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AGREE REALTY CORP - Annual Report: 2021 (Form 10-K)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-12928

AGREE REALTY CORPORATION

(Exact name of registrant as specified in its charter)

Maryland

    

38-3148187

State or other jurisdiction of incorporation or organization

(I.R.S. Employer Identification No.)

70 E. Long Lake Road, Bloomfield Hills, Michigan

(Address of principal executive offices)

48304

(Zip Code)

(248) 737-4190

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, $.0001 par value

ADC

New York Stock Exchange

Depositary Shares, each representing one-thousandth of a share of 4.25% Series A Cumulative Redeemable Preferred Stock, $0.0001 par value

ADCPrA

New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No 

The aggregate market value of the Registrant’s shares of common stock held by non-affiliates was $4,857,492,055 as of June 30, 2021, based on the closing price of $70.49 on the New York Stock Exchange on that date.

At February 21, 2022, there were 71,285,311 shares of common stock, $.0001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for the annual stockholder meeting to be held in 2022 are incorporated by reference into Part III of this Annual Report on Form 10-K as noted herein.

Table of Contents

AGREE REALTY CORPORATION

Index to Form 10-K

Page

PART I

 

Item 1:

Business

2

 

Item 1A:

Risk Factors

9

 

Item 1B:

Unresolved Staff Comments

22

 

Item 2:

Properties

23

 

Item 3:

Legal Proceedings

26

 

Item 4:

Mine Safety Disclosures

26

 

PART II

 

Item 5:

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

26

 

Item 6:

[Reserved]

27

 

Item 7:

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

 

Item 7A:

Quantitative and Qualitative Disclosures about Market Risk

42

 

Item 8:

Financial Statements and Supplementary Data

43

 

Item 9:

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

43

 

Item 9A:

Controls and Procedures

43

 

Item 9B:

Other Information

44

 

Item 9C:

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

44

PART III

 

 

Item 10:

Directors, Executive Officers and Corporate Governance

45

 

Item 11:

Executive Compensation

45

 

Item 12:

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

45

 

Item 13:

Certain Relationships and Related Transactions, and Director Independence

45

 

Item 14:

Principal Accountant Fees and Services

45

 

PART IV

 

Item 15:

Exhibits and Financial Statement Schedules

46

 

Consolidated Financial Statements and Notes

F-1

 

Item 16:

Form 10-K Summary

50

SIGNATURES

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PART I

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” “may,” “will,” “seek,” “could,” “project” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could materially affect the Company’s results of operations, financial condition, cash flows, performance or future achievements or events. Currently, one of the most significant factors, however, is the adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Moreover, you should interpret many of the risks identified in this report, as well as the risks set forth below, as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. Additional factors which may cause actual results to differ materially from current expectations include, but are not limited to:  global and national economic conditions and changes in general economic, financial and real estate market conditions; the financial failure of, or other default in payment by, tenants under their leases and the potential resulting vacancies; the Company’s concentration with certain tenants and in certain markets, which may make the Company more susceptible to adverse events; changes in the Company’s business strategy; risks that the Company’s acquisition and development projects will fail to perform as expected; adverse changes and disruption in the retail sector and the financing stability of the Company’s tenants, which could impact tenants’ ability to pay rent and expense reimbursement; the Company’s ability to pay dividends; risks relating to information technology and cybersecurity attacks, loss of confidential information and other related business disruptions; loss of key management personnel; the potential need to fund improvements or other capital expenditures out of operating cash flow; financing risks, such as the inability to obtain debt or equity financing on favorable terms or at all; the level and volatility of interest rates; the Company’s ability to renew or re-lease space as leases expire; limitations in the Company’s tenants’ leases on real estate tax, insurance and operating cost reimbursement obligations; loss or bankruptcy of one or more of the Company’s major tenants, and bankruptcy laws that may limit the Company’s remedies if a tenant becomes bankrupt and rejects its leases; potential liability for environmental contamination, which could result in substantial costs; the Company’s level of indebtedness, which could reduce funds available for other business purposes and reduce the Company’s operational flexibility; covenants in the Company’s credit agreements and unsecured notes, which could limit the Company’s flexibility and adversely affect its financial condition; credit market developments that may reduce availability under the Company’s revolving credit facility; an increase in market interest rates which could raise the Company’s interest costs on existing and future debt; a decrease in interest rates, which may lead to additional competition for the acquisition of real estate or adversely affect the Company’s results of operations; the Company’s hedging strategies, which may not be successful in mitigating the Company’s risks associated with interest rates; legislative or regulatory changes, including changes to laws governing real estate investment trusts (“REITs”); the Company’s ability to maintain its qualification as a REIT for federal income tax purposes and the limitations imposed on its business by its status as a REIT; and the Company’s failure to qualify as a REIT for federal income tax purposes, which could adversely affect the Company’s operations and ability to make distributions.

