Agree Realty Corporation Reports Operating Results for the Second Quarter 2010

FARMINGTON HILLS, Mich., July 29 /PRNewswire-FirstCall/ --

SECOND Quarter 2010 Highlights:

• 2nd Quarter diluted FFO per share of $0.61
• $0.51 per share quarterly dividend paid July 13, 2010
• Completed a 1,495,000 share common stock offering generating approximately $31.1 million in net proceeds

Agree Realty Corporation (NYSE: ADC) today announced results for the quarter ended June 30, 2010. Second quarter funds from operations (FFO) was $5,899,000 compared with FFO in the second quarter of 2009 of $5,910,000.  FFO per diluted share for the second quarter of 2010 was $0.61 compared with $0.70 for the second quarter of 2009.  FFO per share decreased primarily due to an increase in the weighted average shares outstanding as the result of the common share offering in April 2010.  A reconciliation of net income to FFO is included in the financial tables accompanying this press release.  Net income for the second quarter of 2010 was $4,431,000, or $0.46 per diluted share, compared with net income for the second quarter of 2009 of $4,508,000, or $0.54 per share.  Total revenues increased 4.0% to $9,230,000, compared with total revenues of $8,872,000 in the second quarter of 2009.

For the six months ended June 30, 2010, FFO increased 3.0% to $11,955,000 compared with FFO for the six months ended June 30, 2009 of $11,605,000.  FFO per diluted share was $1.32 compared with $1.38 for the six months ended June 30, 2009.  FFO per share decreased primarily due to an increase in the weighted average shares outstanding as the result of the common share offering in April 2010.  Net income was $14,400,000, or $1.59 per diluted share, compared with net income for the comparable period last year of $8,825,000, or $1.05 per diluted share.  Net income for the six months of 2010, included a gain of $5,328,000, or $0.59 per share from the sale of the Company's Santa Barbara, California Borders Book store.  Total revenues increased 4.5% to $18,680,000 compared with total revenues of $17,871,000 for the comparable period last year.  

"We are very pleased with our operating results for the second quarter," said Joey Agree, President and Chief Operating Officer.  "We completed our Oakland, California project on behalf of Walgreens during the second quarter of this year. We also acquired two retail properties net leased to CVS/Caremark during the quarter.  Our current developments in Atlantic Beach, Florida, St. Augustine Shores, Florida, and Ann Arbor, Michigan, as well as our redevelopment of Boynton Festive Center, are on track and will be turned over in the third and fourth quarters of 2010.  Additionally, the completion of our secondary stock offering allowed us to repay all amounts outstanding on our revolving credit facility.  Our balance sheet is strong and we are well-positioned to take advantage of development and acquisition opportunities as they arise."

Dividend

The Company paid a cash dividend of $0.51 per share on July 13, 2010 to shareholders of record on June 30, 2010.  The dividend is equivalent to an annualized dividend of $2.04 per share and represents a payout ratio of 83.6% of FFO for the quarter.

Portfolio

At June 30, 2010, the Company's total assets were $270,353,000 and its portfolio consisted of 74 properties located in 15 states and totaling 3,492,468 square feet of gross leasable space.  The portfolio was 99.2% leased at the end of the quarter.  

The Company's construction in progress balance totaled approximately $9,738,000 at June 30, 2010, and the Company capitalized $111,519 of construction period interest during the second quarter of 2010.

Lease Expirations

The following table, as of June 30, 2010, sets forth lease expirations for the next 10 years for the Company's freestanding properties and community shopping centers, assuming that none of the tenants exercise renewal options or terminate their leases prior to the contractual expiration date.

Annualized Base Rent of Properties

The following is a breakdown of base rents in effect at June 30, 2010 for each type of retail tenant:

Major Tenants

The following is a breakdown of base rents in effect at June 30, 2010 for each of the Company's major tenants:

Outstanding Shares and Operating Partnership Units

For the three and six months ended June 30, 2010, the Company's fully diluted weighted average shares outstanding were 9,348,301 and 8,732,671.  The basic weighted average shares outstanding for the three and six months ended June 30, 2010 were 9,316,229 and 8,706,401.

The Company's assets are held by, and all of its operations are conducted through, Agree Limited Partnership, of which the Company is the sole general partner.  As of June 30, 2010, there were 347,619 operating partnership units outstanding and the Company held a 96.44% interest.

In April, the Company completed an underwritten public offering of a total of 1,495,000 shares of common stock, including the exercise of the underwriter's over-allotment option, resulting in net proceeds to the Company of approximately $31,100,000 The proceeds were used to reduce amounts outstanding under the Company's credit facilities and for general corporate purposes.

Development Activity

The Company developed a retail space on behalf of Walgreens located at the southwest corner of 14^th Street and Broadway in Oakland, California.  The retail space was formerly occupied by Gap.  The Company managed and coordinated the development process and oversaw the construction for a fee.  The development process commenced during the third quarter of 2009 and the project was completed and delivered to the tenant during the second quarter of 2010.

In addition, the Company has commenced three developments for a national retailer in the U.S. chain drugstore industry.  The developments are located in Atlantic Beach, Florida, St. Augustine Shores, Florida and Ann Arbor, Michigan.  The Company has also commenced the redevelopment of its vacant Circuit City store in Boynton Beach, Florida for Dick's Sporting Goods, Inc.  The developments and redevelopment are expected to be completed during the third and fourth quarters of 2010 at an aggregate cost of approximately $14 million.

Acquisition Activity

In June, the Company acquired two retail properties net leased to CVS/Caremark Corporation for a total of approximately $7,713,000.  The properties are located in Atchison, Kansas and Johnstown, Ohio.

About Agree Realty Corporation

Agree Realty Corporation is engaged in the ownership, management and development of properties, which are primarily single tenant properties leased to retail tenants and neighborhood community shopping centers.  The Company currently owns and operates a portfolio of 74 properties, located in 15 states and containing approximately 3.5 million square feet of gross leasable space.  The common stock of Agree Realty Corporation is listed on the New York Stock Exchange under the symbol "ADC."

Forward-Looking Statements

The Company considers portions of the information contained in this release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended.  These forward-looking statements represent the Company's expectations, plans and beliefs concerning future events.  Although these forward-looking statements are based on good faith beliefs, reasonable assumptions and the Company's best judgment reflecting current information, certain factors could cause actual results to differ materially from such forward–looking statements.  Such factors are detailed from time to time in reports filed or furnished by the Company with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended December 31, 2009.  Except as required by law, the Company assumes no obligation to update these forward–looking statements, even if new information becomes available in the future.

For additional information, visit the Company's home page on the Internet at http://www.agreerealty.com