ADC - Earnings call transcript Q1 2020 | Agree Realty Corporation

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Operator

Good morning and welcome to the Agree Realty First Quarter 2020 Conference Call. Today, all participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that today’s event is being recorded.

At this time, I would like to turn the conference over to Clay Thelen, Chief Financial Officer. Clay. ahead, go Please

Clay Thelen

discuss morning Realty’s thank call. first be morning of Good results. us Joey for for course, to this me Agree quarter joining first everyone you. quarter you and joining will, our Thank XXXX earnings

call, during federal that under will make laws. Please may this certain considered be note we that forward-looking securities statements

duration reasons, mitigate discussed of measures on of containment the scope, statements for forward-looking on actual may results any the the pandemic, tenants. differ and Our COVID-XX and economic and pandemic us to number the significantly direct including of actions in severity contain effects related from indirect pandemic and and its the matters to the uncertainty a the taken impact, or our

our XX-K on SEC statements. risks annual report subsequent and and and forward-looking our discussion release latest uncertainties including earnings of Form filings, for yesterday’s reports, a various our see underlying Please

including operations most non-GAAP in filings. In and release, of GAAP operations from earnings funds EBITDA. the financial recurring measures, addition, these be can measures SEC or comparable discuss website our adjusted Reconciliations non-GAAP core measures we or debt and funds to to FFO, from directly financial net found AFFO, core

Joey. to I’ll the call now turn over

Joey Agree

Thank us. you, you good and for everybody, thank Clay and morning joining

experiences importantly, our balance That and company, survive current ADC aspects to all First recession uniquely call our today, family’s wish thrive I Recession only current during off, experience has gained XXXX I’ve portfolio and after would our us and The most to times. like that Agree crisis. positioned learned our pandemic. all lessons I’ll Great made start that broadly and response of the through their these Realty’s listeners our this to of most health battle-tested from sheet about construction. difficult but applied and significant the not safety this speaking to

and future. unquestioned and us balance X.Xx outstanding sheet ability net approximately gives pro flexibility forma be equity, from over midst This capital. opportunities prior even this know the feel the million which our validated fortified complete with sheet of in receipt we to the this I pandemic, forward the in will was additional credit for into year which rating further balance of Our $XXX pursue by at debt-to-EBITDA, greater to was investment-grade equitizing S&P

we strong of for Given are million capitalized lack our increasing market $XXX the acquisition to quality and dislocation, Rest guidance visibility pipeline year. competition, high we into to our million extremely of historic we $XXX the will importance utmost and that and will criteria. further discipline enhance already our the our the assured will maintain pipeline that our and acquisition is quality of stringent

all let the Before for ATM a for filing the and please efforts, truly some teams April, of legal my effort. moment data to and a gratitude equity including accounting, quarter lease I two remarkable to me administration our remotely during finance, a month express management, asset offerings, provide take closing pandemic, sincere their an

we the for the of our tenant undertaken resiliency collections Regarding April, base. of the have the our demonstrate thoughtful construction portfolio and month month

total of outstanding has tenants that April of investment-grade very am XXX% rent our report XX% their received pleased over rent. to been I that and paid

not challenges that have are asset resistance create met will of and will be and consists to accounting and response with tenant We functional a rent to legal, any manage value. Retailers relations team cross full pay long-term created management, recourse. COVID short-term that also full that opportunistic while choose seeking

of. poised this crisis that Longer take company our advantage opportunity to term, significant a is is

this additional given and to see begun prospects quality environment macro have investment further I We the to accelerate. relationships, tenant and sheet our high anticipate and balance

with absolute positioned to ever. is economic for emerge than our hard losers relative and recovery country stronger long, Realty winners a Agree and expect We

important least I’ll as we execution, markets probably year of on strong report the our careers. the quarter all that to reporting the our opportunities phases continued Now capital excluding capitalize a quarter pleased our start first strategic business. into represented of to get to I’m is our what across

strengthen and significant steps we portfolios proactive through further During our while balance the taking management activity investment strategic asset fortify industry-leading our to quarter, sheet. offensively

quarter, the $XXX through representing were quality into of million XX properties million. lease nearly During high total invested acquisition across $XXX XX these of external growth properties platform volume retail our three acquisition we originated net platforms. our

times, is XX% base uncertain retailers. we annualized by quarter investment-grade our acquisition evidenced While derived during strong achieved again of discipline, volume a from another of rent most record these notable, being acquired

sectors to quarter XX improvement. lease years. leased The stores, of XX rate general XX and had dollar cap average service, term during acquired tire and average acquired merchandise, The at and X.X% in were a a off-price, properties XX auto operating tenants including properties weighted the weighted parts, auto of home

of pleased very Most total Today, of rents The tenant deployed. more acquisition opportunities. capital Walmart is marked base we unique acquisitions six I’m were during X.X% that to Walmart a our notably largest growing. Supercenters comprising and by number at the one-third annualized acquired than report of quarter,

the retailer going to to is continue that thrive world’s believe We largest post-pandemic.

will or contract While the struggle, go majority significantly. of away either their competition

to with a our to approach of continue all identify work with opportunities of tenants for our estate We to add been our value. partners unique years. opportunities Identifying retail real hallmark additional has

store portfolio. and in of the Hampton, to familiar York permit store. This with pleased for quarter. past like lease report entitle, are Goods Home trophy the this to several construct. very our East addition the sure represents I’m Its that another acquired asset took to am our New store listeners years many we developer I net

XX Additionally, transaction our of ninth we & to annualized base rents. sale Tire Corporation TBC property largest tenant Battery, with National raising on X.X% at lease back a executed

added TBC, leading to list a similar operator a may transaction. and tire top recall, through you we service XXXX in As auto investment-grade tenant our

already in sales United grinding the XX a with that Given the auto will contemporary cars to tire approaching sector is new The anticipate is A of well as halt, auto car road parts thrive. record to recessionary continue service and States, age as strengthen. environment, this I years. poised to average on further the

in this quarter, portfolio XX% in base including annualized nearly of ground at past the added rents as ground to We and stood X.X% lease portfolio This assets lease of more Lowe’s from Toledo, Minnesota. rent base of two continues X/XX derive investment-grade to Ohio during ALDI and a leading retailers.

of and investment that on we million. volume quarter our completed Capital had projects Moving Solutions total either development $XX of more those past projects during to representing PCS during $XX committed were platforms, than development construction Partner quarter completed this million. under and Three total the or of represented capital four

Rentals in Big Lots Tools; our and continued to Tractor the for of ALDI, the Hart, Harbor project Kmart and with rent in our target Michigan; Frankfort, Kentucky first of development Converse, year. commence our The first Maxx completed Freight in projects development is quarter during include the with development company’s this immediately redevelopment in with Sunbelt fifth Texas. on there TJ former and project in anticipated Harlingen, Construction third the to a adjacent Texas, quarter Supply

rewarding that review using our efforts potential to team’s on are the to very fruition come heard is them national been have estate before, real tool comprehensive sandbox. all see me months candidates working that of ability vacancies we It’s quickly within service backfill screening our for our speak for full such several current and our have deploy about the You capabilities proverbial to to software projects. another yet

we to redevelopment where a Supply O’Reilly Mayflower, This by Tractor in Arkansas Parts and quarter-end, Sunbelt former redeveloped we our formerly now of our tenanted the our Subsequent Shopko. for project Hart first in box on vacant, Auto Fred’s. construction follows in commenced projects path and Rentals a

our evaluate market the attractive I We to prefer will continue seeing to this in to for development cost vacancies and nationwide GLA a partners growing retail strongly approach buildings these ground-up and work at both retailers these anticipate we redevelop GLA with and that our ADC vacant given current basis sandbox. very accelerate.

