DEVELOP | ACQUIRE | PARTNER

JUNE 2016

Safe Harbor

This presentation contains certain statements that are the Companys and Managements hopes,
intentions, beliefs, expectations, or projections of the future and might be considered forward-looking
statements under Federal Securities laws. Prospective investors are cautioned that any such forwardlooking statements are not guarantees of future performance and involve risks and uncertainties. The
Companys actual future results may differ significantly from the matters discussed in these forwardlooking statements and we may not release revisions to these forward-looking statements to reflect
changes after weve made the statements. Factors and risks that could cause actual results to differ

materially from expectations are disclosed from time to time in greater detail in the companys filings with
the SEC including, but not limited to, the Companys report on Form 10-K, as well as Company press
releases.

Agree Realty Corporation (NYSE: ADC)

Retail net lease REIT focused on growth through the acquisition
and development of high-quality retail properties
Our Company

$1.4 billion retail net lease REIT headquartered in Bloomfield Hills, MI and listed on the NYSE under ticker ADC

320 retail properties totaling approximately 6.2 million square feet in 42 states

~50% investment grade tenants and 11.2 years average remaining lease term

Our History

45 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 June 2, 2016.

Recent Highlights
Consistent execution has led to enhanced shareholder value
Acquired $79.5 million California-centric portfolio in June 2016

Over 50% of net operating income derived from California

80% of net operating income from properties near Los Angeles, San Francisco, Austin, Denver, Seattle and Orlando

11 properties concentrated in home improvement, grocery, discount apparel, craft & novelty and specialty retail

11.4 weighted average remaining lease term

Increased 2016 acquisition guidance by 40% in May 2016 to a range of $250 million to $275 million
Surpassed $1.0 billion equity market cap with May 2016 follow-on equity offering of $115 million
Increased quarterly dividend by 3.2% to $0.48/share, a 20% increase since 2011
Increased Q1 2016 FFO per share by 8.5% and Q1 2016 AFFO per share by 7.9%
Invested in 13 retail net lease assets for an aggregate investment of $38.3 million in Q1 2016

Q1 2016 acquisition weighted-average cap rate of 7.9%

Completed Hobby Lobby development project in Springfield, OH

Continually focused on leading brands and retailers operating in e-commerce resistant and experiential retail
sectors

As of June 2, 2016.

Investment Strategy

Unique Real Estate Investment Strategy

Leverage real estate acumen and naturally overlapping investment
platforms to identify best risk-adjusted retail net lease opportunities
ADCs three 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

Development

Inorganic development
Partner with private developers
Provide capital and development expertise

Acquisitions

Organic development
45 year track record
Preferred developer status

Site
selection

Land
negotiation

Entitlements

Land
purchase

Construction

Delivery

Acquire stabilized assets

Sale-leasebacks and third
party sellers

Sale

Retail Net Lease Real Estate Lifecycle

5

Emphasis on Tenant Real Estate Solutions

Unique dual capabilities drive opportunistic value-add
partnerships with retailers nationwide

DEVELOPMENT
Spearheading retailer
expansion programs for over
four decades

SALE-LEASEBACK
Track record of execution
as acquirer and real estate
partner

In-house expertise

Ability to close quickly

Superior access to capital

Focus on core
competencies

Transparency & credibility

Side-by-side growth

Track Record of Execution

Since 2010, ADC has invested over $800 million
in high-quality retail net lease properties
Investment Activity
$ millions

$300.0

$250.0
$14.9
$220.1

$200.0

$17.7

$150.0

$147.5

$100.0

$28.4
$81.5
$73.3

$50.0
$38.6

$0.0
2011

2012

2013

Acquisitions

As of June 2, 2016.

2014

2015

2016

Development / PCS

Accelerating Growth
Established real estate capabilities and growing market
presence driving increased investment opportunities
Annualized Base Rent (ABR)

# of Properties
$ millions

$90.0

330
297
320

$85.2

300
$80.0
279

270

$72.4

$70.0

240

210
209

$60.0

180
$56.5

$50.0

150

130

120

$45.1

$40.0

109

90

$38.1
87
$34.0

$30.0

60
2011

As of June 2, 2016.

