DEVELOP | ACQUIRE | PARTNER November 2018
Forward-Looking Statements Forward-Looking Statements This presentation may contain certain “forward -looking statements” made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” “forecast,” “continue,” “assume,” “plan,” references to “outlook” or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections and forecasts and other forward-looking information and estimates. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. These risks and uncertainties are described in greater detail in the Company’s filings with the Securities and Exchange Commission, including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and in subsequent quarterly reports. Except as required by law, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. For further information about the Company’s business and financial results, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Company’s Form 10-Q, copies of which may be obtained at the Invest section of the website at www.agreerealty.com. All information in this presentation is as of October 31, 2018. The Company undertakes no duty to update the statements in this presentation to conform the statements to actual results or changes in the Company’s expectations. 1
Agree Realty Corporation (NYSE: ADC) Retail net lease REIT focused on growth through the acquisition and development of high-quality retail properties Our Company ▪ (1) $2.6 billion retail net lease REIT headquartered in Bloomfield Hills, MI and listed on the NYSE under ticker ADC ▪ 520 retail properties totaling approximately 10.0 million square feet in 45 states ▪ 47% investment grade tenants and 10.1 years average remaining lease term Investment grade credit rating of Baa2 with a stable outlook from Moody’s ▪ Our History ▪ 47-year operating history as a developer, owner and manager of retail properties ▪ IPO in 1994 to continue and expand business of predecessor company ▪ Formally launched acquisition platform in 2010 and Partner Capital Solutions (“PCS”) business in 2012 Our Business Plan ▪ Opportunistically expand and diversify our high-quality retail net lease portfolio through a refined and disciplined investment strategy ▪ Generate consistent and sustainable earnings growth ▪ Provide a reliable income stream through a growing dividend ▪ Maintain a conservative and flexible capital structure As of September 30, 2018, unless otherwise noted. (1) As of October 31, 2018. 2
Recent Highlights Consistent execution has led to enhanced shareholder value ▪ 96 retail net lease properties acquired year-to-date for a record $351.1 million ▪ 13 development and PCS projects completed or under construction totaling $59.6 million ▪ 17 properties sold year-to-date for total gross proceeds of $61.9 million (1) ▪ Completed forward equity offering for anticipated net proceeds of approximately $190 million ▪ Declared a quarterly dividend of $0.54 per share, a 6.9% year-over-year increase ▪ Increased 2018 acquisition guidance to a range of $425 million to $475 million As of September 30, 2018. 3 (1) Includes Meijer’s exercise of a purchase option totaling $3.9 million .
Investment Strategy
Scaling Three-Pronged Investment Strategy Leverage real estate acumen and three investment platforms to identify best risk-adjusted retail net lease opportunities ADC’s synergistic investment platforms adhere to the same core principles while pursuing opportunities along the full spectrum of net lease asset origination ▪ Bottoms-up underwriting => real estate and residuals matter ▪ 100% retail properties => superior real estate + longer term leases ▪ National and super-regional retailers => superior real estate + credit enhancement ▪ Emphasis on tenant real estate solutions => long-term relationships and repeat business Partner Capital Solutions ➢ “Inorganic” development ➢ Partner with private developers ➢ Provide capital and development expertise Development Acquisitions ➢ “Organic” development ➢ Acquire stabilized assets ➢ 47-year track record ➢ Sale-leasebacks and third party sellers ➢ Preferred developer status Site Land Land Entitlements Construction Delivery Sale selection negotiation purchase Retail Net Lease Real Estate “Lifecycle” 5