portfolio investment record management through strategic we’ve asset portfolio during activity, efforts through our our strengthened we’ve year. also disposition the and diversified While

an quarter our first disposition six front Fabrics, disposition Sports, during another for active restaurants the of franchise JOANN very the Walgreens. approximately sale of gross assets quarter proceeds Academy Our million. was first $XX.X we only as the and Notable included activity on four sold

a currently additional is two subject approximately at and total Subsequent Dave was to COVID-XX our sell. This to further a XXX% X.X%. Wild restaurant & assets. would also three purchase to even very of a The Buster’s Thus with assets entered to Buffalo of including contract reducing agreement is under franchise rate. rise the franchise now contract course three with end, $XXX,XXX Bell exposure and a we’ve quarter Taco I closing Wings – non-refundable into our note sold fully one of million, cap purchaser franchise conditions. for customary is $X.X attractive that deposit after

will bottom the million raising year activities, the to Given as evaluate for the our which year, are year-to-date current disposition disposition of progresses. we guidance $XX we the end

Our on asset our maturities. also upcoming management team addressing focused diligently has been lease

a our of at As of at expirations five just XXXX base result these lease end. maturity X.X% efforts, remaining annualized quarter lease represented and only rents stand

leases, leasable During approximately XXX,XXX of options feet or we new space. execute extensions and quarter, the first gross square

exercised, very to site is frankly a Mount Hobby at this asset Ulta several surprise. was Lobby redevelopment joining will testament hold Pleasant, to decision addition In in be Michigan This to we for notable yet of auctions development. former the Kmart are our being to pleased our that announce another and pleasant

states. retail growing portfolio of consisted of As XXX our across XX March properties XX,

lease industry-leading of with operating vacant nearly flagship related in retailers rents has than The The primarily Van investment-grade sectors remains at minimal XX.X% almost Art portfolio in comprised more weighted and drop average tenants. coming retail of X.X store. tenants the XX% occupied from Our base years. occupancy annualized XX to was a now of term fully

these provides for the thank to continuing more quality and the in discusses any retail times. their we and take we questions at than balance unprecedented the Thank a trying our to embarked country. highest is quarter. portfolio believe our a validated sheet update to construction you methodical the decade support that Clay portfolio like during loyal ago Happy moment remain your what have financial stakeholders first we our answer patience. after of to for for and improve all an results on on events Recent ever almost focused I’d

I’ll turn it over Clay. you, to

Clay Thelen

million you, from of additional markets We more announcement. and quarter than had activities. Thank capital update highlights raising $XXX our yesterday’s sheet I’ll markets, $XXX capital an very and with common a with million in equity equity equity common the recent Joey. start balance active of a

after we almost and through million addition flow $XX quarter. free cash activity our to In disposition rates, capital generated dividend during the also

to In XX, addition commenced $XXX yesterday’s transaction, we an March on totaling million. overnight equity offering $XXX million

$XXX sale ATM average an million. at for X.X gross sell Additionally, we than forward anticipated are very share during proceeds active and of quarter common million price on the entered per stock of first of to agreement our into net shares more $XX

of end quarter, the offerings million. approximately settled forward At $XXX the we totaling

and will And at had this announced company’s This offerings with forward in in and Given strong the activity, XXXX quarter unsettled forward equity activity be tremendous as very to week. puts yesterday, settlement optionality position. we activity end. combined with we million liquidity $XXX approximately us these this settling raising provides remaining forward a capital us us available

quarter and the proceeds Pro previously forward end access million $XXX equity, raised our announcement. forward equity over forma facility, to offering for equity gross of the overnight yesterday’s in million on full hand credit from at in settlement cash and our have $XXX $XXX million we

in its history our in sheet position company. balance fortified of remains the our Further, most

inclusive Joey net net to X.X EBITDA XX, mentioned, as EBITDA our all March was debt recurring equity of was to times. activities, of and our debt And X.X approximately pro recurring forma As times.

Total company at a at while XX.X%, approximately value record includes X.X coverage, fixed debt was amortization principle to times. end which quarter set enterprise charge

quarter was $X.XX first from year-over-year XX.X% share, a the Core funds the $X.XX, per an of from was increase. XX% operations funds quarter for increase per for Adjusted operations year-over-year. share

G&A total administrative lease expense non-cash above totaled of or excluding intangibles. the revenue and in expenses quarter and X.X% the million. market below $X.X amortization of X.X% General was

below amortization percentage anticipate improvement lower approximate the in market to from impact XXXX, continue lease XXXX as basis revenues. We total the revenue range or in of and an for intangible above XX point of G&A X% to be total excluding

for totaled $XXX,XXX. tax Income quarter the expense

XXXX. dividend anticipate on was XX, continue a expense per tax a we representing since stockholders our a XXXth X consecutive This paid in to XXXX, increase. dividends $X.XXX of For X.X% $X.X April range of The of $X to total record million on company’s year-over-year to XXXX, be in income cash April share to the million. IPO company

AFFO Our have payout ratios for the conservative share and first to of XX% believe per were and a FFO covered quarter dividend. we continue well we core

With to the that, back I’ll turn over Joey. call

Joey Agree

we will this Thank questions. for you, up time, open operator, Clay. it At

Operator

session. question-and-answer Stifel. of from the Instructions] We proceed. first Yarmak will now [Operator begin Simon Today’s question comes Please

Simon Yarmak

everyone. morning, Good

Joey Agree

Good morning, Simon. you? How are

Simon Yarmak

are guys safe. and that well families are your Hopefully doing you

Joey Agree

Thank you much. very

Simon Yarmak

Congratulations activity. April collections capital and the rent recent on solid strong a quarter, market

last at exposure pretty the about first take the a of years? over have of tenants, essentially Obviously, your couple investment-grade made the want How Where tenants increase number couple you’ve Over to paid. think rent end the April effort with of the conscious that years to forward? quarter. you collections, going approaching XX% to do you investment-grade next

Joey Agree

increase. the question, number the trajectory appreciate no doubt pipeline I tell closed and will Simon. I would what in you, given continue there’s of we Well, to our that QX,

to disposition as with restaurants I mentioned. three franchise efforts to the You’d in quarter-end the have with also add subsequent the

elevated. obviously tell Publixs we’re imputing in to pipeline Lobbys terms I of or our credit of Hobby world. to the I you would Tractor So is everybody, credit remind similar. QX very the in or shadow close Supply or would tenant Chick-fil-A investment-grade the not quality, ratings date in Again, XX% are

credit say, probably debt number at whatever may us. reason, an so, as an point repetitive, retailers output all, that may in still don’t investment-grade It’s have or country of a are And carry private this they I but always it’s there a investment-grade not data be our is for strategy, for of rating.

I I it of XX% rise expect would that a continue ceiling and fully to I end – surpasses in at to So number. here it the wouldn’t QX. QX anticipate put would on

Simon Yarmak

Thank you.

