Earnings call transcript Q4 2022

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Operator

Good morning, everyone, and welcome to the Agree Realty Fourth Quarter and Full Year 2022 Conference Call. 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] We do ask you please limit yourselves to two questions during the call. And please note today's conference is being recorded.

would Hawthorne, turn Director I over conference time, Brian to of this like the to call At Corporate Finance. Brian. ahead, go Please

Brian Hawthorne

Thank quarter and for everyone, earnings you. for Good us joining call. thank Agree full and you fourth year XXXX Realty's morning,

the cautionary and to Before language. record call discuss first me to quarter, the for let over run our Joey turning Peter results through the

this that Federal that during call, may Securities considered note make statements we Please certain under be forward-looking Law. will

differ the earnings on reasons. including matters forward-looking may our any significantly of statements for of annual in Form filings, results number forward-looking a our discussion statements. Please various actual Our report from for our latest SEC release risks discussed XX-K underlying a and yesterday's see and uncertainties

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

to turn call over Joey. now I'll the

Joey Agree

Brian. you, morning Thank for thank today. and joining us you Good everyone

our committed a XXXX included approximately XXX times an while to the $X.X high-quality total net milestones nearly liquidity forma sheet by at Investors the at of EBITDA development of XXXX pleased $X.X our investment XX Service record Notable of than was forward Partner investment including portfolio, to raising need I'm and record Including equity We outstanding Solutions $X.X with XX to upgraded our commencement of and addition of over forward of The $XXX for lease from execute record credit positioning receiving for XX%. billion, and capital rating properties capital, X.X $XXX the XXXX grade Capital Moody's projects available growing our closed of recurring over of approximately pro net months more year the including debt million, million that equity. billion election. year-end, another activity billion surpassing company. approximately at our past our billion high $X.X additional balance for equity, to was report without in record XX/XX. BaaX over

activity, by our remains higher, to rates fourth crept demonstrated dynamics. As to quarter as acquisition bid-ask current cap are spread but market adjust slow sellers

residual a appearance we disciplined the remain As our risk refrain strategy, the and up cap always, or from investment quickly risk environment. create of to curve via rate going expanding to credit

chase appropriate fail not spreads to to our to that shareholders. sufficient cap down Similarly, rates levels we create drive will returns for

to retailers the Our of the focus country them strong current remains level on withstand the balance with macroeconomic sheets environment allow the deterioration. best regardless in of to

industry-wide leveraging strong relationships team this Our track terrific add opportunities navigating growing while job doing environment, our uncovering a and to our record to is portfolio.

both partners. and transactions one-off leading leasebacks Our larger sale pipeline includes smaller our with retail

Given acquisition I that of are be to am of north confident spreads $X billion appropriately able accretive. that team will activity our source at pipeline,

sectors, and quarter auto parts, and in leased auto properties via XXX best-in-class among three through $XXX during farm XXX of fourth retail, dollar the are store million. store, originated the invested of the our representing approximately properties to and volume convenience platform, across approximately others. properties acquisition acquired $XXX growth home the we external During acquisition million operators The tire quarter, platforms. off-price our service, supply improvement, rural

of remaining acquired lease Over cap term The grade of XX.X a the a are rents rate tenants. from and average weighted weighted investment properties acquired XX% average of had years. derived X.X% retail

derived investment X% more was ground rents annualized rent of leases nearly acquired XXXX, than grade retailers, year base represented full the the For acquired. of while from leading XX%

projects, again under with the either We platforms. million year projects PCS and construction, the over development of during of committed total with representing our costs XX This XX to completed commenced capital. a or includes year anticipated on Moving $XXX had $XXX record million.

with costs anticipated approximately million. During and the of fourth six development we quarter, new $XX PCS total commenced projects

development XX projects. another projects the X while construction of continued completed We on

our of We $XX continued to with These properties proceeds portfolio completed gross year were weighted dispositions the call average a prior seven during of noncore cap assets from for over sold million. at rate X.X%.

