Agree Realty Corporation (ADC): Business Model Canvas [Dec-2025 Updated]

You're looking at Agree Realty Corporation (ADC) and want to know how they keep delivering such stable returns; it's simpler than you think. Their core business model is a masterclass in low-risk real estate: they focus almost exclusively on triple-net leases (NNN) with recession-resistant, investment-grade retailers, which shifts most operating costs and risk to the tenant. This strategy is powering their massive 2025 growth, with capital expenditures for new investments guided between $1.50 billion to $1.65 billion, and the market is noticing, forecasting Adjusted Funds From Operations (AFFO) per share to hit $4.31 to $4.33. Honestly, with 67% of their base rents coming from investment-grade tenants and portfolio occupancy at a near-perfect 99.7% in Q3 2025, their structure is defintely built for stability and predictable cash flow, so let's dig into the nine building blocks that make this REIT a powerhouse.

Agree Realty Corporation (ADC) - Canvas Business Model: Key Partnerships

The core of Agree Realty Corporation's (ADC) strategy is a relentless focus on partnering with the strongest, most resilient retailers and the most sophisticated capital providers. This isn't about having a lot of partners; it's about having the right partners. Your growth is directly tied to the financial strength and strategic alignment of these key relationships.

As of late 2025, ADC's partnerships are primarily concentrated in two areas: securing flexible, low-cost capital and aligning with top-tier, investment-grade retail tenants to fuel an aggressive investment pipeline, which is now guided to be between $1.50 billion and $1.65 billion for the full year 2025.

Top-tier financial institutions for debt capital

Securing a 'fortress balance sheet' is a stated goal, and the partnerships with major financial institutions are how ADC achieves it. The recent closing of a new unsecured delayed draw term loan is a perfect example of this.

On November 17, 2025, ADC entered into a new 5.5-year unsecured delayed draw term loan for $350 million, maturing in May 2031. This facility includes an accordion option to increase the total commitment to $500 million, providing significant, pre-arranged growth capacity. The interest rate is fixed at a competitive 4.02%, reflecting the company's strong A- credit rating from Fitch Ratings. This is smart, long-term capital planning.

The syndicate of lenders and arrangers for this new term loan highlights the caliber of ADC's banking relationships:

• PNC Bank, National Association: Served as the Administrative Agent.
• PNC Capital Markets LLC: Served as a Joint Lead Arranger.
• Wells Fargo Securities, LLC: Served as a Joint Lead Arranger.
• J.P. Morgan: Served as a Joint Lead Arranger.

Investment banks for equity capital markets (ATM program, forward equity)

ADC uses its investment bank partners to execute its At-The-Market (ATM) equity program and forward equity sales, which are crucial for funding its acquisition and development platforms without taking on excessive balance sheet risk. The sheer volume of capital raised in 2025 shows the strength of these partnerships.

Through the first nine months of 2025, ADC was highly active in the equity markets. For instance, in the third quarter alone, the company settled 3.5 million shares of outstanding forward equity for net proceeds of approximately $252 million. Earlier in the year, in the second quarter, they raised approximately $415 million of forward equity via the ATM program and an overnight offering. You need top-tier investment banks to execute capital raises of this size and complexity efficiently.

Retail developers for Developer Funding Platform (DFP) projects

The Developer Funding Platform (DFP) is a unique partnership model where ADC provides capital and a forward commitment to purchase a property upon completion, allowing retail developers to focus on their core competency: building. This is a one-stop shop for developers, and it secures high-quality, new assets for ADC.

This platform is a significant component of ADC's growth, alongside direct acquisitions and internal development. In the third quarter of 2025, ADC commenced five DFP projects with a total committed capital of approximately $51 million. This commitment is a clear signal of the value ADC places on these developer relationships.

Leading national retailers like TJX Companies and Walmart for new developments

The most important operational partnerships are with the tenants themselves. ADC focuses on investment-grade, omni-channel retailers that are recession-resistant, which is why 66.7% of their annualized base rent (ABR) comes from investment-grade tenants as of September 30, 2025. These retailers aren't just tenants; they are partners in new developments and long-term ground leases.

Walmart is the largest tenant, and the portfolio is intentionally diversified to limit exposure to any single company. The focus on necessity-based and off-price retail, like TJX Companies, provides a defensive revenue stream.

Here is the breakdown of the top tenant partnerships by their contribution to Annualized Base Rent (ABR) as of September 30, 2025:

Tenant	Annualized Base Rent (in thousands)	Percent of Total ABR	Investment Grade Rating
Walmart	$40,287	6.0%	Yes
Tractor Supply Company	N/A	N/A	Yes
TJX Companies	N/A	N/A	Yes
CVS Health	N/A	N/A	Yes
Dollar General	N/A	N/A	Yes

Note: The precise ABR for tenants other than Walmart was not disclosed in the Q3 2025 summary, but they remain top-tier investment-grade partners.