When and you last built done months, the differently what over of from job in essentially would of we’ve last there great do that. you your portfolio weeks XX about anything portfolio remarks, touched at is years going over You think prepared that pandemic? a couple your this the been through last couple going forward here, constructing you learning the in lessons after you’ve

Joey Agree

later already the do to still review We perspective it’s perspective this doubt and e-commerce avoided in would I an and pandemic. retailers you, trends think an we discretionary after we goods. early. hopefully what will what from mortar from tell after saw believe retail, my or always world. brick to sooner in a tell would you has be action omni-channel no accelerated I than Look, pandemic I perspective we experiential going an rather this

was that our part strategy. so And of already

I this obviously think what saw. and disappearing. is That’s we the weak exponentially increased the already done what has stronger survive

quarter Supercenters to the XX. tens of Walmart top acquired of set we dollars into think emblematic that’s the I of millions their in six Walmart the during and

obviously, portfolio So five to I defer of until that’s would would X.X%. I a approximately tell I’m our you, after not thrilled own movie but at theaters minority today

haven’t think haven’t movie We that in believe number potentially is have a movie more space that avoided. you a in again, theater I only the my I the could sector would and tell actively touched But three that But a head we years. we acquired theater over years. half of I

review, quarter third hopefully, after be to action undertake ask we time but call all have the an this we’ll do by certainly and one. over me, So will will

Simon Yarmak

Sure.

of over was of going last question, the weeks. is six, down in are market How that transaction? strong environment today? competitive is How portfolio cost what is Then the that XXXX between capital. lastly, environment? market and the really take a of to your loss peers with competitive activity changing terms the changed? seven It in has acquisition been the last spread that’s the the landscape, Just one-off current halt How to

Joey Agree

our your business very, peers rarely very, Sort is people of have run our into our question, models. of most to them They ever think very We first most peers. of competition. differentiated

into our we very so run peers. And rarely

our generally net purchasers, net financed tell traditional $X be which private fragmented lease XXXX space, either a the XXXX you larger just would and or lease point that market is over the price transaction average Our million purchaser. of from I the space in competition party highly a

CMBS so competition very the market the that’s tell you the debt. frankly with amount unavailability offline. would That a And is of of I lockup bank and taking – in significant

think accordingly. we directly, this ask rates hopefully didn’t cap see I You but will rise

Your what? second Simon was question,

Simon Yarmak

one-off portfolio between and sales spread transaction. The

Joey Agree

activity not think or diversified be pipeline. our QX I I’ll or actively QX embedded honest, reviewed are that in have portfolios portfolios we any any

tell million I spread, historic see a earlier. with would I early what happens spread. little really million it’s our no increased So mention portfolio sale-leaseback our $XXX no would to $XXX guidance activity, that It’s too regular to or transaction. $XXX $XXX activity, activity, of that $X guidance, no if or includes million way a so, M&A just million you million That little plus

is call this expectations don’t see visibility to any going fluid dynamic to very So continue frankly I and into. transparency materialize frankly or on careful of a this environment. to we set not we’re I think lot And that want to obviously have be a

Simon Yarmak

stay and Thanks, safe. Sure.

Joey Agree

Simon. you, Appreciate it. Thank

Operator

of The RJ Baird. next Milligan question RW comes from Please proceed.

RJ Milligan

obviously to morning, rent looking of Hey, in you collections May, collected less looking Joey, rent guys. good expect in month but do more or into get good into April, the May?

Joey Agree

wish Again I Governor I was you opening where of market the April tell is for looks visibility. had again, participants everything were. question. understand of up important like it I would our state I thought collections transparency a weekend. good to this great and We Georgia the mean

So But at reopen businesses of to how sure to one, of not not that I’m it’s actually is I the haircut. sales. of drive if a I’m function, are quickly level potentially don’t to sales, required frankly a if in able sure was drive going actual anyone be that retailers reopen to helps. talking secondary these Atlanta. to places actually mine any and a people going besides go friend if

an public be gone breach to a a saying unilateral not mentioned of a rent. default we going And them choices. a will many which eventual retailers retailers. is in rise it will choice and retailers choice individual but contract, to they my of remarks That see prepared have function paying I to Second, it’s of be of and are

I data would most of misleading. are tell points you I think these very

April think I helpful. is

the portfolio But a the see can portfolio I plus grade investment was overly people and in of our XX% of grade. portfolio. would the resiliency investment surprised rated hope taken terms So one or no shadow given aback strength that

to do those, run your want you plus leases. on If own those ground the

So all I’m data I’ll tell are you very very points these confident. fluid. of what

reject This a retailers or is solvent, majeure their And that have not force do pay think not end in of. up we that a a We restructuring any in retailer event. breached quiet end a few these we very We’ll not and up rent. lease does have enjoyment. liquidation, which not

or whether and May, will collect so way. And they of a have those pay April reminded some pay in they’re they interest whether along the penalties a accruing way fees, late and we dollars friendly retailers that we hopefully

cash retailer on short-term us So preservation longer-term the for collected be methods bankruptcy will a cash scenario. side absent

RJ Milligan

you helpful. that’s didn’t lease receive any Agree’s leases in Joey, you the Were which in Okay, April? is And ground part a rent portfolio, which sizable mentioned there of portfolio. ground

Joey Agree

great Yes, question.

We not, where have of ground one, the did I two we we very leases XX% rent. small believe received

rent. The other one did not receive we

would see free frankly, that the building more I have head. those top no be will of we I approximately to they and them minimis, very of of in default basis you terms tell building cure. and $XXX,XXX I would casual tell for look for Again, the about But putting own have are if frankly buildings we to of terms default. into you even hoping rent. those free. tenants, it’s in two fail in small we’ll de they was my we total forward or we We would taking of dining operations,

fairly them quickly. So expect to I would cure

RJ Milligan

the is to of a recession. Okay. we’re question follow My impacts obviously with COVID, deep dealing what’s probably but is, last

more XXXX, impact necessarily XXXX not As economic but any to less you’re about you concerned there the into and industries think concerned versus longer-term categories, are and about, with deal impact? shutdown, out that the

Joey Agree

it I you same effectively criteria. would historic investment the tell is as our

more demographics movie those are And to replaceable so “experiential”. and an restaurants We’ve discretionary avoided accessible and participants. mentioned. avoided more leases. that online. We’ve avoided sporting goods, we and easily more have I’ve avoided goods We’ve easily avoided which absent frankly, they’re ground We’ve goods. And more becoming theaters, online

our and like emphasis to what best greatest So environment. our world project in doing is your I focus, recessionary now think that question, looks our post-pandemic the to

And going so I new and spoke from sales are million. to single go million Battery to to National $XX digit the somewhere & in car Tire

the Battery dropping going I to impacts, of car So duration XX then of Tire sales road. spoke on car secondary years & Well, a the the approaching are what to impact new such and average National degree?

and And in and our are over cars auto AutoZone, so required, disseminate Well, parts they’re does then to be O’Reilly, more how our a for be required. auto older cars have older that is into construction. portfolio we retail going going portfolio relationships our portfolio future to for service XXX and great tire

do Used the grocery car to sales. new at sales to in will thing going Deep discount for relative most likely a is that right grocery. accelerate. accelerate same basis We car

rate Goods, historic because is that’s day, the but X.X%, Marshalls, the retail from day At going Now see Day, Home Field Maxx, the does the right. what store sector, the the is a all likely here participation off-price the most space going Burlington’s the challenging have are we’ll effectively because to field online a of end a have will dead. department accelerate. but those and TJ Ross’ to The

say, makes are Nordstrom’s It’s buy or it. apparel? where and the look I going And off-price, Kohl’s maybe apparel and maybe either to so people I makes space, at it, Target Walmart,

lives. at the so were recessionary now be we think a believe And forefront, with to environment still of and structurally challenges behaviors for my at the are the is change that and forefront consumer We rest going opportunity we say, were of omni-channel, to forefront. we the of post-pandemic what our I the at have forefront the at our biggest our at we I what biggest be – were to forefront

