Agree Realty Corporation Reports First Quarter 2025 Results

Raises 2025 Investment Guidance to $1.3 Billion to $1.5 BillionIncreases 2025 AFFO Per Share Guidance to $4.27 to $4.30 , /PRNewswire/ -- Agree Realty Corporation (NYSE: ADC) (the "Company") today announced results for the quarter ended March 31, 2025. All per share amounts included herein are on a diluted per common share basis unless otherwise stated. First Quarter 2025 Financial and Operating Highlights: Invested approximately $377 million in 69 retail net lease properties Commenced four development or Developer Funding Platform ("DFP") projects for total committed capital of approximately $24 million Net Income per share attributable to common stockholders decreased 2.0% to $0.42 Core Funds from Operations ("Core FFO") per share increased 3.1% to $1.04 Adjusted Funds from Operations ("AFFO") per share increased 3.0% to $1.06 Declared an increased monthly dividend of $0.256 per common share for April, a 2.4% year-over-year increase Sold 2.4 million shares of common stock via the forward component of the Company's at-the-market equity ("ATM") program for anticipated net proceeds of approximately $181 million Settled 2.7 million shares of outstanding forward equity for net proceeds of approximately $183 million Established a $625 million unsecured commercial paper program Balance sheet well positioned at 3.4 times proforma net debt to recurring EBITDA; 4.9 times excluding unsettled forward equity Ended the quarter with approximately $1.9 billion of total liquidity including availability on the revolving credit facility, outstanding forward equity, and cash on hand Financial Results Net Income Attributable to Common Stockholders Net Income for the three months ended March 31, 2025 increased 5.0% to $45.1 million, compared to $43.0 million for the comparable period in 2024. Net Income per share for the three months ended March 31st decreased 2.0% to $0.42 compared to $0.43 for the comparable period in 2024. Core FFO Core FFO for the three months ended March 31, 2025 increased 10.5% to $112.7 million, compared to Core FFO of $102.0 million for the comparable period in 2024. Core FFO per share for the three months ended March 31st increased 3.1% to $1.04, compared to Core FFO per share of $1.01 for the comparable period in 2024. AFFO AFFO for the three months ended March 31, 2025 increased 10.4% to $114.0 million, compared to AFFO of $103.3 million for the comparable period in 2024. AFFO per share for the three months ended March 31st increased 3.0% to $1.06, compared to AFFO per share of $1.03 for the comparable period in 2024. Dividend In the first quarter, the Company declared monthly cash dividends of $0.253 per common share for each of January, February and March 2025. The monthly dividends declared during the first quarter reflect an annualized dividend amount of $3.036 per common share, representing a 2.4% increase over the annualized dividend amount of $2.964 per common share from the first quarter of 2024. The dividends represent payout ratios of approximately 73% of Core FFO per share and 72% of AFFO per share, respectively. Subsequent to quarter end, the Company declared an increased monthly cash dividend of $0.256 per common share for April 2025. The April monthly dividend reflects an annualized dividend amount of $3.072 per common share, representing a 2.4% increase over the annualized dividend amount of $3.00 per common share from the second quarter of 2024. The April dividend is payable on May 14, 2025 to stockholders of record at the close of business on April 30, 2025. Additionally, subsequent to quarter end, the Company declared a monthly cash dividend on its 4.25% Series A Cumulative Redeemable Preferred Stock of $0.08854 per depositary share, which is equivalent to $1.0625 per annum. The dividend is payable on May 1, 2025 to stockholders of record at the close of business on April 21, 2025. Earnings Guidance The table below provides estimates for significant components of our 2025 earnings guidance. In addition, the AFFO per share guidance range includes an estimate for the dilutive impact of the Company's outstanding forward equity calculated in accordance with the treasury stock method. Prior 2025 Guidance(1) Revised 2025 Guidance AFFO per share(2) $4.26 to $4.30 $4.27 to $4.30 General and administrative expenses (% of adjusted revenue)(3) 5.6% to 5.9% 5.6% to 5.9% Non-reimbursable real estate expenses (% of adjusted revenue)(3) 1.0% to 1.5% 1.0% to 1.5% Income and other tax expense $3 to $4 million $3 to $4 million Investment volume $1.1 to $1.3 billion $1.3 to $1.5 billion Disposition volume $10 to $50 million $10 to $50 million The Company's 2025 guidance is subject to risks and uncertainties more fully described in this press release and in the Company's filings with the Securities and Exchange Commission.