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REIT Agree Realty Continues to Diversify Portfolio

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Real estate investment trusts (REITs) are realty-based securities that trade on stock exchanges. They provide tax advantages and give individuals a more liquid opportunity to invest in real estate than purchasing properties directly.

Agree Realty Corporation (NYSE: ADC) is a Michigan-based REIT that is currently attempting to diversify its holdings geographically and develop a lessee-base that can weather economic changes.

“We are currently working on acquisitions and developments across the continental United States,” Joey Agree, President & COO, explains to Benzinga. “We don't see geography as a physical constraint, but rather an opportunity for us to further diversify our portfolio.”

He adds, “In terms of sector, we are focused on developing and acquiring industry leading retailers that are both web and recession resistant. Core consumer products, both hard and soft, that lend themselves to the traditional brick and mortar shopping experience.”

Describing current trends amongst Agree Realty's lessees, Joey Agree says “We see retailers ramping up their new store strategies, as well as focusing on relocations of older high performing stores as well as adjusting to shifting traffic patterns and/or demographic changes.” He continues, “We are currently working with retailers such as Walgreens, Wawa, JPMorgan Chase, McDonalds, among others, that are consistently looking at their storing strategies and adjusting their market coverage.”

Agree Realty offers a high dividend relative to its peers, with a dividend yield of approximately 7%. The board reviews the dividend payout ratio on a quarterly basis, says Joey Agree. He also claims, “The current dividend is well-covered. Our target payout ratio is in the range of 75-85%.”

Joey Agree says investors can expect significant opportunities in the company's pipeline. He explains, “Our pipeline of development and acquisition opportunities remains strong and diversified. Our current pipeline of approximately $60mm consists of assets in 6 retail sectors spread among 11 states.”

The two major analysts who cover Agree Realty expect consistent earnings per share from the firm. The consensus analyst estimated EPS is around $1.98 for full-year fiscal 2012, and $2.04 for full-year fiscal 2013. Shares of Agree Realty are currently trading around $22.25, up close to 1% for the day.

Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.

Posted-In: Joey AgreeLong Ideas News Small Cap Analysis Management Trading Ideas

 

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