Unless the context otherwise requires, references in this Annual Report on Form 10-K to the terms “registrant,” the “Company,” “Agree Realty,” “we,” “our” or “us” refer to Agree Realty Corporation and all of its consolidated subsidiaries, including its majority owned operating partnership, Agree Limited Partnership (the “Operating Partnership”). Agree Realty has elected to treat certain subsidiaries as taxable real estate investment trust subsidiaries which are collectively referred to herein as the “TRS.”

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Item 1:       Business

General

The Company is a fully integrated REIT primarily focused on the ownership, acquisition, development and management of retail properties net leased to industry leading tenants. The Company was founded in 1971 by its current Executive Chairman, Richard Agree, and its common stock was listed on the New York Stock Exchange (“NYSE”) in 1994. The Company’s assets are held by, and all of its operations are conducted through, directly or indirectly, the Operating Partnership of which the Company is the sole general partner and in which it held a 99.5% common interest as of December 31, 2021. Under the partnership agreement of the Operating Partnership, the Company, as the sole general partner, has exclusive responsibility and discretion in the management and control of the Operating Partnership.  As of December 31, 2021, the Company’s portfolio consisted of 1,404 properties located in 47 states and totaling approximately 29.1 million square feet of gross leasable area (“GLA”).

As of December 31, 2021, the Company’s portfolio was approximately 99.5% leased and had a weighted average remaining lease term of approximately 9.3 years. A significant majority of the Company’s properties are leased to national tenants and approximately 67.0% of our annualized base rent was derived from tenants, or parent entities thereof, with an investment grade credit rating from S&P Global Ratings (acting through Standard & Poor’s Financial Services LLC), Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners. Substantially all of our tenants are subject to net lease agreements. A net lease typically requires the tenant to be responsible for minimum monthly rent and property operating expenses including property taxes, insurance and maintenance.

As of December 31, 2021, the Company had 57 full-time employees, covering acquisitions, development, legal, asset management, accounting, finance, administrative and executive functions.

The Company was incorporated in December 1993 under the laws of the State of Maryland.  The Company believes that it has operated, and it intends to continue to operate, in such a manner to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). In order to maintain qualification as a REIT, the Company must, among other things, distribute at least 90% of its REIT taxable income each year and meet asset and income tests. Additionally, its charter limits ownership of the Company, directly or constructively, by any single person to 9.8% of the value or number of shares, whichever is more restrictive, of its outstanding common stock and 9.8% of the value of the aggregate of all of its outstanding stock, subject to certain exceptions. As a REIT, the Company is not subject to federal income tax with respect to that portion of its income that is distributed currently to its stockholders.

The Company’s principal executive offices are located at 70 E. Long Lake Road, Bloomfield Hills, MI 48304 and its telephone number is (248) 737-4190. The Company’s website is www.agreerealty.com. The Company’s reports are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”) pursuant to Section 13 or 15(d) of the Exchange Act and can be accessed through this site, free of charge, as soon as reasonably practicable after we electronically file or furnish such reports. These filings are also available on the SEC’s website at www.sec.gov. The Company’s website also contains copies of its corporate governance guidelines and code of business conduct and ethics, as well as the charters of its audit, compensation and nominating and governance committees. The information on the Company’s website is not part of this report.

Recent Developments

For a discussion of business developments that occurred in 2021, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” later in this report.  Certain summarized highlights are contained below.

Investments and Disposition Activity

During 2021, the Company completed approximately $1.42 billion of investments in net leased retail real estate, including acquisition and closing costs. Total investment volume includes the acquisition of 290 properties for an aggregate purchase price of approximately $1.39 billion and the completed development of four properties for an aggregate cost of

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approximately $31.0 million. These 294 properties are net leased to 92 different tenants operating in 27 sectors and are located in 43 states. These assets are 100% leased for a weighted average lease term of approximately 11.5 years.

During 2021, the Company sold 18 properties for net proceeds of $56.0 million.

