stockrowWhat it does
Agree Realty is a real estate investment trust, or REIT, that owns, buys, develops and manages retail properties. Its customers are retailers that rent space from it, principally under net leases. These agreements generally require tenants to pay rent as well as property taxes, insurance and maintenance costs. Agree Realty focuses on properties leased to national or large regional retailers.
The company was founded in 1971 by Richard Agree, its executive chairman, and is headquartered in Royal Oak, Michigan. Its chief executive is Joey. Agree Realty holds its assets and conducts its operations through an operating partnership that it manages as sole general partner.
Agree Realty adds properties through acquisitions, its own development projects and a developer funding platform. In a typical development, the company directs work from site selection and lease negotiations through construction. Through the funding platform, it works with developers or retailers on projects already in progress, providing capital and construction expertise. It typically takes ownership when those projects are completed.
As of December 31, 2025, the portfolio comprised 2,674 properties in all 50 states, totaling approximately 55.5 million square feet of gross leasable area. The portfolio was approximately 99.7% leased. At the end of the third quarter of 2026, the portfolio was approaching 2,900 properties and was 99.8% occupied. The company also manages leases, inspects properties and maintains contact with tenants.
How it makes money
Agree Realty earns rental income from its retail properties. A typical net lease calls for minimum monthly rent and makes the tenant responsible for property operating expenses, including real estate taxes, insurance and maintenance. The leases are generally long term: the portfolio’s weighted average remaining lease term was approximately 7.8 years as of December 31, 2025.
The company seeks new rental income by acquiring leased properties, developing properties for tenants and funding projects with developers or retailers. It considers the rent, lease term, tenant’s finances, property characteristics and purchase price when assessing an investment. Development projects are typically built to suit a tenant, with Agree Realty owning the completed property. The developer funding platform similarly typically results in ownership when a project is finished.
Agree Realty also works to renew or replace leases. During 2025, excluding properties sold, it executed new leases, extensions or options on approximately 3,033,000 square feet of gross leasable area. The annualized base contractual rent associated with those agreements was approximately $29.7 million. Property sales can also produce gains or losses; in 2025, the company sold 22 assets and land parcels for net proceeds of $42.1 million and recorded a net gain of $5.4 million.
To maintain REIT qualification, Agree Realty must meet income and asset tests and distribute at least 90% of its REIT taxable income each year. It is not subject to federal income tax on the portion of its income currently distributed to stockholders. The company uses common and preferred equity and debt, as well as proceeds from property sales, to meet capital needs.
Customers and how it sells
Agree Realty leases primarily to national and large regional retailers. Its investment criteria emphasize retailers with established ways of serving customers both in stores and online, as well as retailers in sectors the company considers resistant to e-commerce and recessions. The company evaluates tenants’ financial profiles, operating histories, business plans and industry conditions when considering investments.
As of December 31, 2025, no tenant accounted for more than 10.0% of annualized base rent. Approximately 66.8% of annualized base rent came from tenants, or their parent entities, with an investment-grade credit rating. At the end of the third quarter of 2026, investment-grade exposure was approximately 65% of annualized base rents.
The portfolio covered all 50 states at the end of 2025 and all 50 states and the District of Columbia at the end of the third quarter of 2026. Third-quarter acquisitions included properties leased to Walmart, BJ’s Wholesale, Gerber Collision, Hobby Lobby and Five Below, along with ground leases to Lowe’s and Home Depot. The company’s grocery investment approach includes regional operators such as HEB, Wegmans and Publix and national price-focused retailers such as Walmart, Aldi and Kroger.
Suppliers and costs
Agree Realty’s principal demands for cash include operating expenses, debt principal and interest, dividends and distributions, and spending on acquisitions and development. Its tenants normally pay property operating expenses under their net leases, though the company can be responsible for expenses when space is vacant. Agree Realty’s credit and occupancy loss measure includes lost rent and the operating and tax expenses it pays during a vacancy.
The company’s development work includes land acquisition, due diligence, design and construction. Its properties are designed and built to require minimal capital improvements other than renovations or alterations, which tenants typically pay for. Company personnel inspect properties and maintain contact with major tenants.
For the year ended December 31, 2025, general and administrative expenses were $44.1 million, while net interest expense was $134.6 million. Agree Realty had $3.32 billion of debt outstanding before deferred financing costs and original issue discount as of December 31, 2025. At the end of the third quarter of 2026, it had no short-term or floating-rate borrowings and no material debt maturities until 2028. Agree Realty had 90 full-time employees as of December 31, 2025.