(1) As issued on February 11, 2025.(2) The Company does not provide guidance with respect to the most directly comparable GAAP financial measure or provide reconciliations to GAAP from its forward-looking non-GAAP financial measure of AFFO per share guidance due to the inherent difficulty of forecasting the effect, timing and significance of certain amounts in the reconciliation that would be required by Item 10(e)(1)(i)(B) of Regulation S-K. Examples of these amounts include impairments of assets, gains and losses from sales of assets, and depreciation and amortization from new acquisitions or developments. In addition, certain non-recurring items may also significantly affect net income but are generally adjusted for in AFFO. Based on our historical experience, the dollar amounts of these items could be significant and could have a material impact on the Company's GAAP results for the guidance period.(3) Adjusted revenue excludes the impact of the amortization of above and below market lease intangibles. CEO Comments "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. Given the continued strong performance of our portfolio and robust opportunities across all three platforms, we are increasing full-year 2025 investment guidance to a range of $1.3 billion to $1.5 billion and raising our 2025 AFFO per share guidance to a range of $4.27 to $4.30. We will maintain our disciplined and thoughtful approach to asset underwriting and portfolio construction during this period of uncertainty." Portfolio Update As of March 31, 2025, the Company's portfolio consisted of 2,422 properties located in all 50 states and contained approximately 50.3 million square feet of gross leasable area. At quarter end, the portfolio was 99.2% leased, had a weighted-average remaining lease term of approximately 8.0 years, and generated 68.3% of annualized base rents from investment grade retail tenants. Ground Lease Portfolio During the first quarter, the Company acquired two ground leases for an aggregate purchase price of approximately $13.5 million, representing 3.6% of annualized base rents acquired. As of March 31, 2025, the Company's ground lease portfolio consisted of 231 leases located in 37 states and totaled approximately 6.4 million square feet of gross leasable area. Properties ground leased to tenants represented 10.6% of annualized base rents. At quarter end, the ground lease portfolio was fully occupied, had a weighted-average remaining lease term of approximately 9.5 years, and generated 88.0% of annualized base rents from investment grade retail tenants. Acquisitions Total acquisition volume for the first quarter was approximately $358.9 million and included 46 select properties net leased to leading retailers operating in sectors including grocery, off-price, auto parts, convenience stores and tire and auto service. The properties are located in 23 states and leased to tenants operating in 19 sectors. The properties were acquired at a weighted-average capitalization rate of 7.3% and had a weighted-average remaining lease term of approximately 13.4 years. Approximately 68.7% of annualized base rents acquired were generated from investment grade retail tenants. Dispositions During the first quarter, the Company sold one property for gross proceeds of approximately $2.5 million. The Company anticipates disposition volume for the full year 2025 to be between $10 million and $50 million. Development and Developer Funding Platform During the first quarter, the Company commenced four development or DFP projects, with total anticipated costs of approximately $23.9 million. Construction continued during the quarter on 14 projects with anticipated costs totaling approximately $79.9 million. The Company completed six projects during the quarter with total costs of approximately $27.2 million. For the three months ended March 31, 2025, the Company had 24 development or DFP projects completed or under construction with anticipated total costs of approximately $131.0 million. The projects are leased to leading retailers including TJX Companies, Burlington, 7-Eleven, Boot Barn, Starbucks, Gerber Collision, and Sunbelt Rentals. The following table presents estimated costs for the Company's active or completed development and DFP projects for the quarter ended March 31, 2025: Quarter of Delivery Number of Projects Costs Funded to Date Remaining Funding Costs Anticipated Total Project Costs Q1 2025 6 $27,234 $0 $27,234 Q2 2025 5 12,155 6,222 18,377 Q3 2025 9 26,193 41,593 67,786 Q4 2025 1 1,432 6,587 8,019 Q2 2026 1 1,509 1,141 2,650 Q3 2026 2 4,739 2,236 6,975 Total 24 $73,262 $57,779 $131,041 Development and DFP project costs are in thousands. Any differences are the result of rounding. Costs Funded to Date in Q1 2025 may include adjustments related to completed projects to arrive at the correct