Earnings call transcript Q2 2023

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Operator

Good day, and welcome to the Agree Realty Second Quarter 2023 Conference Call. All participants today will be in a listen-only mode. [Operator Instructions]. Note today's event is being recorded.

I would now like to turn the conference over to Brian Hawthorne, Director of Corporate Finance. ahead. go please Brian,

Brian Hawthorne

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

turning will quarter, under to our over Please considered note through the forward-looking Peter this language. statements Before discuss call, that during to be we the Joey cautionary law. results certain me federal let and the securities that first make run for call may

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

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

now Joey. the I'll over call to turn

Joey Agree

and Thanks, this us morning. all joining for you thank Brian,

milestones we Alaska our reach. several geographic to notable states XXXX for in quarter This the our company, we adding property mark celebrated surpassed XX

has less now size Our tremendous years. portfolio in the team our than of doubled three

near collaborative an LEED and rooms, Additionally, future. the building will areas. auditorium, The support We've our a that building friendly the new bar, we continued meeting have features moved locker of state-of-the-art environmentally coffee completed spaces, certification growth. wellness incorporated a includes our into headquarters achieve other and center, anticipate to a cutting-edge number outdoor in technology,

database. to information to our technology Lastly, proprietary and made invest continued further in we enhancements ARC have

are management XXXXs strategically further construction. dividends, module development hours and and to relationship paying sourcing, increased created of bolster and has savings manual entry. reallocate an capabilities. for With automation enabled of resources the have us our These of reduced underwriting updated significantly significant time that rollout This they've the investments to

and XX our a savings anticipated these least bring or addition, G&A growth of points are lower year. basis to X% continued In at top-line percentage to down as revenue this

have environment. forward we ambitious with to coming ahead, Looking for we our you And in sharing months. look plans the more IT

our strong that to very to the report on balance year start occupancy pleased to solidifying platforms, capital full our our three across sheet. external continued deploying we I'm results, significant and Moving maintaining near further growth our

million. quarter, acquisition includes three the approximately our This invested million high-quality net platforms. assets external we XXX retail of During the $XXX leased properties growth approximately $XXX XX in for across

off leased in during leading second tire are The service. parts, and and auto auto operating properties acquired sectors retailers farm to rural quarter dollar and the including price supply, retail, stores,

transaction and Our as close operators developers. pipeline transactions sellers Sale leaseback myriad extend leading of repeat structures. current and include distressed a to-date opportunities, in new different as well blend with

be to and continue call the market. We in highly last a first fatigued fragmented and

average lease weighted was years annualized basis of approximately continue quarter relative weighted than term and grade rates move our The derived XX-basis in investment are as XX% cap acquired our full XX rents year average favor to to higher and to rate close X.X% by point Cap quarter a had results. a from of expansion XXXX. retailers. points first The the XX properties demonstrated second base

acquisition ground quarter of three quarter. volume $XX for acquired million, X% approximately total We leases or during the the representing

our visibility to increased from Given into least raising X.X growing billion for guidance pipeline, least our at we acquisition are the our year. at acquisition volume year-to-date, with billion X.X

largest year, our quarter-to-date volume the quarter this significantly. our has to be pipeline as third grown I anticipate

strategy. or As always, disciplined our deviating up we the from and curve remain our criteria moving to avoid underwriting risk

opportunities execute on sidelined. is competition sheet us while fortress enables most our to balance many Our exciting of

to ability within market. competition continues on in the calls, And prior with choice move makes quickly certainty to our today's and be a of mentioned lack targeted there buyer our As us sandbox. of

we've seller continues while pushing high-quality an execute points to cap opportunities, settle rates year's extremely in, been above able to last As average. fatigue XX basis

year, net and half months XX million lease annualized investment For close acquired across invested of XX we've of six of Approximately quarters states retail the activities from spanning XXX our this properties $XXX retail million rent best-in-class three demonstrate partner retailers XXX in the originated continued to program. base of acquisition investment the leading first and opportunities platform, first solutions our development sectors. our portfolios, metrics comes retail both execute different partners, acquisitions leaseback retailers. counterparties, These including and individual to one from avenues, our and capitalist our with off diversified across year grade from multiple institutional sale ability with the