2012

2013

2014

2015

Current

2011

2012

2013

2014

2015

Current

Active Portfolio Management

Our focus on real estate fundamentals guides
non-core asset sales and capital recycling
Total Dispositions 2011-2015: $71.6M

$15.9M

$8.3M

Tulsa, OK

$12.9M

$29.0M

Chippewa Commons

North Lakeland Plaza

Columbus, OH

Chippewa Falls, WI

Lakeland, FL

Plymouth Commons

Petoskey Town Center

Ferris Commons

Columbus, OH

Petoskey, MI

Big Rapids, MI
Marshall Plaza

Shawano Plaza

Norman, OK

Shawano, WI

$5.5M

Charlevoix Commons

Ann Arbor, MI

Charlevoix, MI

2011

2012

East Lansing, MI

Marshall, MI

Ironwood Commons

Ypsilanti, MI

2013

Ironwood, MI

2014

Waynesboro, VA

2015
9

Portfolio Summary

Portfolio Transformation
Execution has led to increased portfolio diversification
and improved quality of rental income
Property Type (% ABR)
Retail
Net Lease
71%

6% Tenant
Ground Leases

Top 3 Tenant Concentration (% ABR)

80.0%
Retail
Net Lease

70.0%

60.0%

98%
40.0%

Shopping
Centers
29%
2%

1/1/2010
(73 properties)

20.0%

8%

Shopping
Centers

Tenant Ground Leases

23.3%

0.0%

Current
(320 properties)

1/1/2010

Current

(Walgreens, Borders, Kmart)

Geographic Diversification

Retail Sector Exposure

1/1/2010

Pharmacy
Bookstores
General Merchandise
Casual Dining
Financial Services
Auto Parts

Current

1/1/2010
(16 states)

As of June 2, 2016.

(Walgreens, Wal-Mart, Lowes)

Pharmacy
QSRs
Health & Fitness
Grocery Stores
Sporting Goods
Warehouse Clubs
Apparel
Convenience Stores
Casual Dining
Specialty Retail
Home Improvement
Theater

Auto Parts
Financial Services
Auto Service
Healthcare
Crafts & Novelties
Dollar Stores
Pet Supplies
General Merchandise
Discount Stores
Home Furnishings
Consumer Electronics
Entertainment Retail

Current
(42 states)

11

Q1 2016 Portfolio Snapshot

Tenants
$ in millions

Lease Expirations

Annualized
Base Rent(1)

Tenant / Concept

$ millions

% of Total

$12.3

16.5%

3.9

5.2%

2.5

3.3%

$41.1

$40.0

$30.0

$20.0

2.5

3.3%

2.0

2.7%

$10.0
$4.3

1.9

2.5%
$0.0

(2)

(3)

Other
Total

1.8

2.5%

1.8

2.4%

1.8

2.4%

1.7

2.3%

1.7

2.3%

1.5

2.1%

1.4

1.9%

1.2

1.7%

1.2

1.6%

1.2

1.6%

1.1

1.5%

33.3

44.0%

$74.8

100.0%

As of March 31, 2016.

(1) Based on GAAP annualized base rent.
(2) Franchise restaurants operated by Charter Foods North, LLC.
(3) Franchise restaurants operated by Meridian Restaurants Unlimited, L.C.

$0.0

$1.7

$1.4

$6.5
$2.5

$4.8

$2.8

$3.8

$5.9

Retail Sectors
$ in millions

Tenant Sector
Pharmacy
Restaurants - Quick Service
Specialty Retail
General Merchandise
Apparel
Grocery Stores
Warehouse Clubs
Health & Fitness
Sporting Goods
Convenience Stores
Restaurants - Casual Dining
Dollar Stores
Auto Parts
Crafts and Novelty
Home Improvement
Other
Total

Annualized
Base Rent(1)
$16.7
5.7
4.0
4.0
3.9
3.8
3.7
3.6
3.1
2.6
2.4
2.3
2.3
2.0
1.8
12.9
$74.8

% of Total
22.3%
7.6%
5.4%
5.3%
5.2%
5.1%
5.0%
4.8%
4.2%
3.5%
3.2%
3.0%
3.0%
2.6%
2.5%
17.3%
100.0%

12

National and Super-Regional Retailers

Industry leading brands and retailers
operating in e-commerce resistant sectors
Retail Tenant Type (% ABR)

National
75%

Super-Regional

13%
Franchise

9%

z
z

As of June 2, 2016.

