Agree Realty (ADC) came out with quarterly funds from operations (FFO) of $1.1 per share, beating the Zacks Consensus Estimate of $1.08 per share. This compares to FFO of $1.03 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of +1.85%. A quarter ago, it was expected that this real estate investment trust would post FFO of $1.06 per share when it actually produced FFO of $1.06, delivering no surprise.Over the last four quarters, the co ...

Core Viewpoint - Agree Realty (NYSE:ADC) raised its full-year guidance for adjusted FFO and investment volume following Q3 earnings and revenue that exceeded Wall Street expectations due to strong investment activity [2] Financial Performance - The retail REIT anticipates FY2025 AFFO per share to be in the range of $4.31 to $4.33, with a midpoint of $4.32, compared to the previous expectation of $4.25 [2]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201%3A%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income, statements of equity, and statements of cash flows, along with detailed notes explaining the company's organization, significant accounting policies, real estate investments, debt, equity, and other financial instruments [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time | Metric | September 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Total Assets | $9,484,030 | $8,486,446 | | Net Real Estate Investments | $8,297,241 | $7,418,108 | | Total Liabilities | $3,610,789 | $2,975,785 | | Total Equity | $5,873,241 | $5,510,661 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This statement outlines the company's financial performance over specific periods, reporting revenues, expenses, and net income trends | Metric | Three Months Ended Sep 30, 2025 (in thousands) | Three Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2025 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | | :--------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Rental income | $183,191 | $154,292 | $527,701 | $456,139 | | Total Revenues | $183,222 | $154,332 | $527,909 | $456,361 | | Total Operating Expenses | $97,018 | $81,683 | $283,285 | $240,464 | | Net Income | $52,279 | $44,528 | $148,780 | $144,455 | | Net Income Attributable to Common Stockholders | $50,258 | $42,516 | $142,734 | $138,380 | | Basic EPS | $0.45 | $0.42 | $1.30 | $1.38 | | Diluted EPS | $0.45 | $0.42 | $1.30 | $1.37 | - Rental income increased by **18.7%** for the three months ended September 30, 2025, and by **15.7%** for the nine months ended September 30, 2025, compared to the respective prior periods[12](index=12&type=chunk) - Net income attributable to common stockholders increased by **18%** for the three months ended September 30, 2025, and by **3%** for the nine months ended September 30, 2025, compared to the respective prior periods[12](index=12&type=chunk) [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) This statement details changes in the company's equity, including preferred stock, common stock, and retained earnings, over specific periods | Metric | September 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Preferred Stock | $175,000 | $175,000 | | Common Stock (Amount) | $11 | $10 | | Additional Paid-In Capital | $6,247,606 | $5,765,582 | | Dividends in excess of net income | $(581,162) | $(470,622) | | Total Equity - Agree Realty Corporation | $5,872,983 | $5,510,046 | | Common Shares Issued and Outstanding | 114,134,251 | 107,248,705 | - Common stock dividends declared per share for the three months ended September 30, 2025, was **$0.768**, an increase from **$0.750** in the same period of 2024[13](index=13&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity | Nine Months Ended Sep 30, 2025 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Cash Provided by Operating Activities | $392,821 | $340,575 | | Net Cash Used in Investing Activities | $(1,170,125) | $(537,067) | | Net Cash Provided by Financing Activities | $787,783 | $195,205 | | Change in Cash and Cash Equivalents and Cash Held in Escrow | $10,479 | $(1,287) | | Cash and cash equivalents and cash held in escrow, end of period | $16,878 | $13,237 | - Net cash used in investing activities significantly increased by **117.9%** due to higher real estate acquisitions, while net cash provided by financing activities surged by **303.6%** driven by common stock offerings and debt proceeds[15](index=15&type=chunk)[243](index=243&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1 – Organization](index=9&type=section&id=Note%201%20%E2%80%93%20Organization) This note describes the company's business, organizational structure, and its primary activities as a REIT - Agree Realty Corporation is a fully integrated REIT focused on ownership, acquisition, development, and management of retail properties net leased to industry-leading tenants[16](index=16&type=chunk) - As of September 30, 2025, the Company owned **2,603 properties** with approximately **53.7 million square feet** of gross leasable area (GLA)[19](index=19&type=chunk) - The Company held a **99.7%** common equity interest in Agree Limited Partnership (the "Operating Partnership") as of September 30, 2025[17](index=17&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=9&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and policies applied in the preparation of the financial statements - The financial statements are prepared in accordance with GAAP for interim financial information, reflecting normal recurring adjustments[20](index=20&type=chunk) - The Company consolidates the Operating Partnership, where it acts as the sole general partner[22](index=22&type=chunk) - Revenue recognition for operating