representing In light in approximately DFP $XXX platforms commitment define a it as that we for more our developer renaming program, in funding of or activity clearly across DSP. the the developers, of prospective program, under million. capital we're by Increased development completed construction, and to platform XX future record a seeing projects increased the are interest evidenced

approximately XX, As of completed June $XX or incurred of costs to related projects. million ongoing XX we

HomeGoods anticipated and projects over $XX the of anticipated Sunbelt during South million completed two XX Six with quarter, Louis, $XX the commenced we Elgin, million. in costs quarter Construction Illinois, projects developments. X projects, approximately Collision During were on Missouri, continued of Rentals quarter, St. including total in new during Gerber total the a costs.

with gross XXX,XXX executed during Lansing, basis Lobby in points we Hobby on options maturing. six Dora, for feet and We Michigan XXX,XXX remainder square leases leasing months quarter, the first square Florida. the of of of excellent a the rents the new leasable second leases, leases, the to XX over or Walmart Mount extensions just new annualized of in we year, extensions position and a gross year or of XX executed including Through on area area. base were an options or leasable approximately feet Moving

Occupancy at approaching our XX%. annualized grade quarter earlier, our spans XX and of portfolio rents. this exposure ground mentioned very than XX.X% more properties is base across strong XXX states, I now representing investment XXXX As best-in-class including remained leases total XX.X%

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

Peter Coughenour

Joey. Thanks,

period our was compared second AFFO $X.XX. to to a year-over-year for month-over-month we to increased April, unchanged monthly the representing dividends increase. subsequently Starting for FFO at cash cents quarter X.X% the second share increased X.X% for monthly earnings, the with of May, same We last and cash per In declared share, core July. each share per per dividend $X.XXX $X.XXX per of year quarter $X.XX. share June

in annualized almost dividend monthly The the and X.X% represents share dividend periods an higher annualized of $X.XX per comparable is amount from XXXX. the than dividend

AFFO for second share. our ratio below payout XX% stated was the quarter Our of range at per

by adjusted growth. General ratio and unadjusted revenue. payout and be totaled above the earnings the administrative amortization up $X.X was expenses lease G&A of or to in continued continues dividend quarter our X.X% growing below supported market non-cash revenue for second strong of X.X% expense and Our million intangibles

earlier, year gain revenue. the of decrease for full G&A XX as still least Joey a at continue mentioned to percentage G&A leverage, expect As we to adjusted we basis points

was the million the Income expense now to second for year, $XXX,XXX from tax and of quarter, to $X.X million range we full the expect down be $X $X million $X.X previous during million. expense approximately between income tax

debt X.X-year the the term full loan used markets activities, closed was and us pay we we support balance our the maturities outstanding down strong banking quarter July million, variable extend on drew capital and financing no term term a all fits from key have to million rate further our the no on XX, loan to our schedule. X.X-year debt a outstanding This during XXXX. $XXX the into amounts and which $XXX revolver. to was with sheet with Today allowed maturity material our XXXX, our partners. maturity debt commitments into leading which for until Moving fortified nicely market We

based on to loan credit on the is The swaps, $XXX forward includes million term total fix to over impact into entered loan, commitments, to $XXX of closing term of a the we interest up also of us at five-year allows loan starting the the the current additional term option the rating. an of advance fixed accordion lender request swaps period, including SOFR that million. our X.XX% rate In

shares X.X the forward proceeds quarter, net $XXX approximately million. equity second outstanding settled We of over of million during realizing

