AGREE REALTY CORP [ADC] Filings

10-Q 1 adc-20240630x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

Mark One


☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2024, or


☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period fromto

Commission File Number 001-12928

AGREE REALTY CORPORATION

(Exact name of registrant as specified in its charter)


Maryland		38-3148187
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
Organization)
32301 Woodward Avenue, Royal Oak, Michigan		48073
(Address of principal executive offices)		(Zip Code)

(248) 737-4190

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value	ADC	New York Stock Exchange
Depositary Shares, each representing one-thousandth of a share of 4.25% Series A Cumulative Redeemable Preferred Stock, $0.0001 par value	ADCPrA	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes	☒	No	◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes	☒	No	◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated Filer	◻	Non-accelerated Filer	◻	Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes	☐	No	☒

As of July 22, 2024, the Registrant had 100,624,549 shares of common stock issued and outstanding.

Table of Contents

AGREE REALTY CORPORATION

Index to Form 10-Q


		Page

PART I	Financial Information

Item 1:	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	1

	Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2024 and 2023	2

	Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2024 and 2023	3

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 3:	Quantitative and Qualitative Disclosures about Market Risk	44

Item 4:	Controls and Procedures	45

PART II	Other Information

Item 1:	Legal Proceedings	45

Item 1A:	Risk Factors	45

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	46

Item 3:	Defaults Upon Senior Securities	46

Item 4:	Mine Safety Disclosures	46

Item 5:	Other Information	46

Item 6:	Exhibits	47

SIGNATURES		49

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per-share data)

(Unaudited)


	June 30,		December 31,
	2024		2023
ASSETS
Real Estate Investments
Land	$	2,340,966	$	2,282,354
Buildings		5,061,561		4,861,692
Less accumulated depreciation		(494,737)		(433,958)
		6,907,790		6,710,088
Property under development		44,839		33,232
Net Real Estate Investments		6,952,629		6,743,320

Real Estate Held for Sale, net		—		3,642
Cash and Cash Equivalents		9,639		10,907
Cash Held in Escrow		14,615		3,617
Accounts Receivable - Tenants, net		94,853		82,954
Lease Intangibles, net of accumulated amortization of $408,969 and $360,061 at June 30, 2024 and December 31, 2023, respectively		837,991		854,088
Other Assets, net		91,111		76,308

Total Assets	$	8,000,838	$	7,774,836

LIABILITIES
Mortgage Notes Payable, net	$	42,518	$	42,811
Unsecured Term Loan, net		347,115		346,798
Senior Unsecured Notes, net		2,236,223		1,794,312
Unsecured Revolving Credit Facility		43,000		227,000
Dividends and Distributions Payable		25,863		25,534
Accounts Payable, Accrued Expenses, and Other Liabilities		106,058		101,401
Lease Intangibles, net of accumulated amortization of $43,860 and $42,813 at June 30, 2024 and December 31, 2023, respectively		36,983		36,827

Total Liabilities		2,837,760		2,574,683

EQUITY
Preferred stock, $.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 June 30, 2024 and December 31, 2023		175,000		175,000
Common stock, $.0001 par value, 180,000,000 shares authorized, 100,624,624 and 100,519,355 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		10		10
Additional paid-in-capital		5,357,143		5,354,120
Dividends in excess of net income		(400,809)		(346,473)
Accumulated other comprehensive income		30,915		16,554

Total Equity - Agree Realty Corporation		5,162,259		5,199,211
Non-controlling interest		819		942
Total Equity		5,163,078		5,200,153

Total Liabilities and Equity	$	8,000,838	$	7,774,836

See accompanying notes to condensed consolidated financial statements.

Table of Contents

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except share and per-share data)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Revenues
Rental income	$	152,424	$	129,876	$	301,847	$	256,485
Other		151		24		182		33
Total Revenues		152,575		129,900		302,029		256,518

Operating Expenses
Real estate taxes		10,721		9,874		21,422		19,305
Property operating expenses		6,487		5,821		13,860		12,602
Land lease expense		415		410		830		840
General and administrative		9,707		8,420		19,222		17,244
Depreciation and amortization		50,454		42,750		98,917		83,396
Provision for impairment		—		1,315		4,530		1,315
Total Operating Expenses		77,784		68,590		158,781		134,702

Gain on sale of assets, net		7,156		319		9,252		319
Gain (loss) on involuntary conversion, net		20		—		(35)		—
Income from Operations		81,967		61,629		152,465		122,135