Leasing

During 2021, excluding properties that were sold, the Company executed new leases, extensions or options on more than 603,000 square feet of GLA throughout its portfolio. The annualized base contractual rent associated with these new leases, extensions or options is approximately $6.7 million.

Dividends

The Company transitioned to a monthly cash dividend commencing in January 2021.  The Company increased its monthly dividend per common share from $0.207 to $0.217 in April 2021 and further increased the monthly dividend per common share to $0.227 in October 2021.

The December 2021 dividend per share of $0.227 represents an annualized dividend of $2.72 per share and an annualized dividend yield of approximately 3.8% based on the last reported sales price of our common stock listed on the NYSE of $71.36 on December 31, 2021.  

The Company has paid a common cash dividend for 111 consecutive quarters, and although we expect to continue our policy of paying regular dividends, we cannot guarantee that we will maintain our current level of common dividends, that we will continue our recent pattern of increasing dividends per share or what our actual dividend yield will be in any future period.

In addition to its common dividends, the Company has paid monthly cash dividends on its 4.25% Series A Cumulative Redeemable Preferred Stock for all periods subsequent to its September 2021 issuance.  

Financing

Equity

During 2021, the Company completed two follow-on public offerings of common stock under its shelf registration statement, issuing a total of 8,050,000 common shares.  These offerings generated total net proceeds of $548.4 million. Additionally, the Company completed a follow-on public offering of 5,750,000 shares of common stock, in connection with forward sale agreements. Upon settlement of the forward agreements, the offering is anticipated to raise net proceeds of approximately $374.8 million.

In September 2021, the Company completed its first underwritten public offering of depositary shares (the “Depositary Shares”), each representing 1/1,000th of a share of Series A Preferred Stock, which resulted in net proceeds to the Company of approximately $170.3 million.

In February 2021, the Company entered into a new $500 million at-the-market (“ATM”) program (the “2021 ATM Program”) through which the Company, from time to time, may sell shares of common stock and/or enter into forward sale agreements.

During 2021, the Company settled 3,129,982 shares of common stock under predecessor ATM programs, generating net proceeds of $197.0 million.  Additionally, the Company completed forward sale agreements under the 2021 ATM Program for 2,125,296 shares of common stock, for anticipated future net proceeds of $144.4 million. None of the forward sales agreements under the 2021 ATM Program have been settled.  The Company is required to settle these forward agreements by various dates between March and December 2022.

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After considering the 2,125,296 shares of common stock subject to forward sale agreements under the 2021 ATM Program, the Company had approximately $349.7 million of availability remaining under the 2021 ATM Program as of December 31, 2021.

Debt

In May 2021, the Operating Partnership completed an underwritten public offering of $350 million aggregate principal amount of 2.000% Notes due 2028 (the “2028 Senior Unsecured Public Notes”) and $300 million in aggregate principal amount of 2.600% Notes due 2033 (the “2033 Senior Unsecured Public Notes”).  The 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes are fully and unconditionally guaranteed by the Company and certain wholly owned subsidiaries of the Operating Partnership.  Considering the effect of terminated swap agreements relating to these notes, the blended all-in rates for the $350 million and $300 million principal amounts are 2.11% and 2.13%, respectively.

In May 2021, the Company used proceeds from the offering of the 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes to repay all amounts outstanding under its unsecured term loans and settle the related swap agreements.  

In December 2021, the Company entered into a Third Amended and Restated Revolving Credit Agreement which increased its senior unsecured revolving credit facility (the "Revolving Credit Facility") to $1.0 billion. The Revolving Credit Facility includes an accordion option that allows the Company to request additional lender commitments up to a total of $1.75 billion. The Revolving Credit Facility will mature in January 2026 with Company options to extend the maturity date to January 2027.  The Revolving Credit Facility's interest rate is based on a pricing grid with a range of 72.5 to 140 basis points over LIBOR, determined by the Company's credit ratings, subject to improvement based on certain criteria.

Business Strategies

Our primary business objectives are to capitalize on distinct market positioning in the retail net lease space, focus on 21st century industry-leading retailers through our external growth platforms, leverage our real estate acumen and relationships to identify superior risk-adjusted opportunities, maintain a conservative and flexible capital structure that enables growth, and provide consistent, high-quality earnings growth and a well-covered growing dividend.  The following is a discussion of our investment, financing and asset management strategies.