The ground lease portfolio, which is another form of partnership where ADC owns the land and the tenant owns the building, represents 10.0% of ABR and is 88.5% investment-grade, locking in long-term, low-risk revenue.

Agree Realty Corporation (ADC) - Canvas Business Model: Key Activities

You're looking at Agree Realty Corporation (ADC) and asking where the real work happens-the core activities that drive their cash flow. Honestly, it's a three-pronged approach: buy high-quality assets, build new ones strategically, and then manage the heck out of the existing portfolio. The final, crucial piece is the financing that makes it all possible.

Acquiring high-quality retail net lease properties

The primary engine for Agree Realty Corporation is the disciplined acquisition of single-tenant, net lease retail properties, focusing heavily on investment-grade tenants. Through the first nine months of 2025, the company invested approximately $1.1 billion to acquire 227 properties across 40 states and 29 retail sectors. This is not just volume; it's quality.

The weighted-average capitalization rate on these acquisitions was a tight 7.2%, securing a weighted-average remaining lease term of approximately 12.0 years. Plus, a significant 64.6% of the annualized base rents acquired came from investment-grade retailers. That's how you build a stable income stream.

Here's the quick math on their 2025 ambition: they've raised their full-year investment guidance to a range of $1.5 billion to $1.65 billion. That's a serious commitment to growth in a tough rate environment.

Executing development and Developer Funding Platform (DFP) projects

Acquisitions are the bread and butter, but development provides superior risk-adjusted returns. The Developer Funding Platform (DFP) is a key activity, allowing Agree Realty Corporation to partner with retailers and developers to build new, custom assets.

As of September 30, 2025, the company had committed approximately $190.4 million across 30 development or DFP projects that were either completed or under construction. This platform is scaling defintely. In the third quarter alone, they commenced five new projects with anticipated costs of roughly $50.8 million.

Their internal target is to commence $250 million in projects annually in the medium term, demonstrating the growing importance of this activity in their overall strategy.

Proactive asset management and lease extensions on 2.4 million square feet (9M 2025)

The best investment is the one you already own. Asset management is a core, value-add activity, focused on maintaining the portfolio's near-perfect occupancy and extending high-value leases. The portfolio's occupancy rate stood at approximately 99.7% as of September 30, 2025.

This team is busy: through the first nine months of 2025, they executed new leases, extensions, or options on approximately 2.4 million square feet of gross leasable area. What this estimate hides is the successful negotiation, which resulted in a strong rent recapture rate of approximately 104% on those deals.

The low lease rollover risk for the rest of the year is also a testament to their work; 2025 lease maturities represented only 0.2% of annualized base rents as of Q3 2025.

Asset Management Metric	Value (9M 2025)	Insight
Gross Leasable Area (GLA) Leased/Renewed	2.4 million square feet	Volume of portfolio optimization.
Rent Recapture Rate	Approximately 104%	Securing higher rent on renewed leases.
Portfolio Occupancy Rate	Approximately 99.7%	Extremely low vacancy risk.
2025 Lease Maturities (as % of ABR)	0.2%	Minimal near-term rollover exposure.

Disciplined capital allocation and balance sheet management

Capital allocation is the foundation of a REIT's growth. Agree Realty Corporation maintains a fortress balance sheet to ensure they can fund their aggressive investment pipeline. This is a critical action, not just a financial outcome.

Key actions include maintaining a conservative pro forma net debt to recurring EBITDA ratio of 3.5x (excluding unsettled forward equity, it's 5.1x) and achieving an A- issuer rating from Fitch Ratings. The company also manages its portfolio quality through selective dispositions, selling 13 properties for gross proceeds of approximately $23.7 million through September 30, 2025.

• Maintain low leverage: 3.5x net debt to recurring EBITDA (pro forma Q3 2025).
• Secure high credit rating: Achieved Fitch A- issuer rating.
• Manage asset quality: Disposed of 13 properties for $23.7 million (9M 2025).

Securing long-term, fixed-rate debt financing

The ability to secure low-cost, long-term capital is a core competitive advantage, especially when acquisition yields are around 7.2%. In November 2025, the company closed an unsecured $350 million delayed draw term loan, which matures in May 2031.

The genius move here was using forward starting swaps to fix the interest rate at a highly competitive 4.02% for the entire term, based on their current A- credit rating. This locks in a favorable spread against their acquisition cap rates. They also completed a $400 million public bond offering of 5.60% senior unsecured notes due 2035 in Q2 2025, with an all-in rate of 5.35% inclusive of prior hedging. This proactive financing ensures they have over $2.2 billion in total liquidity and no material debt maturities until 2028.

Agree Realty Corporation (ADC) - Canvas Business Model: Key Resources

You're looking at Agree Realty Corporation (ADC) and trying to map out its core strengths-the Key Resources that drive its net lease model. Honestly, it boils down to three things: a massive, high-quality real estate portfolio, a war chest of capital, and the internal team that knows how to deploy it. It's a simple, powerful flywheel.