square feet leasing leases, quarter. the fourth front, new approximately gross square XXXX, we on including executed XXX,XXX area of On extensions XXX,XXX options or feet in leasable the during

Notable or lease lease due We to Bank lack a in lease options opportunity had to options. Stockbridge, first where ground the Chase tenant’s executed extensions new ground included recapture of our leases, XX-year approximately emblematic Georgia, a we we and eventually is portfolio. were able lift able XXX%. with The the new of to in ground by generate NOI embedded were the increase value our Chase to a lease rent

a strong Moving for very with rents we executed to a this into we in year, down remainder number the maturing. number this extensions, lease annualized only year. year-end, of position are bringing have of X.X% Subsequent to X% the of base

XXX Occupancy investment States, At healthy tenants XX.X% year-end, a our ground carry credit XX continental remained all across portfolio encompassed rating. of very X,XXX of all our top XX.X%. our nearly Again, total And stood representing including grade leases annualized an XX exposure XX%. investment grade properties United at base rents.

positioned best-in-class macroeconomic to portfolio very withstand well the environment. Our is current

up over call and we to any for hand then the open can I'll that, questions. With Peter

Peter Coughenour

our year. sheet Thank you, I'll and markets balance Joey. activities the capital start during by recapping

$X.X gross mentioned, capital highly markets, further active billion growth. raising and in As us sheet to through $XXX the proceeds our of balance $X.X approximately X.X% of activity. activities continued with program, all effective unsecured equity notes of bolster two an were billion million for position and senior raised Joey we Notable equity X.XX%, in our due offering offerings a prior of rate bond XXXX hedging at-the-market public inclusive include and overnight

on of hand. million revolver activities during with at on equity, provided availability the million markets $XX $X.X forward approximately of of liquidity million $XXX year-end, capital us outstanding billion Our XXXX including and of $XXX cash

for of free disposition plus any dividend the XXXX additional capital. cash execute the approximately Our our after in and million strategy enable $XX existing need growth proceeds to opportunistically us without flow liquidity

for the December XXst, X.X of settlement equity, to our approximately was of forward pro net As $XXX debt the outstanding million times. recurring of EBITDA forma

of EBITDA X.X the our Excluding unsettled recurring times. forward impact was to debt equity, net

average and well At debt at maturities maturity year-end, stood our debt no rate volatility. eight interest limited headwinds to capital approximately XXXX, weighted years. With remain withstand and debt rate we material variable markets until positioned

end year Total at enterprise at XX%. to debt value stood

X While dividend remained ratio, our and includes amortization level fixed principle preferred coverage a healthy which charge of times. the at

per full year core X.X% representing was for year-over-year increases, XXXX, and for earnings, the was share to and X.X% respectively. the and and the year, X.X% for representing respectively. per increases, FFO quarter $X.XX Moving $X.XX $X.XX full per year-over-year for fourth X.X% share fourth AFFO quarter share $X.XX

our As the a stock of is deal in ADC half and price offerings if offerings. dilutive trades less in quarter forward the stock the these The reminder, year. our treasury fourth for roughly was share included above to penny impact aggregate a settlement, equity to diluted prior outstanding than full count related $X.XX

consistent well reliable growing and support a Our continues to earnings covered dividend. and growth

a increase On cash for each an quarter dividends fourth share represent X.X% the the of October, December. fourth per over dividend monthly common dividends the and annualized of annualized November monthly of we basis, XXXX. from the $X.XX During declared quarter

a X.X% declared XX% per share, stack on of increase year-over-year $X.XX Company just the year, full dividends a and increase the a basis. two-year For over

ratios targeted payout low at the full per for our XX% and Our fourth the remained or of XX% end year share. to quarter below of AFFO range of

$X.XX of quarter for dividend a announced annualized amount $X.XX monthly we an each per share, per increase reflects dividend dividend monthly share first amount X.X% $X.XX of XXXX. year-end, of over January of dividend per the of approximately or from February. The After and share the annualized

We totaled of below of expenses achieved during leverage total administrative XXXX expenses or $XX.X and above revenue G&A excluding lease X% of the XX in basis points market XXXX. and noncash million. G&A General X.X%, amortization were intangibles.