Operator

proceed. comes of Please Collin Mings The next question from James. Raymond

Collin Mings

Good morning, Clay. Good Thank you. Joey. morning,

Joey Agree

Collin. How you? morning, Good are

Collin Mings

there. in Hanging

you quarter-to-date your to guidance. wanted to as the it you’ve to pipeline Simon maybe far as call to you’ve near-term what on just having activity discussion on to expand relates go I back with on or in more for it Can as closed your So acquisition the what upward touched quantify First, expect past? bit days. visibility to little XX XX close revision you’d a

the would particularly there to So and seem near-term on go visibility have current pretty actually in to rate environment, good guidance. it opportunities out

Joey Agree

I is from any will tell you, details I’ll correct. the dissimilar QX. it our in are many mention on not You Walmart closed terms into – details pipeline. continue. won’t too get I did that activity the of

are do very credit The million hit inclusions hitting there. pandemic or us We this full similar pipeline have of We some $XXX we focused something confidence that pipeline, wave will very terms quality. country. of time $XXX a for give composition some is and it into in million that does that movement, atypical but both second that to absent fallout

So very again, plus we’ve retailers similar But a focused ones. to current this on call other about that QX the at you few talked expect on its frankly is it would it’s state.

Collin Mings

short-term release, That’s about relief Got the yesterday’s the of you third I for asking a noted rent mean, relief, far rent for And your other in it, just okay. tenants request for given pandemic. helpful. as then as are considerations

the You’re actually relief mix valid? as then again maybe, this yet? the your and granted obligations would of front view anything you But your if to anything, about have. call you pretty on you the how that clear, tenants view on And requests have formally quantify clarify,

Joey Agree

quickly are they back deferral, credit they digit small deferrals. single paid not them. small executed that abatements, have are deferrals we portfolio. question, first Those very will be we of your and operators, at few on operators requests predominantly the Those with in enhancement top have answer deferral have we times are our To

honest was terms in release. In counsel And we count, fantastic it the include not of I’ll remarks, and counsel. I with required in this you, have want our be XX% to it did even by

XX%, that really that operator open small frankly a a I all no couple would in on the retailer even from operating retailers environment and this absurd, have needs to frankly think there is warn this and call a are that are participants everybody thriving that help. that and of XX% debt, I ranges market the the

ranges defer And any the you data so Two, request. I not abate? in we should be leases. point rent opportunistic, tell I not discussions retailers a later to quickly to have had They are for aware form. spectrum such think, made quantify considered will can you it’s the a in that of can’t of. everyone or us. Can frankly so very Are there and a wary help with. wide from there for And the email our To that long-term us we They you, April us? those offer I – made willing were help harsh spectrum, pay are general it few were partners is them it you. we remedies

reminded the And I the put made a a mall take of them REIT evict and fees, them our they on pay. They subject paid, are not them shopping that or implications. not that co-tenancy late has will have you would and And implications the some some either notice them tell possession REIT didn’t. – flow we them, we penalties, and evict interest lease, traffic the we’ve to also or ability to or center

willing literally remedies vigorously That but immediately any a we said, in fitness, piece, developed opportunistically. franchisee got is default unique inception. father planet lease since shopping we’ve very a there will a at partner upon context, restaurant are the acts retailer or my that been in it’s ago to buffet minority very net tenant XX that years small legacy that and So pursue we the center with Chinese

but think it’s important people need lease. be for really net We’re retailers to understand for in very it, that partners to there willing I

don’t to to request don’t have And retailers future. are rent percentage unilateral in We have We fixed more that we not returns. the pay. for get willing We rent. to get upside. ask We can’t the direct ability

Collin Mings

you these. recognizing Again, maybe on foreign it’s opposed handful of But just maybe you a Can expand on of Just other relief? some as to long-term exchange that it providing just deferment and what be there’s work as for point, short-term maybe forgiveness. expand of requests. could think sort upon enhancements touched that beneficial generally some like you’re asking sounds some you on, maybe it’s options credit I touched Joey, on last you with

Joey Agree

the I no. most – And Yes important that’s thing. think

I we $X. obligations – ones abate So to abated clear, Those $X intend of We would here. be want the don’t have not to digits single are deferrals. that

and us period there discussions the them preliminarily is work that. for to like think our for menu engaged true and partners consideration I in we’ve closure in in is prepared a and spoke I options help that and exchange retail potentially this the significant remarks, during just partnership long-term of with opportunity for value to created is of the and

We take have of obviously creation long-term profile, the options. that Clay us menu include include and and That for for in could exercises, menu liquidity pain short-term a the the consideration short-term do balance to options We value unique on We and can shareholders. do exercise which We has. concert. current be options can our your nature be long-term developer. preferred estate acquire Realty types this a back, ability to sale the balance and in partner for of at spoke in service given sheet. stores real have fantastic things Agree capabilities the lease can different full that of if – you working all team sheet We

to, the corners this or few come thresholds. deal, within be have retailer is. three, confident solvent That willing the to has be very to frankly, a of their to they world. recessionary a number have to be to in future said, have that to they And the be have in not we four make It’s to they what Number because Number partner. that pass frankly table two, have one, post-pandemic that’s document. to the new they –

a that it’s We’re new document. willing with deal but partners, a new work and to our is

Collin Mings

Joey. Thanks,

Joey Agree

you. Thank

Operator

comes question next Citi. from McElroy The proceed. Please Christy of

Christy McElroy

guys. Hi, good morning

for expect for to typically paid don’t they’re by For be tenants that run costs the whether landlords temporarily that utility To extent directly tenant, think in April, taxes, but those you what P&L. in understanding in about property paid and that that permanently? through like have But those your not or expenses default. are pay hook should other May, how generally on the could don’t and the we the

Joey Agree

P&Ls. they has our of team into response – for what a those speak done. gone paid. practice for been We’ve Number and are I’ll some COVID paid just those has has generally that and confirming were Number has obviously taxes I’ll where COVID response one, utilities, details property then us water let Yes, one, to Clay is occupancy. our confirmed, predominantly, in talk been our team standard open bills,

that – is a question. so And an it’s important

to You’re net some tenants speak lease, through you right. or – and head, of that to get They’re would frankly, to some want our then Clay, pieces my we the reimbursed have. you run sometimes details pay over in that obligation expenses them. It’s an Obviously, question? want of talk to direct. they those of

Clay Thelen

Yes, of course.

little in property to half real terms a provide just our and come – expenses, So approximately Christy, of operating P&L, those that’s estate a to taxes of – that some through in provide what quantify terms of little expenses. try bit.

