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Agree Realty (ADC) Recaps 2017, Issues Guidance for 2018


Agree Realty Corporation ADC provided an insight into the acquisitions and disposition activities that it plans to commence this year. The company also summed up the investment activities undertaken in 2017.

During 2017, total investment activity amounted to $399.7 million. It included acquisitions, development and the finished or presently under construction projects of Partner Capital Solutions.

Throughout 2017, the company’s acquisition volume for retail net lease properties came in at $336.8 million which covered 79 properties. However, the company expects the volume to decline to the range of $250-$300 million in 2018. The capitalization rate for the acquisitions made in 2017 was 7.4% and the properties accounted for 47.2% of annualized base rents from investment grade retail tenants.

Disposition activity in 2017 included 15 assets, which totaled $45.8 million. Meanwhile, the company projects disposition for 2018 in the range of $25-$50 million. The capitalization rate for the dispositions made last year was 6.9%.

Joey Agree, president and chief executive officer at Agree Realty, is upbeat about the acquisitions executed last year and the bullish outlook for this year. He added, “Our unique capabilities and fortified balance sheet strongly position our growing Company to continue executing on our operating strategy in the upcoming year."

The company successfully raised roughly $87.1 million from the issuance of 1,776,766 shares of common stock at an average price of $49.03 per share. It issued the shares in the fourth quarter of 2017 through an at-the-market equity program.

Shares of Agree Realty have gained 12.5% in the past six months, underperforming the industry’s rally of 23.9%.

The company carries a Zacks Rank #3 (Hold).

Stocks That Warrant a Look

Arbor Realty Trust ABR witnessed an upward earnings estimate revision of 8.7% for 2017 in the last 60 days. Also, its shares have gained 1.9% in the past six months. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

One Liberty Properties OLP witnessed an upward earnings estimate revision of 7.1% for 2017 in the last 60 days. Also, its shares have gained 9.8% in the past six months. It also has a Zacks Rank #1.

Easterly Government Properties’ DEA Zacks Consensus Estimate for 2017 has been revised nearly 1% upward over the last 60 days. Also, its shares have inched up 2.3% in six months’ time. It carries a Zacks Rank #2 (Buy).

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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