XX, anticipated settled June $XXX raise to be are As approximately settlement. we million upon to which forward of million existing remaining had of shares under still proceeds net agreements, sale X.X

our outstanding forward net our recurring settlement EBITDA quarter equity. debt end, to approximately At was of the for X.Xx forma pro

the impact debt Excluding equity, unsettled or to net forward approximately was of recurring X.Xx. EBITDA

the million more outstanding at availability over of liquidity nearly of to and the enterprise forward over of value includes fixed total remained million quarter debt had in and $XXX dividend total at healthy revolver, while quarter $XXX $XX a end, preferred than Our on on We position charge $XXX cash million hand. of amortization, XX%, very was ratio, including equity, approximately million coverage our X.Xx. principal at which end

bolstered closing recent approximately $X.X X.X of the year $XXX liquidity term for the loan, is million to forma Pro billion. total

want level steering Greenleaf Lastly, third in the from I greenhouse thank outlines committee year, to gas our report report progress annual The the during ESG emissions. recognition that reporting for initiatives earning significant quarter. made ESG Leaders issuing on past the ESG on introducing we've including our gold Program, the and

the Joey certification. headquarters, which mentioned is new anticipated report as our addition, LEED to highlights receive In earlier

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

Joey Agree

Thank our set company The of Peter. opportunity truly exciting. front is in you,

up this distressed of environment questions. for uniquely At we are lack it within We execute time a positioned to open operator, with will a competition.

Operator

you. Thank

will America. of begin [Operator of And from the now Bank our proceed Dennerlein question. We with question-and-answer question Please Instructions]. comes first session. Josh today your

Unidentified Analyst

question your your Hi, the also of choice this behalf and your with comment [indiscernible] And a loan how Dennerlein. foreign you maybe of had if and Josh especially of cost is of view make a can equity quick issuing outstanding? transpiring, that's capital on just term on about

Peter Coughenour

question. Thanks for Peter. the This is

participation bank to continued term First, want support and group thank loan. the our in their for I

to the loan In term pricing with to process, attractive. most the options of moving terms we of prior considered forward be and market all our evaluated term

a the where the into half to addition, had a our X.X-year REIT market been In XXXX issue many, to have debt year a us in recently, term and schedule. deals in five were not any we window which we loan and if able there push maturity maturity allowed

debt our and that us our well to no this issuing debt priced XXXX. of maturities debt attractively goal allowed So accomplished maturity fixed well fits letter schedule rate material until maintain into

have X.X% as the our today, of loan million we of capital we mentioned, at terms that In $XXX you just term closed. cost

$XXX average outstanding of million our similar those fairly the inputs have in of high cost capital that fives. our forward when puts take you is And equity weighted today. a range. them, of today the in fives equity mid And roughly cost combine in We and

Operator

Thank you.

from come question from next proceed Citi. will question. Eric Wolfe your Please Our with

Eric Wolfe

eventually. talked the that profit development really merchant you've about need good find In past, the developers any hadn't on morning. liquidity would Hey, to made

been has open point. big they And Dollar part satisfying forward, through inventory General that of needs? their are a for They much looking store was How merchant for? stores, openings. worked at others how you curious of look Just what and are their solutions they and then that as this development

Joey Agree

Hey, only rates regional construction regional but the historically and faced significant and good have that we're to retailers the pulled new that loans local primarily developers those challenges and morning, gapped Eric. that with the headwinds market today, conversations not obviously we constructive net facilities merchant and [indiscernible] have crisis that continue It's upon have topical, the back. rates and and banking deliver and cap conversations developers really regional builders through That's seeing to development lenders, lending supported lenders stores. from with very constraints out, Joey. particular, and Frankly, have relied in

solutions, of a we conversation to and/or platform, where next distress. of funding it's anticipate developer with a and We're So disparate more week last we're to on of retailers, conversations in fee sheet at This looking significant years all a point program. the moving sale when their either I provide earnings couple supplies whether heard developers, of those through and we it believe opportunities. in be leasebacks. a of call, organic conversations commentary, our is they development topic for going with can how was or balance we're really But tractor

the abundance merchant programs some sellers of quarter, really were not acquisition more I'll third merchant assets. quarter, an with in -- had second did We opportunities focused stabilized have unique tell the party specifically, the you and during volume our developer developer second transactions.