Anticipated Total Project Costs. Leasing Activity and Expirations During the first quarter, the Company executed new leases, extensions or options on approximately 584,000 square feet of gross leasable area throughout the existing portfolio. Notable new leases, extensions or options included a 123,000-square foot Walmart Supercenter in Rancho Cordova, California, a 120,000-square foot Home Depot in Farmington, New Mexico, and 16 geographically diverse AutoZone leases comprising over 100,000-square feet. As of March 31, 2025, the Company's 2025 lease maturities represented 0.9% of annualized base rents. The following table presents contractual lease expirations within the Company's portfolio as of March 31, 2025, assuming no tenants exercise renewal options: Year Leases Annualized Base Rent (1) Percent of Annualized Base Rent Gross Leasable Area Percent of Gross Leasable Area 2025 30 $5,820 0.9 % 626 1.3 % 2026 100 22,927 3.5 % 2,280 4.6 % 2027 167 38,142 5.9 % 3,544 7.1 % 2028 175 46,173 7.1 % 4,051 8.1 % 2029 209 66,283 10.2 % 6,293 12.6 % 2030 306 65,902 10.2 % 5,337 10.7 % 2031 195 46,840 7.2 % 3,530 7.1 % 2032 241 50,300 7.8 % 3,630 7.3 % 2033 217 49,623 7.6 % 3,903 7.8 % 2034 206 46,811 7.2 % 3,054 6.1 % Thereafter 757 209,911 32.4 % 13,670 27.3 % Total Portfolio 2,603 $648,732 100.0 % 49,918 100.0 % The contractual lease expirations presented above exclude the effect of replacement tenant leases that had been executed as of March 31, 2025, but that had not yet commenced. Annualized Base Rent and gross leasable area (square feet) are in thousands; any differences are the result of rounding.(1) Annualized Base Rent represents the annualized amount of contractual minimum rent required by tenant lease agreements as of March 31, 2025, computed on a straight-line basis. Annualized Base Rent is not, and is not intended to be, a presentation in accordance with generally accepted accounting principles ("GAAP"). The Company believes annualized contractual minimum rent is useful to management, investors, and other interested parties in analyzing concentrations and leasing activity. Top Tenants The following table presents annualized base rents for all tenants that represent 1.5% or greater of the Company's total annualized base rent as of March 31, 2025: Tenant Annualized Base Rent(1) Percent of Annualized Base Rent Walmart $38,490 5.9 % Tractor Supply 31,839 4.9 % Dollar General 28,417 4.4 % Best Buy 21,682 3.3 % Kroger 20,534 3.2 % TJX Companies 19,971 3.1 % CVS 19,936 3.1 % Dollar Tree 18,338 2.8 % O'Reilly Auto Parts 18,263 2.8 % Hobby Lobby 18,198 2.8 % Lowe's 17,884 2.8 % Gerber Collision 15,180 2.3 % Sunbelt Rentals 14,964 2.3 % 7-Eleven 14,205 2.2 % Burlington 14,019 2.2 % Sherwin-Williams 12,439 1.9 % Home Depot 11,387 1.8 % Wawa 10,410 1.6 % Other(2) 302,576 46.6 % Total Portfolio $648,732 100.0 % Annualized Base Rent is in thousands; any differences are the result of rounding.(1) Refer to footnote 1 on page 5 for the Company's definition of Annualized Base Rent. (2) Includes tenants generating less than 1.5% of Annualized Base Rent. Retail Sectors The following table presents annualized base rents for all the Company's retail sectors as of March 31, 2025: Sector Annualized Base Rent(1) Percent of Annualized Base Rent Grocery Stores $65,660 10.1 % Home Improvement 59,016 9.1 % Convenience Stores 50,546 7.8 % Tire and Auto Service 50,526 7.8 % Dollar Stores 45,409 7.0 % Auto Parts 40,567 6.2 % Off-Price Retail 39,572 6.1 % General Merchandise 33,934 5.2 % Farm and Rural Supply 33,611 5.2 % Consumer Electronics 25,162 3.9 % Pharmacy 24,887 3.8 % Crafts and Novelties 20,516 3.2 % Warehouse Clubs 16,793 2.6 % Health Services 16,091 2.5 % Equipment Rental 16,020 2.5 % Dealerships 15,078 2.3 % Discount Stores 14,663 2.3 % Restaurants - Quick Service 12,536 1.9 % Health and Fitness 12,325 1.9 % Specialty Retail 9,357 1.4 % Sporting Goods 8,482 1.3 % Financial Services 7,000 1.1 % Restaurants - Casual Dining 5,704 0.9 % Home Furnishings 3,969 0.6 % Shoes 3,955 0.6 % Theaters 3,854 0.6 % Pet Supplies 3,782 0.6 % Beauty and Cosmetics 3,493 0.5 % Entertainment Retail 2,323 0.4 % Apparel 2,016 0.3 % Miscellaneous 1,261 0.2 % Office Supplies 624 0.1 % Total Portfolio $648,732 100.0 % Annualized Base Rent is in thousands; any differences are the result of rounding.(1) Refer to footnote 1 on page 5 for the Company's definition of Annualized Base Rent. Geographic Diversification The following table presents annualized base rents for all states that represent 1.5% or greater of the Company's total annualized base rent as of March 31, 2025: State Annualized Base Rent(1) Percent of Annualized Base Rent Texas $46,064 7.1 % Michigan 35,691 5.5 % Illinois 35,511 5.5 % Ohio 33,241 5.1 % Florida 33,181 5.1 % North Carolina 32,419 5.0 % New York 31,930 4.9 % Pennsylvania 30,203 4.7 % California 27,850 4.3 % Georgia 25,594 3.9 % New Jersey 24,069 3.7 % Missouri 18,470 2.8 % Louisiana 18,400 2.8 % Wisconsin 18,135 2.8 % Virginia 15,884 2.4 % South Carolina 15,668 2.4 % Kansas 15,553 2.4 % Mississippi 15,502 2.4 % Minnesota 13,575 2.1 % Connecticut 13,211 2.0 % Massachusetts 12,705 2.0 % Tennessee 12,365 1.9 % Indiana 12,239 1.9 % Alabama 11,118 1.7 % Maryland 9,737 1.5 % Other(2) 90,417 14.1 % Total Portfolio $648,732 100.0 % Annualized Base Rent is in thousands; any differences are the result of rounding.