Agree Realty (NYSE: ADC) reported record second-quarter investment activity and raised its full-year outlook.
The company invested more than $500 million across its three external growth platforms during the quarter. This investment activity included $451 million of acquisitions involving 82 retail net-lease assets.
Weighted-average capitalization rate for assets acquired in the second quarter
The acquired assets in the second quarter carried a weighted-average lease term of 11.2 years. Investment-grade retailers accounted for more than 73% of annualized base rent acquired during the quarter, while ground leases represented approximately 13.5% of acquired annualized base rent.
One transaction involved approximately $75 million for large-format travel centers backed by BP North America, which carries an A-minus credit rating.
Financial Guidance and Performance
Agree Realty raised its full-year 2026 investment-volume guidance to a range of $1.6 billion to $1.8 billion. The midpoint of this updated 2026 guidance represents a 24% increase from the company's initial guidance for that year.
The company also increased its full-year adjusted funds from operations (AFFO) per-share guidance to a range of $4.57 to $4.59. CFO Peter Coughenour stated the midpoint of the updated AFFO per-share guidance was raised by $0.02, implying nearly 6% year-over-year growth.
During the second quarter, Core FFO per share was $1.13, an increase of 7.5% from a year earlier. AFFO per share was $1.14 for the quarter, representing a 7.4% year-over-year increase.
Agree Realty
Portfolio and Development
The company now assumes 25 basis points of credit and occupancy loss for the year, after experiencing 10 basis points of fully loaded credit and occupancy loss through the first half of the year.
Agree Realty commenced five development and developer funding projects during the quarter with anticipated costs of about $88 million. Through June 30, the company had commenced more than $105 million of projects.
The company sold 14 properties during the quarter for approximately $30 million in gross proceeds at a weighted-average cap rate of 7%.
At quarter-end, ground leases accounted for more than 10% of the company's annualized base rent.
