in the first half. It also executed new leases, extensions or options on approximately 3.033 million square feet in 2025, producing about $29.7 million of annualized base contractual rent. The company describes its balance sheet as well positioned, reporting 3.7 times proforma net debt to recurring EBITDA, or 5.2 times excluding unsettled forward equity.

Risks

• Tenant credit and defaults — A significant majority of rent comes from national tenants, and financial failure or bankruptcy of one or more major tenants could reduce rent and recoverable expense payments.
• Interest rate and financing conditions — Elevated inflation and increased interest rates have raised acquisition costs and reduced availability of acceptable financing, per the 10-K risk factors.
• Acquisition and development execution — The company's growth depends on acquisitions and development or DFP projects performing as expected, after record investment volumes in 2025 and the first half of 2026.
• Concentration and retail sector disruption — The risk factors cite concentration with certain tenants and markets and adverse retail sector changes, including tariff impacts, as factors that could affect tenant rent-paying ability.

Outlook

The company raised its 2026 investment guidance to $1.6 billion to $1.8 billion and increased 2026 AFFO per share guidance to $4.57 to $4.59, as stated in its July 30, 2026 earnings release. It ended the first half with approximately $1.9 billion of liquidity including revolver availability, outstanding forward equity and cash on hand. Reported annual revenue grew from $339.3 million in 2021 to $718.4 million in 2025, and management notes the full rental income impact of 2025 acquisitions will not be seen until 2026.