(1) Refer to footnote 1 on page 5 for the Company's definition of Annualized Base Rent. (2) Includes states generating less than 1.5% of Annualized Base Rent. Capital Markets, Liquidity and Balance Sheet Capital Markets In March 2025, the Company established its inaugural commercial paper program. The program allows the Company, through its subsidiary, Agree Limited Partnership, to issue up to $625 million of short-term, unsecured commercial paper notes. The notes are sold under customary terms in the United States commercial paper note market and rank pari passu with all the Issuer's other senior unsecured indebtedness. The notes are fully and unconditionally guaranteed by the Company and certain of its subsidiaries. During the first quarter, the Company entered into forward sale agreements in connection with its ATM program to sell an aggregate of 2.4 million shares of common stock for net proceeds of $181.4 million. Additionally, the Company settled 2.7 million shares under existing forward sale agreements for net proceeds of $183.3 million. The following table presents the Company's outstanding forward equity offerings as of March 31, 2025: Forward Equity Offerings Shares Sold Shares Settled Shares Remaining Net Proceeds Received Anticipated Net Proceeds Remaining Q2 2024 ATM Forward Offerings 3,235,964 3,203,496 32,468 $192,818,310 $2,015,646 Q3 2024 ATM Forward Offerings 6,602,317 2,238,000 4,364,317 $157,481,346 $311,030,200 Q4 2024 ATM Forward Offerings 739,013 - 739,013 - $55,156,654 October 2024 Forward Offering 5,060,000 - 5,060,000 - $367,499,198 Q1 2025 ATM Forward Offerings 2,408,201 - 2,408,201 - $181,412,163 Total Forward Equity Offerings 18,045,495 5,441,496 12,603,999 $350,299,656 $917,113,861 Liquidity As of March 31, 2025, the Company had total liquidity of approximately $1.9 billion, which includes $928.0 million of availability under its revolving credit facility, $917.1 million of outstanding forward equity, and $11.2 million of cash on hand. The Company's $1.25 billion revolving credit facility includes an accordion option that allows the Company to request additional lender commitments of up to a total of $2.0 billion. Balance Sheet As of March 31, 2025, the Company's net debt to recurring EBITDA was 4.9 times. The Company's proforma net debt to recurring EBITDA was 3.4 times when deducting the $917.1 million of anticipated net proceeds from the outstanding forward equity offerings from the Company's net debt of approximately $3.0 billion as of March 31, 2025. The Company's fixed charge coverage ratio was 4.3 times at quarter end. The Company's total debt to enterprise value was 25.5% as of March 31, 2025. Enterprise value is calculated as the sum of net debt, the liquidation value of the Company's preferred stock, and the market value of the Company's outstanding shares of common stock, assuming conversion of Agree Limited Partnership (the "Operating Partnership" or "OP") common units into common stock of the Company. For the three months ended March 31, 2025, the Company's fully diluted weighted-average shares outstanding were 107.5 million. The basic weighted-average shares outstanding for the three months ended March 31, 2025 were 107.0 million. For the three months ended March 31, 2025, the Company's fully diluted weighted-average shares and units outstanding were 107.9 million. The basic weighted-average shares and units outstanding for the three months ended March 31, 2025 were 107.4 million. The Company's assets are held by, and its operations are conducted through, the Operating Partnership, of which the Company is the sole general partner. As of March 31, 2025, there were 347,619 Operating Partnership common units outstanding, and the Company held a 99.7% common interest in the Operating Partnership. Conference Call/Webcast The Company will host its quarterly analyst and investor conference call on Wednesday, April 23, 2025 at 9:00 AM ET. To participate in the conference call, please dial (800) 836-8184 approximately ten minutes before the call begins. Additionally, a webcast of the conference call will be available via the Company's website. To access the webcast, visit www.agreerealty.com ten minutes prior to the start time of the conference call and go to the Investors section of the website. A replay of the conference call webcast will be archived