leases includes straight-line recognition of fixed rent increases and recognition of variable rents when determinable[37](index=37&type=chunk) - The Company evaluates collectability of tenant charges regularly and records an adjustment to rental revenue if collectability changes[41](index=41&type=chunk) - The Company has elected to be taxed as a REIT and generally is not subject to federal income taxes on distributed amounts, with certain TRS activities being subject to federal income taxes[51](index=51&type=chunk)[52](index=52&type=chunk) - Recent accounting pronouncements include ASU 2023-05 (Joint Venture Formations), ASU 2023-09 (Income Tax Disclosures), ASU 2024-03 (Expense Disaggregation), and ASU 2025-06 (Internal-Use Software), with the Company evaluating their impacts[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [Note 3 – Leases](index=25&type=section&id=Note%203%20%E2%80%93%20Leases) This note details the company's lease agreements, including tenant net leases and related financial impacts - Substantially all tenant leases are net lease agreements, requiring tenants to cover minimum monthly rent and property operating expenses[72](index=72&type=chunk) Lease Payments | Lease Payments (in thousands) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total lease payments | $187,574 | $159,566 | $541,661 | $471,652 | | Total non-variable lease payments | $166,484 | $143,320 | $480,830 | $418,900 | Future Non-Variable Lease Payments | Future Non-Variable Lease Payments (in thousands) | Total | | :------------------------------------------------ | :---- | | Future non-variable lease payments | $5,698,154 | - The Company had **$45.7 million** in right-of-use assets, net, and **$22.5 million** in corresponding lease obligations, net, for land leases as of September 30, 2025[78](index=78&type=chunk) [Note 4 – Real Estate Investments](index=28&type=section&id=Note%204%20%E2%80%93%20Real%20Estate%20Investments) This note provides information on the company's real estate portfolio, including acquisitions, dispositions, and impairment provisions - As of September 30, 2025, the Company owned **2,603 properties** with a total GLA of approximately **53.7 million square feet** and net real estate investments of **$8.30 billion**, up from **2,370 properties** and **$7.42 billion** at December 31, 2024[83](index=83&type=chunk) Acquisitions | Acquisitions (in thousands) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Number of properties acquired | 90 | 66 | 227 | 144 | | Total purchase price | $402,635 | $216,037 | $1,090,006 | $531,361 | Dispositions | Dispositions (in thousands) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Number of properties sold | 8 | 2 | 13 | 18 | | Net proceeds | $14,615 | $6,894 | $22,772 | $63,573 | | Gain on sale of assets, net | $924 | $1,850 | $3,207 | $11,102 | Impairment Provisions | Impairment Provisions (in thousands) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Number of properties impaired | 3 | 2 | 10 | 5 | | Provision for impairment | $2,980 | $2,694 | $10,272 | $7,224 | [Note 5 – Debt](index=29&type=section&id=Note%205%20%E2%80%93%20Debt) This note details the company's various debt instruments, including terms, outstanding amounts, and compliance with covenants - Total gross indebtedness was **$3.39 billion** as of September 30, 2025, comprising mortgage notes, unsecured term loan, senior unsecured notes, and revolving credit facility/commercial paper notes[89](index=89&type=chunk) Debt Type | Debt Type | September 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Mortgage notes payable, net | $41,718 | $42,210 | | Unsecured term loan, net | $347,900 | $347,452 | | Senior unsecured notes, net | $2,583,685 | $2,237,759 | | Unsecured revolving credit facility and commercial paper notes | $389,000 | $158,000 | | Total Principal Amount Outstanding | $3,392,141 | $2,811,904 | - The Company closed a **$350.0 million** unsecured term loan in July 2023, maturing in January 2029, with interest hedged to a fixed rate of **3.57%** using interest rate swaps[94](index=94&type=chunk) - In May 2025, the Operating Partnership completed a **$400.0 million** public offering of **5.600% Notes due 2035** and repaid **$50.0 million** of 2025 Senior Unsecured Notes at maturity[102](index=102&type=chunk)[103](index=103&type=chunk) - The Company established a **$625.0 million** commercial paper program in March 2025, backed by its **$1.25 billion** revolving credit facility, which matures in August 2028 (with extension options to August 2029)[106](index=106&type=chunk)[108](index=108&type=chunk)[113](index=113&type=chunk) - The Company was in compliance with all material loan covenants as of September 30, 2025[116](index=116&type=chunk) [Note 6 – Common and Preferred Stock](index=36&type=section&id=Note%206%20%E2%80%93%20Common%20and%20Preferred%20Stock) This note describes the company's common and preferred stock, including authorized shares, offerings, and ATM program activities - Stockholders approved an increase in authorized common stock from **180 million** to **360 million shares** in May 2025[117](index=117&type=chunk) - In April 2025, the Company completed a follow-on public offering of **5,175,000 common shares**, anticipated to raise **$386.7 million** in net proceeds[119](index=119&type=chunk)[121](index=121&type=chunk) - As of September 30, 2025, **7,000,000 depositary shares** of Series A Preferred Stock were outstanding, with a **4.25%** annual dividend rate[123](index=123&type=chunk)[124](index=124&type=chunk) ATM Activity | ATM Activity (in millions) | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Shares of common stock