Introduces 2024 AFFO Per Share Guidance of $4.10 to $4.13 ROYAL OAK, Mich., April 23, 2024 /PRNewswire/ -- Agree Realty Corporation (NYSE:ADC) (the "Company") today announced results for the quarter ended March 31, 2024. All per share amounts included herein are on a diluted per common share basis unless otherwise stated. First Quarter 2024 Financial and Operating Highlights: Invested approximately $140 million in 50 retail net lease properties Commenced four development or Developer Funding Platform ("DFP") projects for total committed capital of approximately $18 million Net Income per share attributable to common stockholders decreased 2.4% to $0.43 Core Funds from Operations ("Core FFO") per share increased 3.5% to $1.01 Adjusted Funds from Operations ("AFFO") per share increased 4.6% to $1.03 Declared an April monthly dividend of $0.250 per common share, a 2.9% year-over-year increase Balance sheet well positioned at 4.3 times proforma net debt to recurring EBITDA; 4.8 times excluding unsettled forward equity Ended the quarter with over $920 million 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, 2024 increased 8.2% to $43.0 million, compared to $39.8 million for the comparable period in 2023. Net Income per share for the three months ended March 31st decreased 2.4% to $0.43 compared to $0.44 for the comparable period in 2023. Core FFO Core FFO for the three months ended March 31, 2024 increased 14.6% to $102.0 million, compared to Core FFO of $89.0 million for the comparable period in 2023. Core FFO per share for the three months ended March 31st increased 3.5% to $1.01, compared to Core FFO per share of $0.98 for the comparable period in 2023. AFFO AFFO for the three months ended March 31, 2024 increased 15.9% to $103.3 million, compared to AFFO of $89.1 million for the comparable period in 2023. AFFO per share for the three months ended March 31st increased 4.6% to $1.03, compared to AFFO per share of $0.98 for the comparable period in 2023. Dividend In the first quarter, the Company declared monthly cash dividends of $0.247 per common share for each of January, February and March 2024. The monthly dividends declared during the first quarter reflected an annualized dividend amount of $2.964 per common share, representing a 2.9% increase over the annualized dividend amount of $2.880 per common share from the first quarter of 2023. 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 a monthly cash dividend of $0.25 per common share for April 2024. The monthly dividend reflects an annualized dividend amount of $3.00 per common share, representing a 2.9% increase over the annualized dividend amount of $2.916 per common share from the second quarter of 2023. The April dividend is payable on May 14, 2024 to stockholders of record at the close of business on April 30, 2024. 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, 2024 to stockholders of record at the close of business on April 19, 2024. Earnings Guidance 2024 Guidance AFFO per share(1) $4.10 to $4.13 General and administrative expenses (% of adjusted revenue)(2) 5.7% to 6.0% Non-reimbursable real estate expenses (% of adjusted revenue)(2) 1.0% to 1.5% Income and other tax expense $4 to $5 million Acquisition volume Approximately $600 million Disposition volume  $50 to $100 million The Company's 2024 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) 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. (2) Adjusted revenue excludes the impact of the amortization of above and below market lease intangibles.   CEO Comments "We are pleased with our strong start to the year as evidenced by the introduction of full-year acquisition guidance of approximately $600 million of high-quality retail net lease properties," said Joey Agree, President and Chief Executive Officer. "With total liquidity of over $920 million, more than $385 million of hedged capital and no material debt maturities until 2028, we enjoy ample balance sheet flexibility to execute our disciplined operating strategy. Our best-in-class portfolio and fortress balance sheet provide us with conviction that we can achieve 2024 AFFO per share between $4.10 and $4.13 without deviating from our core strategy or moving up the risk curve." Portfolio Update As of March 31, 2024, the Company's portfolio consisted of 2,161 properties located in 49 states and contained approximately 44.9 million square feet of gross leasable area. At quarter end, the portfolio was 99.6% leased, had a weighted-average remaining lease term of approximately 8.2 years, and generated 68.8% of annualized base rents from investment grade retail tenants. Ground Lease Portfolio As of March 31, 2024, the Company's ground lease portfolio consisted of 224 leases located in 35 states and totaled approximately 6.1 million square feet of gross leasable area. Properties ground leased to tenants represented 11.6% of annualized base rents. At quarter end, the ground lease portfolio was fully occupied, had a weighted-average remaining lease term of approximately 10.3 years, and generated 88.0% of annualized base rents from investment grade retail tenants. Acquisitions Total acquisition volume for the first quarter was approximately $123.5 million and included 31 