ROYAL OAK, Mich. - Agree Realty Corporation (NYSE: NYSE:ADC), a real estate investment trust, has initiated a public offering of 4 million shares of common stock, with Citigroup and Wells Fargo Securities serving as the joint book-running managers. The company also anticipates granting the underwriters a 30-day option to purchase up to an additional 600,000 shares.
The offering is part of forward sale agreements with Citibank, N.A. and Wells Fargo Bank, National Association, which will potentially involve up to 4.6 million shares if the underwriters' option is exercised in full. These forward purchasers or their affiliates are expected to borrow and sell the shares to the underwriters. Agree Realty plans to settle these agreements on one or more future dates, delivering shares to the forward purchasers for cash proceeds at the public offering price, after adjusting for underwriting discounts and commissions.
Initially, Agree Realty will not receive any proceeds from the sale of shares by the forward purchasers. However, future settlements of the forward sale agreements are intended to fund general corporate activities, including property acquisitions, development, or repayment of debt under the company’s revolving credit facility.
This offering is made under an effective shelf registration statement filed with the Securities and Exchange Commission (SEC). A prospectus supplement related to the offering will be filed with the SEC. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed.
Agree Realty Corporation specializes in the acquisition and development of properties net leased to retail tenants and, as of September 30, 2024, owns a portfolio of 2,271 properties across 49 states.
The press release includes forward-looking statements, and the company cautions that the offering's completion is not guaranteed and that the net proceeds' intended use may change. The company's performance and financial results are subject to various risks, including macroeconomic conditions, market volatility, and changes in the retail industry. This news is based on a press release statement from Agree Realty Corporation.
In other recent news, Agree Realty Corporation has shown significant growth and strategic positioning in its Q3 2024 earnings call. The company has raised nearly $470 million through an at-the-market program, resulting in almost $2 billion in liquidity. The acquisition guidance for the year was increased to approximately $850 million, and AFFO per share guidance was raised to $4.12-$4.14, indicating a 4.6% year-over-year growth. RBC Capital Markets has raised its price target for Agree Realty to $80, maintaining an Outperform rating. The analysts at RBC have signaled Q4 2024 as the most significant in terms of acquisitions for the year, backed by several factors such as a lower cost of capital and adjusted expectations from sellers. Agree Realty's management has also shown a strategic focus on acquiring high-quality assets, avoiding certain types of properties. The company's credit rating was upgraded to BBB+, reflecting an improved portfolio size and credit metrics. In the recent developments, Agree Realty has shown a commitment to strategic growth and financial stability, with a positive outlook for the upcoming quarters.
InvestingPro Insights
Agree Realty Corporation's recent public offering of 4 million shares aligns with its strong market position and growth strategy. According to InvestingPro data, the company boasts a market capitalization of $7.75 billion, reflecting its significant presence in the retail REIT sector.
The company's financial health is underscored by its consistent dividend performance. An InvestingPro Tip reveals that Agree Realty has raised its dividend for 11 consecutive years, demonstrating a commitment to shareholder returns. This track record of dividend growth may appeal to income-focused investors considering the new share offering.
Moreover, Agree Realty's revenue growth of 17.78% over the last twelve months, as reported by InvestingPro, suggests that the company is experiencing solid expansion. This growth trajectory could potentially justify the need for additional capital through the share offering to fund further acquisitions and developments.
It's worth noting that while the company trades at a relatively high P/E ratio of 41.55, another InvestingPro Tip indicates that analysts predict the company will remain profitable this year. This profitability outlook may provide some reassurance to investors regarding the company's financial stability amidst its expansion efforts.
For those interested in a deeper analysis, InvestingPro offers 11 additional tips that could provide valuable insights into Agree Realty's investment potential. These tips, along with real-time metrics, can help investors make more informed decisions about the company's stock in light of this new offering.
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