and available online through the Investors section of www.agreerealty.com. About Agree Realty Corporation Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of March 31, 2025, the Company owned and operated a portfolio of 2,422 properties, located in all 50 states and containing approximately 50.3 million square feet of gross leasable area. The Company's common stock is listed on the New York Stock Exchange under the symbol "ADC". For additional information on the Company and RETHINKING RETAIL, please visit www.agreerealty.com. Forward-Looking Statements This press release contains forward-looking statements, including statements about projected financial and operating results, within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may,", "can", "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "assume," "plan," "outlook" or other similar words or expressions. Forward-looking statements, including our updated 2025 guidance, are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Although these forward-looking statements are based on good faith beliefs, reasonable assumptions and the Company's best judgment reflecting current information, you should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and which could materially affect the Company's results of operations, financial condition, cash flows, performance or future achievements or events. Currently, some of the most significant factors, include the potential adverse effect of ongoing worldwide economic uncertainties and increased inflation and interest rates on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets. The extent to which these conditions will impact the Company and its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence. Moreover, investors are cautioned to interpret many of the risks identified in the risk factors discussed in the Company's Annual Report on Form 10-K and subsequent quarterly reports filed with the Securities and Exchange Commission (the "SEC"), as well as the risks set forth below, as being heightened as a result of the ongoing and numerous adverse impacts of the macroeconomic environment. Additional important factors, among others, that may cause the Company's actual results to vary include the general deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, the Company's continuing ability to qualify as a REIT and other factors discussed in the Company's reports filed with the SEC. The forward-looking statements included in this press release are made as of the date hereof. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, changes in the Company's expectations or assumptions or otherwise. For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company's website at www.agreerealty.com. The Company defines the "weighted-average capitalization rate" for acquisitions and dispositions as the sum of contractual fixed annual rents computed on a straight-line basis over the primary lease terms and anticipated annual net tenant recoveries, divided by the purchase and sale prices for occupied properties. The Company defines the "all-in rate" as the interest rate that reflects the straight-line amortization of the terminated swap agreements and original issuance discount, as applicable. References to "Core FFO" and "AFFO" in this press release are representative of Core FFO attributable to OP common unitholders and AFFO attributable to OP common unitholders. Detailed calculations for these measures are shown in the Reconciliation of Net Income to FFO, Core FFO and Adjusted FFO table as "Core Funds From Operations – OP Common Unitholders" and "Adjusted Funds from Operations – OP Common Unitholders". Agree Realty Corporation Consolidated Balance Sheet ($ in thousands, except share and per-share data) (Unaudited) March 31, 2025 December 31, 2024 Assets: Real Estate Investments: Land $ 2,599,164 $ 2,514,167 Buildings 5,648,162 5,412,564 Accumulated depreciation (601,088) (564,429) Property under development 50,294 55,806 Net real estate investments 7,696,532 7,418,108 Real estate held for sale, net 1,278 - Cash and cash equivalents 7,915 6,399 Cash held in escrows 3,254 - Accounts receivable - tenants, net 105,485 106,416 Lease Intangibles, net of accumulated amortization of $487,849 and $461,419 at March 31, 2025 and December 31, 2024, respectively 897,380 864,937 Other assets, net 88,733 90,586 Total Assets $ 8,800,577 $ 8,486,446 Liabilities: Mortgage notes payable, net 42,050 42,210 Unsecured term loans, net 347,609 347,452 Senior unsecured notes, net 2,238,451 2,237,759 Unsecured revolving credit facility 322,000 158,000 Dividends and distributions payable 28,542 27,842 Accounts payable, accrued expenses, and other liabilities 129,652 116,273 Lease intangibles, net of accumulated amortization of $46,998 and$46,003 at March 31, 2025 and December 31, 2024, respectively 47,353 46,249 