sold under ATM programs | 2,770,222 | 9,859,024 | | Shares of common stock settled under ATM programs | 6,798,857 | 2,900,000 | | Net proceeds received | $476.6 | $175.7 | [Note 7 – Dividends and Distributions Payable](index=40&type=section&id=Note%207%20%E2%80%93%20Dividends%20and%20Distributions%20Payable) This note provides details on dividends and distributions declared for both common and preferred stock - Monthly common stock dividends declared were **$0.256 per share** for the three months ended September 30, 2025, up from **$0.250** in the prior year[130](index=130&type=chunk) - Monthly dividends on Series A Preferred Shares were **$0.08854 per Depositary Share** for the three months ended September 30, 2025 and 2024[131](index=131&type=chunk) [Note 8 – Derivative Instruments and Hedging Activity](index=40&type=section&id=Note%208%20%E2%80%93%20Derivative%20Instruments%20and%20Hedging%20Activity) This note explains the company's use of derivative instruments, primarily interest rate swaps, for hedging purposes - The Company uses interest rate swaps to manage exposure to interest rate movements and stabilize interest expense, designated as cash flow hedges[133](index=133&type=chunk) - As of September 30, 2025, the Company had **$650.0 million** notional amount of interest rate swaps outstanding, primarily hedging SOFR-indexed debt[143](index=143&type=chunk) - The fair value of derivative contracts was a net liability of **$1.7 million** as of September 30, 2025, compared to an asset position of **$17.9 million** as of December 31, 2024[147](index=147&type=chunk) [Note 9 – Fair Value Measurements](index=46&type=section&id=Note%209%20%E2%80%93%20Fair%20Value%20Measurements) This note outlines the fair value measurements of financial instruments, categorized by valuation input levels - Fair value measurements are based on a hierarchy of valuation inputs (Levels 1, 2, and 3), with derivatives classified in **Level 2** due to observable market-based inputs[153](index=153&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk) Fair Value | Fair Value (in thousands) | September 30, 2025 (Level 2) | December 31, 2024 (Level 2) | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Derivative assets - interest rate swaps | $1,369 | $17,526 | | Derivative liabilities - interest rate swaps | $3,278 | $0 | Debt Fair Value | Debt Fair Value (in thousands) | Carrying Value (Sep 30, 2025) | Fair Value (Sep 30, 2025) | | :------------------------------------------ | :------------------------------ | :-------------------------- | | Mortgage Notes Payable | $41,718 | $41,104 | | Unsecured Term Loan | $347,900 | $347,900 | | Senior Unsecured Notes | $2,583,685 | $2,544,630 | | Commercial Paper Notes | $389,000 | $389,000 | [Note 10 – Equity Incentive Plan](index=48&type=section&id=Note%2010%20%E2%80%93%20Equity%20Incentive%20Plan) This note describes the company's equity incentive plan, including restricted shares and performance units granted to employees - The 2024 Omnibus Incentive Plan, approved in May 2024, allows for awards of up to **2,000,000 shares** of common stock, with **1,721,041 shares** available as of September 30, 2025[162](index=162&type=chunk) - Unrecognized compensation costs for restricted shares totaled **$9.1 million** as of September 30, 2025, expected to be recognized over a weighted average period of **1.8 years**[166](index=166&type=chunk) - Performance units are granted to executive officers, vesting based on the Company's total shareholder return (TSR) compared to industry indices over a three-year period[168](index=168&type=chunk) - Unrecognized compensation costs for performance units totaled **$8.4 million** as of September 30, 2025, expected to be recognized over a weighted average period of **2.0 years**[171](index=171&type=chunk) [Note 11 – Commitments and Contingencies](index=53&type=section&id=Note%2011%20%E2%80%93%20Commitments%20and%20Contingencies) This note discloses the company's commitments and contingencies, including routine legal actions - The Company is involved in routine legal actions incidental to its business, with outcomes not expected to have a material adverse effect on its financial position or results of operations[179](index=179&type=chunk) [Note 12 – Subsequent Events](index=53&type=section&id=Note%2012%20%E2%80%93%20Subsequent%20Events) This note reports on significant events or transactions that occurred after the reporting period - No reportable subsequent events or transactions occurred between September 30, 2025, and the financial statements' issuance date[180](index=180&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting portfolio growth, acquisition and disposition activities, and detailed comparisons of financial performance for the three and nine months ended September 30, 2025, versus 2024. It also discusses liquidity, capital resources, and non-GAAP financial measures [Cautionary Note Regarding Forward-Looking Statements](index=54&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note advises readers that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that could materially affect the Company's results[182](index=182&type=chunk) - Key risk factors include changes in economic conditions, tenant financial failures, concentration risks, financing risks, interest rate volatility, and the ability to maintain REIT qualification[182](index=182&type=chunk) [Overview](index=56&type=section&id=Overview) This section provides a high-level summary of Agree Realty Corporation's business model and real estate portfolio - Agree Realty Corporation is a fully integrated REIT specializing in net-leased retail properties, with a