Net Lease REIT Agree Realty to Sell New Preferred – UPDATE

UPDATE–the OTC grey market ticker is ADCDV. Look for this to change after a day or two (the last digit V to change to something else).

Net lease REIT Agree Realty (ADC) has announced a new perpetual preferred stock issuance.

I am seeing the typical REIT preferred terms for this issue–optionally redeemable in about 5 years, cumulative and non qualified.

The company has no other preferred shares outstanding.

ADC is a very solid net lease REIT with over 1200 properties–68% are leased to investment grade tenents.

For investors wanting a very modest coupon from a solid REIT this issue will provide that coupon. There will be significant downside share price potential if interest rates start moving higher (assuming a coupon in the 4.375% area).

Agree’s investor relations page is here.

An investor presentation from August can be seen here.

The preliminary prospectus can be seen here.

EB was right on top of this one and suggest a coupon in the 4.375% area.

8 thoughts on “Net Lease REIT Agree Realty to Sell New Preferred – UPDATE”

  1. Maybe I’m missing something, but why would you buy this one when you could get 6.25 from the ABR’s recent preferred. I know it’s a MREIT, but has 1st class management and finances apartments which seems safer to me than retail properties. I don’t put a lot of faith in ratings, do my own research of each company so I may be out of the norm. And not saying Agree Realty is not high quality, I know it is, just not seeing that big of a difference.

  2. 4.25% coupon.

    https://finance.yahoo.com/news/agree-realty-announces-pricing-offering-201500653.html?.tsrc=fin-srch

    BLOOMFIELD HILLS, Mich., Sept. 8, 2021 /PRNewswire/ — Agree Realty Corporation (NYSE: ADC) (the “Company”) today announced that it has priced an underwritten public offering of 7,000,000 depositary shares at $25.00 per depositary share, with each depositary share representing 1/1,000th of a share of 4.250% Series A Cumulative Redeemable Preferred Stock, for expected gross proceeds of approximately $175 million, before deducting the underwriting discount and other estimated offering expenses. The closing of the offering is expected to occur on or about September 17, 2021, subject to the satisfaction of customary closing conditions.

    The Company intends to use the net proceeds from the offering for general corporate purposes, including to fund property acquisitions and development activity.

  3. I see where at the corporate level Agree = Baa2/BBB rated… It looks like this will initially be issued without a rating but as a preferred, it would obviously be lower rated than this if/when they get a rating… 4.375%? whew…

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