Investment

We are primarily focused on the long-term, fee simple ownership of properties net leased to national or large, regional retailers operating in sectors we believe to be more e-commerce and recession resistant than other retail sectors. Our leases are typically long-term net leases that require the tenant to pay all property operating expenses, including real estate taxes, insurance and maintenance. We believe that a diversified portfolio of such properties provides for stable and predictable cash flow.

We seek to expand and enhance our portfolio by identifying the best risk-adjusted investment opportunities across our three external growth platforms: development, Partner Capital Solutions (“PCS”) and acquisitions.

Development: We have been developing retail properties since the formation of our predecessor company in 1971 and our development platform seeks to employ our capabilities to direct all aspects of the development process, including site selection, land acquisition, lease negotiation, due diligence, design and construction. Our developments are typically build-to-suit projects that result in fee simple ownership of the property upon completion.

Partner Capital Solutions: We launched our PCS program in April 2012. Our PCS program allows us to acquire properties or development opportunities by partnering with private developers or retailers on their in-process developments. We offer construction expertise, relationships, access to capital and forward commitments to purchase the properties to facilitate the successful completion of their projects. We typically take fee simple ownership of PCS projects upon their completion.

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Acquisitions: Our acquisitions platform was launched in April 2010 in order to expand our investment capabilities by pursuing opportunities that meet both our real estate and return on investment criteria.

We believe that development and PCS projects have the potential to generate superior risk-adjusted returns on investment in properties that are substantially similar to those we acquire.

We focus on four core principles that underlie our investment criteria:

omni-channel critical (e-commerce resistance), focusing on leading operators that have matured in omni-channel structure or those in e-commerce resistant sectors;
recession resistance, emphasizing a balanced portfolio with exposure to counter-cyclical sectors and retailers with strong credit profiles;
avoidance of private equity sponsorship, emphasizing leading operators with strong balance sheets and minimizing exposure to the possibility of such sponsorship overleveraging their acquisitions and reducing retailers’ abilities to invest in their businesses; and
adherence to strong real estate fundamentals and fungible buildings, protecting against unforeseen changes to our investment philosophies.

Each platform leverages the Company’s real estate acumen to pursue investments in net lease retail real estate. Factors that we consider when evaluating an investment include but are not limited to:

overall market-specific characteristics, such as demographics, market rents, competition and retail synergy;
asset-specific characteristics, such as the age, size, location, zoning, use and environmental history, accessibility, physical condition, signage and visibility of the property;
tenant-specific characteristics, including but not limited to the financial profile, operating history, business plan, size, market positioning, geographic footprint, management team, industry and/or sector-specific trends and other characteristics specific to the tenant and parent thereof;
unit-level operating characteristics, including store sales performance and profitability, if available;
lease-specific terms, including term of the lease, rent to be paid by the tenant and other tenancy considerations; and
transaction considerations, such as purchase price, seller profile and other non-financial terms.

Financing

We seek to maintain a capital structure that provides us with the flexibility to manage our business and pursue our growth strategies, while allowing us to service our debt requirements and generate appropriate risk-adjusted returns for our stockholders. We believe these objectives are best achieved by a capital structure that consists primarily of common equity and prudent amounts of preferred equity and debt financing. However, we may raise capital in any form and under terms that we deem acceptable and in the best interest of our stockholders.

We have previously utilized common and preferred stock equity offerings, secured mortgage borrowings, unsecured bank borrowings, private placements and public offerings of senior unsecured notes and the sale of properties to meet our capital requirements. We continually evaluate our financing policies on an on-going basis in light of current economic conditions, access to various capital markets, relative costs of equity and debt securities, the market value of our properties and other factors.

We occasionally sell common stock through forward sale agreements, enabling the Company to set the price of shares upon pricing the offering while delaying the issuance of shares and the receipt of the net proceeds by the Company.

As of December 31, 2021, the Company’s ratio of total debt to enterprise value, assuming the conversion of common limited partnership interests in the Operating Partnership (“Operating Partnership Common Units”) into shares of common stock, was approximately 24.5%, and its ratio of total debt to total gross assets (before accumulated depreciation) was approximately 30.4%.

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As of December 31, 2021, our total debt outstanding before deferred financing costs and original issue discount was $1.70 billion, including $32.6 million of secured mortgage debt that had a weighted average fixed interest rate of 4.16% (including the effects of interest rate swap agreements) and a weighted average maturity of 1.6 years, $1.51 billion of unsecured borrowings that had a weighted average fixed interest rate of 3.18% (including the effects of interest rate swap agreements) and a weighted average maturity of 8.4 years, and $160.0 million of floating rate borrowings under our revolving credit facility at a weighted average interest rate of approximately 1.84%.