investments in this achieving to similar database, leverage including our recently system, proprietary ARC we our further G&A Given our year. anticipate and improvements implemented ERP systems,

quarter. $XXX,XXX during tax was $X.X Lastly, expense including total XXXX income million, expense the for of fourth approximately

the back I'd over Joey. to that, turn like With to call

Joey Agree

Thank you, we'll up time, open questions. operator, Peter. it At this for

Operator

will Nick today first Instructions] Ladies begin and that Our at question-and-answer from Citi. question this time, from we gentlemen, comes Joseph session. [Operator

Nick Joseph

was the impact and I of get what current to rate more on to some builder on having maybe merchant hoping kind trends, color recent Joey, side specific the it's cap deals? just you're Thanks. any seeing on

Joey Agree

since builders saw for Dollar Yes. distressed you that leveraged Dollar Good a talking they new were clear leverage is morning, a merchant tell O'Reilly, to builder interrupted that builder effectively Nick. of the platform taking Well, first, had their stores, on during of number the net this General, we're of retailers I'll the point. -- you, timeout a Dollar, need quarter, where with still for at advantage have transactions situations inventory. we their merchant to we historically Family, on Tree business fourth number merchant side during

for new looking so potentially can and on a XXXX And are that new And were year-end all focused think for we retailers builders where openings, that's play merchant we XXXX solutions. part.

complicated cap frankly. terms of In a rates, situation, it's

wouldn't bifurcated, trifurcated. rates, cap think I would call it's -- it I I it call

we will something do risk here, want that you to not is that up readily curve, If go the is which available.

with or private You they’re operators handles in in third backed second seven clearly things operators tier front go spaces. them, or respective can acquire equity of their

we there, maintaining there of share qualitative acquire space, we hurdles. IG our the out $X shortage over while per if of in this XXXX. AFFO opportunities the in portfolio wanted drive to see we can in we where What is finding It's no quality right those billion could opportunities

is in lot have But off credit a their there's so, come much and price XXXX. XXXX cap of And nuances driven, to is it lows Much it. obviously point of of it rates driven.

like like that all, first right? to bonds And this I a is assets. But bond everyone that this leads think bonds of is business, like understands --

short-term in year debt up the go and so the witnessed costs, long-term both And last financing significantly. we

yet in space. -- commensurate cap have to cap We the rate expansion rate see

curve and value sacrifice of And won't That's for path. long-term a so, space a we risk private result the in moving as lease drive short-term will we're is, frankly, something up the appearance public we creation -- seeing that what investors spreads. do to net never

And so, remain this and we'll out. disciplined, see plays how we'll

Nick Joseph

the and the to And about normal pipeline maybe the talk on given in you then then current materialize? environment. current half to are about less exceed specificity the is acquisitions, those? if deals of can thinking you just more maybe the than year billion of you $X billion talked least back Maybe at opportunity of that pipeline, How timing the the the about start $X

Joey Agree

starting the of I alone if to love back happen of I'll going -- year half I the let what's half tell opportunity the hear in tomorrow. weighted. be is going the when to back don't I know just year, just pipeline with current build fifth pipeline. industry mentioned, our a QX, has I way our transactions. for QX you to leaseback about the as sale of scale through leaders, We're We're that. larger one-off has

today is terms have and don't going one this I QX. for and earth going that a to nothing to or be QX, QX in be be here a hitting going I'll not soft we're it's to for We QX landing -- know deal meteor economy. this honest, of

think and we then be for be sheet. which I are perspective think to different as And materializes. balance again, us capital $X has We there. appropriate don't disciplined our everyone as flexible, that it's equity, So with deploy need this most year I we of

Operator

from Stevenson Rob from Our comes next Janney. question

Rob Stevenson

current pipeline projects your the with dollar and go of new of pipeline partner aggressive growing, projects? being as out? of can shrinking in the about projects that capital and talk How over you future come you volume today, you 'XX course and are Joey, see stable, development

