On July 23, 2024, Agree Realty Corp (ADC, Financial) released its 8-K filing for the quarter ended June 30, 2024. Agree Realty Corporation operates as a fully integrated real estate investment trust mainly focused on the ownership, acquisition, development, and management of retail properties net leased to industry-leading tenants. The Company is primarily in the business of acquiring, developing, and managing retail real estate, with properties including Walmart, 7-Eleven, Wawa, and Gerber Collision.
Financial Performance and Key Metrics
Agree Realty Corp (ADC, Financial) reported a net income attributable to common stockholders of $52.9 million for Q2 2024, a 35.5% increase from $39.0 million in Q2 2023. Net income per share rose 25.6% to $0.52, surpassing the analyst estimate of $0.44. For the first half of 2024, net income increased 21.7% to $95.9 million, with net income per share up 11.3% to $0.95.
Core Funds From Operations (Core FFO) for Q2 2024 increased 14.0% to $104.2 million, with Core FFO per share rising 5.7% to $1.03. Adjusted Funds From Operations (AFFO) for the quarter grew 14.7% to $105.3 million, with AFFO per share up 6.4% to $1.04. These figures indicate robust operational performance and efficient capital management.
Dividend and Guidance
Agree Realty declared monthly cash dividends of $0.250 per common share for April, May, and June 2024, reflecting an annualized dividend of $3.00 per share, a 2.9% increase over the previous year. The payout ratios were approximately 73% of Core FFO per share and 72% of AFFO per share.
The company raised its 2024 AFFO per share guidance to $4.11 to $4.14, up from the previous range of $4.10 to $4.13. Acquisition guidance was also increased to approximately $700 million from $600 million, reflecting confidence in the company's growth trajectory.
Operational Highlights
As of June 30, 2024, Agree Realty's portfolio consisted of 2,202 properties across 49 states, with a 99.8% lease rate and a weighted-average remaining lease term of 8.1 years. The ground lease portfolio, comprising 223 leases, was fully occupied with a weighted-average remaining lease term of 10.0 years.
During Q2 2024, the company acquired 47 properties for $185.8 million, with a weighted-average capitalization rate of 7.7%. For the first half of 2024, total acquisition volume was $309.3 million. Dispositions for the quarter totaled $36.9 million, with a weighted-average capitalization rate of 6.4%.
Capital Markets and Liquidity
In May 2024, Agree Realty completed a $450 million public bond offering of 5.625% senior unsecured notes due 2034. The company also received commitments to expand its credit facility to $1.25 billion, with an option to increase to $2.0 billion. As of June 30, 2024, total liquidity was over $1.4 billion, proforma for the expanded credit facility, liquidity stands at approximately $1.7 billion.
CEO Commentary
We are very pleased with our performance during the first half of the year," said Joey Agree, President and Chief Executive Officer. "During the quarter, we raised nearly $650 million of capital to further bolster our balance sheet, which now enjoys total liquidity of $1.7 billion proforma for the closing of our expanded Credit Facility. Our growing pipelines across all three external growth platforms give us confidence to increase our full-year acquisition guidance to approximately $700 million. Given accelerating investment activity and the strong performance of our portfolio year-to-date, we are raising our 2024 AFFO per share guidance to a range of $4.11 to $4.14, reflecting 4.4% growth at the midpoint."
Conclusion
Agree Realty Corp (ADC, Financial) has demonstrated strong financial performance in Q2 2024, exceeding analyst estimates and raising its full-year guidance. The company's strategic acquisitions, robust portfolio, and enhanced liquidity position it well for continued growth. Investors and stakeholders will find the detailed financial metrics and operational highlights indicative of a solid investment opportunity in the retail real estate sector.
Explore the complete 8-K earnings release (here) from Agree Realty Corp for further details.