Total Liabilities $ 3,155,657 $ 2,975,785 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 March 31, 2025 and December 31, 2024 175,000 175,000 Common stock, $.0001 par value, 180,000,000 shares authorized, 110,018,590 and 107,248,705 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively 11 10 Additional paid-in-capital 5,948,156 5,765,582 Dividends in excess of net income (508,059) (470,622) Accumulated other comprehensive income (loss) 29,344 40,076 Total Equity - Agree Realty Corporation $ 5,644,452 $ 5,510,046 Non-controlling interest 468 615 Total Equity $ 5,644,920 $ 5,510,661 Total Liabilities and Equity $ 8,800,577 $ 8,486,446 Agree Realty Corporation Consolidated Statements of Operations and Comprehensive Income ($ in thousands, except share and per share-data) (Unaudited) Three months ended March 31, 2025 2024 Revenues Rental Income $ 169,113 $ 149,422 Other 47 31 Total Revenues $ 169,160 $ 149,453 Operating Expenses Real estate taxes $ 11,513 $ 10,701 Property operating expenses 8,381 7,373 Land lease expense 485 415 General and administrative 10,771 9,515 Depreciation and amortization 55,755 48,463 Provision for impairment 4,331 4,530 Total Operating Expenses $ 91,236 $ 80,997 Gain (loss) on sale of assets, net 772 2,096 Gain (loss) on involuntary conversion, net - (55) Income from Operations $ 78,696 $ 70,497 Other (Expense) Income Interest expense, net $ (30,764) $ (24,451) Income and other tax (expense) benefit (825) (1,149) Other (expense) income 41 117 Net Income $ 47,148 $ 45,014 Less net income attributable to non-controlling interest 152 155 Net Income Attributable to Agree Realty Corporation $ 46,996 $ 44,859 Less Series A Preferred Stock Dividends 1,859 1,859 Net Income Attributable to Common Stockholders $ 45,137 $ 43,000 Net Income Per Share Attributable to Common Stockholders Basic $ 0.42 $ 0.43 Diluted $ 0.42 $ 0.43 Other Comprehensive Income Net Income $ 47,148 $ 45,014 Amortization of interest rate swaps (736) (629) Change in fair value and settlement of interest rate swaps (10,031) 11,543 Total Comprehensive Income (Loss) 36,381 55,928 Less comprehensive income attributable to non-controlling interest 117 193 Comprehensive Income Attributable to Agree Realty Corporation $ 36,264 $ 55,735 Weighted Average Number of Common Shares Outstanding - Basic 107,048,557 100,284,588 Weighted Average Number of Common Shares Outstanding - Diluted 107,547,193 100,336,600 Agree Realty Corporation Reconciliation of Net Income to FFO, Core FFO and Adjusted FFO ($ in thousands, except share and per-share data) (Unaudited) Three months ended March 31, 2025 2024 Net Income $ 47,148 $ 45,014 Less Series A Preferred Stock Dividends 1,859 1,859 Net Income attributable to OP Common Unitholders $ 45,289 $ 43,155 Depreciation of rental real estate assets 37,164 31,966 Amortization of lease intangibles - in-place leases and leasing costs 18,064 15,996 Provision for impairment 4,331 4,530 (Gain) loss on sale or involuntary conversion of assets, net (772) (2,041) Funds from Operations - OP Common Unitholders $ 104,076 $ 93,606 Amortization of above (below) market lease intangibles, net and assumed mortgage debt discount, net 8,630 8,379 Core Funds from Operations - OP Common Unitholders $ 112,706 $ 101,985 Straight-line accrued rent (4,009) (2,847) Stock based compensation expense 3,129 2,425 Amortization of financing costs and original issue discounts 1,612 1,186 Non-real estate depreciation 527 501 Adjusted Funds from Operations - OP Common Unitholders $ 113,965 $ 103,250 Funds from Operations Per Common Share and OP Unit - Basic $ 0.97 $ 0.93 Funds from Operations Per Common Share and OP Unit - Diluted $ 0.96 $ 0.93 Core Funds from Operations Per Common Share and OP Unit - Basic $ 1.05 $ 1.01 Core Funds from Operations Per Common Share and OP Unit - Diluted $ 1.04 $ 1.01 Adjusted Funds from Operations Per Common Share and OP Unit - Basic $ 1.06 $ 1.03 Adjusted Funds from Operations Per Common Share and OP Unit - Diluted $ 1.06 $ 1.03 Weighted Average Number of Common Shares and OP Units Outstanding - Basic 107,396,176 100,632,207 Weighted Average Number of Common Shares and OP Units Outstanding - Diluted 107,894,812 100,684,219 Additional supplemental disclosure Scheduled principal repayments $ 250 $ 235 Capitalized interest 442 304 Capitalized building improvements 600 493 Non-GAAP Financial Measures Funds from Operations ("FFO" or "Nareit FFO")FFO is defined by the National Association of Real Estate Investment Trusts, Inc. ("Nareit") to mean net income computed in accordance with GAAP, excluding gains (or losses) from sales of real estate assets and/or changes in control, plus real estate related depreciation and amortization and any impairment charges on depreciable real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company's operations. FFO should not be