portfolio of **2,603 properties** across all **50 states**, totaling approximately **53.7 million square feet** of GLA as of September 30, 2025[183](index=183&type=chunk)[184](index=184&type=chunk) - The portfolio was approximately **99.7% leased** with a weighted average remaining lease term of **8.0 years**, and **66.7%** of annualized base rent derived from investment-grade tenants[184](index=184&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, expenses, and net income trends [Overall](index=56&type=section&id=Overall) This subsection provides a general overview of the company's real estate portfolio growth and its impact on rental income - The real estate investment portfolio grew from **$7.13 billion** (**2,271 properties**) at September 30, 2024, to **$8.30 billion** (**2,603 properties**) at September 30, 2025[186](index=186&type=chunk) - Increased rental income in 2025 is partly due to revenue recognition from acquisitions made in 2024 and 2025[186](index=186&type=chunk) [Acquisitions](index=56&type=section&id=Acquisitions) This subsection details the company's property acquisition activities, including the number of properties and total purchase price | Metric | Three Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2025 | | :------------------------------------------ | :------------------------------ | :----------------------------- | | Number of properties acquired | 90 | 227 | | Total purchase price (in thousands) | $402,635 | $1,090,006 | | Weighted-average lease term (years) | 10.7 | 12.0 | | Underwritten weighted-average capitalization rate | 7.2% | 7.2% | [Development and Developer Funding Platform](index=58&type=section&id=Development%20and%20Developer%20Funding%20Platform) This subsection outlines the company's development and developer funding platform activities, including project completions and commencements | Development Activity | Three Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2025 | | :------------------------------------------ | :------------------------------ | :----------------------------- | | Projects completed | 8 | 18 | | Projects commenced | 5 | 10 | | Projects under construction at period-end | 12 | 12 | [Dispositions](index=58&type=section&id=Dispositions) This subsection reports on the company's property disposition activities, including the number of sales and net proceeds | Disposition Activity (in thousands) | Three Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2025 | | :------------------------------------------ | :------------------------------ | :----------------------------- | | Number of properties sold | 8 | 13 | | Net proceeds | $14,615 | $22,772 | | Gain on sale of assets, net | $924 | $3,207 | [Comparison of the three months ended September 30, 2025 to the three months ended September 30, 2024](index=58&type=section&id=Comparison%20of%20the%20three%20months%20ended%20September%2030%2C%202025%20to%20the%20three%20months%20ended%20September%2030%2C%202024) This subsection compares the company's financial performance for the three months ended September 30, 2025, against the same period in 2024 | Metric (in thousands) | Sep 30, 2025 | Sep 30, 2024 | Variance (dollars) | Variance (%) | | :------------------------------------------ | :----------- | :----------- | :----------------- | :----------- | | Rental income | $183,191 | $154,292 | $28,899 | 19% | | Real estate tax expense | $13,173 | $11,935 | $1,238 | 10% | | Property operating expense | $8,243 | $6,015 | $2,228 | 37% | | Depreciation and amortization expense | $61,179 | $51,504 | $9,675 | 19% | | General and administrative expenses | $10,887 | $9,114 | $1,773 | 19% | | Interest expense, net | $35,212 | $28,942 | $6,270 | 22% | | Provision for impairment | $2,980 | $2,694 | $286 | 11% | | Net gain on sale of assets | $924 | $1,850 | $(926) | -50% | | Income and other tax expense | $225 | $1,077 | $(852) | -79% | | Net income | $52,279 | $44,528 | $7,751 | 17% | - The increase in rental income and operating expenses is primarily due to the acquisition and ownership of an increased number of properties[191](index=191&type=chunk) - Interest expense, net, increased by **$6.3 million** (**22%**) due to higher borrowings for property acquisitions and development, including the issuance of **$400.0 million** in 2035 Senior Unsecured Public Notes[193](index=193&type=chunk) [Comparison of the nine months ended September 30, 2025 to the nine months ended September 30, 2024](index=60&type=section&id=Comparison%20of%20the%20nine%20months%20ended%20September%2030%2C%202025%20to%20the%20nine%20months%20ended%20September%2030%2C%202024) This subsection compares the company's financial performance for the nine months ended September 30, 2025, against the same period in 2024 | Metric (in thousands) | Sep 30, 2025 | Sep 30, 2024 | Variance (dollars) | Variance (%) | | :------------------------------------------ | :----------- | :----------- | :----------------- | :----------- | | Rental income | $527,701 | $456,139 | $71,562 | 16% | | Real estate tax expense | $37,519 | $33,357 | $4,162 | 12% | | Property operating expense | $25,040 | $19,875 | $5,165 | 26% | | Depreciation and amortization expense | $175,872 | $150,421 | $25,451 | 17% | | General and administrative expenses | $32,990 | $28,336 | $4,654 | 16% | | Interest expense, net | $98,250 | $79,809 | $18,441 | 23% | | Provision for impairment | $10,272 | $7,224 | $3,048 | 42% | | Net gain on sale of assets | $3,207 | $11,102 | $(7,895) | -71% | | Income and other tax expense | $1,475 | $3,231 | $(1,756) | -54% | | Net income | $148,780 | $144,455 | $4,325 | 3% | - Net income attributable to common stockholders