Certain financial agreements to which the Company is a party contain covenants that limit its ability to incur debt under certain circumstances; however, our organizational documents do not limit the absolute amount or percentage of indebtedness that we may incur. As such, we may modify our borrowing policies at any time without stockholder approval.

Asset Management

We maintain a proactive leasing and capital improvement program that, combined with the quality and locations of our properties, has made our properties attractive to tenants. We intend to continue to hold our properties for long-term investment and, accordingly, place a strong emphasis on the quality of construction and an on-going program of regular and preventative maintenance. Our properties are designed and built to require minimal capital improvements other than renovations or alterations, typically paid for by tenants. Personnel from our corporate headquarters conduct regular inspections of each property, maintain regular contact with major tenants and engage in consistent dialogue to understand store performance and tenant sustainability.

We have a management information system designed to provide our management with the operating data necessary to make informed business decisions on a timely basis. This system provides us rapid access to lease data, tenants’ sales history, cash flow budgets and forecasts. Such a system helps us to maximize cash flow from operations and closely monitor corporate expenses.

Competition

The U.S. commercial real estate investment market is a highly competitive industry. We actively compete with many entities engaged in the acquisition, development and operation of commercial properties. As such, we compete with other investors for a limited supply of properties and financing for these properties. Investors include traded and non-traded public REITs, private equity firms, institutional investment funds, insurance companies and private individuals, many of which have greater financial resources than we do and the ability to accept more risk than we believe we can prudently manage. There can be no assurance that we will be able to compete successfully with such entities in our acquisition, development and leasing activities in the future.

Significant Tenants

No tenant accounted for more than 10.0% of our annualized base rent as of December 31, 2021. See “Item 2 – Properties” for additional information on our top tenants and the composition of our tenant base.

Regulation

Environmental

Investments in real property create the potential for environmental liability on the part of the owner or operator of such real property. If hazardous substances are discovered on or emanating from a property, the owner or operator of the property may under certain statutory schemes be held strictly liable for all costs and liabilities relating to such hazardous substances. We have obtained a Phase I environmental study (which involves inspection without soil sampling or ground water analysis) conducted by independent environmental consultants on each of our properties and, in certain instances, have conducted additional investigation, including Phase II environmental assessments.

We have no knowledge of any hazardous substances existing on our properties in violation of any applicable laws; however, no assurance can be given that such substances are not currently located on any of our properties.

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We believe that we are in compliance, in all material respects, with all federal, state and local ordinances and regulations regarding hazardous or toxic substances. Furthermore, we have not received notice from any governmental authority of any noncompliance, liability or other claim in connection with any of our properties.

Americans with Disabilities Act of 1990

Our properties, as commercial facilities, are required to comply with Title III of the Americans with Disabilities Act of 1990 and similar state and local laws and regulations (collectively, the “ADA”). Investigation of a property may reveal non-compliance with the ADA. Our tenants will typically have primary responsibility for complying with the ADA, but we may incur costs if the tenant does not comply. As of December 31, 2021, we have not received notice from any governmental authority, nor are we otherwise aware, of any non-compliance with the ADA that we believe would have a material adverse effect on our business, financial position or results of operations.

Human Capital

Team Members and Values

As of December 31, 2021, the Company had 57 full-time team members covering acquisitions, development, legal, asset management, accounting, finance, administrative, and executive functions as compared to 49 full-time team members as of December 31, 2020. The increased headcount is attributable to the Company’s need to support its current and future portfolio growth.  

Our core values are the foundation of our Company culture and include: 

Challenging ourselves to improve every facet of our business.
Exemplifying an ownership mentality in our choices.
Our team members are expected to be consistent and persistent in building the success of our business.
We expect our team members to be disciplined in all aspects of the business.
Team members are expected to think strategically.

We work to attract the best talent externally to meet the current and future demands of our business.  We utilize social media, professional recruiters and other organizations to find motivated and talented team members and employ competency-based behavioral interviewing techniques.

Talent Management

Professional development is a cornerstone of our talent management system, and we diligently work to develop talent from within. We emphasize professional development through both technical and soft-skill development and training. To empower team members to reach their potential, the Company provides a range of on-the-job training and mentoring, knowledge sharing, continuing education and “lunch-and-learn” programs.  Our talent management practices include the utilization of our core competency frameworks, professional development plans, career pathing and succession planning and carefully designed promotion and internal mobility opportunities.  