13

Leading, Pure-Play Retail Net Lease REIT

Diversified portfolio of high-quality retail properties occupied
by superior credit tenants under long term leases
Retail % of Total Portfolio

Investment Grade Tenants

100.0%

52.0%
100%

100%

47.0%

90%

75.0%

79%

50%

42.0%

44%
42%

37.0%

61%

32.0%
27.0%

25.0%

22.0%
0.0%
ADC

NNN

SRC

(1)

VEREIT

(2)

STOR

(3)

21%

17.0%
ADC

Occupancy

VEREIT

NNN

SRC

Undisclosed

57%

Undisclosed

50.0%

STOR

Weighted-Average Lease Term

100.0%

13.0 yrs

14.0

99.8%
99.5%

99.0%

12.0 yrs

99.1%
98.6%

98.6%

98.0%

98.4%

97.0%

11.3

11.0 yrs

11.2

11.1
10.4

10.0 yrs

10.0

96.0%

9.0 yrs
STOR

ADC

NNN

SRC

VEREIT

STOR

NNN

ADC

SRC

VEREIT

Peer data from first quarter 2016 supplemental or company SEC filings.
(1)

Excludes Medical/Other Office, Education, Distribution and Manufacturing, as disclosed.

(2)

Excludes Office, Industrial and Distribution, as disclosed.

(3)

Excludes Industrial, Early Childhood Education Centers, Colleges and Professional Schools and All Other Service Industries, as disclosed.

14

Executing Growth Through Strategic Investments

11 Property Portfolio
Purchase Price: $79.5 million
Over 50% concentration in California
Weighted average remaining lease term of
11.4 years
Nearly 40% of net operating income from
investment grade tenants
E-commerce resistant sectors: Grocery,
Warehouse Clubs, Home Improvement,

Specialty Retail, Crafts & Novelties and

Discount Apparel

15

Executing Growth Through Strategic Investments

Unique opportunity to invest in a highly diversified portfolio with over 50% of the
portfolios net operating income derived from California

1%

50%

7%

6%

35%

16

High-Quality Retail Real Estate = Stronger Residual Values

Sunnyvale, California
Corporate guarantee from Lowes
Companies, Inc. (S&P: A-)
In the heart of Silicon Valley, only 1.5

miles from Apples new corporate

headquarters
Terrific demographics
$127K household income within a 3
mile radius
3 mile population density of 219K
17

Executing Growth Through Strategic Relationships

Multi-State Portfolio
Purchase Price: $16.8 million
4 Properties
Maryland, Iowa and Ohio
E-commerce resistant sectors:
Warehouse Clubs, Financial Services,
Casual Dining and Specialty Retail
Executed two early lease extensions
with relationship tenants

18

High-Quality Retail Real Estate = Stronger Residual Values

Ann Arbor, Michigan

Redevelopment of 1937 historic
building into flagship campus store
Off-market transaction
Centrally located on the hard corner
directly across from the Diag on the
University of Michigans Central
Campus

19

High-Quality Retail Real Estate = Stronger Residual Values

Lake Zurich, Illinois

Completed off-market acquisition from
repeat seller
Located at signalized intersection
within dominant retail corridor
Benefits from strong demographics
and traffic counts

20

High-Quality Retail Real Estate = Stronger Residual Values

Charlotte, North Carolina

Acquisition of ground floor retail
condominium
Located within downtown Charlotte, near
upper income condominium and multifamily developments
Small format urban grocery component
of a larger mixed-use development
Credit upgrade in 2015 with Krogers
acquisition of Harris Teeter

21

High-Quality Retail Real Estate = Stronger Residual Values

New Lenox, Illinois

Partner Capital Solutions project
Acquired land post-permit & precommencement
Inorganic development opportunity
achieved superior yield & credit

22

Representative Acquisitions
Single Tenant Net Lease

Lowes
Concord, NC

KeyBank
Elyria, OH

H-E-B
Brenham, TX

AutoZone Portfolio (14)

6 states

Academy Sports + Outdoors /

Jo-Ann Fabrics / Orscheln
Topeka, KS

Michaels / PetSmart
Anderson, SC

Michaels / Dollar Tree / PetSense

Fort Oglethorpe, GA

Wendys Portfolio (3)

Georgia & South Carolina

Golden Corral
Springfield, IL

Burger King Portfolio (11)

North Dakota & Minnesota

Multi-Tenant Net Lease

Mattress Firm / ULTA Beauty

Columbus, MS

Franchise Restaurants

Taco Bell Portfolio (4)