increased by **$4.3 million** (**3%**) to **$142.7 million**, driven by portfolio growth partially offset by increased expenses and lower gains on asset sales[204](index=204&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its financial obligations and fund future operations through available capital - The Company's principal demands for funds include operating expenses, debt payments, dividends, and future property acquisitions and development[205](index=205&type=chunk) - As of September 30, 2025, the Company had over **$1.91 billion** in liquidity, including cash and cash equivalents (**$16.9 million**), unsettled forward equity (**$1.04 billion**), and **$861.0 million** of availability under its Revolving Credit Facility[209](index=209&type=chunk) - Long-term capital needs are anticipated to be funded through cash from operations, Revolving Credit Facility borrowings, and issuance/settlement of equity or debt[210](index=210&type=chunk) [Capitalization](index=64&type=section&id=Capitalization) This subsection provides an overview of the company's capital structure, including total enterprise value and debt ratios - As of September 30, 2025, the Company's total enterprise value was approximately **$11.68 billion**, with total debt principal to total enterprise value at **29.0%**[213](index=213&type=chunk) [Equity](index=64&type=section&id=Equity) This subsection details the company's equity financing activities, including stock offerings and ATM programs - Authorized common stock shares increased from **180 million** to **360 million** in May 2025[215](index=215&type=chunk) - A follow-on public offering in April 2025 of **5,175,000 common shares** is expected to yield **$386.7 million** in net proceeds[217](index=217&type=chunk) - ATM programs generated **$476.6 million** in net proceeds for the nine months ended September 30, 2025[225](index=225&type=chunk) [Debt](index=67&type=section&id=Debt) This subsection provides a detailed breakdown of the company's debt portfolio, including credit facilities and notes Debt Type | Debt Type | Principal Amount Outstanding (Sep 30, 2025, in thousands) | Principal Amount Outstanding (Dec 31, 2024, in thousands) | | :------------------------------------------ | :-------------------------------------------------------- | :-------------------------------------------------------- | | Revolving Credit Facility and Commercial Paper Notes | $389,000 | $158,000 | | Unsecured Term Loan | $350,000 | $350,000 | | Senior Unsecured Notes | $2,610,000 | $2,260,000 | | Mortgage Notes Payable | $43,141 | $43,904 | | Total Principal Amount Outstanding | $3,392,141 | $2,811,904 | - The **$1.25 billion** Revolving Credit Facility matures in August 2028 (with extension options to August 2029) and serves as a backstop for the Commercial Paper Program[229](index=229&type=chunk)[230](index=230&type=chunk) - The **$350.0 million** 2029 Unsecured Term Loan's credit spread decreased by **five basis points** in August 2025 due to an improved credit rating[233](index=233&type=chunk) - The Company repaid **$50.0 million** of 2025 Senior Unsecured Notes at maturity in May 2025[238](index=238&type=chunk) - All material loan covenants were in compliance as of September 30, 2025[241](index=241&type=chunk) [Cash Flows](index=71&type=section&id=Cash%20Flows) This subsection analyzes changes in cash flows from operating, investing, and financing activities - Net cash provided by operating activities increased by **$52.2 million** for the nine months ended September 30, 2025, primarily due to portfolio growth and interest rate swap settlements[242](index=242&type=chunk) - Net cash used in investing activities increased by **$633.0 million**, driven by a **$557.8 million** increase in property acquisitions and a **$34.9 million** increase in real estate development[243](index=243&type=chunk) - Net cash provided by financing activities increased by **$592.6 million**, largely due to a **$409.0 million** increase in net borrowings from the Revolving Credit Facility and Commercial Paper Program, and a **$300.9 million** increase in common stock issuance proceeds[243](index=243&type=chunk) [Material Cash Requirements](index=73&type=section&id=Material%20Cash%20Requirements) This subsection outlines the company's significant future cash obligations and funding plans Obligation | Obligation (in thousands) | 2025 (remaining) | 2026 | 2027 | 2028 | 2029 | Thereafter | Total | | :------------------------------------------ | :--------------- | :--- | :--- | :--- | :--- | :--------- | :---- | | Mortgage Notes Payable | $262 | $629 | $0 | $0 | $42,250 | $0 | $43,141 | | Revolving Credit Facility and Commercial Paper Notes | $389,000 | $0 | $0 | $0 | $0 | $0 | $389,000 | | Unsecured Term Loan | $0 | $0 | $0 | $0 | $350,000 | $0 | $350,000 | | Senior Unsecured Notes | $0 | $0 | $50,000 | $410,000 | $100,000 | $2,050,000 | $2,610,000 | | Land Lease Obligations | $499 | $2,022 | $1,884 | $1,855 | $1,846 | $34,702 | $42,808 | | Estimated Interest Payments on Outstanding Debt | $32,138 | $126,300 | $125,032 | $119,238 | $96,998 | $323,523 | $823,229 | | Total | $421,899 | $128,951 | $176,916 | $531,093 | $591,094 | $2,408,225 | $4,258,178 | - Anticipated total costs for **12 development projects** under construction are approximately **$88.6 million**, to be funded by cash from operations or other capital resources[246](index=246&type=chunk) [Dividends](index=73&type=section&id=Dividends) This subsection details the company's dividend declarations for both common and preferred stock - Monthly common stock dividends declared were **$0.256 per share** for the quarter ended September 30, 