Eric Wolfe

this? at of different trying but typically single on wrong I because will to I probably thoughts I'm I'm least of But there just I the it's understand, that would eight zero, like through stores then Was I well. yield every develop as XX%? Is pipeline And sort XX%? in gone you that forward, I for your mean, understand. think you assume it of Understand. curious tenant, has it terms percentage, if today. they And to looking need maybe an that north then sure in sourced that, I'm guess, of

Joey Agree

broke continue to part it's projects break quarter, think first two ground the this year. I we'll the projects of going to additional during on ground it. be We selective. We're on

stack. think fill to You challenges. take capital major I risk. but strategies term more here. of we're mentioned personally the organic continue But that phone given that's risk be or for from store speculative duration retailers see yield, true credit take to development. And their risk, duration underlying through I out developers platform estate looking equals that obviously, the are either development going to to funding new calls without course, not change and to large see again, not going But probably eight appropriate appropriate, real in that a we're going to risk returns more gap adjusted also feel of we're growth. their number I going think there operating We're

Operator

next RBC. Please with comes Brad question. with Heffern Our your proceed question from

Brad Heffern

Hey, for rates, expectation largely your cap pressure? some morning, everybody. the in if pipeline talk settled upward the acquisitions have can they've or if out additional about good you Joey, and

Joey Agree

that volatility to disciplined, And Yes. were the leases in sheet the reliant decline exponentially on in once in the and market Walgreens back ground to thought again, activity upon again our sheets the the NAREIT be it the way X% balance incremental frankly think we or given prudent with would It'll you've to they we or the cap weren't out are quarter investment pre-equitization I balance from without that of curve. fall moving seen time carwashes weaker be have and or risk up that talked in the that not grade, this us heading going end. increase our gap XX% rates that about and are retailers same going an be all

will look And XXXX -- in our going be be emblematic so pipeline I about tell QX, points basis it XXXX. large, XX for higher you will of differences, it's is to the

was that, basis acquisitions and year-over-year. So XX our surpass anticipate be approximately I $XXX XXXX QX higher to again, million. points QX about

And continue be stay is how for to here so while. we sellers here the here. it's And more end it's capitulations here new normal but migration, And more and on for stay. see knows frankly, long to to it's a to realization that going who

Brad Heffern

so you Okay. think industry? that. that's that that credit do lost Thanks to you for issues surprised And then you more And in a rent we'll forward? see continue have something been that see Or that? across the we haven't change in do seen far resulted going that

Joey Agree

challenges. see home] retailers list retailers about I then talked at are a before, it having [Joanne happen or world every to and can But challenges. [ph], you just stay have that retailers are space. in industry, bankruptcies thrive, had think down when We've it cheap either during back to across got where number going everybody again, didn't we're normal. There were a that of It a was No. additional that access to that really going happens capital. We're deferred there for pre-COVID retail keep rent, COVID, today, out able the

have labor in the with get that and degrade And fulfillment So to Bed great talking liquidity their invest going Street to week and piece we're was that demise Wall Journal in liquidity longer that I see think balance sheet it frankly, Bath sheets commentary. retailers those I to three those the can of the survive a and & Beyond don't those to options, and there, to areas to to continue invest thrive. price liquidity retailers in last that continue the and can't in work no continue balance about see have business, her believe of Holly going there's we're in don't Ellen's But they until inventory. and

Operator

next St. Our from Haendel comes question

proceed from question. Juste Mizuho. Please your with

Haendel St. Juste

just some up and some has competition, pipeline about I follow also of discussions your In to leaseback and on your sale the distressed last wanted Joey. you're remarks, in developers. you that the lack with that Hey, talked question.

range So I if at looking bit you're could opportunities talk the today. a of you curious was more about

Within here do and new yields portfolio, any does activity the range any Thanks. your in sectors high compare how pipeline, of include it recent the to sixes?