Our team members goal setting and performance feedback processes include formal quarterly and annual reviews and self and team leader reviews, as well as ongoing one-on-one meetings with team leaders. Professional development plans based on critical competencies are created and monitored to ensure progress is made along established timelines.

Financial and Health Wellness

As part of our compensation philosophy, we offer and maintain market competitive total rewards programs for team members in order to attract and retain superior talent. These programs not only include wages and incentives, but also health, welfare, and retirement benefits.

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Our compensation philosophies include:

Total compensation that is both fair and competitive.  The Company seeks fairness in total compensation with reference to external and internal comparisons.
Attract, retain and motivate team members.  Compensation is used to achieve business objectives by attracting, retaining and motivating top talent.
Reward superior individual and Company performance on both a short-term and long-term basis.  Performance-based pay aligns the interests of management with the interests of our stockholders and motivates and rewards individual efforts and company success.
Align executives’ long-term interests with those of our stockholders.  The Company seeks to align these interests by providing a significant portion of executive officer compensation in the form of restricted common stock.

The structure of our compensation programs balance incentive earnings for both short-term and long-term performance. Specifically, the programs include a base salary, incentive compensation through annual cash bonuses and equity participation, and a retirement plan with Company match.  

The “Agree Wellness Program” affords team members paid time off and holidays, fully equipped on-site fitness amenities, and leaves of absence for specified events.  Insurance coverages are provided for all team members and their dependents, including medical, dental, vision, disability, and life insurance. The Company pays 100% of medical, short-term, long-term, and life insurance premiums for the Company team members and their families.

COVID-19

During 2021, we have continued to focus on the safety of our team members in response to the COVID-19 pandemic.  To do so we have:

when warranted, closed our offices for non-essential functions and added remote work flexibility;
increased cleaning protocols;
maintained regular communication regarding impacts of the COVID-19 pandemic, including health and safety protocols and procedures;
implemented screening of any team members and vendors at our offices;
provided additional personal protective equipment and cleaning supplies;
maintained protocols to address actual and suspected COVID-19 cases and potential exposure;
limited non-essential travel for all team members; and
continued employing protocols regarding required masks and social distancing

Environmental, Social and Governance (ESG)

Environmental Sustainability

The Company, through its team members, understands that corporate and environmental responsibility is an ongoing endeavor and embraces responsibility to being a steward of the environment, using natural resources carefully, and meeting the goals of its tenant partners. We remain committed to using our time, talents, resources and relationships to grow in a manner that makes the world and the environment better for future generations.

The Company’s focus on industry leading, national and super-regional retailers provides for long-term relationships with some of the most environmentally conscientious retailers in the world. This is particularly meaningful because the Company’s portfolio is primarily comprised of properties that are leased to tenants under long-term net leases where the tenant is generally responsible for maintaining the property and implementing environmentally responsible practices. We are proud to know that our tenants have pioneered the use of environmentally-preferable solutions in their business practices in many ways. Additionally, the Company’s award-winning headquarters utilize green technologies including programmable thermostats, Low-E window glass, LEED HVAC systems and LED occupancy-sensored lighting.

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Social Company Culture and Team Members

The Agree Wellness Program focuses on physical and financial wellness to enhance team members’ well-being.  The Company believes that team members who are healthy, fit, financially secure and motivated are team members who achieve personal and professional success.  Ongoing professional development is offered to help all team members advance their careers.  The Company regularly sponsors local charities and has received numerous local awards recognizing its outstanding corporate culture and wellness initiatives. The Company supports healthy living through enhanced health insurance, an on-site gym, training and education, various complementary meal programs and many other benefits.   

We support team members with generous cash compensation plans, equity ownership programs, retirement plans and ongoing access to financial planning resources. Team members are compensated for their performance and rewarded for their outstanding work. Alignment of individual, team, corporate and stockholder objectives provides for continuity, teamwork and increased collaboration. Our team members are paid commensurate with their qualifications, responsibilities, productivity, quality of work and adherence to our core values.  

The Agree Culture Committee is composed of team members from departments throughout the organization. The Company’s Culture Committee hosts a variety of events that are focused on team building and camaraderie as well as contributing to the communities in which they live.

Governance Fiduciary Duties and Ethics

We believe that nothing is more important than a company’s reputation for integrity and serving as a responsible fiduciary for its stockholders. We are committed to managing the Company for the benefit of our stockholders and are focused on maintaining good corporate governance.  