considered an alternative to net income as the primary indicator of the Company's operating performance, or as an alternative to cash flow as a measure of liquidity. Further, while the Company adheres to the Nareit definition of FFO, its presentation of FFO is not necessarily comparable to similarly titled measures of other REITs due to the fact that all REITs may not use the same definition. Core Funds from Operations ("Core FFO")The Company defines Core FFO as Nareit FFO with the addback of (i) noncash amortization of acquisition purchase price related to above- and below- market lease intangibles and discount on assumed debt and (ii) certain infrequently occurring items that reduce or increase net income in accordance with GAAP. Management believes that its measure of Core FFO facilitates useful comparison of performance to its peers who predominantly transact in sale-leaseback transactions and are thereby not required by GAAP to allocate purchase price to lease intangibles. Unlike many of its peers, the Company has acquired the substantial majority of its net-leased properties through acquisitions of properties from third parties or in connection with the acquisitions of ground leases from third parties. Core FFO should not be considered an alternative to net income as the primary indicator of the Company's operating performance, or as an alternative to cash flow as a measure of liquidity. Further, the Company's presentation of Core FFO is not necessarily comparable to similarly titled measures of other REITs due to the fact that all REITs may not use the same definition. Adjusted Funds from Operations ("AFFO") AFFO is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO further adjusts FFO and Core FFO for certain non-cash items that reduce or increase net income computed in accordance with GAAP. Management considers AFFO a useful supplemental measure of the Company's performance, however, AFFO should not be considered an alternative to net income as an indication of its performance, or to cash flow as a measure of liquidity or ability to make distributions. The Company's computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore may not be comparable to such other REITs. Agree Realty Corporation Reconciliation of Non-GAAP Financial Measures ($ in thousands, except share and per-share data) (Unaudited) Three months ended March 31, 2025 Mortgage notes payable, net $ 42,050 Unsecured term loans, net 347,609 Senior unsecured notes, net 2,238,451 Unsecured revolving credit facility 322,000 Total Debt per the Consolidated Balance Sheet $ 2,950,110 Unamortized debt issuance costs and discounts, net 25,544 Total Debt $ 2,975,654 Cash and cash equivalents $ (7,915) Cash held in escrows (3,254) Net Debt $ 2,964,485 Anticipated Net Proceeds from Forward Equity Offerings (917,114) Proforma Net Debt $ 2,047,371 Net Income $ 47,148 Interest expense, net 30,764 Income and other tax expense 825 Depreciation of rental real estate assets 37,164 Amortization of lease intangibles - in-place leases and leasing costs 18,064 Non-real estate depreciation 527 Provision for impairment 4,331 (Gain) loss on sale or involuntary conversion of assets, net (772) EBITDAre $ 138,051 Run-Rate Impact of Investment, Disposition and Leasing Activity $ 4,421 Amortization of above (below) market lease intangibles, net 8,546 Recurring EBITDA $ 151,018 Annualized Recurring EBITDA $ 604,072 Total Debt per the Consolidated Balance Sheet to Annualized Net Income 15.8x Net Debt to Recurring EBITDA 4.9x Proforma Net Debt to Recurring EBITDA 3.4x Non-GAAP Financial Measures Total Debt and Net DebtThe Company defines Total Debt as debt per the consolidated balance sheet excluding unamortized debt issuance costs, original issue discounts and debt discounts. Net Debt is defined as Total Debt less cash, cash equivalents and cash held in escrows. The Company considers the non-GAAP measures of Total Debt and Net Debt to be key supplemental measures of the Company's overall liquidity, capital structure and leverage because they provide industry analysts, lenders and investors useful information in understanding our financial condition. The Company's calculation of Total Debt and Net Debt may not be comparable to Total Debt and Net Debt reported by other REITs that interpret the definitions differently than the Company. The Company presents Net Debt on both an actual and proforma basis, assuming the net proceeds of the Forward Equity Offerings (see below) are used to pay down debt. The Company believes the proforma measure may be useful to investors in understanding the potential effect of the Forward Offerings on the Company's capital structure, its future borrowing capacity, and its ability to service its debt. Forward Equity OfferingsThe Company has 12,603,999 shares remaining to be settled under the Forward Equity Offerings. Upon