Agree Realty Raises Lower End of Adjusted Funds From Operations Forecast to $4.58
Key Facts
Agree Realty raised the lower end of its 2026 adjusted funds from operations per share forecast to $4.58, according to its third-quarter earnings statement, while revising its investment and property sales targets. The projected annual range is now $4.58–4.59 per share, compared with $4.57–4.59 in the guidance issued with its second-quarter results. The improvement was therefore limited to the lower end of guidance, while the company kept the upper end unchanged. Agree Realty cut its investment target for the year to about $1.6 billion from a previous range of $1.6 billion to $1.8 billion. Conversely, the company raised its annual property sales target to a range of $100 million to $150 million.
For the quarter, Agree Realty reported core funds from operations of $1.15 per diluted share in the third quarter, according to its earnings statement for the period. Adjusted funds from operations also totaled $1.15 per diluted share, putting the two measures at the same level in the reported quarterly results. The company said both core and adjusted funds from operations per share grew 4.9% from the same period a year earlier. Compared with the previous quarter, adjusted funds from operations had totaled $1.14 per share in the second quarter, according to the earnings statement for that period. On leverage, pro forma net debt to recurring earnings before interest, taxes, depreciation and amortization stood at 4.8 times, before accounting for forward equity settlements.
Agree Realty's third-quarter acquisitions totaled about $308.6 million, according to figures the company released with its quarterly results. In terms of the tenant mix at these properties, investment-grade tenants generated 52.1% of their annualized base rent. As background to its investment activity, the company had recorded about $502 million in investments during the second quarter, a level it described as a record. The weighted-average capitalization rate for acquisitions in that quarter was 7.0%, according to the previous earnings statement detailing the terms of the acquired properties. The $308.6 million figure relates to third-quarter acquisitions, while the $502 million refers to reported second-quarter investment activity.
On financing, Agree Realty's operating partnership priced a $400 million bond offering, according to the offering's pricing disclosure filed with the U.S. Securities and Exchange Commission. The notes were senior unsecured obligations, according to the terms set out in the financing disclosure. The partnership set the notes' coupon at 5.650%, the coupon rate announced when the offering was priced. The notes mature in 2036, according to the term specified in the pricing document filed with the commission. After accounting for prior hedges, the notes' all-in interest cost was 5.36%, compared with the coupon rate specified in the offering terms, according to the same disclosure.
On cash returns to shareholders, Agree Realty declared a monthly common stock dividend for October, according to a separate dividend announcement. It set the monthly dividend at $0.271 per common share, the amount approved for that month. The company said the new dividend represented a 1.5% increase from the previous month, applying the increase to the announced monthly shareholder payment. The new monthly dividend rate equates to annual dividends of $3.252 per share, according to the annualized equivalent provided by Agree Realty in its announcement. In its third-quarter results, the company said dividends for the period represented about 69% of adjusted funds from operations per share, illustrating the size of the payout relative to that operating measure.
On capital allocation, Chief Executive Joey Agree said the company would focus on "value over volume," according to his comments in the third-quarter earnings statement. That approach accompanied the lower annual investment target and higher property sales target announced as part of the company's updated guidance for the year. Regarding the upcoming debt schedule, the chief financial officer said in the bond pricing disclosure that the company faces no material debt maturities until 2028. The October dividend will be payable to shareholders of record at the close of business on October 30, 2026, according to the date specified in the dividend announcement. Payment is scheduled for November 13, 2026, according to the timetable Agree Realty announced to shareholders.