Christy McElroy

paid presumably, to But by obligated if the they’re tenant, you’re not Okay. those. pay

Joey Agree

more remedies to an of would That’s full event we Correct. lease. default pay, correct. the rent would to does and not not paying the that in have the be tenant If

Christy McElroy

And in the that normally probability? – how we you I potentially guidance, know just about But how impact collectability tenants would paid, Okay. think of you should about also be deferrals. you QX terms to sort how as FFO in are approaching give don’t still potential of, haven’t thinking but regards you FFO the assessing

Joey Agree

again, May, would think difficult details a into of portfolio some collectability, into the QX Clay, take of I’ll ignore them them data to I’ll again to for ours these don’t Clay, be we’re as to going especially – – I credit your not turn obviously. fluid and quality the a such let you drivers. any take right such situation, to I’ll provide to encourage points, frankly even now details though. It’s but with that and guidance. you ours very over short-term, as people in tell in dynamic to us The question short-term I the let

Clay Thelen

Sure.

focused been so course, Joey that tenants rent mentioned not our Of deferrals, note relief, discussion on so it’s important as have deferrals. to specifically with

on focus I’ll So, that.

of of not total the deferrals, of in when really received. we of collect terms and so cash it’s an In timing terms the cash impact amount

impacted so reflects deferrals. it line, FFO by will And since be not straight

other is will reflect However, measure due a and FFO it when therefore is the cash essentially deferral hand, on rent agreements. the under the

under us collecting We bit, it’s apply and determining extent rents aren’t that highlight, those receivables collection. Christy. the rules, of least at you collectible we accounting probable off write a XXXX, it’s probability must or to the mentioned lease from when receivables a tenant or any of little collectibility a probability at XX% these chance probability effective I’d in of new the came

focused certainly something organization forward, across very something COVID that. obviously on. assessment we’ll and continuing monitor a conversations focused And team, had And, our is to on going we to so, the very response number that it’s be of that is

Operator

from of proceed. comes question Berenberg. next Our Nate Please Crossett

Nate Crossett

Hey, guys. good morning

longer-term the you a opportunistic this Just amount targets on of you leverage weeks. How a of Or are forward? couple kind be just guys is equity changing in? the over about want kind you of type leverage level? bands Are clearly, going meaningful thinking of last threshold temporary to raises,

Joey Agree

it, raises The I I are has think these hesitant the effectively chest. to us go war we appreciate on a say clearly have That to use built it equity investment equity front. question, us. the but execute offensive enables as I’ll raised for

option forward levered five levered, times equity think – question not balance tell is a think times you, this this pandemic, during it a important a inappropriate which to surpass for us. net I lease of I pandemic we to sheet likely would is would tell longer-term, it at having outside is absent that will to company. an I six I most and run you five outstanding

I think we very during debt. is debt – can easy. raise the Raising always

unsecured. an have We

in bond always term the access today, market to market unsecured loan place the have that public market, easy. that private is the We

But is, most part you do ability is tell of obviously portfolio, this that now sheet to times where a I balance accretive six have And I offensive is so we in and question to our now – is add current an out capabilities. when stated the important delever, think executed debt we opportunities given window the the run which conservative would us in what sheet to manner, delever, our we the the gives to your an your balance offensive environment. have feel pre-pandemic range appropriate five of it

Nate Crossett

you were the Okay. to right And does to That’s pricing raise debt. helpful. go on means today out, now. guess? don’t need what any I the like any But pre-COVID, look versus debt quickly you Obviously, just by if then

Joey Agree

not Yes, we Clay the – I’ll let tell Clay, seen number speak markets. are to companies I’ll that access. actively obviously debt We’ve in of a you, generally.

have significantly. shuts is have out and opens would So open, the gapped Pricing expect. you market windows as spreads – and it

anticipated think know in – credit improving of our our type market of to been haven’t you I the in want quality we frankly, do credit in card give looking. situation. is active terms only spreads? I this specifics Clay, But any

Clay Thelen

current a to points. say just No, we’re prior investment-grade given look, data closely. market lot the are I’d certainly – They’re say earnings a tough very certainly those haven’t they we tut really deals, There just watching of of it’s it. much few and just a to continue obviously were closely. lot to not something just currently blackouts, let’s we’ll monitor ago, deals, and weeks were been data been but, pricing spreads In wider than six points

Nate Crossett

but too lower the tenants you PPP program your G&A facility? tap of lending tap the personally lending just you then some suspect are more to for the think could troubled Do what your I could. own that I Okay. guys one And most about program? program, tenants if And could large Fed costs? more PPP of the

Joey Agree

are question. was it was to made PPP second us tap solvent. been We quite appropriate the program. think for did believe, – the the to it PPP it have program. not speak think to we we I We’ve tap – eligible we obviously I’ll would don’t

balance spoken a pretty that about have sheet extensively we We here.

be defy that values. any realty to that core programs would a at We do would our aren’t going opportunistically government tap – frankly, that

speak question, are really ability could government of seen to to tenants our the have of in fallen not availability I’ll we time our subject. government or that applicable Second your programs, I’ve one be It’s done terms research in lot you, angel a really first only tenants – companies. to former on the programs. tell the stuff some with grade too the spend our that for have time have I you reliant if Clay, but know, businesses of busy, or to government it small spent want personally. the to loans haven’t don’t I it. to right our small bonds in investment now. you’ve that bit portfolio I don’t of bunch upon little are a tenants know we a been any

Clay Thelen

XXX being I employees would PPP them the just tenants have from would our Yes, specific eliminate to program, over above eligible. having

our a given we that as so, option real view tenant And base. don’t really

Nate Crossett

Okay. guys. Thanks

Clay Thelen

Thank you.

Operator

Our question Rob comes Please Janney. with proceed. next from Stevenson

Rob Stevenson

out? quarters your as attractiveness of not point even pipeline Is likely of considering a percentage open pipeline, is are any start when about the you how is is relevant what tenants currently you into in on at And business? into certain mix start Joey, we going, thinking guys. of still morning Good tenants? looking the consideration, factoring Or for that fourth third that open to that be economy that time? backfill you and sort that that the acquisition are

Joey Agree

that’s tenants looking because the no, of at their nature of one, the great business. that Yes, of honestly number a tell we’re question. I just most would you,

and time them. I our statistics to If who you again specifically I number, tenant our exact managers talking spent so was every our calling don’t would the you have and portfolio. property at we that open portfolio tell our XX%, approximately I and you, tell released much would look of but current least an emblematic I think

there’s currently whether to closing I Now, paying are Colin that. they mentioned as around or duration XX earlier, is to think structure to days. not rent our mechanisms Again, XX average

tell not existing long-term we how for they for deferrals, again, and given sellers nature have they it’s have some consideration duration pay you watch see So, us I’ll a visits, time big some we to leases. mean, of and rent. ask the those If I

we at, and our we first that feel them per basis price you, with I’ll could which that if in case considerations then foot any and escrow was the to the for relationships structured, is warranted. quarter, frankly, we’ve not it’s for one pre-closing, looked properties open provide that acquisitions deferral in future there the that acquire square was we the any seller in case, the and be and price acquisition closed tell mechanism a an these point, The access, and that to in tenant.

Rob Stevenson

then for conversations had a names? would pay, that you them be about of that that And you a publicly. if you choosing continues? and with of your guys long-term to that some non Okay. are them public about I their consider disclosing they’re got, problem Is healthy companies them you and you that mean, shaming talked partners for not sort would certainly consideration

Joey Agree

I you will tell hesitate, tenants. have we made that I

and rights here those remedies about tenants they think our of aware the considerations take there are I there I and perspective them our for think and public I public, should account. are their frankly, tenants into made them have for We think that considerations

as lease, kind on that, forget space. space, think when tenants the rent say not mall well flint rent, it, one what of think many the net what lot forget? paying across I other that, it but in people people was actually piece we’re of is in not and the is necessarily as And many a I amortized shopping centers mentioned TI

have TIA operation have advance, tenants’ tenant of amortized part in They financed that the landlords lenders the either landlords effectively they tenant work that’s have built So, effectively into have rate is, in repayment the and specifics, frankly provided those case rental of that or these been tenants. to obligations.

our never pay it’s, right not lenders. the don’t guess, frankly, And pay dividend. consider option, to we don’t I it not so option; now, have to we our but have the option as the have We we’d

mortgage will our is be that their us rent, on unilateral considering our to rely will told our employees, not dividend of income. I all our frankly citizens upon I’ve for we all of be and what are be pay so you our basis, many their paying paying and senior And rents, tell XX-year-olds lenders, tenants our or if shareholders, paying of a we you paying will we will your that

able is your pay even have to cascading a to that your effect so you’re not us. rent, though decision And unilateral to not tolerable frankly