ADC’s Unique Dual Capabilities Emphasis on comprehensive real estate solutions drive multi-faceted partnerships DEVELOPMENT SALE-LEASEBACK ✓ Spearheading retailer ✓ Track record of execution expansion programs for over as acquirer and real estate four decades partner • • In-house expertise Ability to close quickly • • Superior access to capital Focus on core competencies • Transparency & credibility • Side-by-side growth 6
Track Record of Execution ADC anticipates investing over $500 million in 2018 Investment Activity $ in millions $500.0 $59.6 $450.0 $400.0 $62.7 $336.8 $38.0 $300.0 $295.8 $14.9 $220.1 $200.0 $17.7 $147.5 $100.0 $28.4 $73.3 $0.0 2013 2014 2015 2016 2017 2018 (1) (2) Acquisitions Development & PCS (1) 2018 Acquisitions represents midpoint of 2018 acquisition guidance. (2) Represents development and PCS activity, completed or commenced. 7
Accelerating Growth Established real estate capabilities and growing market presence driving increased investment opportunities Annualized Base Rent (“ABR”) # of Properties $ in millions 297 $141.7 520 500 $130.0 450 $119.2 436 $110.0 400 366 350 $94.3 $90.0 300 279 $70.0 250 $72.4 200 209 $56.5 $50.0 150 $45.1 130 100 $30.0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 As of September 30, 2018. 8
Active Portfolio Management Our focus on real estate fundamentals guides non-core asset sales and capital recycling Total Dispositions 2010-2018: $223 million (1) $61.9M (1) Mauston, WI $45.8M Upland, CA Atlantic Beach, FL Apopka, FL $12.9M $29.7M Minnesota (3) $29.0M Plainfield, IN Chippewa Commons North Lakeland Plaza Ocala, FL North Dakota (3) Chippewa Falls, WI MN (2) & ND (1) Lakeland, FL Petoskey Town Center Ferris Commons Macomb Township, MI Florida (2) Petoskey, MI Michigan (3) Big Rapids, MI Marshall Plaza Oscoda, MI East Lansing, MI Rancho Cordova, CA Wichita Falls, TX Marshall, MI Ironwood Commons Michigan (3) Springfield, IL Ironwood, MI Waynesboro, VA Port St. John, FL 2014 2015 2016 2017 2018 YTD 9 As of September 30, 2018. Graph is representative and does not include all dispositions. (1) Includes Meijer’s exercise of a purchase option totaling $3.9 million.
Portfolio Summary
Portfolio Transformation Execution has led to increased portfolio diversification and improved quality of rental income Property Type (% ABR) Top 3 Tenant Concentration (% ABR) 6% Tenant 75.0% Ground Leases Retail Retail 70% Net Lease Net Lease 60.0% 71% 99% 45.0% Shopping Centers 30.0% 29% 8% 1% 15.0% Shopping 14% Centers Tenant Ground Leases 0.0% 1/1/2010 9/30/2018 1/1/2010 9/30/2018 (73 properties) (520 properties) (Walgreens, Borders, Kmart) (Walgreens, Walmart, LA Fitness) Geographic Diversification Retail Sector Exposure 1/1/2010 Current Pharmacy Health Services Pharmacy ✓ ✓ ✓ QSRs Tire & Auto Service Bookstores ✓ ✓ ✓ Health & Fitness Entertainment Retail General Merchandise ✓ ✓ ✓ Grocery Stores Crafts & Novelties Casual Dining ✓ ✓ ✓ Off-Price Retail Dollar Stores Financial Services ✓ ✓ ✓ Warehouse Clubs Pet Supplies Auto Parts ✓ ✓ ✓ Apparel General Merchandise ✓ ✓ Convenience Stores Discount Stores ✓ ✓ Casual Dining Sporting Goods ✓ ✓ Specialty Retail Home Furnishings ✓ ✓ Home Improvement Office Supplies ✓ ✓ Theaters Consumer Electronics ✓ ✓ Auto Parts Farm & Rural Supply ✓ ✓ Financial Services Shoes ✓ ✓ 1/1/2010 9/30/2018 + (16 states) (45 states) 11
Portfolio Transformation January 2015 Current Pharmacy 29.7% Pharmacy 9.7% Top QSRs 7.5% Tire & Auto Service 8.0% Sectors Grocery 7.0% Apparel 6.1% 21.9% 6.2% Top 4.4% 3.9% Tenants 4.4% 3.6% # of 209 properties 520 properties Properties Enterprise $0.8 billion $2.6 billion (1) Value As of September 30, 2018, unless otherwise noted. 12 (1) As of October 31, 2018.
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