Joey Agree

to very it's this in cap development into call Rob, Obviously, chase rates similar transaction, going I’ll to not down, when Yes. in enter last it, you acquisitions. course any there's throughout PCS of duration transaction, the answer terms of yields to given rise my or a potential, We're year. it.

transactions of XX, months. of X take them take some So, months, those some XX

have on And of so, to be return compensated you the in terms appropriately costs.

duration premium of be risk, for number still. thing pipeline, today to getting most But credit a risk. we we're unannounced obviously, in residual important it's the be it will in some the not that the announced the but not going that risk, duration we projects to It's are of have is our that be Now, risk. going appropriate fourth quarter,

transaction, or And PCS to, credit a to or should partners, going as we -- it's we're and we or with from could profile well we'd have retail third-party inside close a closing so, say, that into ability a to something develop period, as into if I XX-day or to if similar where much have prefer our buy much visibility enter visibility from possible. the

Rob Stevenson

retailer to where's sort last projects does capital tenants, of with sort talking that And of demand developers ability been your to years? up of match then, development? And the merchant it's that expansion to start to over today core new your understanding versus how where fund get few

Joey Agree

It topical. is a great question. It is extremely

are Go General Kum all Five Below operators. popshelf, the and still had levels operators with, and stores, shortage, XX discount have format, the continue throughout challenge we've the the now to stores, sheet National to road able Napa Goodyear sale overall with on obviously, keep C that. dollar and both effect. Bridgestone, get the partners, benefit General Batteries, AutoZone, don't groceries, auto historically we retailers retailers or as don't sheet We Dollar & entering rare down know in and grocery Dollar the service that grow. conversations weekly of General, Metro business with them world. effect, The Tire they of trade ones aren't having because for format would retail The Five O'Reilly, biggest that car, afraid via the to leaseback is on Detroit, from then the cars have the this they the the to a to and with operators platform them two trade grow development them the continue want various offload our of Large discussion builder Dollar country, because balance they majority Sheetz years vast or deep Market in macro this to have keep self literally the and parts on balance stomach down them grow. merchant The environment Firestone, Beyond, eclipsing permanently to the these tire and/or auto country, want not a Obviously the chips parts continue discount

Capital three could acquisition, conversations of be capabilities, so, potentially development these Solutions solution external growth around with Partner for revolve them. which a And our retailers our and

We'll ongoing. they're see some of producing so, And strike. dialogue. interesting And any these are that conversations them are if

XX By the can add the Club first to announced net you for XX years, what, in, way, with that Sam's new stores. time

you value the is see clouds the these of grow frankly, grow oriented discount these oriented ability But want so, And to challenge. storm their or horizon. regardless that on retailers the retailer to

Operator

Our next RJ question comes Raymond from James. from Milligan

RJ Milligan

Joey, being for the there's do I'm sellers little those to just bit your pricing has sort if were of more hit buy, comments think expectations, but you obviously to here. what that you plenty willing happen pricing adjust a to prudent to curious, expectations?

Joey Agree

great It's a question.

away cut that Maybe no yesterday. like the this to there of a up washed flow of going Fed landing, certainty like the I and the think still daily rates first all, swings and hopeful, at Nobody we going shifts to market, a got data we Chinese a with this balloon is rambling have on estate soft spy is inclusive going a real that sellers, to year. this this be Tony during to see the game. landing, hard knows speakers sentiment Romo for that of Fed while, end is new the football economy

status I quo so, spread. bid-ask in current And the a results think

morning we consumer or have Now, with data more consumer spending. this sentiment

your obviously you a can with leaseback terms how that are extremely where real in And creditor needs visibility here. to will a so, via help rates And has LTVs, in retail evolve private sponsored hence or growth. banks find pulled middle nobody the last challenge with who as unless market lender, this resort you on back today have or leaseback who pulled is or your estate have there sale economy is lenders equity secured a and sale back are capital here into going elevated, to be you of

still is out that hope until there's And challenge Now, much too think up, have third-party the on clears that there. going to market still I we're a spread. specifically the bid-ask

all much And how will The just evolve? to how doing I Now, I it. capitulation. economy find and of question because the the market out distribution the have don't any what contacts, as our different idea don't for is all And groups, economy's different and through finding we're stakeholders the all we're scouring our partners going is, of that we there of our evolves? looking know