Rob Stevenson

acquisitions one for powder the the cash and some when the without of million How dry leverage capacity, additional million $XXX while staying deals and you then reasonable you of raising $XXX you the now sort of do capital? have forward debt close that incremental the level. any And Okay. right Clay, to factor within in to much have

Clay Thelen

we acquire make sure between of leverage outstanding what and and are slightly of forwards billion. given hand, would I it’s, where we’re comfortable running billion just the low asking and balance including to – on a $X cash that’s the lower million what kind – Rob, and understand close, what question capacity, able the allow $X.X think to available, $X the acquisitions in total point. volume still again, us and north So, capital It’s sheet, very you’re given it’s terms stay of our range leverage at what I

Joey Agree

And Rob, this is Joey.

me use posted it’s to walk high a we – the of I’m numbers there here to the numbers Let for important I everybody lot our that just to because posted move going here, that is think just I into website. year. through kind obviously so there’s jump the be of level, disclosure forthcoming, as and know a details and But, we is round will for additional

repeat any free net again, flow this acquisition so the the prior end development We – the us of For approximately our to the Cohen basically, equity dispositions cash at that. achieve just & would without anticipated PCS upper net at guidance obviously, spend, additional dividend. year to times, development of plus after ended year, transaction I’ll have of five Steers

& our without one, company number five of What additional we at allows debt-to-EBITDA & Steers net Hitting to would the times equity. approximately Cohen do high acquisition any is, the hopefully, end the transaction this Steers all year the year Cohen number exceed guidance, aware. transaction I and think without the on without given dislocation we’ll that and our the five get as times visibility; we see, guidance basis exceeding market election, more that the forward progresses, opportunities as a it’s one, at that and you’re end

is we if we that up the have the pipeline. of end we XXXX it or at middle if lower Secondly, that do frankly, a anticipate If of or exceed, our funding guidance our now, basically if – starts today. XXXX don’t year that it end don’t lower which guidance, not end we exceed I guidance our end XXXX –

Cohen at our guidance, top of of end up & around equity, So, end end without of $X we Steers’ the X%. again, year, the

that’s transaction think base typically because what potentially exceed window enabled I that our of the fund so this times to out aggregation five that of And of XXXX, pipeline, pipeline mid-October using times that the five frankly will guidance frankly us which do, in going today our year. – six into allows times is XX days start to us to it and/or

Rob Stevenson

was looking Thank Perfect. Okay. you. exactly what for. That I was

Joey Agree

Okay.

Rob Stevenson

guys. Thanks

Operator

with next comes Our from Kim question SunTrust. Bin proceed. Please Ki

Ki Bin Kim

mentality but there. Thanks don’t do all great wanted to philosophy I say, good before the just too usually and this out right morning this. having often, job And and on

cap my raised to rates you but slowly. question is, move all So, realized I acquisition tend your think guidance, we

more? any So, have a do maybe if just – concerns it wait is there bit you be had, out little you better price that to a

Joey Agree

the dynamic delivery picture, or equity to or be $X, whatever and advertise sheet effectively our times, ever Was April I in for enable low or April-June better The fluid. right. and $X frankly there would a you look all we our is to I thing raised the had? it’s we mean for mean, price that oil market so prices market wait $X and big trades last I so is capabilities five another do – is. driven negative if at, out oil has it balance April-May macro-dynamics, think much deliveries. today’s as March on The

Ki Bin Kim

not balance your acquisitions Joey, I meant own sheet. for for your

Joey Agree

Sorry.

think we cap Look, a that that for basis nothing to margin, acquisitions. prospectively at XX use is or number let’s the going lack possible side point Walmart cap but bid, tell we acquisition rates think up, go we’re or X.X perspective rates going round not just basis of increase. of we points wait are a and cap anticipate to XX on the we the you, For a move supercenter do that can will I’ll buy high-performing we hopefully given on if

we goods nothing so with And – Hamptons. thing home do the the the same in

marginal, continue rates that hit going essential the or to at news we hit will that them, And The of execute we the them to find we opportunities going in into the them. execute move. look is we is, we and home continue cap aren’t the we good to now more sheet to on and XXXX. Hamptons to to aren’t goods We have opportunities for that wait for the balance

wait rise, could you think And rise even so we’re to we’re or rise, in they to mentioned they going even rise, for not because going do slow cascading; do cap do if to prospectively that be I be going which this too. time, there rates we’re if at to

is that fixed of execute. So, we the have today, We know we a capital. liquidity cost to what have

Ki Bin Kim

on any end real taxes, industry be, get do for the result yourselves, – but going do what assuming I’m municipalities about... real reality? think to to the back estate And these reflect not you Okay. is just will lower estate think taxes, to How you to

Joey Agree

those. would – on home firms I that the everybody’s to from anticipate are estate Yes. law – commercial going their great the to everybody do real

lower their their conjunction as want their to hopefully costs of occupancy be in their rent on a mean, tenants our I all with work obligations possible. we will – go-forward basis. as to all-in of We low outside

future we with will time. is consideration – the during appropriate this work so obviously, a And them

potentially always with will given tenants as they the revaluation. tax require lower obligations, do; parties we We our typically partner real their both to estate

Ki Bin Kim

be going think because the just to one. press left what’s many different to do provide I just on release your done, and have in the helpful on This is Okay will just at a little offerings, just table been what’s you suggestion. last it a layers But, equity same time.

Joey Agree

No.

noted. – think I

– XX% to all debt to everybody a retail we if can’t hopefully is to have the I be that of significant page on expand posted We a disclosures, disclosed sectors. but to in website used work other. the now net reconciliation have I to EBITDA our that recall would think, X, exact We note amount, helpful. will recurring XX% amount.

bins that leased We again down donation broken net on $XX,XXX towers, billboards on came just with it. X way that the and frankly that’s and we a all that that properties year are to bottom, which that’s page own cell at now miscellaneous, is the have

into The So, disclosure is as helpful. hopefully helpful, net we take again, well, and the that account future. is that debt-to-EBITDA a will for reconciliation

Ki Bin Kim

All right. great job, guys.

Joey Agree

appreciate Thank Bin. you, I it. Ki

Operator

Please Our next from Fargo. Todd comes of proceed. Wells question Stender

Todd Stender

and stays thanks. Joey of team, everybody Hi, Clay healthy I and rest and your the hope safe.

Joey Agree

Todd. You as you, well. thank

Todd Stender

I do an have questions Most between been probably, four-wall which the to going to maybe accounting when I retailers, would they’re or whether going of more or you gap you’re imagine you. answered, maybe open and increased, look with But around FFO for probably my as not. your net, a FFO how is answered. a safety going think guess, underwriting that’s that, had at FAD, coverage. your protection. to just you question the guidance deteriorate all Thank this Clay little change forward, at acquisition need you but how looking And bit underwriting? going do just forward,

Joey Agree

EBITDA. of coverage four-wall do again, our Just most for not retailers us report

kite. location, Walmart If a I their EBITDA of they fly a any underwriting. to been specific tell nicely It’s sales think or on you would driver ask store what you is never

of a the covenant, a do not lender, performing not report I would negative. have credit, poor thought Home and the proxy EBITDA want – performance tell the can Home on you, have never would was a Walmart the portfolio, you I really and because a corporate somebody retailer on I the lease Depot owner. location, it we’re credit, pick you the or we’re much real of mean, change a have for of Depot mean lender can vast can our I which positive majority and pick but it’s else, estate so that We for don’t is to

is I would cyclical. counter say the our portfolio of majority

AutoZone would and TJ anticipate frankly, up. pandemic, their Auto go of world, post so I Maxx and Parts potentially again, coverage the Walmarts And O’Reilly and the would

it constructive say been thoughts in with has everyone’s So our portfolio, me two heard line.

a and them I of it e-commerce admit resistant. would was that, pandemic One a recession readily resistant wasn’t

is with National to of in thrive recessionary least at going they much environment, Dollar believe AutoZone, so Tire will. a and I and frankly, that Battery, so And O’Reilly resistance, recession General

Todd Stender

it to do there? last so the you guidance, probably just that of shares And number? on just debt of kind is pre-Cohen And was be in of & helpful. the the assumed debt net kind think did assume of that the That’s Great. high-end just referenced what what question, question, was at remaining times debt-to-EBITDA, the your balance Steers you forward five sheet in have equity offering, that the settled, some expectations I

Joey Agree

Type or debt? amount of

Todd Stender

You’re kidding.