settlement, the offerings are anticipated to raise net proceeds of approximately $917.1 million based on the applicable forward sale prices as of March 31, 2025. The applicable forward sale price varies depending on the offering. The Company is contractually obligated to settle the offerings by certain dates between July 2025 and October 2026. EBITDAreEBITDAre is defined by Nareit to mean net income computed in accordance with GAAP, plus interest expense, income tax expense, depreciation and amortization, any gains (or losses) from sales of real estate assets and/or changes in control, any impairment charges on depreciable real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. The Company considers the non-GAAP measure of EBITDAre to be a key supplemental measure of the Company's performance and should be considered along with, but not as an alternative to, net income or loss as a measure of the Company's operating performance. The Company considers EBITDAre a key supplemental measure of the Company's operating performance because it provides an additional supplemental measure of the Company's performance and operating cash flow that is widely known by industry analysts, lenders and investors. The Company's calculation of EBITDAre may not be comparable to EBITDAre reported by other REITs that interpret the Nareit definition differently than the Company. Recurring EBITDAThe Company defines Recurring EBITDA as EBITDAre with the addback of noncash amortization of above- and below- market lease intangibles, and after adjustments for the run-rate impact of the Company's investment and disposition activity for the period presented, as well as adjustments for non-recurring benefits or expenses. The Company considers the non-GAAP measure of Recurring EBITDA to be a key supplemental measure of the Company's performance and should be considered along with, but not as an alternative to, net income or loss as a measure of the Company's operating performance. The Company considers Recurring EBITDA a key supplemental measure of the Company's operating performance because it represents the Company's earnings run rate for the period presented and because it is widely followed by industry analysts, lenders and investors. Our Recurring EBITDA may not be comparable to Recurring EBITDA reported by other companies that have a different interpretation of the definition of Recurring EBITDA. Our ratio of net debt to Recurring EBITDA is used by management as a measure of leverage and may be useful to investors in understanding the Company's ability to service its debt, as well as assess the borrowing capacity of the Company. Our ratio of net debt to Recurring EBITDA is calculated by taking annualized Recurring EBITDA and dividing it by our net debt per the consolidated balance sheet. Annualized Net IncomeRepresents net income for the three months ended March 31, 2025, on an annualized basis. Agree Realty Corporation Rental Income ($ in thousands, except share and per share-data) (Unaudited) Three months ended March 31, 2025 2024 Rental Income Source(1) Minimum rents(2) $ 154,006 $ 137,033 Percentage rents(2) 1,556 1,368 Operating cost reimbursement(2) 18,088 16,469 Straight-line rental adjustments(3) 4,009 2,847 Amortization of (above) below market lease intangibles(4) (8,546) (8,295) Total Rental Income $ 169,113 $ 149,422 (1) The Company adopted Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 842 "Leases" using the modified retrospective approach as of January 1, 2019. The Company adopted the practical expedient in FASB ASC 842 that alleviates the requirement to separately present lease and non-lease components of lease contracts. As a result, all income earned pursuant to tenant leases is reflected as one line, "Rental Income," in the consolidated statement of operations. The purpose of this table is to provide additional supplementary detail of Rental Income. (2) Represents contractual rentals and/or reimbursements as required by tenant lease agreements, recognized on an accrual basis of accounting. The Company believes that the presentation of contractual lease income is not, and is not intended to be, a presentation in accordance with GAAP. The Company believes this information is frequently used by management, investors, analysts and other interested parties to evaluate the Company's performance. (3) Represents adjustments to recognize minimum rents on a straight-line basis, consistent with the requirements of FASB ASC 842. (4) In allocating the fair value of an acquired property, above- and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition and the Company's estimate of current market lease rates for the property. 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Agree Realty Corporation Reports First Quarter 2025 Results

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