select properties net leased to leading retailers operating in sectors including home improvement, auto parts, grocery stores, convenience stores and tire and auto service. The properties are located in 22 states and leased to tenants operating in 15 sectors. The properties were acquired at a weighted-average capitalization rate of 7.7% and had a weighted-average remaining lease term of approximately 8.2 years. Approximately 64.0% of annualized base rents acquired were generated from investment grade retail tenants. The Company anticipates acquisition volume for the full year 2024 to be approximately $600 million. Dispositions During the first quarter, the Company sold six properties for gross proceeds of approximately $22.3 million. The dispositions were completed at a weighted-average capitalization rate of 6.2%. The Company anticipates disposition volume for the full year 2024 to be between $50 and $100 million. Development and DFP During the first quarter, the Company commenced four development or DFP projects, with total anticipated costs of approximately $17.6 million. Construction continued during the quarter on 14 projects with anticipated costs totaling approximately $56.3 million. The Company completed two projects during the quarter with total costs of approximately $8.0 million. For the three months ended March 31, 2024, the Company had 20 development or DFP projects completed or under construction with anticipated total costs of approximately $81.9 million. The projects are leased to leading retailers including TJX Companies, Burlington, Starbucks, Gerber Collision, and Sunbelt Rentals.   The following table presents estimated costs for the Company's active or completed development or DFP projects for the quarter ended March 31, 2024: Three Months Ended March 31, 2024 Number of Projects 20 Costs Funded During Q1 2024 $16,539 Costs Funded Prior to Q1 2024 31,610 Remaining Funding Costs 33,732 Anticipated Total Project Costs $81,881 Development and DFP project costs are in thousands. Any differences are the result of rounding. Costs Funded During Q1 2024 exclude any costs associated with projects that were completed in prior quarters. Remaining Funding Costs exclude any costs associated with projects that were completed in Q1 2024. Costs Funded Prior to Q1 2024 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 405,000 square feet of gross leasable area throughout the existing portfolio. Notable new leases, extensions or options included a 46,000-square foot Best Buy in Danvers, Massachusetts, a 57,000-square foot Hobby Lobby in Port Arthur, Texas, and a 147,000-square foot Walmart Supercenter in Mena, Arkansas. As of March 31, 2024, the Company's 2024 lease maturities represented 0.4% of annualized base rents. The following table presents contractual lease expirations within the Company's portfolio as of March 31, 2024, assuming no tenants exercise renewal options: Year  Leases AnnualizedBase Rent (1)  Percent of Annualized Base Rent Gross Leasable Area  Percent of GrossLeasable Area 2024 12 2,327 0.4 % 274 0.6 % 2025 70 15,818 2.8 % 1,598 3.6 % 2026 122 27,110 4.8 % 2,788 6.2 % 2027 156 34,329 6.1 % 3,134 7.0 % 2028 176 46,901 8.3 % 4,338 9.7 % 2029 192 58,384 10.3 % 5,613 12.6 % 2030 268 56,470 10.0 % 4,318 9.7 % 2031 185 44,152 7.8 % 3,252 7.3 % 2032 237 48,897 8.7 % 3,631 8.1 % 2033 198 46,102 8.2 % 3,557 8.0 % Thereafter 721 184,462 32.6 % 12,169 27.2 % Total Portfolio 2,337 $564,952 100.0 % 44,672 100.0 % The contractual lease expirations presented above exclude the effect of replacement tenant leases that had been executed as of March 31, 2024, 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, 2024, 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, 2024: Tenant Annualized Base Rent(1)  Percent of Annualized Base Rent Walmart $33,864 6.0 % Tractor Supply 28,155 5.0 % Dollar General 26,831 4.7 % Best Buy 19,593 3.5 % CVS 17,809 3.2 % Dollar Tree 17,558 3.1 % Kroger 16,802 3.0 % TJX Companies 16,762 3.0 % O'Reilly Auto Parts 16,411 2.9 % Hobby Lobby 14,673 2.6 % Lowe's 14,025 2.5 % Burlington 13,080 2.3 % Sunbelt Rentals 12,761 2.3 % 7-Eleven 12,431 2.2 % Gerber Collision 11,710 2.1 % Sherwin-Williams 11,423 2.0 % Wawa 9,916 1.8 % Home Depot 9,591 1.7 % BJ's Wholesale Club 8,713 1.5 % Other(2) 252,844 44.6 % Total Portfolio $564,952 100.0 %       Annualized Base Rent is in thousands; any differences are the result of rounding.       (1)   Refer to footnote 1 on page 4 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, 2024: Sector Annualized Base Rent(1)  Percent of Annualized Base Rent Grocery Stores $54,894 9.7 % Home Improvement 49,349 8.7 % Tire and Auto Service 47,363 8.4 % Convenience Stores 46,072 8.2 % Dollar Stores 42,881 7.6 % Off-Price Retail 33,992 6.0 % General Merchandise 32,331 5.7 % Auto Parts 32,256 5.7 % Farm and Rural Supply 29,883 5.3 % Pharmacy 24,200 4.3 % Consumer Electronics 21,723 3.9 % Crafts and Novelties 16,952 3.0 % Discount Stores 14,155 2.5 % Warehouse Clubs 13,699 2.4 % Equipment Rental 13,087 2.3 % Dealerships 12,411 2.2 % Health Services 11,500 2.0 % Restaurants - Quick Service 9,109 1.6 % Health and Fitness 9,034 1.6 % Sporting Goods 7,450 1.3 % Specialty Retail 6,620 1.2 % Financial Services