Other (Expense) Income
Interest expense, net		(26,416)		(19,948)		(50,867)		(37,945)
Income and other tax expense		(1,004)		(709)		(2,154)		(1,492)
Other income		366		43		483		91
Net Income		54,913		41,015		99,927		82,789

Less net income attributable to non-controlling interest		189		147		344		307
Net income attributable to Agree Realty Corporation		54,724		40,868		99,583		82,482
Less Series A preferred stock dividends		1,859		1,859		3,718		3,718
Net Income Attributable to Common Stockholders	$	52,865	$	39,009	$	95,865	$	78,764

Net Income Per Share Attributable to Common Stockholders
Basic	$	0.53	$	0.42	$	0.95	$	0.86
Diluted	$	0.52	$	0.42	$	0.95	$	0.86

Other Comprehensive Income
Net income	$	54,913	$	41,015	$	99,927	$	82,789
Amortization of interest rate swaps		(675)		(630)		(1,305)		(1,259)
Change in fair value and settlement of interest rate swaps		4,172		3,341		15,716		3,341
Total comprehensive income		58,410		43,726		114,338		84,871
Less comprehensive income attributable to non-controlling interest		201		157		394		315

Comprehensive Income Attributable to Agree Realty Corporation	$	58,209	$	43,569	$	113,944	$	84,556

Weighted Average Number of Common Shares Outstanding - Basic		100,349,943		93,053,870		100,319,591		91,549,390

Weighted Average Number of Common Shares Outstanding - Diluted		100,454,703		93,134,385		100,415,466		91,862,290

See accompanying notes to condensed consolidated financial statements.

Table of Contents

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(In thousands, except share and per-share data)

(Unaudited)


											Accumulated
									Dividends in		Other
	Preferred Stock			Common Stock			Additional		excess of net		Comprehensive		Non-Controlling		Total
	Shares	Amount		Shares	Amount		Paid-In Capital		income		Income (Loss)		Interest		Equity
Balance, December 31, 2023	7,000	$	175,000	100,519,355	$	10	$	5,354,120	$	(346,473)	$	16,554	$	942	$	5,200,153
Repurchase of common shares	—		—	(37,957)		—		(2,183)		—		—		—		(2,183)
Issuance of stock under the 2020 Omnibus Incentive Plan	—		—	147,656		—		—		—		—		—		—
Forfeiture of restricted stock	—		—	(79)		—		—		—		—		—		—
Stock-based compensation	—		—	—		—		2,425		—		—		—		2,425
Series A preferred dividends declared for the period	—		(1,859)	—		—		—		—		—		—		(1,859)
Common stock dividends and distributions declared for the period	—		—	—		—		—		(74,732)		—		(257)		(74,989)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—	—		—		—		—		10,876		38		10,914
Net income	—		1,859	—		—		—		43,000		—		155		45,014
Balance, March 31, 2024	7,000	$	175,000	100,628,975	$	10	$	5,354,362	$	(378,205)	$	27,430	$	878	$	5,179,475
Repurchase of common shares	—		—	(126)		—		(7)		—		—		—		(7)
Forfeiture of restricted stock	—		—	(4,225)		—		(17)		—		—		—		(17)
Stock-based compensation	—		—	—		—		2,805		—		—		—		2,805
Series A preferred dividends declared for the period	—		(1,859)	—		—		—		—		—		—		(1,859)
Common stock dividends and distributions declared for the period	—		—	—		—		—		(75,469)		—		(260)		(75,729)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—	—		—		—		—		3,485		12		3,497
Net income	—		1,859	—		—		—		52,865		—		189		54,913
Balance, June 30, 2024	7,000	$	175,000	100,624,624	$	10	$	5,357,143	$	(400,809)	$	30,915	$	819	$	5,163,078

Cash dividends declared per depositary share of Series A preferred stock:
For the three months ended March 31, 2024		$	0.266
For the three months ended June 30, 2024		$	0.266

Cash dividends declared per common share:
For the three months ended March 31, 2024					$	0.741
For the three months ended June 30, 2024					$	0.750

See accompanying notes to condensed consolidated financial statements.