Our Board has nine directors, seven of whom are independent.  Five new independent directors have been added since 2018.  Independent directors meet regularly, without the presence of officers or team members.  A Lead Independent Director was appointed in 2019.  

The Board has adopted an insider trading policy that applies to all directors, officers and team members.  The Company does not have a stockholder rights plan (“poison pill”) and maintains stock ownership guidelines for directors and named executive officers requiring specified levels of stock ownership.  Time-vested stock grants to officers and team members vest over a five-year period to provide long-term alignment, while performance-based stock grants to named executive officers utilize total shareholder return, with the amount of the grants intended to increase as total returns to stockholders increase, further enhancing alignment.  Our board of directors has established a succession plan for the Chief Executive Officer to cover emergencies and other occurrences.  Finally, the Company annually submits “say-on-pay” advisory votes and has received support in excess of 95% for the past six years.

In addition to annually reviewing and signing an acknowledgment of the Code of Business Conduct and Ethics, all team members adhere to the Company’s “Rules for Victory,” which include a framework that focuses on honesty, accountability, resourcefulness, dedication and passion for their work.

Available Information

We make available free of charge through our website at www.agreerealty.com all reports we electronically file with, or furnish to, the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, as soon as reasonably practicable after those documents are filed with, or furnished to, the SEC. These filings are also accessible on the SEC’s website at www.sec.gov.

Item 1A:        Risk Factors

The following factors and other factors discussed in this Annual Report on Form 10-K could cause the Company’s actual results to differ materially from those contained in forward-looking statements made in this report or presented elsewhere

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in future SEC reports. You should carefully consider each of the risks, assumptions, uncertainties and other factors described below and elsewhere in this report, as well as any reports, amendments or updates reflected in subsequent filings or furnishings with the SEC. We believe these risks, assumptions, uncertainties and other factors, individually or in the aggregate, could cause our actual results to differ materially from expected and historical results and could materially and adversely affect our business operations, results of operations, financial condition and liquidity.

Risks Related to Our Business and Operations

The current pandemic of the novel coronavirus, or COVID-19, its variants, and the future outbreak of other highly infectious or contagious diseases, could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance.

 

The COVID-19 pandemic has had, and another pandemic in the future could have, repercussions across regional and global economies and financial markets. The outbreak of COVID-19 in many countries, including the United States, has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak continues to rapidly evolve and many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel.

 

Many states and cities, including where we own properties, have development sites and where our principal place of business is located, have also reacted by instituting quarantines, social distancing requirements, restrictions on travel, “shelter in place” rules, restrictions on the types of businesses that may continue to operate and/or restrictions on the types of construction projects that may continue. Although many of these jurisdictions have lifted some of these restrictions, the Company cannot predict whether and to what extent the restrictions will be reinstated, whether additional states and cities will implement similar restrictions or when restrictions currently in place will expire. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, including industries in which the Company and our tenants operate. A number of our tenants had announced temporary closures of their stores and requested rent deferral or rent abatement during certain points during this pandemic.

 

Although the duration and severity of this pandemic are still uncertain, there is reason to believe that the success of vaccination efforts in the U.S. will have a positive impact on businesses, as federal, state and local restrictions are lifted, and individuals return to pre-pandemic activities.  However, COVID-19’s variants, its surges and resurgences in the population, and challenges relating to vaccine immunization are still having a very fluid and continuously evolving impact on businesses and consumers.  

In addition, our team members based at our headquarters have worked remotely to varying extents. The effects of restrictions on our operations, including future restrictions and extended periods of remote work arrangements, could strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business. The COVID-19 pandemic, or a future pandemic, could also have material and adverse effects on our ability to successfully operate and on our financial condition, results of operations and cash flows due to, among other factors:

 

a complete or partial closure of, or other operational issues at, one or more of our properties resulting from government or tenant action;
the reduced economic activity severely impacts our tenants’ businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations;
the reduced economic activity could result in a prolonged recession, which could negatively impact consumer discretionary spending;
difficulty accessing debt and equity capital on attractive terms, or at all, impacts to our credit ratings, and a prolonged severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis and our tenants’ ability to fund their business operations and meet their obligations to us;
the financial impact of the COVID-19 pandemic could negatively impact our future compliance with financial covenants of our Revolving Credit Facility and other debt agreements and result in a default and potentially an

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acceleration of indebtedness, which non-compliance could negatively impact our ability to make additional borrowings under our Revolving Credit Facility and pay dividends;
any impairment in value of our tangible or intangible assets which could be recorded as a result of weaker economic conditions;
a continued decline in business activity and demand for real estate transactions could adversely affect our ability or desire to grow our portfolio of properties;
a deterioration in our or our tenants’ ability to operate in affected areas or delays in the supply of products or services to us or our tenants from vendors that are needed for our or our tenants’ efficient operations could adversely affect our operations and those of our tenants; and
the potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption.

