NYSE:ADC
AGREE REALTY CORP
A premier industrial REIT delivering consistent revenue growth and strong cash flows from a high-quality logistics property portfolio.
Key Metrics
Investment Thesis
Bull Case
Investors may find value in the stock due to consistent year-over-year revenue and earnings growth driven by expanding industrial demand, coupled with a strong cash position that provides flexibility for opportunistic acquisitions or share repurchases. The company's dominant market position in logistics real estate offers defensive characteristics during economic downturns.
Bear Case
Concerns regarding high leverage levels evidenced by substantial revolver activity and large accumulated other comprehensive income losses could weigh on future returns if refinancing conditions tighten. Additionally, the heavy reliance on a single sector means any slowdown in e-commerce or supply chain restructuring could disproportionately impact earnings stability.
About AGREE REALTY CORP
Agree Realty Corp is a leading commercial real estate investment trust focused on developing and operating industrial logistics properties across North America. The company serves e-commerce giants and third-party logistics providers through its portfolio of distribution centers and warehouse spaces. Its diversified asset base allows it to capitalize on sustained growth in online retail and supply chain efficiency demands.
Analysis
Management Discussion
The company demonstrated robust financial performance with revenue growing from $429.8M in 2022 to $718.4M in 2025, while net income expanded steadily from $153.0M to $205.0M over the same period. Strong operating cash flow of $504.1M and a healthy cash balance of $20.6M indicate effective capital management despite significant financing activities including revolver proceeds exceeding $28B.
Industry Overview
The industrial real estate sector is experiencing structural growth driven by the continued shift towards online shopping and the need for efficient distribution networks. This environment favors operators with extensive property portfolios that can meet the specific logistical requirements of major retailers and third-party logistics firms.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $429.8M | $537.5M | $617.1M | $718.4M |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $429.8M | $537.5M | $617.1M | $718.4M |
| Operating Expenses | $211.7M | $283.1M | $314.9M | $378.0M |
| Operating Income | $218.1M | $254.4M | $302.2M | $340.4M |
| G&A | $30.1M | $34.8M | $37.2M | $44.1M |
| Stock-Based Comp | $6.5M | $8.3M | $10.8M | $13.0M |
| D&A | $133.6M | $176.3M | $207.0M | $239.3M |
| Other OpEx | $181.6M | $248.3M | $277.6M | $333.9M |
| Non-Operating Income | $0 | $0 | $0 | $0 |
| Interest Expense | $63.4M | $81.1M | — | — |
| Pre-Tax Income | $218.1M | $254.4M | $302.2M | $340.4M |
| Income Tax | $2.9M | $2.9M | $4.3M | $1.7M |
| Continuing Ops | $215.2M | $251.5M | $297.9M | $338.7M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $153.0M | $170.5M | $189.8M | $205.0M |
| Minority Interest | $598.0K | $588.0K | $635.0K | $640.0K |
| Net to Common | $152.4M | $170.0M | $189.2M | $204.3M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Cash & Equivalents | $27.8M | $10.9M | $6.4M | $16.3M |
| Operating Leases | $60.9M | $60.2M | $47.5M | $46.5M |
| Total Assets | $6.71B | $7.77B | $8.49B | $9.80B |
| Total Liabilities | $2.08B | $2.57B | $2.98B | $3.53B |
| Shareholders' Equity | $4.63B | $5.20B | $5.51B | $6.27B |
| Paid-In Capital | $4.66B | $5.35B | $5.77B | $6.68B |
| AOCI | $23.6M | $16.6M | $40.1M | $35.5M |
| Total L&E | $6.71B | $7.77B | $8.49B | $9.80B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $153.0M | $170.5M | $189.8M | $205.0M |
| Non-Cash Adjustments | $199.7M | $205.7M | $210.9M | $288.0M |
| Working Capital Changes | $9.4M | $15.3M | $31.2M | $11.1M |
| Cash from Operations | $362.1M | $391.6M | $432.0M | $504.1M |
| Capital Expenditures | $1.60B | $1.20B | $874.5M | — |
| Cash from Investing | $-1.62B | $-1.27B | $-885.4M | $-1.54B |
| Share Buybacks | $1.9M | $2.7M | $2.3M | $3.7M |
| Dividends Paid | $220.3M | $277.7M | $303.6M | $340.7M |
| Cash from Financing | $1.24B | $869.0M | $445.3M | $1.05B |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-16.3M | $-14.4M | $-8.1M | $14.2M |
| Beginning Cash | $45.2M | $28.9M | $14.5M | $6.4M |
| Ending Cash | $28.9M | $14.5M | $6.4M | $20.6M |
Frequently Asked Questions
How does AGREE REALTY CORP make money?
Core industrial leasing operations generating rental income from e-commerce clients, value-add development projects converting existing assets into modern distribution centers, and property management services ensuring optimal occupancy rates across the North American network.
What are the main risks for ADC?
Potential for rising interest rates impacting debt servicing costs given significant revolver activity, sensitivity to e-commerce volume fluctuations affecting industrial demand, and exposure to commercial real estate market cycles regarding rental rate growth and property re-leasing timelines.
What is ADC's competitive advantage?
Strong strategic location of properties near major transportation hubs reduces client logistics costs, a high portfolio occupancy rate provides stable recurring revenue, and experienced management team delivers consistent asset appreciation and lease renewal rates.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.