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Agree Realty Notes '18 Investment Activity, Issues '19 View

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Agree Realty Corporation (ADC - Free Report) has summed up the investment and capital market activities undertaken in 2018. It also provided an insight into the acquisitions and disposition activities which it plans to commence this year.

During 2018, total investment activity amounted to $681.5 million. This included acquisitions, development and completed or under construction projects of Partner Capital Solutions. This has enabled the company to diversify its portfolio across 38 states and add 60 preeminent tenants operating in various sectors.

For full-year 2018, the company’s acquisition volume for retail net lease properties aggregated to nearly $607 million, covering 225 properties. The buyouts were strategically executed at a capitalization rate of 7%. Further, 61.5% of annualized base rents came from investment grade retail tenants. However, the company expects the volume to decline to the range of $350-$400 million in 2019.

Disposition activity in 2018 included 21 assets, which totaled $67.6 million. The capitalization rate for the dispositions made last year was 7.5%. Furthermore, it aided Agree Realty to enhance its real estate portfolio and reduce tenant concentration. Meanwhile, the company projects disposition for 2019 in the range of $25-$75 million.

Per management, the company’s capital market initiatives have fortified the balance sheet and will facilitate execution of its operating strategy in the near term. Specifically, in fourth-quarter 2018, it successfully raised roughly $181.2 million from the issuance of 3,057,263 shares of common stock through its at-the-market equity program.

In addition, in December 2018, the company entered into a pricing amendment, to reduce interest burden on two unsecured term loans worth $65 million and $35 million. Particularly, the recast offers a new pricing grid above LIBOR on the term loans maturing on Jan 15, 2024. This will also boost Agree Realty’s cash flow and alleviate its bottom-line pressure.

Agree Realty’s 2019 outlook is optimistic and will likely support its 2019 performance. In fact, over the past seven days, the company’s funds from operations (FFO) per share have been revised marginally upward.

Also, over the past six months, shares of this Zacks Rank #3 (Hold) company have rallied 9.2% as against the industry’s decline of 19.8%.


 

Stocks That Warrant a Look

Simon Property Group, Inc. (SPG - Free Report) witnessed a marginal upward FFO estimate revision for 2018 to $12.13 in the last 60 days. Currently, it carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

STORE Capital Corporation recorded 1.7% upward FFO estimate revision for 2018 to $1.83 in the last 60 days. It carries a Zacks Rank of 2, currently.

National Retail Properties’ (NNN - Free Report) Zacks Consensus Estimate for 2018 has been revised marginally upward to $2.65 over the last month. It holds a Zacks Rank of 2, at present.

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