Agree Realty cuts investment target to $1.6 billion, raises dispositions
Key Facts
Agree Realty cut its investment volume target for 2026 to about $1.6 billion in its third-quarter results released on October 20, while raising its asset sales target. In guidance accompanying its second-quarter results, released in July, the company had set an annual investment range of $1.6 billion to $1.8 billion. The revision puts the new target at the bottom of the previous range, shifting the company from an investment range to an estimate of about $1.6 billion. On the other side of capital allocation, Agree Realty raised its asset disposition guidance for the current year to between $100 million and $150 million. July guidance had put expected asset sales at between $50 million and $100 million, with the third-quarter revision combining lower targeted investment and higher targeted dispositions.
Alongside the changes to its investment and disposition targets, the company raised the lower end of its annual adjusted funds from operations per share guidance, bringing the new range to $4.58 to $4.59, according to the earnings release. Its previous guidance, issued with second-quarter results, ranged from $4.57 to $4.59 per share, leaving the upper end of the annual forecast unchanged. Agree Realty said in an investor presentation filed with the U.S. Securities and Exchange Commission that the midpoint of the updated range implies annual growth of about 6%. Actual adjusted funds from operations per share in the third quarter of the current year came to $1.15, according to figures in the company's release. That represents growth of 4.9% from the same period a year earlier, while the updated guidance covers full-year 2026 performance.
Agree Realty's actual investment volume in the third quarter was about $357.7 million, according to the earnings release that included the revision to its investment target for the current year. That followed investment of about $502 million in the second quarter, a level the company described in that period's earnings announcement as a quarterly record. Chief Executive Joey Agree said its capital allocation approach puts "value over volume," outlining management's priority when weighing investment deals. Across its existing property portfolio, occupancy stood at about 99.8% at the end of September 2026, according to the company's third-quarter results. The investor presentation for the same period showed that investment-grade tenants accounted for 65.1% of annualized base rent, the share relating to rents generated by those tenants.
On available financing, Agree Realty said total liquidity stood at about $2.0 billion at the end of the third quarter, according to the earnings release. That total includes amounts available under the company's credit facility, along with outstanding forward equity and cash, the components the company listed as available liquidity. The company said in its investor presentation that it ended the quarter with no short-term debt outstanding, alongside its disclosure of available liquidity at the end of the period. It also had no floating-rate debt at the close of the quarter, according to the description of its debt structure in the presentation filed with the U.S. regulator. On its repayment schedule, Agree Realty said it had no material debt maturities before 2028, based on its debt position at the end of September 2026.
In September 2026, Agree Realty priced a $400 million offering of unsecured notes through its operating partnership, according to the company's financing announcement. The offering carried an all-in interest cost of 5.36%, after accounting for the effect of a prior hedge, the company said in its note pricing release. Agree Realty said it intended to use the proceeds for general corporate purposes, among the uses it specified when announcing the pricing of the financing. Those purposes include reducing outstanding debt, according to the release, which listed debt repayment among the planned uses of funds from the unsecured note offering. The company also intends to direct the financing proceeds toward property acquisitions and funding development activity, both announced uses alongside debt reduction and general corporate purposes.
On payments to shareholders, Agree Realty declared a monthly cash dividend for October of $0.271 per common share, according to the investor presentation filed with the U.S. regulator. The announced amount relates to the monthly dividend on common shares, while the third-quarter earnings release scheduled its payment for November of the current year. This will be the next monthly cash dividend on common shares, according to the schedule the company provided with its results and revised annual guidance. The payment date relates to the October dividend, according to the company's release, which distinguishes between the month covered by the dividend and the month set for its payment to shareholders. The cash dividend is scheduled to be paid on November 13, 2026, the next date specified in Agree Realty's announcement for common share payments.