Joey Agree

of to I've to Yes. the mentioned in will Haendel, XXXX appreciate range a never have a openings fairly our new which QX. figure remarks, wide I number, in leasebacks, my leaseback couple XXXX opportunities QX, range stores it way thanks. I of out in us in sale here from question. get how a retailers opportunities. is, such ramp trying It for Frankly, the career the as sale we of are significant all ground the prepared is to and wide for seen here in that

yield So incrementally key it's or the next Again, time. come again, printing The not a terms is of seeing up X.X printing of opportunities. X.X just that ends sense not our going qualitatively and portfolio. opportunities a risk those quarter, quarter, I quarter that last higher very, expansion we're at to very we're up X.X, wide within quantitatively for in range a but way, us here, than only make selecting migration guess curve this a anybody's is this yield where our anticipate go

I'll to It's in seen, And that is competition so to I lack expectations. seen tell continue we've think you, of opportunities diverse of sellers be the stunning. we've selective, market us and never the we're but going set the frankly

too overly, can't And then REITs, this private infrequent high the course, leverage. The the much. has individuals, private levered in the playing purchasers get worth space net ones, them the about except don't aren't the XXXX so of hear anymore. vanished And you buyer non-traded

interesting fruitful And spectrum an to as remarks, wide seen choice So ranging be opportunities. never And that it's have an I of in mentioned really the prepared so and our we opportunity in. paradigm with I've ripe here.

Haendel St. Juste

interesting, starting space really new to all? That's seeing helpful. any to capital Are the at nibble or you bring

Joey Agree

Absolutely zero.

or a And normal what white flag says the a on seeing raises into this and and new limited market. visibility that seeing QX. get crosses our line have are seller -- it's we're a paralysis accelerated and the day what that's We XXXX the is we we and who into every daily into QX, developer

It'll larger market be to this But QX. will QX fatigue. be or or QX the said continues this I significantly than than year. QX last year's As larger have fairly

goes I'll the anybody's guess QX. world. Again, where, of frankly, reiterate it's in there give contraction happening the don't where pricing that opportunities And questions anytime in strike and price they a sellers different a in and that XXXX, galore. just It where terms where see beyond But near it's future. realize I finally

Haendel St. Juste

you. one one That's And helpful. on XXX. Thank quick

C Now their and area pricing be can top and the stores, you. XX [indiscernible] discuss availability you're that'll going seeing the forward as well? viewers, in an of focus Thank you

Joey Agree

Yes, and horse us large all acquisition, XX of It a quarter, quarter with a of for it just are a a out it will trade as there. be XXX focus actually in during the from of that $XX the that seller the XXX major C that seller repeat so for [indiscernible] was Charlotte over mentioned, was stores to across The MSA a XX to C acquired us somewhat three you we third-party sellers, tied area nine are of was was transaction transaction disposition largest million. format stores, platforms. specifically a stores portfolio from

basis lot And in a country, gapped XXX and backyard at regional most We front, working out level being a stores, plans. basis. a or or across Kwik major Sheetz store developers, the are that & frankly C XXX Go We're there are one-off working works is There's & we Wow-Wow, this cap acquired With two fund speak. on Maverik the There's platforms of make Sheetz leaseback are it's we're to C some potentially could of seeing our a by significant them. for as capital Maverik whether entering the looking out who points space. lot of on then with Trip There to which institutional c-stores in c-store Kum the sense their rates or have sale us. the operators expansion not Go, planning and now, Kum phases. in activity

interesting it that could opportunities are even discussion today. more So active we in present

Haendel St. Juste

seeing Can yield there you a give us sense of broadly? are you

Joey Agree

Haendel, repeat that. Sorry,

Haendel St. Juste

the Thanks. there Can broadly. you're give sense of yields, a you us seeing

Joey Agree

the that are the The recycle It's the we wider, board. and institutional you and want honest. across the sale that developer. sellers tell of capital corporates our redeploy the by transactions, leaseback one-off frankly be frankly, level I'll on that into discussions pipeline desperation or business. some depends certainty in are have and to in that I'll required themselves that

able so And to tell that six those there's to strike would I a range, from you seven, transactions. on we're