Joey Agree

Todd, you Todd? there?

Todd Stender

me? hear you Can Yes.

Joey Agree

or Yes. amount type of referencing you Are debt of…

Todd Stender

that the get number? market tap kind assumed of bond now you investment the rating, but grade that imagine would I budgeted, What’s you’ll level unsecured Yes. what is in

Joey Agree

to Clay, you want that? take

Clay Thelen

look terms looking have Yes, we’re the unsecured optionality at rating. Todd. we obviously borrower, we second to continue now, – of be in have an And we’ll now certainly

think is your regards ultimately this I of on in question just dependent timing to of capital. sizing uses

current We cash the outstanding and position equity certainly position, our as well. our full have given optionality,

execute both from of And the uses market we’ll and and will accordingly. monitor based so on that private so I lead continue ultimately unsecured and very depending timing closely said, Obviously, like closely bond on uses uses takes the to we again, the market. monitor placement market and us

Todd Stender

you. Thank Great.

Joey Agree

you, Todd. Thank

Operator

with Tsai Linda from proceed. comes question next The Jefferies. Please

Linda Tsai

good Hi, morning.

does the on of a your rates that not comment change mean effect rates, slow given cap deals Just and currently impacts in for you’re cascading pipeline? cap seeing that COVID

Joey Agree

I Well, large a the just you and good hit in primarily ownership. morning slow it it’s think slow head. cascading of and fragmented cascading Linda. on Actually It’s it’s such and and because market terms

balance we seen to are that opportunistic liquidity hold maybe there and facts under or are of because under and immediately. a So gapped on capital. or and the differentiated Then, set have the out opportunities, be seller sheets we circumstances, need cap potentially and sellers that out has don’t to try have event will have closed continue they need I’ll where those tell LOI opportunities have rates you, contract

cascading. I be and so very think likely to And it slow is

Our team – opportunities to cascading team’s right the faster. find not go is is faster. frankly but rise they opposite what job sure And our the up now, cap origination I’m acquisition where move rates frankly of

macro cascading and And so be you, it rate with environment. of terms agree but slow cap will I in – do

Linda Tsai

what’s of it think do you rate XQ, be see through – think do think acquisition the more, XQ? you in XQ to will best one just run And XQ volumes Thanks. about way larger and you’ll

Joey Agree

anticipates the acquisitions have to large or no portfolios full regular million million guidance $XXX I $X transparency, M&A, In transactions. our increased million aggregating plus transactions, $XXX run to no idea. off Agree Again, sale mill just way, leasebacks,

I frankly together the LOI end mean, the just – for the or those execution in deals transaction close faster. reference Sherwin-Williams bigger typically came execution and at lease of happened XXXX XX really so days from deals to

no So pipeline. I idea, have in they’re our currently guidance frankly our not in or but

Linda Tsai

Thanks.

Joey Agree

Thank you.

Operator

Lucas Chris The with proceed. One next question comes Securities. Capital from Please

Chris Lucas

Have incentivizing question. seen commercial hazard you guys you call, everyone. morning where do evictions I’ll prohibiting many just a rent? in tenants withhold may created one by operate civil long Good moral It’s or authority have and therefore so ask to been locations

Joey Agree

No, – reviewed. have and we’ve we evaluated seen

team reviewed legal last believe have a assets. don’t time was counties has we think was, that. I updated it The couple I Our any I was of in California.

current concern process. obviously a consideration expansive to a monitor monitoring they or really not will it’s of it, ours, but is continue pretty that So

Chris Lucas

Okay. Appreciate guys. Thanks it.

Joey Agree

you, Chris. Thank

Operator

proceed. John comes next with the Ladenburg question from Our Please Thalmann. Massocca

John Massocca

morning Good everyone.

Joey Agree

Good morning, John.

John Massocca

you the but ability disagreement tenants, get timeline you unilaterally kind tenant process of and Chris’s just little doesn’t rent, even can is your asset? through us and of the to not hopefully rectifying value walk on any that and have that with extent a maybe paying most So, of out April question general building or this kind to through obviously of May a come to kind bit

Joey Agree

mean I wouldn’t it, Yes, remedies look, I leases rectify word and default. tell cure you, it’s landlord to subject and the I use would periods. all obviously there’s

they – a generally a in will landlord, essentially they’re tenant, we then notice then We and period If put to they rent. pay basically have default. you don’t, notice have respond to will

tenant, rent. periods landlord’s cure of to obligations leases accelerated and obligations second random tenant so degrees. reminder acceleration notice a or make in pay some all rental have a varying have leases lease, The all and to second from range keep Some have, possession, can taking evicting the we remedies to them place send then can a the which you

tenant efforts premises, If on re-let The reasonable rate, often a for rental efforts, use that the tenant. landlord the if you tenant, with And are rental if the any generally commercial including efforts to to the you still the responsible associated responsibilities to the tenant leasing – they allowance, build hook any evict to for is for re-let do re-tenanting. is and responsible regional there rental evict the costs penalties the by any costs, for then the other income of interest, commissions, property. landlord’s offset are tenant also outs, landlord, re-tenanting

speaking, So to and lease middle sheet with a the to tenant in a down rent. their regional balance needs perspective, national a a put big or pay generally that tenant

John Massocca

going speaking, I by type that locality-to-locality, is a mean, potentially in of that it of recovery the broadly vary going XXXX kind something happens situation but a any be of situation? just more situation, to end it’s then And and that to pay to tenant I kind year rent, is of of refuses where know in a this or from a

Joey Agree

tidings, filing, national undertake depends rent if in want I obligated everything filing a tell and to not I’m of fight question, back country. I sure the I’m the cash to risks to I’m frictional All a Chris’s that the I courts, across landlords and know and am to not conservation bunch I and liquidity costs obviously – else. bankruptcy and I mode, the have you I the pay am will retailer I potentially know

rent for And remind a pay for so my full of their expectation on tenants will to and is to again, basis them that. timely we them continue

John Massocca

question, one And rent of does to April just months? cash or in of cash last XX% receipts then the the couple rent how quick year’s last compared of last detailed April either kind received

Joey Agree

But you all want, you received it. if generally rents. our can detail Clay, we

mean… I So

Clay Thelen

Yes, right Joey. that’s

to month fully We’re the would everything of is XXth the XXst going of at received. month the the reported, be so be

John Massocca

for Thanks me. it very much. That’s Okay.

Joey Agree

Thank you.