- Revenue$718.4M
- Cost of revenue−$88.1M
- Selling, general and administrative−$44.1M
- Other operating costs−$245.8M
- Operating income$340.4M
Competitive position
Agree Realty competes with other investors for a limited supply of commercial properties and the financing used to acquire them. Competitors include traded and non-traded public REITs, private equity firms, institutional investment funds, insurance companies and private individuals. Some have greater financial resources and can accept more risk than Agree Realty believes it can prudently manage. Agree Realty does not name individual property-market competitors.
The company said acquisition competition had eased because capital had become more expensive and constrained. It also said it generally competes in a fragmented market primarily owned by individuals. Agree Realty seeks opportunities through acquisitions, development and its developer funding platform, and uses relationships with retailers and developers in those activities.
Our reading: The three ways of adding properties provide a useful source of differentiation, because Agree Realty can work on projects before completion as well as buy existing assets. That advantage is limited by competition for both properties and financing.
Our reading: Tenant relationships and development capabilities can help the company find and execute projects, but the evidence does not establish that those relationships prevent other investors from competing. Its access to equity and debt is also important, although financing costs and availability can change.
Growth opportunities
Agree Realty seeks to expand through acquisitions, development and its developer funding platform. Its development team can select sites, acquire land, negotiate leases and oversee design and construction. The funding platform works with developers or retailers on projects already underway. The company also uses leasing and capital improvements to manage its existing portfolio, and it sells selected properties.
During 2025, Agree Realty completed approximately $1.57 billion of investments in net leased retail real estate. That included the acquisition of 305 properties for approximately $1.44 billion and completion of 21 developments at an aggregate cost of approximately $131.2 million. The properties were located in 41 states and leased to tenants operating in 29 sectors.
In the first nine months of 2026, the company invested approximately $1.3 billion in 261 retail net lease properties across 42 states and the District of Columbia. It had 26 projects completed or under construction during that period. Agree Realty reduced its 2026 investment volume guidance to approximately $1.6 billion as its spot cost of capital increased, removing lower-yield opportunities and repricing its pipeline.
The company has a medium-term objective of $250 million in annual development and developer funding platform commencements. It also increased its anticipated 2026 disposition volume to $100 to $150 million and said it would continue pursuing property sales to recycle capital. Funding for growth can come from operations, debt, equity and property sales.
- $339.3MFY2021
- $429.8MFY2022
- $537.5MFY2023
- $617.1MFY2024
- $718.4MFY2025
Structural risks
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Tenant financial health: Weaker tenant performance, bankruptcies or lease defaults can reduce rent and the expenses tenants are able to reimburse. When space is vacant, Agree Realty can also face lost rent and property operating and tax expenses.
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Financing and interest rates: Borrowing on acceptable terms may be limited or unavailable. That could constrain acquisitions and development, make refinancing harder, increase interest expense and reduce funds available for distributions. Debt obligations can also limit operating flexibility.
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Property and leasing conditions: Local economic conditions, competition from other properties and changes in demand can affect the ability to lease space at favorable rents or sell a property when desired. Properties can also suffer damage or become functionally obsolete.
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Environmental and regulatory liability: As a property owner, Agree Realty may face investigation and cleanup costs for contamination, including in circumstances where it did not cause or know of the contamination. Changes in disability-access, environmental, zoning or tax rules can increase compliance costs.
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REIT qualification: Agree Realty must comply with income, asset and distribution requirements to retain its REIT status. If it fails to qualify, it would be subject to federal income tax at regular corporate rates and would lose the deduction for dividends paid to stockholders.
Leadership
Founder Richard Agree is executive chairman. Agree Realty is the sole general partner of its operating partnership and has exclusive responsibility and discretion over its management and control.
| Name | Role | Since | Total pay, FY2025 |
|---|---|---|---|
| Joel Agree | — | $11.0 million | |
| Peter Coughenour | — | $2.2 million | |
| Nicole Witteveen | — | $2.2 million | |
| Craig Erlich | — | $2.0 million | |
| Danielle Spehar | — | $1.4 million |
Bottom line
Our reading
Our reading: Agree Realty is a retail landlord whose recurring rent depends on tenants remaining able to pay and on properties staying leased. Its net leases pass many property expenses to tenants, while acquisitions and development offer routes to add rent. Growth also depends on access to capital and the returns available on new properties; debt costs, tenant distress and competition for assets can pressure that model.