Table of Contents

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(In thousands, except share and per-share data)

(Unaudited)


											Accumulated
									Dividends in		Other
	Preferred Stock			Common Stock			Additional		excess of net		Comprehensive		Non-Controlling		Total
	Shares	Amount		Shares	Amount		Paid-In Capital		income		Income (Loss)		Interest		Equity
Balance, December 31, 2022	7,000	$	175,000	90,173,424	$	9	$	4,658,570	$	(228,132)	$	23,551	$	1,392	$	4,630,390
Issuance of common stock, net of issuance costs	—		—	2,945,000		—		195,133		—		—		—		195,133
Repurchase of common shares	—		—	(35,578)		—		(2,607)		—		—		—		(2,607)
Issuance of restricted stock under the 2020 Omnibus Incentive Plan	—		—	128,993		—		—		—		—		—		—
Forfeiture of restricted stock	—		—	(13,760)		—		—		—		—		—		—
Stock-based compensation	—		—	—		—		1,831		—		—		—		1,831
Series A preferred dividends declared for the period	—		(1,859)	—		—		—		—		—		—		(1,859)
Dividends and distributions declared for the period	—		—	—		—		—		(65,939)		—		(250)		(66,189)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—	—		—		—		—		(627)		(2)		(629)
Net income	—		1,859	—		—		—		39,755		—		160		41,774
Balance, March 31, 2023	7,000	$	175,000	93,198,079	$	9	$	4,852,927	$	(254,316)	$	22,924	$	1,300	$	4,797,844
Issuance of common stock, net of issuance costs	—		—	3,070,997		1		205,104		—		—		—		205,105
Repurchase of common shares	—		—	(101)		—		(8)		—		—		—		(8)
Issuance of stock under the 2020 Omnibus Incentive Plan	—		—	373		—		—		—		—		—		—
Forfeiture of restricted stock	—		—	(12)		—		—		—		—		—		—
Stock-based compensation	—		—	—		—		2,177		—		—		—		2,177
Series A preferred dividends declared for the period	—		(1,859)	—		—		—		—		—		—		(1,859)
Dividends and distributions declared for the period	—		—	—		—		—		(68,688)		—		(252)		(68,940)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—	—		—		—		—		2,701		10		2,711
Net income	—		1,859	—		—		—		39,009		—		147		41,015
Balance, June 30, 2023	7,000	$	175,000	96,269,336	$	10	$	5,060,200	$	(283,995)	$	25,625	$	1,205	$	4,978,045

Cash dividends declared per depositary share of Series A preferred stock:
For the three months ended March 31, 2023		$	0.266
For the three months ended June 30, 2023		$	0.266

AGREE REALTY CORP [ADC] Filings
AGREE REALTY CORP [ADC-PA] Filings
10-Q	[2024-07-23]
10-Q	[2024-04-23]
10-K	[2024-02-13]
10-Q	[2023-10-24]
10-Q	[2023-08-01]
10-Q	[2023-05-04]
10-K	[2023-02-14]
10-Q	[2022-11-01]
10-Q	[2022-08-02]
10-Q	[2022-05-03]
10-K	[2022-02-22]
10-Q	[2021-11-01]
10-Q	[2021-07-26]
10-Q	[2021-05-03]
10-K	[2021-02-18]
10-Q	[2020-10-19]
10-Q	[2020-07-20]
10-Q	[2020-04-20]
10-K	[2020-02-20]
10-Q	[2019-10-21]
10-Q	[2019-07-22]
10-Q	[2019-04-22]
10-K	[2019-02-21]
10-Q	[2018-10-22]
10-Q	[2018-07-23]
10-Q	[2018-04-23]
10-K	[2018-02-22]
10-Q	[2017-10-23]
10-Q	[2017-07-24]
10-Q	[2017-04-24]
10-K	[2017-02-23]
10-Q	[2016-10-24]
10-Q	[2016-07-27]
10-Q	[2016-04-27]
10-K	[2016-03-11]
10-Q	[2015-10-30]
10-Q	[2015-07-31]
10-Q	[2015-05-01]
10-K	[2015-03-06]
10-Q	[2014-10-31]
10-Q	[2014-08-01]
10-Q	[2014-05-02]
10-K	[2014-03-07]
10-Q	[2013-11-01]
10-Q	[2013-08-02]
10-Q	[2013-05-03]
10-K	[2013-03-11]
10-Q	[2012-11-02]
10-Q	[2012-08-03]
10-Q	[2012-05-04]
10-K	[2012-03-12]

AGREE REALTY CORP [ADC] Filings

AGREE REALTY CORP [ADC-PA] Filings