2025, representing a **2.4% increase** over the annualized dividend amount in the same period of 2024[248](index=248&type=chunk)[249](index=249&type=chunk) - Monthly dividends on Series A Preferred Shares were **$0.08854 per Depositary Share** for the quarter ended September 30, 2025[251](index=251&type=chunk) [Recent Accounting Pronouncements](index=75&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the impact of recently issued accounting pronouncements on the company's financial reporting - The Company refers to Note 2 for a summary and anticipated impact of applicable accounting pronouncements[252](index=252&type=chunk) [Critical Accounting Policies and Estimates](index=75&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the significant accounting policies and estimates requiring management's judgment - Management uses judgment in applying accounting policies and making estimates, which affect reported amounts; no material changes to these policies were made during the reporting periods[253](index=253&type=chunk) [Non-GAAP Financial Measures](index=75&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and reconciles non-GAAP financial measures used to evaluate the company's operating performance [Funds from Operations ("FFO" or "Nareit FFO")](index=75&type=section&id=Funds%20from%20Operations%20%28%22FFO%22%20or%20%22Nareit%20FFO%22%29) This subsection defines Funds from Operations (FFO) as per Nareit guidelines, a key metric for REITs - FFO is defined by Nareit as net income excluding gains/losses from real estate sales and depreciation/amortization, considered helpful for evaluating real estate company operations[254](index=254&type=chunk) [Core Funds from Operations ("Core FFO")](index=75&type=section&id=Core%20Funds%20from%20Operations%20%28%22Core%20FFO%22%29) This subsection defines Core FFO, an adjusted measure of FFO, used for comparing performance across peers - Core FFO adjusts Nareit FFO by adding back noncash amortization of acquisition purchase price related to lease intangibles and debt discount, facilitating performance comparison to peers[256](index=256&type=chunk) [Adjusted Funds from Operations ("AFFO")](index=77&type=section&id=Adjusted%20Funds%20from%20Operations%20%28%22AFFO%22%29) This subsection defines Adjusted Funds from Operations (AFFO), a further refined non-GAAP performance metric - AFFO further adjusts FFO and Core FFO for certain non-cash items, serving as a supplemental measure of operating performance[259](index=259&type=chunk) [Reconciliations](index=77&type=section&id=Reconciliations) This subsection provides reconciliations of net income to FFO, Core FFO, and AFFO | Metric | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Funds from Operations - Operating Partnership common unitholders | $112,926 | $94,566 | $324,321 | $284,004 | | Core Funds from Operations - Operating Partnership common unitholders | $122,354 | $102,943 | $351,000 | $309,141 | | Adjusted Funds from Operations - Operating Partnership common unitholders | $123,117 | $104,769 | $354,756 | $313,325 | | FFO per common share and partnership unit - diluted | $1.01 | $0.93 | $2.94 | $2.81 | | Core FFO per common share and partnership unit - diluted | $1.09 | $1.01 | $3.18 | $3.05 | | AFFO per common share and partnership unit - diluted | $1.10 | $1.03 | $3.22 | $3.10 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=78&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses the Company's exposure to market risks, primarily interest rate risk, and its strategies for managing these risks, including the use of interest rate swap agreements. It provides a breakdown of outstanding debt by maturity and weighted average interest rates - The Company is exposed to interest rate risk through borrowing activities, with inherent roll-over risk as borrowings mature[261](index=261&type=chunk) - Interest rate risk is managed by monitoring variable rate debt and converting it to fixed rates, and through interest rate swap agreements[266](index=266&type=chunk) Debt Type | Debt Type | 2025 (remaining, in thousands) | 2026 (in thousands) | 2027 (in thousands) | 2028 (in thousands) | 2029 (in thousands) | Thereafter (in thousands) | Total (in thousands) | | :------------------------------------------ | :----------------------------- | :------------------ | :------------------ | :------------------ | :------------------ | :------------------------ | :------------------- | | Mortgage Notes Payable | $262 | $629 | $0 | $0 | $42,250 | $0 | $43,141 | | Revolving Credit Facility and Commercial Paper Notes | $389,000 | $0 | $0 | $0 | $0 | $0 | $389,000 | | Unsecured Term Loan | $0 | $0 | $0 | $0 | $350,000 | $0 | $350,000 | | Senior Unsecured Notes | $0 | $0 | $50,000 | $410,000 | $100,000 | $2,050,000 | $2,610,000 | - A hypothetical **100-basis point** increase or decrease in market interest rates would change annual interest expense by **$3.9 million**, assuming no change in outstanding variable-rate borrowings[274](index=274&type=chunk) [Item 4. Controls and Procedures](index=80&type=section&id=Item%204%3A%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the most recently completed fiscal quarter - The Company's disclosure controls and procedures were effective as of the end of the reporting period[275](index=275&type=chunk) - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter[276](index=276&type=chunk) [PART II. OTHER INFORMATION](index=82&type=section&id=PART%20II%20Other%20Information) This section provides additional information not covered in the financial statements, including legal proceedings and risk factors [Item 1. Legal Proceedings](index=82&type=section&id=Item%201%3A%20Legal%20Proceedings) This