8-K
AGREE REALTY CORP (ADC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date
of earliest event reported): January 4, 2022
AGREE REALTY CORPORATION
(Exact name of registrant as specified in its charter)
Maryland
(State or other jurisdiction of incorporation)
| 1-12928<br><br> <br>(Commission file number) | 38-3148187<br><br> <br>(I.R.S. Employer Identification No.) |
|---|---|
| 70 E. Long Lake Road<br><br> <br>Bloomfield Hills, MI<br><br> <br>(Address of principal<br> executive offices) | 48304<br><br> <br>(Zip code) |
(Registrant’s telephone number, including area code)
(248) 737-4190
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425<br>under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12<br>under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to<br>Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to<br>Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.0001 par value | ADC | New York Stock Exchange |
| Depositary Shares, each representing one-thousandth of a share of 4.25% Series A Cumulative Redeemable Preferred Stock, $0.0001 par value | ADCPrA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 7.01. | Regulation FD Disclosure. |
|---|
On January 4, 2022, Agree Realty Corporation (the “Company”) issued a press release announcing the Company’s investment and disposition activity for 2021, investment and disposition guidance for 2022, and updates on its portfolio and its fourth quarter 2021 capital markets activities.
A copy of the press release is furnished as Exhibit 99.1 to this report.
The Company has posted a copy of the press release in the Investors section of its website at www.agreerealty.com.
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits |
| --- | --- |
| Exhibit | Description |
| --- | --- |
| 99.1 | Press release, dated January 4, 2022, entitled “Agree<br>Realty Announces Record 2021 Investment Activity”. |
| 104 | Cover Page Interactive Data File (embedded within the Inline<br>XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AGREE REALTY<br> CORPORATION | |||
|---|---|---|---|
| Date: January 4, 2022 | By: | /s/ Peter Coughenour | |
| Name: | Peter Coughenour | ||
| Title: | Chief Financial Officer and Secretary |
Exhibit 99.1
| 70 E. Long<br> Lake Rd.<br><br> Bloomfield Hills, MI 48304<br><br> www.agreerealty.com<br><br> <br><br> <br><br> <br><br> FOR IMMEDIATE RELEASE |
|---|
AgreeRealty Announces Record 2021 Investment Activity
Provides2022 Investment Guidance, Portfolio & Capital Markets Update
Bloomfield Hills, MI, January 4, 2022 --Agree Realty Corporation (NYSE: ADC) (the “Company”) today announced a summary of its record investment activity in 2021, provided acquisition and disposition guidance for 2022, and provided an update on its portfolio and fourth quarter 2021 capital markets activities.
2021 Investment & Disposition Activity
Total real estate investment activity for 2021, inclusive of acquisition, development, and Partner Capital Solutions projects completed or currently under construction, amounted to a record of $1.43 billion. The properties are net leased to 93 industry-leading retail tenants operating across 27 sectors and are located in 43 states.
During the twelve months ended December 31, 2021, the Company acquired 290 retail net lease properties for total acquisition volume of approximately $1.39 billion. The acquisitions were completed at a weighted-average capitalization rate of 6.2% and had a weighted-average remaining lease term of 11.5 years. Approximately 69.3% of the annualized base rents acquired during the year were derived from investment grade retail tenants. Approximately 29.1% of annualized base rents acquired during the year were derived from ground leased assets.
The Company disposed of 18 assets for total gross proceeds of $58.0 million during 2021. The dispositions, which served to further diversify and strengthen the Company’s real estate portfolio, were completed at a weighted-average capitalization rate of 6.4%.
As of December 31, 2021, the Company’s portfolio generated approximately 67% of annualized base rents from investment grade retail tenants. Properties ground leased to tenants increased to approximately $53 million of annualized base rents and represented over 14% of total annualized base rents.
2022 Investment & Disposition Outlook
The Company’s outlook for acquisition volume in 2022, which includes several significant assumptions, is between $1.1 billion and $1.3 billion of retail net lease properties. The Company’s disposition guidance for 2022 is between $25 million and $75 million.
Capital Markets Update
Credit Facility
In December 2021, the Company entered into a Third Amended and Restated Revolving Credit Agreement to increase its senior unsecured credit facility (the "Credit Facility") to $1.0 billion. The Credit Facility includes an accordion option that allows the Company to request additional lender commitments up to a total of $1.75 billion. The Credit Facility will mature in January 2026 with Company options to extend the maturity date to January 2027.
Common Equity
In December 2021, the Company completed a follow-on public offering of 5,750,000 shares of common stock, including the full exercise of the underwriters' option to purchase additional shares, in connection with forward sale agreements. Upon settlement, the offering is anticipated to raise net proceeds of approximately $374.8 million after deducting fees and expenses and making certain other adjustments as provided in the equity distribution agreements. To date, the Company has not received any proceeds from the sale of shares of its common stock by the forward purchasers.
