Agree Realty Corporation ((ADC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Agree Realty Corporation’s recent earnings call conveyed a strong and positive sentiment, underscoring the company’s robust investment volume, impressive financial performance, and significant achievements such as attaining an A- credit rating. While there were minor concerns regarding credit loss assumptions and minimal dilution impacts, the overall outlook remains optimistic, highlighting the company’s solid position in the market.
Record Investment Volume
Agree Realty Corporation reported its largest quarterly investment volume since the onset of COVID-19, deploying over $450 million across all platforms. This achievement has prompted the company to increase its full-year 2025 investment guidance to a range of $1.5 to $1.65 billion, marking an impressive increase of over 65% compared to last year’s investment volume.
Strong Financial Performance
The company showcased strong financial performance with Core Funds From Operations (FFO) per share for the third quarter reaching $1.09, an 8.4% increase from the same period last year. Additionally, Adjusted Funds From Operations (AFFO) per share rose by 7.2% year-over-year to $1.11, surpassing consensus expectations by $0.02.
A- Credit Rating Achievement
Agree Realty Corporation achieved a significant milestone by receiving an A- issuer rating from Fitch Ratings. This places the company among only 13 publicly listed U.S. REITs with an A- credit rating or better, which has resulted in a reduction of the interest rate on its 2029 term loan by five basis points.
High Occupancy and Investment-Grade Exposure
The company maintained a strong occupancy rate of 99.7% for the quarter, with investment-grade exposure remaining sector-leading at 67%. This highlights the company’s ability to attract and retain high-quality tenants, contributing to its stable financial performance.
Minimal Treasury Stock Method Dilution
Agree Realty anticipates minimal dilution related to the treasury stock method, estimating roughly $0.01 of dilution for the full year 2025. This is based on the impact recognized in the first half of the year, reflecting the company’s effective management of its equity structure.
Credit Loss Assumptions
The company’s guidance includes an assumption of approximately 25 basis points of credit loss for the year. This reflects potential risks associated with tenant defaults or occupancy loss, indicating a cautious approach to managing credit risk.
Forward-Looking Guidance
Looking ahead, Agree Realty Corporation has provided updated guidance for the year, reflecting its robust investment activity. The company has increased its full-year 2025 investment guidance to $1.5 to $1.65 billion, representing a substantial increase from the previous year. Additionally, they have raised their AFFO per share guidance to $4.31 to $4.33, indicating a 4.4% year-over-year growth. The company’s strong liquidity position of $1.9 billion and stable cap rates further support its positive outlook.
In conclusion, Agree Realty Corporation’s earnings call highlighted a strong and optimistic sentiment, driven by record investment volumes, solid financial performance, and strategic achievements such as an A- credit rating. The company’s forward-looking guidance underscores its confidence in continued growth and stability, making it a noteworthy player in the real estate investment trust sector.