# Agree Realty Corporation

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/en/companies/Agree Realty Corporation).

## Overview

Agree Realty Corp is a Maryland-incorporated, NYSE-listed real estate investment trust that owns, acquires, develops and manages retail properties that are primarily structured as net leases. The company’s assets are held and operated through its Operating Partnership, where Agree is the sole general partner and holds a ~99.7% common interest (as of December 31, 2025). As of December 31, 2025, its portfolio comprised 2,674 properties across all 50 U.S. states totaling ~55.5 million square feet, with occupancy around 99.7% and a weighted-average remaining lease term of ~7.8 years. The business model emphasizes long-duration contractual rent streams from national tenants, with tenants typically responsible for property taxes, insurance and maintenance under net lease structures.

## Products & services

• Ownership of net leased retail real estate
• Acquisition of single-tenant retail net lease properties
• Ground-up development of net leased retail properties
• Asset management and leasing oversight for the portfolio
• Dispositions and capital recycling of mature assets
• Tenant/lease analytics via internal management information systems

- **Net lease retail rental portfolio** (92%) — Contractual base rent from single-tenant retail properties under net leases.
- **Development (build-to-suit) investments** (5%) — Ground-up development of net leased retail properties for targeted tenants.
- **Other property income and reimbursements** (3%) — Property-level recoveries and ancillary income not captured in base rent.

- Ownership of net leased retail real estate
- Acquisition of single-tenant retail net lease properties
- Ground-up development of net leased retail properties
- Asset management and leasing oversight for the portfolio
- Dispositions and capital recycling of mature assets
- Tenant/lease analytics via internal management information systems

## Customers

Agree Realty’s direct customers are retail tenants that sign long-term net leases for single-tenant locations, typically where a physical store is central to sales generation. The portfolio is oriented toward sectors management views as more insulated from e-commerce substitution, including grocery, home improvement and convenience stores, as well as auto-related and discount formats. Tenant credit quality is a key underwriting focus; as of December 31, 2025, about 66.8% of annualized base rent came from tenants (or parents) with an investment-grade rating. No single tenant represented more than 10% of annualized base rent at year-end 2025, reducing single-name rent concentration risk. Tenants choose Agree’s properties to secure well-located sites with predictable occupancy costs while shifting most property operating expense variability to the tenant under net lease terms.

- **Grocery stores** (primary) — Lease net-leased stores where in-person shopping and proximity drive sales; provides daily-need traffic and typically resilient demand.
- **Home improvement** (primary) — Lease large-box locations where bulky goods and project-based shopping favor physical presence; supports longer lease terms and strong unit economics.
- **Convenience stores** (primary) — Lease high-visibility sites with fuel/quick-trip demand; tenants value predictable occupancy costs and control of site operations.
- **Auto services and auto parts** (secondary) — Lease service-oriented properties (bays, specialized layouts) that are difficult to replicate online; supports sticky tenancy but can be cyclical.
- **Dollar stores and other value retail** (secondary) — Lease small-box locations serving price-sensitive consumers; often expansion-driven with standardized store prototypes.

- National retail chains seeking long-term, single-tenant locations
- Grocery operators needing physical stores for daily-need traffic
- Home improvement retailers with large-format, destination sites
- Convenience store operators prioritizing high-traffic corners
- Auto service/auto parts tenants needing service-bay locations
- Discount and dollar store chains expanding in value-oriented trade areas
- Investment-grade tenants attracted to standardized net lease terms

## Geography

Agree Realty’s portfolio is U.S.-only and broadly diversified, with 2,674 properties located across all 50 states as of December 31, 2025. The company’s investment activity in 2025 added properties across 41 states, reflecting a strategy of sourcing net lease opportunities nationally rather than relying on a single region. Geographic diversification helps reduce exposure to localized economic shocks, but the portfolio remains sensitive to U.S. consumer spending and state/local property tax regimes. Because assets are spread across many jurisdictions, execution depends on consistent underwriting, local market due diligence and scalable asset management processes. The company’s headquarters are in Royal Oak, Michigan.

- Portfolio spans all 50 U.S. states, reducing single-market dependence
- 2025 investments added assets across 41 states, supporting national scale
- Exposure to state/local property taxes and regulatory permitting varies by state
- Local retail demand and employment conditions influence tenant sales health
- U.S.-only footprint concentrates macro risk in U.S. rates and consumption
- Headquartered in Royal Oak, Michigan with centralized management functions

## Strategy

Agree Realty’s strategy centers on scaling a nationally diversified net lease retail portfolio with long lease terms and tenant credit quality as core underwriting variables. The company uses a mix of acquisitions and ground-up development to deploy capital, as evidenced by 2025 investment volume of roughly $1.57 billion across acquisitions and completed developments. Portfolio construction emphasizes retail categories where physical locations are critical and where tenants have demonstrated omni-channel capabilities, aiming to mitigate e-commerce disruption risk. Operationally, Agree highlights internal systems that provide rapid access to lease data, tenant sales history and forecasting, supporting asset management discipline and expense control. The REIT structure and distribution requirements shape capital allocation toward steady cash generation and access to external financing for growth.