Portfolio of over 2,603 retail net lease properties across all 50 states

The first and most visible asset is the sheer size and geographic spread of the property base. As of September 30, 2025, Agree Realty's portfolio consisted of precisely 2,603 properties, encompassing approximately 53.7 million square feet of gross leasable area. This kind of scale is a resource in itself, allowing for significant diversification and reducing the impact of local economic shocks. It's a national footprint, literally covering all 50 states, which is defintely a logistical feat. The portfolio's occupancy rate is incredibly high, sitting at approximately 99.7% leased as of Q3 2025, showing the quality of the assets and the stickiness of the net lease structure.

Sector-leading exposure to investment-grade tenants at 66.7% of base rents

This is where the quality of the portfolio truly shines. The tenant roster is a core intellectual resource. Agree Realty focuses on investment-grade retailers (those with a credit rating of BBB- or higher from a major rating agency), which translates directly to stable, predictable cash flow. As of September 30, 2025, a significant 66.7% of the company's annualized base rents were generated from these investment-grade retail tenants. This focus on credit quality is a deliberate, defensive strategy against economic downturns and retail disruption.

Here's the quick math on why this matters: higher credit quality equals lower default risk on rent payments. It's a foundational stability metric.

Portfolio Metric	Value (as of Q3 2025)	Significance
Total Properties	2,603	National scale and diversification
Investment-Grade Rent Exposure	66.7%	Cash flow stability and low default risk
Portfolio Occupancy Rate	99.7%	Minimal vacancy and high asset quality
Weighted-Average Remaining Lease Term	Approximately 8.0 years	Long-term, predictable income stream

Fortress balance sheet with over $2.2 billion in available liquidity

Financial resources are paramount for a real estate investment trust (REIT). Agree Realty maintains what they call a fortress balance sheet, which is anchored by substantial liquidity. Following a recent financing transaction in November 2025, the company's total liquidity stood at approximately $2.2 billion. This capital includes availability on their revolving credit facility and outstanding forward equity. This massive liquidity pool gives them the ability to act fast on acquisitions, especially when market volatility creates opportunities.

What this estimate hides is the pre-funded nature of their growth. They have no material debt maturities until 2028, so this $2.2 billion is a true growth and defense resource, not just a liability buffer.

A- issuer credit rating from Fitch Ratings

The credit rating is an intellectual and financial asset that directly impacts the cost of capital. In August 2025, Fitch Ratings assigned Agree Realty an A- issuer rating with a stable outlook. This is a huge competitive advantage, as it places them among only a handful of publicly listed U.S. REITs with an equivalent rating or better.

This rating is a validation of their disciplined approach and translates into lower interest rates on debt, such as the 4.02% fixed rate on a recent $350 million term loan. Lower cost of capital means a wider spread between their borrowing rate and their acquisition cap rate, which directly boosts shareholder returns.

Internal expertise in acquisition, development, and underwriting

The final, intangible, but critical resource is the human capital. The internal team's expertise is what converts the financial resources into profitable real estate assets. This expertise is deployed across three distinct external growth platforms: Acquisitions, Development, and the Developer Funding Platform (DFP).

This team has a proven track record, having invested over $10 billion since the inception of their acquisition platform fifteen years ago. Their underwriting skill is evident in the acquisition volume for the nine months ended September 30, 2025, totaling approximately $1.1 billion across 227 properties. They also actively manage risk by commencing new projects; for example, in Q3 2025 alone, they committed approximately $51 million in capital to five new development or DFP projects.

• Execute a disciplined acquisition strategy.
• Manage a pipeline of development and DFP projects.
• Underwrite tenant credit and lease terms rigorously.

Agree Realty Corporation (ADC) - Canvas Business Model: Value Propositions

The core value proposition Agree Realty Corporation (ADC) offers is a blend of rock-solid stability and predictable growth, centered on owning essential retail real estate. You're not just buying into property; you're buying into the long-term, inflation-resistant cash flows of the most durable retailers in the US.

This strategy is defintely working, with the company raising its full-year 2025 Adjusted Funds from Operations (AFFO) per share guidance to a range of $4.31 to $4.33, which implies a strong 4.4% growth at the midpoint over the prior year.

Stable, long-term cash flow from triple-net leases (NNN)

The primary value to investors is the highly predictable income stream generated by the triple-net lease (NNN) structure. This means the tenant, not Agree Realty Corporation, pays for property taxes, insurance, and maintenance, which strips away the variable costs that sink other real estate investments.

This model locks in cash flow for years. As of September 30, 2025, the portfolio's weighted-average remaining lease term stood at approximately 8.0 years. That's nearly a decade of contractual, predictable rent payments already on the books. Plus, the monthly dividend payout is conservative, representing approximately 70% of both Core FFO and AFFO per share for Q3 2025, giving a strong buffer for continued growth.