Operator

question from with Please Citi. Christy McElroy proceed. next Our comes

Michael Bilerman

to think and levels? – ownership take of base, forwards. execution at your something buy shareholders other providing direct the their did rata of to Michael announced did doing direct you you about effectively shares, Great, million yesterday that a the over How discounted not ability can the share Joey, account XX% price into well to of institutional ownership thanks. maintain Bilerman. X.X issuance other the pro investor size, It’s your institutional you

Joey Agree

Yes Michael.

the a everybody up little question, breaking understood bit, hopefully heard You’re I it.

Michael Bilerman

want. to again, am it you if I say happy

Joey Agree

be you’re I said? hear it everybody just think I was the between the But difference was and again, still and basically choppy, could the this transaction what we it the the question but perceive you transcript. marketed can and line transaction generally, – how see think

Michael Bilerman

you mean, outstanding. one investor have over direct to the you forwards diluted took other shares, that’s into account XX% of base, you well the I to share opportunity even when institutional X.X effectively, issue Well, million take your

base. to provide maintain existing your same shareholders their opportunity that ownership effective to all other didn’t You

of direct And think either single transaction. you their quite of most times transactions you versus other sizable, sort with one off shareholders so, how companies smaller and ATM balance or your I was direct one? This see do do so, relations

Joey Agree

Yes, understood.

which its activity aggregate is of comes vast the the the ATM it did dollars important, market through also think we at end March, context then through I and the of I in terms details, the think reverse majority offering, raised.

is deal. shareholders the opportunities, point it think offering I really a Two, opportunity. market it deal, a would It unique last with significant to positions it hopefully was the establish this in reopening get the at was really plus out that’s the of one, one. I I last will had buying of double have open amount was

set, frankly actively net discount weren’t transaction fully than proceeds thought than to the the We at deal I Steers were the to the thing deals. given Cohen the the was company on higher right and was will a note marketed we & tighter approximately do. it looking, marketed the it that opportunity $X.XX

a the was proceeds net it company. higher tighter with So, to discount

thought constituents were we for so, that which account. And into all made sense taken

Michael Bilerman

that been comment. what’s this you have then, the XX%, in XXX% at at you clearly, that’s And think effectively I last point, March as insinuated about would so think in you

go into So, how I be of about that paid, will what’s May, we your points as deferred. much of expectation guess, XX% that that XX hasn’t percentage

to know to know, take then rights don’t under I is half court now leases. it’s right half that it you’re don’t your So, you versus, use working expect and on if your I that

of Just sense things us overall. to some where stand give

Joey Agree

approximately outlined is release, sectors And retail four – that then, point the through So, media me. risk. place to to you got public not there press that out to the which some XX% you believe firstly was that there’s have – people our probably then, and from at Clay to the I I of look statements XX starting aggregates best for correct considered think March lot if retailers. through wrong, there these of And go a I’m go – reports really

You outcome of we’ll have to referenced put of that probability what terms the to is and paying. to test them say through now the when and that’s go XX% eventual Clay have in

have most are Some I retailers are so news, significant the closely, in portion, that really us. theater to pretty a people pieces of entertainment look movie large at movie that theater and retail biggest, portion the i.e., the think those the of test those for the

versus not if what of read think the outcome, versus liquidity greater cash I’m we’ve that’s in sure most their April positions given probable and May May – collection anticipation a collection the in I news. collection April

Michael Bilerman

percentage vast deferrals. the up XXX going It’s XX points on that maybe cash on, it so points. thinking because not sounds of just to get of the paid that fund like you in program, of rent haven’t can very issues, whereas deferral collected, working cash majority points get But how XX actually the your much – start to working trying basis maybe ability percentage obligations. just are on of to terms specific collected I’m about the we your rents to you and and these you’re impact

Joey Agree

& Dave what I does literally comes Buster’s to, understand. do. down It fully

We sure frankly – one title with not it to have or $XXX,XXX. we’ll deposit Buster’s, not, three, what I’m own how that’s be contract that’s What non-refundable I company. at have mentioned how happens virus from quickly our walk & is this with to to if subject going we away dissipates. $XXX,XXX under does Dave

virus quickly of is rate of did example, dissipates, could outside you willingness – a space. XX% and you, some that they because of this take because to – by very fast to is opportunism of at capital theater food. them looking other financing, willingness return way. there the be a the de providers lot their are minimis full would rate are you the release, I for in I’m as I using movie mean it’s drive-throughs the frankly referenced think them. tell the using I landlords’ the How there don’t the those just reopening support states, restaurant mean, I’m – think in that recent an customers. There just space, windows. example, – I us, for I through then the we which specifically

not that we’ll not, rent have be pay rent. pay will their of We they not they that We’ve choice McDonald’s, call chose that I’ll big will their see to that’s or fast pick-up, drive-through we had and is whoppers, they anticipate not choice. put whether made, they they couple it a either May food of a a franchisees, in are fast pay pay the rent, franchisees their couple they but We their food did default. open for know

of hard because, the to they to the and are at them the end going we to decisions these and can unilateral that what telegraph not counter rent it’s future, tell their day, parties, pay got [indiscernible]. checks cajole do the again that we’re So, but cut our on are

Michael Bilerman

right. All

how much on, working working the all tenant pay. in like reductions, it of sound to trying not abatement is marginal amount from deferral terms you’re rent right? So, or pretty like you’re of sounds deferrals the It get – terms it’s in doesn’t on to any

Joey Agree

We’ve given zero Yes. abatements.

bit to that be there, will months back paid We – paid frankly all longer, got myself some any May. period, amortized not – back – faster. will any not lot opportunists into to a every gave over a a quality, into end of be give that these here, abatements give The but concerns the higher the out credit subject we be will interested have try we see little would have, any and with again years. rental amortized quick credit talking be given rate of or deferral And to will we’re out – we potentially we in of retailers especially they the look We’ve pull a I’m then, will deferral will it

Michael Bilerman

of know, May. don’t out? where to said we’re XX% decided that’s into the something, pay the tenants we number as to feel the opportunistic think May, asked have they’ve April, direction XX% down for just right understand we to just drop understand our that of going XX% of Because I’m going you move is to some I to you pay – that not I’m is already to, and that but trying going because that of ridiculous. you trying is, I you and Right. – come understand

Joey Agree

I you could wish tell think knew – that it’s fully answer. I I I

states be which the virus, I to think up retailers’ up those and of and it to those, will opening again, up happening May. hopefully Governors this in frankly to dissipation the decisions anticipate and don’t elimination I

visibility would So to. – myself. drive to but, again to what I trying get like XXX% drive understand you’re and too, full I

will here, AFFO specifically, given the come minimal a a estate shareholders mentioned – and then own thrive portfolio and make a be and balance you the sheet longer Clay little flow, our it, fall longer-term, doesn’t winners. we going and there movie tenants’ bit may to contractual ought we the are to understand under off? cash and us, what’s would their this on between tenants out balance have the theater this our profile, and encourage versus we but I Short-term operator flow relative of basis, the Sure, survive, that pay big obligations For to that real to going liquidity to past FFO obviously short-term difference and term, that. look just really unwillingness cash happen sheet

Michael Bilerman

Yes.

you. thank Okay,

Joey Agree

Thank you.

Operator

At At remarks. no the question-and-answer queue. turn And Joey questioners this our showing to this like this would time, concludes time, for the Agree back further in to we any closing are I session. conference over

Joey Agree

luck joining season. Good that I hopefully, appreciate earnings and you luck, for Please Bye. a to Thank I soon. see was – patience. long good to you you safe, the your everybody call. talk us. of stay know rest all

Operator

for attending today’s The conference is presentation. Thank concluded. now you

You may now disconnect.

Agree Realty (ADC) 21 Apr 202020 Q1 Earnings call transcript