Agree Realty's Q4 2024 Earnings Call: Contradictions in Mark-to-Market Upside, Cap Rates, and Sale-Leaseback Strategies

These are the key contradictions discussed in Agree Realty's latest 2024Q4 earnings call, specifically including: Mark-to-Market Upside, Cap Rate Expectations, and Sale-Leaseback Activity:



Investment and Acquisition Strategy:
- Agree Realty invested approximately $371 million in 127 high-quality retail net lease properties across all three platforms in Q4 2024, including acquisition of 98 assets for over $341 million.
- This was part of their disciplined approach to investing in strong retailers with superior risk-adjusted returns, focusing on core investment strategy and being valued partners to the largest retailers.

Capital Markets and Balance Sheet Management:
- The company raised approximately $1.1 billion of forward equity, upsized their revolving credit facility to $1.5 billion, and completed a $450 million bond offering during the year.
- This proactive management of their balance sheet positioned them with $1.1 billion of availability on their revolving credit facility and provided significant liquidity for investment activity in 2025.

Earnings Guidance and Growth Projections:
- Core FFO per share was $1.02 for the fourth quarter, and $4.08 for the full year 2024, reflecting 3.5% and 3.7% year-over-year increases respectively.
- Initial AFFO per share guidance for full year 2025 was $4.26 to $4.30, representing an approximately 3.5% year-over-year growth, supported by their strong investment guidance and balance sheet flexibility.

Retail Sector Performance and Strategy:
- The auto parts sector saw an increase in Agree Realty's portfolio, with exposure to NAPA Auto Parts, alongside established investments in O'Reilly and AutoZone.
- This strategy aligns with the growing demand for auto parts driven by the aging car population, high interest rates, and potential tariff impacts on new car production.