Real estate investment stability via necessity-based retail tenants

Agree Realty Corporation focuses on necessity-based and omni-channel retail, which is a huge differentiator. These tenants are less vulnerable to e-commerce disruption or economic cycles because they sell things people need regularly-like groceries, car parts, or home supplies.

The stability is best shown by the quality of the tenants. As of Q3 2025, a massive 66.7% of the company's annualized base rents (ABR) came from investment grade retail tenants. This is a sector-leading metric and a clear sign of a low-risk tenant base. For example, in Q3 2025 alone, acquisitions included properties leased to major players like Aldi, Kroger, and Walmart Supercenter.

Three-pronged growth approach (Acquisition, Development, DFP)

Growth isn't left to chance; it's driven by three distinct, high-volume platforms: Acquisitions, Development, and the Developer Funding Platform (DFP). This multi-channel approach allows the company to source properties across the entire retail real estate lifecycle, not just on the open market.

Here's the quick math: For the nine months ended September 30, 2025, total investment volume was approximately $1.1 billion. The company is accelerating this, having invested approximately $451 million in Q3 2025 alone and raising its full-year 2025 investment guidance to a range of $1.50 billion to $1.65 billion.

The platforms in action:

• Acquisition: Focus on buying existing, high-quality NNN properties.
• Development: Commencing new, build-to-suit projects.
• DFP (Developer Funding Platform): Partnering with developers to fund projects, securing long-term leases upon completion.

In Q3 2025, the company commenced five Development or DFP projects with a total committed capital of approximately $51 million.

Low-risk profile with 99.7% portfolio occupancy (Q3 2025)

A high occupancy rate is the simplest measure of a real estate company's health. It means properties are desirable and tenants are solvent. Agree Realty Corporation's portfolio occupancy was approximately 99.7% as of September 30, 2025. That is essentially full occupancy-you can't get much better than that.

This near-perfect occupancy rate is maintained across a massive, diversified portfolio of 2,603 properties located in all 50 states, covering approximately 53.7 million square feet of gross leasable area. It's a huge, high-performing asset base.

Inflation protection via ground leases, which are 10% of annualized base rents

Ground leases-where the company owns the land but not the building-are a smart, built-in hedge against inflation. They offer a lower initial rent but capture the long-term appreciation of the land, which is a key inflation-resistant asset.

As of September 30, 2025, properties ground leased to tenants represented a significant 10.0% of total annualized base rents. This portion of the portfolio is fully occupied and has a weighted-average remaining lease term of approximately 9.3 years, further securing that inflation-protected income.

Key Portfolio & Financial Metrics (Q3 2025)	Value Proposition Supported	Metric / Value
Portfolio Occupancy Rate	Low-Risk Profile	99.7%
Investment Grade Retail ABR	Investment Stability	66.7% of Annualized Base Rents
Ground Leases as % of ABR	Inflation Protection	10.0%
Weighted-Average Remaining Lease Term	Stable, Long-Term Cash Flow	Approximately 8.0 years
Full-Year 2025 Investment Guidance (Raised)	Three-Pronged Growth Approach	$1.50 billion to $1.65 billion
Q3 2025 AFFO Per Share	Predictable Income/Growth	$1.10 (7.2% Y/Y increase)

Agree Realty Corporation (ADC) - Canvas Business Model: Customer Relationships

Long-term, non-management intensive relationships via net-lease structure

The core of Agree Realty Corporation's customer relationship model is the triple net lease (NNN) structure. This isn't a high-touch, daily management relationship; it's a long-term, stable partnership where the tenant-your customer-takes on the bulk of the property's operating expenses, including taxes, insurance, and maintenance. This model is defintely a hands-off approach for the landlord, but it creates a deep, multi-decade financial alignment with the tenant.

As of late 2025, the stability of this model is clear: the portfolio's weighted-average remaining lease term is approximately 8.0 years. This long duration means Agree Realty Corporation is not constantly chasing new tenants. Instead, the focus shifts to a select group of high-quality, investment-grade retailers who generate 66.7% of the company's annualized base rents. It's about quality tenants over quantity of interactions.

Dedicated asset management for lease renewals and portfolio optimization

While the net-lease structure is low-maintenance day-to-day, the relationship becomes intensely strategic when a lease nears expiration. This is where the dedicated asset management team steps in, focusing on retention and maximizing the value of the existing real estate. It's a proactive, specialized service, not a reactive maintenance desk.

The results speak for themselves: through the first nine months of 2025, the team executed new leases, extensions, or options covering approximately 2.4 million square feet of gross leasable area. That's a significant volume of relationship management. Here's the quick math on their success:

• Executed new leases/extensions/options in Q3 2025: 860,000 square feet.
• Total square footage managed in the first nine months of 2025: 2.4 million square feet.
• Recapture Rate on renewed space: approximately 104%.

