This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Agree Realty: An Outsized Yield With Risk Controls

NEW YORK (TheStreet) -- On Thursday, Agree Realty (ADC) announced second-quarter earnings. Funds from operations increased to $5,723,000 compared with $5,431,000 the second quarter of 2011.

Net income for the second quarter of 2012 increased to $5,090,000, or 44 cents per diluted share, compared to net income for the second quarter of 2011 of $3,823,000, or 38 cents per share. Total revenue increased to $9,236,000, compared with total revenue of $8,516,000 in the second quarter of 2011.

In the press release Joey Agree, president and chief operating officer stated:

I am extremely pleased to report positive operating results for the quarter. Our efforts to expand and improve our portfolio have begun to materialize as our total revenues and funds from operations for the quarter have both increased over the comparable quarter. During the quarter, we have improved our portfolio occupancy, disposed of non-core assets, made significant development announcements and exceeded our acquisition expectations.

In late 2010, Borders Books filed for bankruptcy. The REIT accounted for around 29% of the company's annualized base rents and thru a series of asset management initiatives the triple-net REIT has reduced its overall exposure substantially.

During the second quarter Agree sold a 30,000 square foot location in Omaha, Neb. for $2.75 million. The company has one former Border's property in Columbus, Ohio under contract for sale and has executed a letter of intent to lease another former Borders property in Monroeville, Pa. (to an industry leading home fashion retailer). The last remaining former Borders property in the portfolio is located in Lawrence, Kan. and the property is currently being marketed for sale or lease.

Throughout the recession, Agree has been able to maintain its dividend. The company has paid 73 consecutive quarterly cash dividends since its IPO (in 1994). Agree owns 87 properties (3.5 million square feet) in 23 states and the majority of the properties are single-tenant assets leased to major national and regional chains.

Agree's top three tenants are Walgreens (WAG) (34%), CVS (CVS) (7%), and Sears/Mart (SHLD) (11%). The Michigan-based REIT is most active in diversifying its platform via acquisitions and development. Some of Agree's tenants include Lowe's, Advance Auto Parts, Kohl's, Chase Bank, Staples, AT&T, Big O Tires, NTB, Wal-Mart, JC Penny, Aldi, Dick's, AutoZone, Goodyear Tire and Dollar Tree.

Recently Agree closed on a strategic alliance with Wawa, a privately held convenience store operator with over 590 locations along the East Coast. Agree was named a preferred developer for Wawa (in Florida) and this strategic partnership should provide the REIT with ample development opportunities for the foreseeable future (Wawa plans to open around 100 new stores in Florida over the next five years).

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,067.56 -30.89 -0.18%
S&P 500 2,002.28 -1.09 -0.05%
NASDAQ 4,598.1880 +17.9170 0.39%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs