AGREE REALTY CORP [ADC] Filings

10-Q 1 adc-20220930x10q.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 September 30, 2022, 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)
70 E. Long Lake Road, Bloomfield Hills, Michigan		48304
(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 October 31, 2022, the Registrant had 88,573,248 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 September 30, 2022 and December 31, 2021	1

	Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2022 and 2021	3

	Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2022 and 2021	4

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3:	Quantitative and Qualitative Disclosures about Market Risk	49

Item 4:	Controls and Procedures	50

PART II	Other Information

Item 1:	Legal Proceedings	50

Item 1A:	Risk Factors	50

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	50

Item 3:	Defaults Upon Senior Securities	50

Item 4:	Mine Safety Disclosures	50

Item 5:	Other Information	50

Item 6:	Exhibits	51

SIGNATURES		52

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)


	September 30,		December 31,
	2022		2021
ASSETS
Real Estate Investments
Land	$	1,841,259	$	1,559,434
Buildings		3,795,181		3,034,391
Less accumulated depreciation		(296,304)		(233,862)
		5,340,136		4,359,963
Property under development		50,685		7,148
Net Real Estate Investments		5,390,821		4,367,111

Real Estate Held for Sale, net		—		5,676

Cash and Cash Equivalents		250,487		43,252

Cash Held in Escrows		1,027		1,998

Accounts Receivable - Tenants, net		68,697		53,442

Lease Intangibles, net of accumulated amortization of
$240,244 and $180,532 at September 30, 2022 and December 31, 2021, respectively		763,458		672,020

Other Assets, net		81,611		83,407

Total Assets	$	6,556,101	$	5,226,906

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

AGREE REALTY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)


	September 30,		December 31,
	2022		2021
LIABILITIES
Mortgage Notes Payable, net	$	71,721	$	32,429

Senior Unsecured Notes, net		1,791,492		1,495,200

Unsecured Revolving Credit Facility		—		160,000

Dividends and Distributions Payable		21,427		16,881

Accounts Payable, Accrued Expenses, and Other Liabilities		85,637		70,005

Lease Intangibles, net of accumulated amortization of
$34,356 and $29,726 at September 30, 2022 and December 31, 2021, respectively		37,117		33,075

Total Liabilities		2,007,394		1,807,590

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 September 30, 2022 and December 31, 2021		175,000		175,000
Common stock, $.0001 par value, 180,000,000 shares authorized, 88,573,248 and 71,285,311 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		9		7
Additional paid-in-capital		4,551,081		3,395,549
Dividends in excess of net income		(203,040)		(147,366)
Accumulated other comprehensive income (loss)		24,124		(5,503)

Total Equity - Agree Realty Corporation		4,547,174		3,417,687
Non-controlling interest		1,533		1,629
Total Equity		4,548,707		3,419,316

Total Liabilities and Equity	$	6,556,101	$	5,226,906

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				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Revenues
Rental income	$	110,031	$	87,469	$	313,136	$	247,722
Other		34		68		147		189
Total Revenues		110,065		87,537		313,283		247,911

Operating Expenses
Real estate taxes		8,526		6,957		24,117		18,812
Property operating expenses		4,557		3,189		13,575		9,944
Land lease expense		404		400		1,213		1,135
General and administrative		6,992		5,687		22,265		18,806
Depreciation and amortization		35,157		24,488		95,666		69,164
Provision for impairment		—		—		1,015		—
Total Operating Expenses		55,636		40,721		157,851		117,861

Gain (loss) on sale of assets, net		3,000		3,470		5,326		13,182
Gain (loss) on involuntary conversion, net		(115)		—		(165)		103
Income from Operations		57,314		50,286		160,593		143,335

Other (Expense) Income
Interest expense, net		(17,149)		(13,066)		(46,592)		(37,267)
Income tax (expense) benefit		(720)		(390)		(2,137)		(1,884)
Loss on early extinguishment of term loans and settlement of related interest rate swaps		—		—		—		(14,614)
Other (expense) income		132		—		132		—
Net Income		39,577		36,830		111,996		89,570

Less net income attributable to non-controlling interest		152		167		485		447
Net income attributable to Agree Realty Corporation		39,425		36,663		111,511		89,123
Less Series A preferred stock dividends		1,859		289		5,578		289
Net Income Attributable to Common Stockholders	$	37,566	$	36,374	$	105,933	$	88,834

Net Income Per Share Attributable to Common Stockholders
Basic	$	0.47	$	0.52	$	1.40	$	1.35
Diluted	$	0.46	$	0.52	$	1.39	$	1.34

