Agree Realty Corporation ( ADC Quick Quote ADC - Free Report) has announced a tally of its investment and capital market activity in 2020 as well as December rent receipts. It also provided an acquisition and disposition outlook for 2021.
Remarkably, total real estate investment activity for 2020 aggregated to $1.36 billion. This includes acquisition, development, and Partner Capital Solutions projects completed or currently under construction. The assets are net leased to 47 preeminent retail tenants operating across 20 sectors and are situated across 40 states.
Specifically, in 2020, the company acquired 317 retail net-lease properties for $1.31 billion. These acquisitions likely enabled the company to increase the portion of the annualized base rents derived from investment-grade retail tenants. In fact, as of Dec 31, 2020, its portfolio generated more than 67% of annualized base rents from investment-grade retail tenants. This indicated an increase of more than 900 basis points over the same period in 2019.
At a time when store closures amid social-distancing measures at the onset of the pandemic have been taking a huge toll on retail tenants’ liquidity, enhancing tenant roster with the addition of well-capitalized retailers have enabled Agree Realty to see strong rent collections.
In fact, as of Dec 31, the company received December rent payments from 99% of its portfolio. This encouragingly marks the fourth straight month it has obtained 99% of all contractual monthly rental obligations. Also, Agree Realty entered deferral agreements with tenants representing less than 1% of December rents.
During the year, the company also sold 17 assets for gross proceeds of $49.4 million. These dispositions enabled it to further diversify and strengthen its real estate portfolio.
In 2021, the company is likely to continue this momentum with the outlook for acquisition volume being $800 million to $1 billion, while disposition is projected to be $25-$75 million.
Moreover, throughout the past year, the company actively tapped into its at-the-market share equity program to raise funds. In fact, as of Dec 31, it had 3,129,982 shares remaining to be settled under the existing forward sale agreements. This is expected to raise $203.2 million in net proceeds.
While investments made in 2020 strengthen the company’s portfolio and positions it well in the current year; retail REITs continue to battle against store closures and bankruptcy issues. In fact, apart from Agree Realty, this trend has affected other retail REITs, including
Macerich ( MAC Quick Quote MAC - Free Report) , Simon Property Group ( SPG Quick Quote SPG - Free Report) and Kimco Realty ( KIM Quick Quote KIM - Free Report) . This remains a major growth hurdle for the company.
Agree Realty currently carries a Zacks Rank #3 (Hold). The company’s shares have edged down 0.7%, against its
industry’s rally of 10.5% in the past three months.
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