A recapture rate over 100% means the new rental rates are higher than the old ones, proving the value of the underlying real estate and the strength of the tenant relationship. You can't get those numbers without a strong, trusted partnership.

Direct, specialized engagement through the Developer Funding Platform (DFP)

The Developer Funding Platform (DFP) is Agree Realty Corporation's most direct and hands-on customer relationship tool. It moves the company beyond being a passive landlord to an active capital partner for its best-in-class retail tenants and private developers. It's a full-complement service, offering ground-up development and funding solutions.

This platform allows Agree Realty Corporation to build custom solutions and forge even deeper, more strategic bonds with key customers. For instance, in the first nine months of 2025, the company committed approximately $190 million across 30 development or DFP projects. This shows a significant commitment to co-investing in the future growth of their tenants. In Q3 2025 alone, they commenced five DFP projects with a total committed capital of approximately $51 million. This is a relationship built on shared risk and superior returns.

Consistent, reliable communication as a publicly traded Real Estate Investment Trust (REIT)

As a publicly traded Real Estate Investment Trust (REIT), Agree Realty Corporation's relationship with its tenants is also defined by its commitment to transparency and financial stability. Tenants, especially the large, omni-channel retailers, want to know their landlord is a reliable, long-term partner with a fortress balance sheet.

The company's performance and financial health are public knowledge, which acts as a form of relationship assurance. For example, the full-year 2025 Adjusted Funds from Operations (AFFO) per share guidance is between $4.31 and $4.33. This financial strength, coupled with an A- issuer rating from Fitch Ratings, communicates reliability. It tells tenants: we have the capital and the stability to support your long-term real estate needs. That's a powerful message in any relationship.

Customer Relationship Metric (2025 Data)	Value/Amount	Relationship Implication
Weighted-Average Remaining Lease Term	Approximately 8.0 years	Long-term, stable, low-churn partnerships.
Investment Grade Retail Tenant Exposure	66.7% of annualized base rents	Focus on high-credit-quality, financially sound partners.
Committed Capital to DFP (9M 2025)	Approximately $190 million across 30 projects	Strategic co-investment and deep, customized development partnerships.
Recapture Rate on Renewed Space (9M 2025)	Approximately 104%	Successful asset management, high tenant retention, and rent growth.
Full-Year 2025 AFFO Per Share Guidance	$4.31 to $4.33	Communicates financial stability and capacity for continued growth/funding.

What this estimate hides is the soft side of the relationship-the day-to-day human interaction between the asset managers and the tenant's real estate team. Still, the numbers show the strategic, long-term nature of these customer bonds is defintely working.

Agree Realty Corporation (ADC) - Canvas Business Model: Channels

You are looking at Agree Realty Corporation's (ADC) channels, which are the arteries of its growth engine. The takeaway is simple: Agree Realty Corporation doesn't rely on a single source for property acquisition, which is a major strength in a volatile market. They actively manage three distinct, internal growth platforms-acquisitions, development, and the Developer Funding Platform (DFP)-all of which are fueled by a highly efficient and defintely aggressive capital markets channel.

This multi-channel approach is how they maintain such a strong investment pipeline, which they recently increased for the full year 2025 to a range of $1.50 billion to $1.65 billion. That's a huge number, and it shows the combined power of these channels working in concert.

Direct acquisition team sourcing one-off and portfolio deals

The core channel for Agree Realty Corporation remains direct acquisition, driven by an in-house team that sources deals ranging from single assets to large portfolios. This is where their deep retailer relationships pay off, allowing them to bypass brokers and capture better margins-a lower weighted-average capitalization rate (cap rate) compared to market averages.

For you, this means the company is consistently adding high-quality, stabilized assets to the portfolio. In the third quarter of 2025 alone, the team invested over $400 million to acquire 90 assets. This includes a strategic focus on ground leases, which are inherently lower-risk assets. They acquired six ground leases in Q3 2025 for approximately $22.5 million, further fortifying the long-term rent profile of the portfolio.

Acquisition Metric (YTD Q3 2025)	Value/Amount	Context
Total Acquisition Volume (YTD)	Approximately $1.1 billion	Represents 227 acquired properties.
Weighted-Average Cap Rate on Acquisitions	7.2%	The rate at which the properties were acquired.
Investment Grade Retail Tenant ABR %	Approximately 64.6%	Percentage of annualized base rents (ABR) from acquired properties leased to investment grade tenants.

In-house development platform for build-to-suit projects

The in-house development platform is a crucial channel for creating bespoke, high-demand retail properties, which are then net-leased back to tenants. This allows Agree Realty Corporation to essentially manufacture their own inventory, often locking in favorable lease terms and new construction quality from day one. It's a riskier, but higher-return, channel than straight acquisition.

This platform is designed to be a direct channel for retailers who need a new store built to their exact specifications (build-to-suit). In the first nine months of 2025, they had 24 development or DFP projects either completed or under construction, with anticipated total costs of approximately $131.0 million. This channel ensures a steady flow of new, long-term leases into the portfolio.