Other Comprehensive Income
Net income	$	39,577	$	36,830	$	111,996	$	89,570
Amortization of interest rate swaps		(273)		82		(109)		869
Change in fair value and settlement of interest rate swaps		(7,181)		3,300		29,881		30,676
Total comprehensive income (loss)		32,123		40,212		141,768		121,115
Less comprehensive income (loss) attributable to non-controlling interest		121		185		630		465

Comprehensive Income (Loss) Attributable to Agree Realty Corporation	$	32,002	$	40,027	$	141,138	$	120,650

Weighted Average Number of Common Shares Outstanding - Basic		79,701,136		69,102,500		75,361,583		65,623,720

Weighted Average Number of Common Shares Outstanding - Diluted		80,589,446		69,591,848		75,890,692		65,952,113

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, 2021	7,000	$	175,000	71,285,311	$	7	$	3,395,549	$	(147,366)	$	(5,503)	$	1,629	$	3,419,316
Issuance of common stock, net of issuance costs	—		—	3,791,964		1		250,683		—		—		—		250,684
Repurchase of common shares	—		—	(28,117)		—		(1,745)		—		—		—		(1,745)
Issuance of stock under the 2020 Omnibus Incentive Plan	—		—	125,422		—		648		—		—		—		648
Stock-based compensation	—		—	—		—		1,635		—		—		—		1,635
Series A preferred dividends declared for the period	—		(1,859)	—		—		—		—		—		—		(1,859)
Dividends and distributions declared for the period	—		—	—		—		—		(49,653)		—		(237)		(49,890)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—	—		—		—		—		20,563		100		20,663
Net income	—		1,859	—		—		—		34,254		—		176		36,289
Balance, March 31, 2022	7,000	$	175,000	75,174,580	$	8	$	3,646,770	$	(162,765)	$	15,060	$	1,668	$	3,675,741
Issuance of common stock, net of issuance costs	—		—	4,667,850		—		300,110		—		—		—		300,110
Repurchase of common shares	—		—	(1,052)		—		(76)		—		—		—		(76)
Issuance of stock under the 2020 Omnibus Incentive Plan	—		—	1,493		—		—		—		—		—		—
Forfeiture of restricted stock	—		—	(128)		—		—		—		—		—		—
Stock-based compensation	—		—	—		—		1,743		—		—		—		1,743
Series A preferred dividends declared for the period	—		(1,859)	—		—		—		—		—		—		(1,859)
Dividends and distributions declared for the period	—		—	—		—		—		(53,867)		—		(245)		(54,112)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—	—		—		—		—		16,487		76		16,563
Net income	—		1,859	—		—		—		34,114		—		157		36,130
Balance, June 30, 2022	7,000	$	175,000	79,842,743	$	8	$	3,948,547	$	(182,518)	$	31,547	$	1,656	$	3,974,240
Issuance of common stock, net of issuance costs	—		—	8,739,752		1		601,086		—		—		—		601,087
Repurchase of common shares	—		—	(943)		—		(66)		—		—		—		(66)
Issuance of stock under the 2020 Omnibus Incentive Plan	—		—	1,754		—		—		—		—		—		—
Forfeiture of restricted stock	—		—	(10,058)		—		(61)		—		—		—		(61)
Stock-based compensation	—		—	—		—		1,575		—		—		—		1,575
Series A preferred dividends declared for the period	—		(1,859)	—		—		—		—		—		—		(1,859)
Dividends and distributions declared for the period	—		—	—		—		—		(58,088)		—		(244)		(58,332)
Amortization, changes in fair value, and settlement of interest rate swaps	—		—	—		—		—		—		(7,423)		(31)		(7,454)
Net income	—		1,859	—		—		—		37,566		—		152		39,577
Balance, September 30, 2022	7,000	$	175,000	88,573,248	$	9	$	4,551,081	$	(203,040)	$	24,124	$	1,533	$	4,548,707

Cash dividends declared per depositary share of Series A preferred stock:
For the three months ended March 31, 2022		$	0.266
For the three months ended June 30, 2022		$	0.266
For the three months ended September 30, 2022		$	0.266

Cash dividends declared per common share:
For the three months ended March 31, 2022					$	0.681
For the three months ended June 30, 2022					$	0.702
For the three months ended September 30, 2022					$	0.702

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, 2020		—	$	—	60,021,483	$	6	$	2,652,090	$	(91,343)	$	(36,266)	$	1,762	$	2,526,249
Issuance of common stock, net of issuance costs	&#

AGREE REALTY CORP [ADC] Filings
AGREE REALTY CORP [ADC-PA] Filings
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