section states that the Company is not involved in any material litigation beyond routine business operations, with outcomes not expected to have a material adverse effect - The Company is not involved in any material litigation, only routine litigation covered by liability insurance[277](index=277&type=chunk) [Risk Factors](index=82&type=page&id=Item%201A%3ARisk%20Factors) This section directs readers to the Company's Annual Report on Form 10-K for a comprehensive discussion of potential risks and uncertainties - For a discussion of potential risks and uncertainties, refer to the 'Risk Factors' section in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[278](index=278&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock repurchases made during the three months ended September 30, 2025, primarily for satisfying tax obligations related to restricted stock vesting - During the three months ended September 30, 2025, the Company withheld shares from employees to satisfy estimated statutory income tax obligations related to the vesting of restricted stock awards[279](index=279&type=chunk) Common Stock Repurchases | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------------------------------------------ | :----------------------------- | :--------------------------- | | July 1, 2025 - July 31, 2025 | 37 | $72.52 | | August 1, 2025 - August 31, 2025 | 766 | $73.46 | | September 1, 2025 - September 30, 2025 | 23 | $72.62 | | Total | 826 | $73.40 | [Item 3. Defaults Upon Senior Securities](index=82&type=section&id=Item%203%3A%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[281](index=281&type=chunk) [Item 4. Mine Safety Disclosures](index=82&type=section&id=Item%204%3A%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[282](index=282&type=chunk) [Item 5. Other Information](index=82&type=section&id=Item%205%3A%20Other%20Information) This section confirms that no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended September 30, 2025[283](index=283&type=chunk) [Item 6. Exhibits](index=83&type=section&id=Item%206%3A%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including amendments to Articles of Incorporation, Bylaws, certifications, and interactive data files - Exhibits include various amendments to the Company's Articles of Incorporation and Bylaws, as well as certifications pursuant to the Sarbanes-Oxley Act[285](index=285&type=chunk)[287](index=287&type=chunk) - The report includes Inline iXBRL formatted financial statements and a Cover Page Interactive Data File[285](index=285&type=chunk)[286](index=286&type=chunk) [SIGNATURES](index=85&type=section&id=SIGNATURES) This section contains the official signatures of the company's authorized officers, certifying the report's accuracy - The report is signed by Joel N. Agree, President and Chief Executive Officer, and Peter Coughenour, Chief Financial Officer and Secretary, on October 21, 2025[291](index=291&type=chunk)

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Financial Performance - Net income for Q3 2025 increased 18.2% to $50.3 million, with net income per share rising 7.9% to $0.45 compared to Q3 2024[4] - Core FFO for Q3 2025 increased 18.9% to $122.4 million, with core FFO per share up 8.4% to $1.09 compared to Q3 2024[6] - AFFO for Q3 2025 increased 17.5% to $123.1 million, with AFFO per share rising 7.2% to $1.10 compared to Q3 2024[9] - Total revenues for the three months ended September 30, 2025, were $183.222 million, a 18.7% increase from $154.332 million for the same period in 2024[55] - Rental income for the nine months ended September 30, 2025, was $527.701 million, compared to $456.139 million for the same period in 2024, reflecting a 15.7% increase[55] - Net income attributable to common stockholders for the three months ended September 30, 2025, was $50.258 million, up from $42.516 million in the same period of 2024, representing an 18.5% increase[55] - Funds from Operations (FFO) for the three months ended September 30, 2025, reached $112,926,000, compared to $94,566,000 in the prior year, reflecting a year-over-year increase of 19.4%[57] - Core Funds from Operations (Core FFO) for the three months ended September 30, 2025, were $122,354,000, up from $102,943,000 in the same quarter of 2024, indicating a growth of 19.0%[57] - Total Rental Income for the three months ended September 30, 2025, was $183,191,000, compared to $154,292,000 in the same period of 2024, marking an increase of 18.8%[68] Investment and Development - The company raised its 2025 investment guidance to a range of $1.50 billion to $1.65 billion[18] - Total acquisition volume for Q3 2025 was approximately $401.4 million, with properties acquired at a weighted-average capitalization rate of 7.2%[22] - The company commenced five development projects in Q3 2025 with total anticipated costs of approximately $50.8 million[27] Portfolio and Leasing - The portfolio consisted of 2,603 properties, approximately 99.7% leased, generating 66.7% of annualized base rents from investment grade retail tenants[19] - For the nine months ended September 30, 2025, the Company executed new leases, extensions, or options on approximately 2.4 million square feet of gross leasable area[31] - As of September 30, 2025, the Company's total annualized base rent was $707.84 million, with 0.2% of annualized base rents maturing in 2025[31] - The top tenant, Walmart, contributed $41.155 million, representing 5.8% of the total annualized base rent[32] - The annualized base rent for grocery stores was $72.94 million, accounting for 10.3% of the total[34] Financial Position and Liquidity - Total liquidity at quarter