Developer Funding Platform (DFP) to partner on new construction

The Developer Funding Platform (DFP) is Agree Realty Corporation's partnership channel. It acts as a one-stop shop for third-party developers, providing them with institutional access to capital and a forward commitment to purchase the asset upon completion. This is a smart way to scale their development pipeline without fully taking on the development risk and overhead.

By using the DFP, Agree Realty Corporation leverages the expertise and retailer relationships of local developers, effectively expanding their sourcing reach across the country. In Q3 2025, they commenced five development or DFP projects with total committed capital of approximately $51 million. What this estimate hides is the long-term pipeline of future acquisitions this platform secures for them.

Capital markets for raising equity and debt to fund investments

None of the property channels work without a robust funding channel, and Agree Realty Corporation's capital markets strategy is best-in-class. They use a mix of equity and debt to maintain a low cost of capital, which is essential for a net lease REIT (Real Estate Investment Trust).

The strength of their balance sheet, including an A- issuer rating from Fitch Ratings, allows them to execute large, strategic financing moves. For instance, in November 2025, they closed on a new $350 million 5.5-year delayed draw term loan, fixing the interest rate at a competitive 4.02%. Plus, they are continually monetizing their forward equity. In Q3 2025, they settled 3.5 million shares of outstanding forward equity, generating net proceeds of approximately $252 million. This is the fuel for the acquisition engine.

Here's the quick math on their immediate funding power as of late 2025:

• Total liquidity is over $2.2 billion.
• They have no material debt maturities until 2028.
• The new $350 million term loan has a 12-month delayed draw feature, giving them flexible, low-cost dry powder.

Finance: Analyze the impact of the new 4.02% fixed-rate debt on the weighted-average cost of capital by the end of the year.

Agree Realty Corporation (ADC) - Canvas Business Model: Customer Segments

You're looking at Agree Realty Corporation (ADC) and want to know who they actually serve. It's simple: their customer segment is a highly curated list of financially strong, necessity-based, national retailers. They are not chasing every storefront; they are laser-focused on the top-tier operators, which is why their portfolio is so resilient.

As of late 2025, ADC's strategy is all about credit quality and essential retail. The core of their business is leasing to companies that can weather economic cycles, which is defintely a smart move when capital costs are high. This focus translates directly into a portfolio that, as of September 30, 2025, consisted of 2,603 properties located across all 50 states and was approximately 99.7% leased.

Industry-leading, omni-channel retail tenants

ADC's customer base is deliberately limited to what they call their 'sandbox'-the top 30 to 35 retailers in the U.S. These are the companies with the scale, brand recognition, and operational flexibility to succeed in an omni-channel world, meaning they integrate their physical stores with their online presence. This tenant group isn't just surviving; they are expanding and dominating their respective markets, making them ideal long-term lessees.

This strategy is evident in the size and quality of their portfolio as of the third quarter of 2025:

• Total portfolio: 2,603 properties
• Gross Leasable Area (GLA): Approximately 53.7 million square feet
• Weighted-average remaining lease term: Approximately 8.0 years

Investment-grade rated retailers (e.g., Walmart, Home Depot, TJX Companies)

The single most important metric for ADC's customer segment is credit quality. They target tenants with an investment-grade credit rating (a rating of BBB- or higher from a major credit agency), as these companies pose a much lower risk of default. This is the bedrock of their conservative, long-term net lease investment model.

Here's the quick math on their quality focus: as of September 30, 2025, a massive 66.7% of their total annualized base rent (ABR) was generated by investment-grade retail tenants. This is a slight dip from the 68.3% reported at the end of Q1 2025, but it remains a remarkably high figure for the net lease sector. This consistency shows their commitment to only working with the best-capitalized retailers.

The concentration of their top tenants reflects this discipline. Walmart Inc. is their largest tenant, but even that exposure is managed, representing the only tenant over 5% of ABR. Other key investment-grade customers include Home Depot and TJX Companies, which are staples in their respective retail categories.

Recession-resistant sectors like grocery, auto parts, and off-price retail

ADC's customer segmentation is also defined by the type of goods and services their tenants provide: necessity-based retail. These sectors tend to be non-discretionary (people need groceries and auto repairs regardless of the economy) or value-oriented (off-price retail thrives when consumers trade down). This makes their rent revenue highly durable.

The largest sector exposure in the portfolio is grocery, but even this is capped at just over 9% of ABR, ensuring no single sector dominates the risk profile. Acquisitions in 2025 have reinforced this focus, including properties leased to major operators in:

• Grocery (e.g., Kroger, Albertsons-backed ACME)
• Auto Parts and Service (e.g., leading national auto parts retailers, CarMax)
• Off-Price Retail (e.g., TJX Companies, Burlington)
• Home Improvement (e.g., Home Depot)

Large, national retailers seeking sale-leaseback transactions

A specific customer need ADC addresses is the desire of large, national retailers to unlock capital tied up in their real estate. This is done through a sale-leaseback (SLB) transaction, where the retailer sells the property to ADC and immediately signs a long-term lease to continue operating the store. This is a critical source of deal flow for ADC.