Operator

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

Rob Stevenson

Good different last lease like changes you've what look the is morning. today? Is the from fee over year simple or any it ground market so? Joey, market look the in the seen

Joey Agree

Rob, of No, similar really it's parallel sellers, market, I types they're often the lease just structure. the It's same similar transactions. really mean,

quarter I $XX Island was a I leases, exposure. we the there QX in traditional a it lease acquired We're the terms significant But Rhode of ground ground as market. front. three over change largest, ground have in the During number seeing on believe lowest turnkey a just us million. will lease for was of no opportunities from ground the really for lease mentioned, differentiation

Rob Stevenson

Okay.

asset? today harder the to So right to there get those a simple not on versus fee assets price

Joey Agree

the specific of sellers all structure. regardless To lease

Rob Stevenson

capital 'XX a And also XX you a price. stock year-to-date. to the asset versus half of mid Okay. only that that thinking a portfolio perspective, low sold but talked from one you about are of source the not then over about you just as equity small pruning How back

Joey Agree

portfolio I like, wants believe of it we're an we of -- movie of which for year, heading continue over to the this frankly, officially use somebody is the about unproductive just affirmed is concern time. so New the Jersey to into Regal. we we team's unless lease, time mentioned Everything buy I had really resources. market, is that of talked and last theaters. QX sale. And our have for problem and Regal fond the We've couple or capital XXXX frankly, a in The in no execution And one position our human

the recycling for years, nominal source it a prune sale assets of the we least the every So in portfolio. for was in least portfolio a actively very

I Just show us today as Go the but And buyers at happy in given the investments with inefficiency and money tip mentioned we're and bank. transacting offers not real the automation we're to And the proposition. has play the the remarks, manual frankly, of of in some is time our look prepared the Fish market be going a go a XXXX to to XXXX team, lack been resources. difficult and This really recalibrated entry to today in IT of spear.

Operator

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

Ki Bin Kim

a to much X a picture to Thanks. can I'm wanted improved? billion more? for go the billion wondering you you seeing, get million, ago, to little quantify couple better was the you you're has are is this of billion Joey, try to improved a deals if seeing if back worth Good morning. paint six example, maybe not it close possible just how that help bit to of X.X can that, XXX it's dollars months you understanding answer the were sure the environment. topic I But it of if seeing, if acquisition way.

Joey Agree

looking and open And in the pull we tell could quickly that mentioned and after achieved. you ARC. then of I something ARC at data in IT I'll infrastructure pull you, as I have call. don't had doing that I the if that prepared the capabilities now enhanced me, demonstrate to for we've we're really -- we'll front remarks, Bin, Ko we're

either perspective, my from a been Real XXXX hook only second is saying and to on a on and perhaps lender sellers, seeing. the fish of you it's move. the quality saying, inbounds need time it's maybe want certainty. now have to that of one we're market the Most or even them really that had finally tell I'll the transact their are dropped who

more we're is seeing is the you here so And our bid more within gap work the second assets, reputation none. And on we're ask to realistic pricing, distance. striking quarter-over-quarter, tell I'll team's closing

And many handles that first for so as not has we'll continue think just, in calls frankly, are handles world. the still fit calls. realization because today's those and that the asking of I come don't to We're getting four or to get last the those market five

from you a some quality We'll the is it ARC So statistics call. get pulled noticeable. from perspective, actual after

Ki Bin Kim

Great. And in basis the a X.Xx the and your quarter. on in was spot second leverage first the same quarter

going level, at? out think do settle leverage high average you will to XXXX, Just where

Joey Agree

from We have no here. problem running leverage, obviously,

a As term team tremendous Peter did his job and on the loan.

We have mentioned as no debt Peter till maturities XXXX.