RJ Milligan

just market’s side? That makes Obviously, the sense. And REITs I for hearing on the what for I'm bit look question you're what opened for and might pricing are the Peter. curious market terms guess to you up just I'm a in here. a seeing curious, And little debt of appetite banks’ what debt that? like

Peter Coughenour

Yes.

unsecured overly frankly, probably range. unsecured discussed on could debt I XX-year we in the I market, isn't think in last still the Xs terms mid-Xs. but today given cost in of price the be call RJ, attractive equity a our view to down we This quarter's first, we call, of from is it today, think similar

market enter the price today to a the term fix more bank term current bond term In we probably given of into market, high-Xs. loan could we assuming terms in and I attractive five-year XX-year the I debt think the than to be five-year view pricing. rate, swaps a the today loan a And loan

being good All liquidity, as billion said, $XXX of the million that Joey of than is mentioned, we news $X.X outstanding forward more have, equity.

options And we either debt the of in need equity can terms capital continue And any capital raises. future so, monitor or be capital. don't capital we and opportunistic to our today,

Operator

Kim question next Bin Truist. Ki comes Our from from

Ki Bin Kim

I'm to may options their financing have tenants’ months? just IG So option the few within -- curious spread you invest over past financing realm migrated the triple how alternative your that to net how and guys in, the that compares

Joey Agree

call. correctly it's First an say name earnings great for operator Ki of on the Bin, one. all, an last your to Apologies hear

relative to options say a when sale? potential you options, financing you are the about financing seller's So, talking

Ki Bin Kim

they bond they I can bank market; the with can a I market. unsecured No, mean, mean, tap financing. for

to tenants, of options? financing curious type traditional IG how debt triple compares I'm just your financing net those For

Joey Agree

we is term us. for be unsecured the avenue mentioned, to quoted -- an think capital. borrower. think market where today. is continue We’ll XX-year He Peter to borrow the as that's most loan continue the a us way to Well, for market we efficient think market possible unsecured We

Peter Coughenour

are retailers? you of Ki Bin, in asking our terms

Ki Bin Kim

Yes.

Joey Agree

very interesting bifurcation today. a that's Well,

So some their referenced to companies sense that's are, have you of the recognize similar what, S&P relative know XX-year today leaseback transactions retailers, they of cost we paper I with are most that where issue XXX say what can pipeline capital that and makes where our sophisticated sale prior. a and in

love Now, a as love first, IG versus Hobby, high-quality retailers. this I I to back, a Aldi. has when have love I held, or They reframe These remind we low-quality have companies today. options not step held grade I very are retailers people rating. retailers; retailers just other closely Publix, versus compare equity non-IG, investment privately The let's take to sponsored high-quality Because Chick-fil-A, limited don't that continue love retail I they're options. private

leaseback those their of and options is on largest estate. sale One a option real the

And be startup or largest so, the we the will one lender creditors last resort, and to care. of not urgent of carwash a

memberships literally Now, none own equity are new capital Metro how from as out behind we all that Detroiters. expanding to with their Metro They monthly sponsored private speak REIT Detroit by of need them. cars there can't these where figure washes washed be four all in are required estate. and are that car are many I real

are They they high-quality up I to liquidity, where the need stressed offload or to to thrive. now with in to shore economic a retailers the their balance environment. going we're frankly, sheets. estate. retailers So real here. the The reality, have the capital low-quality think, the their faced days days balance sheet We're can pre-COVID whatever They back are back

Ki Bin Kim

sheet How here leverage of of the your up way? the times. let I'm about this keep X.X would think curious kind drift strategy, at you as should And we if it year leverage or progresses? in your terms balance this is