During the fourth quarter of 2021, the Company entered into forward sale agreements in connection with its ATM program to sell an aggregate of 207,166 shares of common stock for anticipated net proceeds of approximately $14.2 million. Additionally, the Company settled 1,501,210 shares under forward sale agreements entered into through its ATM program and received net proceeds of approximately $94.2 million.
At year end, the Company had 7,875,296 shares remaining to be settled under existing forward sale agreements, which are anticipated to raise net proceeds of approximately $519.2 million after deducting fees and expenses and making certain other adjustments as provided in the equity distribution agreements.
The following table presents the Company’s outstanding forward equity offerings as of December 31, 2021:
| Forward Equity Offerings | Shares<br><br> Sold | Shares<br><br> Settled | Shares<br> <br><br> Remaining <br><br> to Settle | Net<br><br> Proceeds <br><br> Received | Anticipated<br> <br><br> Net <br><br> Proceeds <br><br> Remaining | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Q1 2021 ATM Forward Offerings | 372,469 | - | 372,469 | - | $ | 24,358,755 | ||||
| Q2 2021 ATM Forward Offerings | 1,178,197 | - | 1,178,197 | - | $ | 79,128,474 | ||||
| Q3 2021 ATM Forward Offerings | 367,464 | - | 367,464 | - | $ | 26,693,468 | ||||
| Q4 2021 ATM Forward Offerings | 207,166 | - | 207,166 | - | $ | 14,234,169 | ||||
| December 2021 Forward Offering | 5,750,000 | - | 5,750,000 | - | $ | 374,768,075 | ||||
| Total Forward Equity Offerings | 7,875,296 | - | 7,875,296 | - | $ | 519,182,941 |
CEO Comments
“We are extremely pleased with another year of outstanding execution by our team,” said Joey Agree, President and Chief Executive Officer. "Our recent capital markets activities have bolstered our fortress-like balance sheet, providing us with substantial liquidity to execute on our robust investment pipeline. Agree Realty has established itself as the leading platform for the aggregation of the highest quality retail net lease opportunities. We look forward to further building on our successes in the years to come."
About Agree Realty Corporation
Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of December 31, 2021, the Company owned and operated a portfolio of 1,404 properties, located in 47 states and containing approximately 29.1 million square feet of gross leasable area. The Company’s common stock is listed on the New York Stock Exchange under the symbol “ADC”. For additional information on the Company and RETHINKING RETAIL, please visit www.agreerealty.com.
Forward-Looking Statements
This press release containsforward-looking statements within the meaning of the federal securities laws, including statements about the terms and size of theoffering, the intended use of proceeds from the offering, if any, and future settlement of its forward sales agreements, thatrepresent the Company's expectations and projections for the future. Although these forward-looking statements are based on goodfaith beliefs, reasonable assumptions and the Company's best judgment reflecting current information, you should not rely onforward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases,beyond the Company's control and which could materially affect the Company's results of operations, financial condition, cash flows,performance or future achievements or events. Currently, one of the most significant factors, however, is the potential adverseeffect of the current pandemic of the novel coronavirus, or COVID-19, on the financial condition, results of operations, cash flowsand performance of the Company and its tenants, the real estate market and the global economy and financial markets. The extent towhich COVID-19 impacts the Company and its tenants will depend on future developments, which are highly uncertain and cannot bepredicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic ormitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Moreover,investors are cautioned to interpret many of the risks identified in the risk factors discussed in the Company'sAnnual Report on Form 10-K for the year ended December 31, 2020 and other SEC filings, as well as the risks set forth below, asbeing heightened as a result of the ongoing and numerous adverse impacts of COVID-19. Additional important factors, among others,that may cause the Company's actual results to vary include the general deterioration in national economic conditions, weakening ofreal estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry,the Company's continuing ability to qualify as a REIT and other factors discussed in the Company's reports filed with the SEC. Theforward-looking statements included in this press release are made as of the date hereof. Unless legally required, the Companydisclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, changes inthe Company's expectations or assumptions or otherwise.
For further information about the Company’sbusiness and financial results, please refer to the “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations” and “Risk Factors” sections of the Company’s SEC filings, including, but not limited to, its AnnualReport on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company’swebsite at www.agreerealty.com.
The Company defines the “weighted-averagecapitalization rate” for acquisitions and dispositions as the sum of contractual fixed annual rents computed on a straight-linebasis over the primary lease terms and anticipated annual net tenant recoveries, divided by the purchase and sale prices.
The Company defines “annualized baserent” as the annualized amount of contractual minimum rent required by tenant lease agreements as of December 31, 2021, computedon a straight-line basis. Annualized base rent is not, and is not intended to be, a presentation in accordance with generally acceptedaccounting principles (“GAAP”). The Company believes annualized contractual minimum rent is useful to management, investors,and other interested parties in analyzing concentrations and leasing activity.
Contact:
Peter Coughenour
Chief Financial Officer
Agree Realty Corporation
(248) 737-4190