ADC's investment platform is structured around three channels-acquisitions, development, and the Developer Funding Platform (DFP)-but SLBs are a key component of their acquisition volume. For instance, in 2025, they completed a notable sale-leaseback with a leading national auto parts retailer and another with a relationship tenant in the tire and auto service sector. This shows an ongoing, active partnership with their top customers to provide a financing solution for their expansion and balance sheet management.

Key Portfolio Metric (as of Q3 2025)	Value/Amount	Significance to Customer Segment
Total Properties	2,603	Scale of national customer reach.
% ABR from Investment-Grade Tenants	66.7%	Core measure of tenant financial strength and credit quality.
Portfolio Occupancy	99.7%	Indicates high demand for properties leased to their chosen customer base.
2025 Investment Guidance (Midpoint)	$1.575 billion	Commitment to acquiring more properties from their target customer segments.
Largest Tenant Exposure (Walmart Inc.)	Just over 5% of ABR	Diversification even among the largest customers.

What this estimate hides is the long-term relationship capital built with these tenants; it's not just a transaction, but a partnership. Finance: draft a memo on how a 10% drop in investment-grade ABR would impact the cost of capital by Friday.

Agree Realty Corporation (ADC) - Canvas Business Model: Cost Structure

The Cost Structure for Agree Realty Corporation, a net lease real estate investment trust (REIT), is primarily driven by capital deployment for new property investments and the associated financing costs. Since the majority of its leases are triple-net, where the tenant covers most operating expenses, the company's internal operating costs-like General and Administrative (G&A) expenses-are kept relatively low as a percentage of revenue.

Capital expenditures for new investments

The largest cost component is the capital expenditure (CapEx) for expanding the portfolio through acquisitions, development, and the Developer Funding Platform (DFP). This is a direct investment in the core revenue-generating asset base. For the full year 2025, Agree Realty Corporation increased its investment guidance to a range of $1.4 billion to $1.6 billion, up from an earlier, lower guidance. This spending is the engine for future revenue growth.

Here's the quick math on the investment strategy: The company is focused on high-quality, investment-grade retail tenants, which typically means lower long-term risk but requires substantial upfront capital. This CapEx is the cost of securing a stable, long-term revenue stream.

Financing costs on unsecured notes and credit facilities

Financing costs are a major fixed and variable expense, representing the cost of capital used to fund the significant investment volume. Agree Realty Corporation manages this through a diversified, unsecured debt structure to maintain financial flexibility and a strong credit rating (currently A- from S&P Global Ratings).

As of the third quarter of 2025, the company's total debt stood at approximately $3.39 billion. Recent capital market activity in late 2025 shows a clear focus on locking in lower rates and extending maturity profiles:

• Closed a new $350 million unsecured delayed draw term loan in November 2025, which matures in May 2031.
• The interest rate on this new $350 million term loan was fixed at 4.02% through May 2031 using forward starting swaps.
• Established a $625 million unsecured commercial paper program in March 2025 to provide a cost-efficient source of short-term capital.
• Completed a $400 million public bond offering in May 2025, consisting of 5.6% senior unsecured notes due in 2035.

To be fair, while the fixed-rate debt provides stability, it also means the company is paying a premium over current short-term rates to hedge against future interest rate hikes. That's a deliberate cost of risk management.

General and administrative (G&A) expenses

G&A expenses cover the day-to-day corporate overhead-salaries, office costs, professional fees-and are a critical measure of efficiency for a net lease REIT. The company's 2025 guidance projects G&A expenses to be between 5.6% and 5.9% of adjusted revenue. This is a low percentage, reflecting the operational simplicity of the net lease model, where the tenant handles most property management duties. The goal is to keep this ratio tight, so more revenue drops straight to the bottom line.

Non-reimbursable real estate expenses

Even with triple-net leases, some property-level costs are not passed on to the tenant. These non-reimbursable real estate expenses include things like property taxes during a vacancy period, insurance deductibles, or certain capital reserves. For 2025, this cost is guided to be between 1.0% and 1.5% of adjusted revenue, which is a very small, manageable operational cost.

Costs associated with development and DFP projects

The costs for development and the Developer Funding Platform (DFP) are essentially CapEx but broken out to show a distinct growth channel. The DFP model lets Agree Realty Corporation fund a third-party developer's project, then acquire the completed asset, which is a way to secure high-quality properties off-market. As of June 30, 2025, the company had 25 development or DFP projects either completed or under construction, representing approximately $139.6 million in anticipated total costs. The committed capital for these projects through the first half of 2025 was $140 million, with $98 million of those costs already incurred.