Joey Agree

equity going Our range. to pro X Leverage effectively leverage at to is ended forma going up to in We leverage. the X.X the of definitely is drift leverage times for drift settlement $XXX times up. XX/XX million targeted to X the at

or not are markets via ATM the back anytime We're soon. in the We equity not coming regular markets. interested way the equity to

execute X the what higher capital on appropriate to strategy drift have our We obviously X to we year. upcoming we're that And to times. for this the and flexibility to think going here leverage is

Operator

comes question next from our Okusanya Tayo from And Suisse. Credit

Tayo Okusanya

to scenario, just curious is one? of -- you how so that to my in -- I ball. going, to call can was opportunities, No on if you you faring thinking Joey, has of different his how I'm how to buddy just economy would of and you knows part Or see to and your your scenarios agency yourself how economy's goes RJ's distressed one do ADC again, response about kind the well question. question Cleo, south one Miss kind do curious, starts continues crystal wanted no where and Do speak. see kind see a or do start economic follow-up who But do economy in to better the see to the improve? time pounce? faring? you're if each economic of Just is either

Joey Agree

the caveat, is we're I very question. I data the Look, with today. Obviously, news unique bad economic with a position. the good think appreciate in news

a and We the defensive most probably we're defensive defensive, the defensive, play balance sheet, offense. to the have able most portfolio,

can so, the play we of ball sides And here. both

this perform best. a the see deterioration underlying to the in portfolio environment, we significant going whether is So

Now, and cost have again, capital, of liquidity there's takes of the sheet if all everything soft a and landing sudden, we off balance execute. to a the the what,

impossible very to so, nearly a poke through And aspect we hole of factors any position. that in year, strategic It's that those hard, into in given this And unknown coming have company a today. all are our single of we're this control. was out unique --

COVID, pivot one disciplined the to two if those did we'll just happen, very we acquisition not time us going things apologize, and for pivot. launched not the slam the did And and quickly, and during so, and this just we And to not Right when time now, platform. it's like be of hold to we'll gas, but said repeatedly, prudent, sign. we're up time it's I've on like I stop we

going grow going think both are sheet we're be grow to environments, to balance this and we portfolio I going AFFO, is dividend, So, our and to focus. in a

Tayo Okusanya

'XX. talk helpful. you bit of terms kind a the And kind of credit about, credit about versus I just 'XX of Could just provisioning impact IG, curious to seen give you know guidance, you And little guys you through issues, walk but Peter, just you've in don't any of again you but then, kind you're and massively that? how of barely think I again, about have how don’t kind are that. could guys seen think any, credit granted, us but -- and then, how you're That’s thinking

Peter Coughenour

recap debt. just XX probably debt in is That's bad guess But recorded basis revenue. XXXX. I closer of to it basis that's roughly term Sure. points tenants instances or of XX points revenue. call to which $XXX,XXX longer slightly our or We below XXXX it average, call bad first. identify And about specifically mentioned, you of of XX we expense as

forward debt And can go bad so, a on be predicting basis difficult.

of is, that grade I we've With wouldn't we it any positioned some the historically. certainly and from macroeconomic withstand coming the deviation current environment, it's presents But from feel current XX% really environment, obviously to very our portfolio with think that where investment tenants anticipate retailers. and rents well significant seen for challenges what

Operator

of Bank from Josh Our America. from next Dennerlein comes question

Josh Dennerlein

think Joey, of just environment? source dispositions as a today's you of potential capital curious kind about in how

Joey Agree

XXXX frankly, buyer, them all an of -- is or who because, wants who of buy use But inefficient a frankly is effectively a went near the anyone year, pristine dispositions time. Yes. outside in if the buyer, cash nearly our into through me, excuse world please it's pristine portfolio gyrations. screen to sorry, couple We to -- guidance This a in AMCs, the We pristine pre entering is here. this give tell is of an position, disposition seller position didn't call.