Xx before leverage no above Xx range of we're believe X Xx Historically, to to was stated Our to from I Xx COVID. at migrating that, or X is challenge.

rate exposure. Here we have no again no maturities, floating near-term debt

balance Xx to sheet in is to scare least. or X.Xx, the going the remain fortified, the it So up operating at but balance me doesn't sheet

of the we feel no it. to that do leverage low sheet conservative. the run a approach, conservative need continue always sources space. monitor we to We'll at a in balance We've advantageous on in means capital a pioneered when execute run forward with By and equity fours. has the Obviously, the all

There's the at yesterday, higher sure. duration look and closed XX.XX composition running you leases the the balance balance for assets. of portfolio, our If absolutely the underlying and won't those of that's maturity our we at challenge quality see equity of of wherever you sheet, issuing no or and sheet leases schedule that us and leverage

Operator

[Baird]. Golladay Capital RBC with Wes from your question. (sic) proceed comes question Markets next with Our please

Wes Golladay

you I guys think That's have Hey, now. my old dial-in Baird program.

like versus the about maybe such how But the you you're to any actual program. that the developers going of that's going you other you're you DFP Do question going sense of lending talked help actual component. the do retailers. quick sounds offer be It product to mix the mix Just the or on lending to have of just yourself? the as development

Joey Agree

on in So here. mortgage second purposes, today. head, any place chasm. going today. on have not you've have sheet simple. own the balance will for to I carrying We're clarity the if that's that we not don't it's just platform We question, to lend payable Wes XX% But not the early be notes obtain a we it We're mean, When the in do on fee don't hit a is, what growth. opportunities. about different the retailers And exploring to head question for exit is The hit key it whether new net can financing today, comes it and or gap they the online, XXXX is we're even store merchant do pricing? XX%, relevant asset that what it's if builders XXXX.

of question are here. to execute crux seeing capital the provide credit the frankly, pipelines. staff that's being extended not it their on is, But So the does today developers what

Wes Golladay

Got it. the big time shock a is in to change happened probably take kind and long mindset. of these And this what's year companies a their last

like talking it have the last they're Collision's. in doing background just you wide year, you people little of dropped to. sounds a bit. bunch a The a Gerber And And you're imagine of array I

I'm big pipeline is with kind you're just now? So of retailers curious, working how the that of shadow

Joey Agree

level. pipeline. asset but and speed retailers can Again, their developers, how are returns had we've solutions with underlying conversations be to that at trying the retailers with both or sheet, expanding changing doing problem some the it to balance I'll on those We of here. solutions developers for subject programmatic holding tell challenging. never platforms, returns development, defining see doing none many you, The you're resolves the as shadow significant find

take not their We're and one-off. seeing are multiple strike is that our question The X between are $XXX the We're we're pipeline. pipelines for conversations seeing and line. and portfolio they're developers those daily, willing That's short, anywhere so where of speculative to ongoing. to and risk. just And million

Operator

Instruction]. [Operator

Morgan proceed with question. Kamdem comes Our next from Please from question Stanley. Ronald your

Ronald Kamdem

Hey, quick ones. just two

So calculation. cost going the back of to one, capital

similar sort been mid we're think I I of the think fives, in you've getting into numbers.

So you about I press. about guys on for it sense where's sort the not where here. makes of -- think in talked right and how the doing you where of think level equity terms the But it

Joey Agree

current equity. stated three leverage pipeline. spot need are year price, declare stay don't into they the range. hit our But we I within to a I won't don't came we saying the one, and to think We need equity the subject

continue the and of cost all and what single each of capital so those then evaluate importantly, relative And every them. we'll to in one markets of

his Peter we overly opportunistic, The back, be term hence XX-year market soon. coming continue That's preferred in a quarter don't for will the this it, look doesn't loan anticipate quarter. four to sure. evaluate the So anytime and attractive, team will

we The capital. good don't is, news as need any

best year into we that's this continue coming year, the and obviously So the loan news, the or was plan opportunistic. don't need strong capital we support from can the that lenders term X.X have we remain to term loan, any