- **Scale investments in net leased retail real estate** (medium-term) — Growth in property count and invested capital expands contractual rent base.
- **Portfolio positioning toward e-commerce-resilient retail uses** (long-term) — Tenant sales durability supports rent coverage and renewal prospects.
- **Data-enabled asset management and expense monitoring** (short-term) — Rapid access to lease and tenant sales data supports proactive decisions and cash flow optimization.

- Grow net lease retail portfolio through acquisitions and development
- Target tenants/sectors where physical presence is critical to sales
- Increase exposure to investment-grade tenant credit where available
- Maintain high occupancy and extend weighted-average lease term
- Use data-driven asset management (lease data, tenant sales, forecasts)
- Recycle capital via dispositions to fund new investments
- Preserve REIT qualification and dividend capacity via compliant payouts

## Risks

Agree Realty’s cash flows depend on tenant rent payments, so tenant bankruptcies, financial distress or lease defaults can reduce revenue and property values, particularly if re-leasing is difficult. The portfolio has sector concentrations (e.g., grocery, home improvement, convenience stores) that can amplify exposure to adverse trends in those categories, including shifts in consumer behavior and competitive dynamics. Elevated interest rates and tighter credit conditions can raise the cost of capital and reduce acquisition/development economics, constraining growth and pressuring valuation. Development and acquisition activity introduces execution risk, including permitting, construction delays, supply chain disruptions and the risk that permanent financing is unavailable or unattractive. Like many real estate operators, the company also faces cybersecurity/IT risks, as well as environmental and climate-related risks that can drive costs or disrupt operations.

- **Retail sector concentration risk** [high] — Meaningful annualized base rent is tied to specific retail sectors; adverse conditions can impair tenant revenues and rent-paying ability.
- **Macroeconomic and financing conditions (rates, liquidity)** [high] — Higher interest rates and reduced financing availability can increase acquisition costs and constrain investment pace.
- **Development and acquisition execution risk** [medium] — Projects can face delays, cost inflation, permitting issues, and lack of attractive permanent financing, reducing returns and cash available for distribution.
- **Cybersecurity and IT systems disruption** [medium] — Security incidents could interrupt operations, expose sensitive data, and lead to legal/regulatory costs; insurance may be insufficient.

- Tenant bankruptcies or lease defaults reduce rental cash flow
- Retail sector concentration increases sensitivity to category downturns
- E-commerce and changing consumer preferences can weaken tenant sales
- Higher interest rates and tighter credit reduce acquisition capacity
- Development risks: delays, cost overruns, permits, supply chain issues
- Property impairments if cash flows/residual values decline
- Cybersecurity incidents could disrupt operations and create liabilities
- Climate/casualty events can damage properties and increase insurance costs

## Accounting

Agree Realty’s reported results are sensitive to purchase price allocation for acquired real estate, which is typically treated as an asset acquisition with value allocated to land, building and identified intangibles based on estimated fair values. Those fair value estimates require judgment about market land values, market rents and expected cash flows, and different assumptions can shift depreciation/amortization and the timing of expense recognition. The company evaluates properties for impairment when indicators arise, comparing undiscounted expected future cash flows (including residual value) to carrying value, and measuring impairment using fair value techniques such as discounted cash flow and comparable sales. Because impairment testing depends on assumptions about re-leasing, holding periods, market conditions and tenant health, results can be volatile in stressed markets. Investors also commonly analyze REIT performance using non-GAAP measures such as Nareit FFO, which adjust GAAP earnings for real estate depreciation and certain gains/losses.

- **Accounting for acquisitions of real estate (asset acquisitions)** — Can shift expense recognition and comparability across periods
- **Impairment evaluation and fair value measurement** — Potential for episodic impairment charges in weaker leasing/market conditions

- Real estate acquisitions treated as asset acquisitions (no goodwill)
- Purchase price allocation to land/building/intangibles uses fair values
- Judgment in market rents/land values affects D&A and expense timing
- Impairment triggers and cash-flow tests can create earnings volatility
- Fair value methods include DCF and comparable sales/purchase offers
- Held-for-sale measurement uses fair value less disposition costs
- Non-GAAP Nareit FFO used to evaluate operating performance

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*Last updated: 2026-08-11T04:46:17.343634+00:00*