I'm We've space waste any there extremely this And just that in nature we to today. and got amount our out And team need that of year. busy. don't is time XXXX starts many this dispositions stops so in to the XXish so, hesitant are market. of just execute members There portfolio, I given think here significant the

Josh Dennerlein

spaces, classes, it that? competitive are the appreciate certain has really your are or gravitating that. shifted acquisitions Are people And at the seeing less towards you I has maybe in Okay. competition asset landscape for -- all? to

Joey Agree

the continue No. transactions the competition in competition. the within buyers that context slower of to less our overall. seen We've question. portfolio. appreciate I country wane XXXX as the grind less see for assets fit We

so, we And see less competition.

talk is brokers, XX% January, most right my nobody you XX% the where If effectively to space, will Where knows. that down conversations. in volume the recent they're go, transactional of month -- In down now.

space. into And so, there's some or less almost for XXXX frankly, negative downloads entering and you equation, the much the doesn't equation of out of leverage it buyers. the will the Obviously, remove leverage you leverage do be inhibit buyers from

them. for of so, We won't just up we're And opportunities. tons pay seeing

we're not take want We're at the and of cycle day. $X into the going a just not earn change end capital, it four our to it. money on We break not to So, quarters machine.

and to capitulations And accelerate. we so, less competition, we're that counting hope continues

Operator

Our comes Haendel next St. from question

Mizuho. from Juste

Ravi Vaidya

the This for St. Haendel is line Ravi Vaidya on

I well. up doing are follow here. to guys just you Hope Juste. wanted

you're you less secure better competition there's for are terms, maybe assets better that Given escalators? annual that targeting, the to able

Joey Agree

Well, we've again, historically the done what minority third-party of is acquisition.

So, tell increasing or scheduled today years. comfortable the leaseback we're excuse negotiating and for amenable not more that every I'll increases increasing lease a sale five more the you, in are or -- retailers escalators. acquisitions are me, development those with transactions to

Ravi Vaidya

helpful. That’s it. Got

any the Kroger-Albertsons from the one you impact expecting of Are Just merger? portfolio here. more

Joey Agree

Kroger largest not. our one partners. Absolutely is of

that that We'll We the have absolutely, the full FTC. they've speculation how recent -- The store have we I guarantees. mention. But with XXXX We'll telegraphed. see see have materializes Kroger expect potential XXX through divestiture. we no the closing in Albertsons should how no, has to a we portfolio, as materializes

Operator

from from Linda comes Jefferies. question Tsai next Our

Linda Tsai

acquisitions of Hi. your Can us, sale what been have from market XXXX you versus remind historically? the percentage leasebacks

Joey Agree

going sound Does number I'm sale on year you. Peter, you, hand. don't one to try leasebacks? approximately throw tell have to that right that last I'll X%. I to that with

Peter Coughenour

XXXX. in think I sub-XX%, Yes,

Joey Agree

anticipate number give don't when being that we XXXX you in I are historic you these market, Sub-XX%, say can't -- forget, QX. sellers. elevated

be the will gains XXXX always to down We're always us. not they buyers they competing -- to not privy have What privy there just ability proceeds, they capital the so, tax And whether pay do they leg, to enter with purchase into with frankly, isn’t or we're it. Linda. agreement it, new a do a

Linda Tsai

you earlier just then the Chase And talking it. in about Georgia. situation lease ground the Got with Bank were

think the high more in of that a lack noted rate. current that a environment? a more recapture of You Was options one-off happens something in or you resulted situation

Joey Agree

ready and to a the Well, was the take a -- Company at lease XX% we was ground at the of another lift? that the which lift I options remaining. tenant unique in time with was had a the $XXX,XXX first had Chase every question. no was at that XX% had what with ever lease history plus came plus very It year situation. It new signed around property expire We the who table five. over XX% bumps a XX-year appreciate

the that leasehold In tenant fee and split, simple construction split everybody, have remind the that forward free. the that instance, a when for future And for that on instances leasehold I and a was building this Again, was the This to of ownership Then I of instance. for embedded Chase was paid a value fee of think ground -- portfolio up. isn’t lease it this a a lease, simple get remaining. sudden to demonstrates lease no building. look in land. hence the so, we reverts go the it, going you to all I'll a rent building. the to when free you're somebody pay ground then building and predecessor options again, Chase NOI of there on paid But has why see back it. was had taken a for And first

we bought to so, actually And able with outcome a years and no were there. options. obviously very favorable ground remaining negotiate two We that lease