Ronald Kamdem

have sort always debt peers. And then it. lowest the you of versus Got bad guys

on looking Just Bed thinking, can much Regal much what's it you're hit Party And maybe you is hit and the what us you how how gone like much how maybe budgeted, there? on the Bath think you've remind City year-to-date. through I and

Joey Agree

which was is will hit the Regal purchased by Bath, turn the firm ecosystem had it over a Burlington there New three Bath Bed the Yes. I to was we Peter. entering already. out one second question total bankruptcy Bed in and Jersey in

near NOI through the we're third we one then approve significant and shortly resolution a tenant anticipate execute second will working one. new The with is lease a where

into as In one terms new were all lift affirmed have leases enter about except well. of to and with tenant a or we NOI Party a on far vastly with there improved term entered in recaptured a City lease which significant

Peter Coughenour

$XXX,XXX. a terms don't bad in line of points specific to We expense. year-to-date, that bad debt in Ron, basis as debt and with roughly of the recorded a revenue. roughly guide we percentage And bad debt That's recorded year of expense of expense we've XX number revenue last approximately

that's average, deviation we've points. portfolio we any our But great don't is mentioned, in as and term Joey to basis or expect Looking XX closer longer shape, XX below material from the been back levels. slightly historically those

Operator

Our comes next from question proceed Jefferies. from with Tsai question. Linda your Please

Linda Tsai

group Hi. and can the like sheet Do previous ones retailers is this feel had development balance presumably on the do doing have limited, now you that of experience?

Joey Agree

relied historically It's It's to if you've easy not merchant to upon a builders. great Linda. transition self-development question

very retailers, are it you, to regional operators that it's have tell retailers expertise, like Not I'll easy large, the balance overhaul. entitlement, need national sheet I'll So to our the if on in only expertise, it the do permitting sandbox, have do internal a the and to the solution, development, generally operators. they an are the model, Transitioning you difficult. liquidity focus an sounds large major super the construction is while

Depot it their sheet. new development Club Riley, inclusive net seeing new the retailers or I call let's we're store sheet, balance signal of of portion has what so had growth, And will store net on same, it some increasing do their believe on balance is Tractor with who a Walmart, fractional Sam's that were Supply, Home that hence

hole store for continue up. for The haven't real how we sheet real pipelines a topical. balance I to new heard solutions market. that needle challenge. earlier, didn't with that That's forward it's experience propose their and it. back that But That's gaping on that is daily hopefully But and frankly historically get net listen, will challenge self-development in this move they have retailers a growth. very mentioned I conversation solution yet ramped a as a

Linda Tsai

seeing seems that point then you're you an rates increase as Thanks distress the between to year? cost Would And to cap the today. in expansion, of spread next look capital forward cap seeing and you inflection for of your expect you're given acquisition more it color. rate like

Joey Agree

seen one-off build line across right the clear we about come QX Again, institutions, developers, say hope gap to name you starting tell I down. of just see in Linda, I very sellers, hope only period we're the rates our you cost And why hope I I seeing more We're capital and right, it that's we're out, been goes XX-day have what year-to-date that is a QX and so. retailers, ask X.X it QX. I've and cap about all can and days telegraphed me clarity. a crystal what yield. Heading could I about XX do my to but we've XXXX, this larger something is had predictions. volume environment higher ball volatile and QX into in ready I had wish what here. to full I those in number we'll But already a make X.X. I wish I look, And I've -- is now.

Operator

turn to Agree our any concludes now closing would to over session. like the question-and-answer for Joey That remarks. I conference

Joey Agree

your you forward summer the of look season. conference again. hope for upcoming seeing and thank you us. Thanks to rest we joining Well, the in enjoy I everybody everybody

Operator

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

disconnect. now may You

Agree Realty (ADC) 2 Aug 232023 Q2 Earnings call transcript