Ohio, Virginia & West Virginia

23

Recent Development and PCS Projects

SITE

Chick-fil-A
Frankfort, KY

Starbucks
Lakeland, FL

Cash & Carry Smart Foodservice

Salem, OR

Cash & Carry Smart Foodservice

Burlington, WA

Buffalo Wild Wings

St. Augustine, FL

Wawa
Orlando, FL

Hobby Lobby
Springfield, OH

McDonalds
East Palatka, FL

Wawa
St. Petersburg, FL
24

Financial Overview

Balance Sheet Positioned for Growth

Pro Forma Capitalization and Leverage(1)

Debt Maturities

Principal
Amt.

$ millions

Debt
Mortgage Payable
Unsecured Term Loans
Senior Term Loans
Credit Facility

Total Debt

92.3
100.0
100.0
98.0
390.3

$ millions
$150.0

$75.0

(3)

$65.0

$60.0
$50.0

$50.0

$44.7

$45.0

$29.1

$30.0

$25.0
$20.7

Equity
New Equity Offering, net
Common Stock
OP Units
Total Equity - Pre Offering

Shares/
Units

Price/
Share

Principal
Amt.

2,875

$ 42.75

109.7

20,763
348

$ 42.75
$ 42.75

887.6
14.9

23,985

$15.0
$8.5

$0.0

Mortgage/Unsecured Debt

Revolving Credit Facility

Financial Ratios at March 31, 2016 and Pro Forma(1)

$ 1,012.2

March 31

Pro Forma

$812M

$1.0B

$1.2B

$1.3B

Total Debt to Total Market Capitalization

30%

22%

Fixed Charge Coverage Ratio

3.5x

3.5x

Net Debt / Adjusted EBITDA

5.3x

4.4x

Equity Market Capitalization

Total Equity Market Capitalization

Total Enterprise Value
Debt/Market Capitalization
Net Debt/Adj. EBITDA

$
$

1,012
1,304
22.4%
4.4x

Total Capitalization

(1)

Reflects information as of March 31, 2016, as adjusted to be pro forma for the Companys March 4, 2016 equity offering using the closing stock price as of June 2, 2016;
assumes no additional investments.

(2)

Mortgage note payable may be extended, at the Companys election, for two years to May 2019, subject to certain conditions.

(3)

Reflects the total commitments under the Companys revolving credit facility, which, at the Companys election, may be extended for one year to July 2019, subject to certain
conditions.

26

Consistent Performance
Management is focused on delivering consistent earnings and dividend growth

FFO per Share

AFFO per Share

$2.40

$2.40
$2.39

$2.38

$2.30

$2.30

$2.20

$2.20

$2.22

$2.18

$2.10

$2.10
$2.10

$2.00

$2.13
$2.09

$2.04

$2.00

$1.90

$1.90
2012

2013

2014

2015

2012

Dividends per Share

2013

2015

G&A % of Total Revenue

$1.92

17.0%
$1.86

$1.80
$1.74

$1.68

15.0%

15.9%

13.7%

13.0%

12.3%

$1.64

$1.56

2014

11.0%

$1.60

10.0%

9.0%

$1.44
2012

2013

2014

2015

2012

2013

2014

2015

27

Attractive Relative Value

ADC offers a well covered dividend and valuation opportunity
Current Dividend Yield

2016E AFFO Payout Ratio

4.50%

85.0%
4.5%
83.2%

4.25%
80.0%
4.00%
4.0%

75.0%

3.9%

75.7%

3.75%

74.0%

3.50%

70.0%
NNN

ADC

2016E FFO Multiple

ADC

NNN

2016E AFFO Multiple

21.0x

22.0x
20.9x

21.0x

20.0x

21.1x

20.9x

20.0x
19.0x

19.1x

19.0x

18.0x

18.7x

18.0x
17.0x

17.4x

17.0x
16.7x

16.0x

16.8x

16.0x
Shopping
Centers

NNN

ADC

Shopping
Centers

NNN

ADC

Per KeyBanc Capital Markets The Leaderboard as of May 27, 2016. Data is based on consensus earnings estimates per SNL Financial.
(1)

Includes National Retail Properties, Realty Income and STORE Capital.

28

Investment Summary Highlights

Highest quality retail real estate

Most secure cash flows

Strongest balance sheet

Proven track record of execution

Consistent dividend growth

Robust growth trajectory

29

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