Linda Tsai

think for then you, City, distressed about is for a forthcoming? feel bath, not And do indicative retailer environment, this they're Bed overall that. situation more Tuesday you Morning, of limited Thanks you Party or but how issues Regal, the do

Joey Agree

think it's I no, coming. Oh, what's

I the train. think we're on pre-COVID

bankruptcy just timeout a just Morning. like everyone and mentioned system called COVID with flood another occur. Obviously, So, tried there of we with Burger King and store, you operator, goods operator, the hello call Capital, we bankruptcy saw in prior. office saw their as all be supply pet and home probably Bankruptcies capital say, will assets no of will cheap franchisee, We TOMS can at supply years disposed recently where Tuesday debt. sporting to to large a timeouts we

online, at companies operators, look through e-commerce rates quick care way experiential five than the and disposition all going days we coming. -- are pre-COVID and bankruptcy, to we the then, short-term there collect, LTVs we filing them the to equity more private longer you either that their their space, operators, will as space, march space, variable MSA carwash again it's Chicago XX% rate our have will attrition years, or debt be going penetration, go oil either know. see fixed the be the urgent last towards change omni-channel as in the And entertainment BOPIS, those world there where up, developed don't for akin where lube delivery, childcare backed loans we're click the to If have again, this retailer to

just it's a time. so And matter of

a train very are of So, am for rationalization we on now confident retailers. pre-COVID the I that

Operator

Baird. our next Wes from question comes Golladay And from

Wes Golladay

multi-tenant you Are Texas a for you glance. openings? anything earnings had Onalaska, lot seeing almost the at center at the and Brenham, few a of guys Wisconsin first shopping release, like then Looking opportunity the PCS at

going So, there? what is on

Joey Agree

number at -- that can looking builders longer multi-tenant that make no and/or number work. Rosses expand with working development, projects TJX are with merchant TJX, world, historically looking those them, these Lobby, again, The opportunities developers them to Hobby effectively retailers finance the the were that Burlington, and Yes. retailers, doing of a of off-price we're a

so, that's out opportunities. And an continue to we area invest can think where to seek capital continue and we

Wes Golladay

cost narrowed down XXX basis all? Now the the And pricing it. quarters thought like about there bid-ask know transactions Has debt of spread to months? retailers be. between markets maybe two -- you points you debt over what do that last a the they Got -- down what that seemed at mentioned to ago debt I bit, were then, have be your a few these wanted at, calmed -- should

Joey Agree

few XX points the Peter basis I about right? XX think months, specifically, over last years referenced

Peter Coughenour

than mid-Xs call, to XX-year relative points. less basis what XXX it what's today discussed but from maybe low-Xs the last came we call down to quarter on

Joey Agree

think the capital. looking I at of cost everybody's relative

the I looking since in perspective haven't construction relative have the for country this inflationary this gone capital, The leading cost of year-over-year. interest to Construction the the shortage XXXX the in loans, they're they're specifically, pressures. labor the think rate loans. only costs we from merchant builders’ not construction at construction at their looking country availability on of down loans,

an store as rate combine private so, be to a cap got And ground or to build bold. combo and the now with Ross, Burlington a that with in put you exit unknown shovel pretty that's a TGX developer a you a

think that types for into are and create asymmetrical in appropriate while divergent with appropriate. we create opportunities so, capabilities shareholders, value risk the can and are up And curve we not the where spread of going those step think the assets we our don't

Operator

like gentlemen, And closing no back additional with management to any turn for the ladies showing I'd to the and remarks. and questions, team over that floor

Joey Agree

you, you, weeks upcoming thank you you. coming everyone, and in we joining operator, today. for conferences. to forward look Thank the us seeing Thank at And

Operator

today's today's gentlemen, question-and-answer we’ll joining. and thank session as We as that with presentation. ladies for conclude And you well

You disconnect your now may lines.

Agree Realty (ADC) 15 Feb 232022 Q4 Earnings call transcript