The table below summarizes the key 2025 cost structure guidance and recent financing activity:

Cost Component	2025 Guidance / Financial Data	Nature of Cost
Capital Expenditures (Investment Volume)	$1.4 billion to $1.6 billion	Variable, Growth-Oriented (Acquisitions, Development)
G&A Expenses (as % of adjusted revenue)	5.6% to 5.9%	Fixed/Semi-Variable, Operational Overhead
Non-Reimbursable Real Estate Expenses (as % of adjusted revenue)	1.0% to 1.5%	Variable, Property-Level Operating Costs
Committed Development/DFP Capital (H1 2025)	$140 million	Variable, Strategic Investment
New Term Loan Interest Rate	4.02% (Fixed on $350M loan)	Fixed, Cost of Debt
Total Debt (Q3 2025)	Approximately $3.39 billion	Fixed, Capital Structure

Agree Realty Corporation (ADC) - Canvas Business Model: Revenue Streams

The core of Agree Realty Corporation's (ADC) revenue model is simple: highly predictable, long-term rental income from a vast portfolio of retail properties, primarily net-leased to financially strong, investment-grade tenants. This focus on defensive retail sectors like grocery, home improvement, and auto parts ensures a stable cash flow, which is the lifeblood of any real estate investment trust (REIT).

Minimum rents from long-term net-lease agreements

The vast majority of Agree Realty Corporation's revenue comes from minimum rents generated by its triple-net leases. A triple-net lease (NNN) means the tenant is responsible for property taxes, insurance, and maintenance, which greatly stabilizes the landlord's operating expenses and makes the revenue stream more predictable. As of September 30, 2025, the portfolio was defintely strong, consisting of 2,603 properties located in all 50 states.

This stability is reinforced by the portfolio's high occupancy and long lease duration. The portfolio was approximately 99.7% leased at the end of the third quarter of 2025, with a weighted-average remaining lease term of approximately 8.0 years. This long-term structure provides clear visibility on future cash flows. You can count on that check showing up.

The quality of the tenant base is crucial here. Over 66.7% of the annualized base rents were generated from investment-grade retail tenants as of September 30, 2025, which significantly reduces credit risk and bolsters the reliability of the minimum rent stream.

Rental income from ground leases (10% of total annualized base rents)

A growing and strategically important component of the revenue stream is rental income from ground leases. A ground lease is essentially renting the land itself, where the tenant builds and owns the building, and it offers an even lower risk profile for the landlord. This is a very smart, defensive strategy.

As of the first quarter of 2025, properties ground leased to tenants represented approximately 10.6% of the total annualized base rents. This portfolio consisted of 231 leases across 37 states as of March 31, 2025.

• Ground leases are long-term, typically 20+ years.
• They require minimal capital expenditure from Agree Realty Corporation.
• 88.0% of the annualized base rents from the ground lease portfolio came from investment-grade retail tenants as of March 31, 2025.

Proceeds from property dispositions (expected $25 million to $50 million in 2025)

While the primary business is holding and growing the portfolio, Agree Realty Corporation also generates revenue from strategically selling non-core or lower-yielding assets. This is less about profit and more about capital recycling-selling older properties to fund the acquisition of newer, higher-growth assets.

The company has provided clear guidance on this activity. For the full year 2025, the anticipated disposition volume is expected to be between $25 million and $50 million. This is a manageable amount that allows them to prune the portfolio without significantly impacting the core rental income. For example, in the third quarter of 2025, the company sold eight properties for gross proceeds of approximately $15.0 million.

Adjusted Funds From Operations (AFFO) per share guided to $4.31 to $4.33 for 2025

For a REIT, the most critical measure of financial performance and revenue health is Adjusted Funds From Operations (AFFO) per share. This metric is a cleaner view of cash flow than simple net income, adjusting for non-cash items and recurring capital expenditures. It tells you how much cash is truly available to pay dividends and reinvest.

Following a strong performance through the third quarter of 2025, Agree Realty Corporation raised its full-year 2025 AFFO per share guidance to a range of $4.31 to $4.33. This updated guidance reflects an expected year-over-year growth of approximately 4.4%.

Here's the quick math on their core financial targets for the year:

Metric	2025 Full-Year Guidance (Latest Update)	Notes
Adjusted Funds From Operations (AFFO) per Share	$4.31 to $4.33	Raised guidance, implying approximately 4.4% year-over-year growth.
Property Disposition Volume (Gross Proceeds)	$25 million to $50 million	Capital recycling to fund new acquisitions.
Investment Volume (Acquisitions & Development)	$1.50 billion to $1.65 billion	Increased guidance, showing aggressive external growth.

What this estimate hides is the potential for credit loss, which management has factored in. The guidance includes an assumption for approximately 25 basis points of credit loss at the high end of the AFFO range. This means they are realistic about tenant risk, even with their high investment-grade exposure.