end was over $1.9 billion, positioning the balance sheet for growth[8] - The Company had total liquidity of $1.9 billion as of September 30, 2025, including $861 million available under its revolving credit facility[38] - The Company's net debt to recurring EBITDA was 5.1 times, with a proforma ratio of 3.5 times when accounting for anticipated net proceeds from forward equity offerings[39] - The total debt to enterprise value was 29.0% as of September 30, 2025[40] - The Company settled 3.5 million shares under existing forward sale agreements for net proceeds of $252 million during the third quarter[37] - The Company received commitments for an unsecured $350 million term loan with a fixed interest rate of 4.02%[36] - The company reported a total debt of $3,392,141,000 as of September 30, 2025, with a net debt of $3,375,263,000 after accounting for cash and cash equivalents[62] - The ratio of Net Debt to Recurring EBITDA was 5.1x, indicating the company's leverage position[62] - The anticipated net proceeds from Forward Equity Offerings are approximately $1.0 billion, expected to be settled between October 2025 and October 2026[64] - Annualized Recurring EBITDA for the three months ended September 30, 2025, was $663,056,000, providing insight into the company's operating cash flow[62] Company Ratings and Events - The company achieved an A- issuer rating from Fitch Ratings with a stable outlook[8] - The company will host its quarterly analyst and investor conference call on October 22, 2025[44] Assets and Liabilities - The total assets of the company increased to $9.484 billion as of September 30, 2025, compared to $8.486 billion as of December 31, 2024, marking a 11.7% growth[53] - The company's total liabilities rose to $3.610 billion as of September 30, 2025, from $2.976 billion as of December 31, 2024, indicating a 21.4% increase[53] Shareholder Information - The company declared a monthly dividend of $0.256 per common share for Q3 2025, representing a 2.4% year-over-year increase[11] - The company’s weighted average shares outstanding increased from 100,730,826 in Q3 2024 to 111,624,935 in Q3 2025, reflecting a growth in share count[57] Accounting and Valuation - Adjustments to recognize minimum rents on a straight-line basis are consistent with FASB ASC 842 requirements[70] - Fair value allocation of acquired properties includes above- and below-market lease intangibles based on the present value of lease payment differences[70] - The weighted-average capitalization rate for acquisitions and dispositions is defined as the sum of contractual fixed annual rents divided by the purchase and sale prices for occupied properties[49]

Earnings Expectation: Analysts predict an EPS of $1.08 and revenue of $181.5 million for the upcoming quarter.Dividend Appeal: With a forward yield of 4.2%, ADC offers an attractive mix of income and growth potential.Financial Metrics: Key ratios such as P/E, debt-to-equity, and earnings yield highlight ADC's market position and financial health.Agree Realty Corporation, trading under the symbol NYSE:ADC, is a real estate investment trust (REIT) known for its stability and growth potential. The company focu ...

David A. Johnson is founder and principal of Endurance Capital Management, a New Jersey Limited Liability Company. As an investor entrepreneur, David invests in stocks, bonds, options, ETFs, REITs, real estate, closed end funds and alternative investment funds such as hedge funds and private credit. With over 30 years’ experience in investing, David holds a Master of Science (MS) Degree in Finance, with a concentration in Investment Analysis, from Boston University, a Certificate in Financial Planning, and ...

Core Insights - David A. Johnson is the founder and principal of Endurance Capital Management, specializing in various investment vehicles including stocks, bonds, options, ETFs, REITs, real estate, closed-end funds, hedge funds, and private credit [1] Group 1 - David A. Johnson has over 30 years of experience in investing and holds a Master of Science (MS) Degree in Finance with a concentration in Investment Analysis from Boston University [1] - He also possesses a Certificate in Financial Planning and an MBA from Fordham University [1]

Group 1 - The article emphasizes the growing significance of credit quality in the current market environment [1] - Recent market unease has particularly affected CLO funds such as Eagle Point Credit (ECC) and Oxford Lane [1]

Group 1 - Agree Realty (NYSE: ADC) is a lesser-known real estate investment trust (REIT) that owns over 2,500 properties across all 50 states, leased to major retailers like Walmart, Tractor Supply, and Dollar General [1][2] - The REIT generates stable cash flow from monthly rent payments, currently offering a dividend yield of 4.2%, which has consistently benefited its investors over the years [2][8] - Agree Realty employs a straightforward investment strategy focused on high-quality retail properties, emphasizing the credit quality of its tenants, with nearly 68% of rent coming from investment-grade tenants [4][5] Group 2 - The REIT's properties are primarily secured by long-term net leases (89.7% of annual base rent) and ground leases (10.3%), providing a stable and predictable rental income [6] - Agree Realty strategically focuses on resilient retail sectors, avoiding properties leased to struggling industries such as theaters and pharmacies, and instead concentrating on grocery stores and home improvement centers [7] - The company has a strong track record of growing its dividend and enhancing shareholder value through its high-quality portfolio of retail properties [8]