The extent to which the COVID-19 pandemic impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Additional closures by our tenants of their stores, tenant bankruptcies, tenant lease defaults, and early terminations by our tenants of their leases could reduce our cash flows, which could impact our ability to continue paying dividends to our stockholders at expected levels or at all.

 

The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our financial condition, results of operations, cash flows and performance.

Economic and financial conditions may have a negative effect on our business and operations.

Changes in global or national economic conditions, such as a market downturn or a disruption in the capital markets, may cause, among other things, a significant tightening in the credit markets, lower levels of liquidity, increases in the rate of default and bankruptcy and lower consumer spending and business spending, which could adversely affect our business and operations. Potential consequences of changes in economic and financial conditions include:

changes in the performance of our tenants, which may result in lower rent and lower recoverable expenses that the tenant can afford to pay and tenant defaults under the leases;
current or potential tenants may delay or postpone entering into long-term net leases with us;
the ability to borrow on terms and conditions that we find acceptable may be limited or unavailable, which could reduce our ability to pursue acquisition and development opportunities and refinance existing debt, reduce our returns from acquisition and development activities, reduce our ability to make cash distributions to our stockholders and increase our future interest expense;
our ability to access the capital markets may be restricted at a time when we would like, or need, to access those markets, which could have an impact on our flexibility to react to changing economic and business conditions;
the recognition of impairment charges on or reduced values of our properties, which may adversely affect our results of operations or limit our ability to dispose of assets at attractive prices and may reduce the availability of buyer financing; and
one or more lenders under our revolving credit facility could fail and we may not be able to replace the financing commitment of any such lenders on favorable terms, or at all.

We are also limited in our ability to reduce costs to offset the results of a prolonged or severe economic downturn given certain fixed costs and commitments associated with our operations, which could materially impact our results of operations and/or financial condition.

Our business is significantly dependent on single tenant properties.

We focus our development and investment activities on ownership of real properties that are primarily net leased to a single tenant. Therefore, the financial failure of, or other default in payment by, a single tenant under its lease and the

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potential resulting vacancy is likely to cause a significant reduction in our operating cash flows from that property and a significant reduction in the value of the property and could cause a significant impairment loss. In addition, we would be responsible for all of the operating costs of a property following a vacancy at a single tenant building. Because our properties have generally been built to suit a particular tenant’s specific needs and desires, we may also incur significant losses to make the leased premises ready for another tenant and experience difficulty or a significant delay in releasing such property.

Bankruptcy laws will limit our remedies if a tenant becomes bankrupt and rejects its leases.

If a tenant becomes bankrupt or insolvent, that could diminish the income we receive from that tenant’s leases. We may not be able to evict a tenant solely because of its bankruptcy. On the other hand, a bankruptcy court might authorize the tenant to terminate its leasehold with us. If that happens, our claim against the bankrupt tenant for unpaid future rent would be an unsecured claim subject to statutory limitations, and therefore any amounts received in bankruptcy are likely to be substantially less valuable than the remaining rent we otherwise were owed under the leases. In addition, any payment on a claim we have for unpaid past rent could be substantially less than the amount owed.

Our portfolio is concentrated in certain states, which makes us more susceptible to adverse events in these areas.

Our properties are located in 47 states throughout the United States and in particular, the state of Texas (where 100 properties out of 1,404 properties are located, or 7.2% of our annualized base rent was derived as of December 31, 2021), Illinois (85 properties, or 5.9% of our annualized base rent) and Ohio (94 properties, or 5.8% of our annualized base rent). An economic downturn or other adverse events or conditions such as natural disasters in any of these areas, or any other area where we may have significant concentration in the future, could result in a material reduction of our cash flows or material losses to our company.

Our tenants are concentrated in certain retail sectors, which makes us susceptible to adverse conditions impacting these sectors.

As of December 31, 2021, 10.5%, 9.5% and 8.0% of our annualized contractual base rent and interest was derived from tenants operating in the grocery store, home improvement and convenience store sectors, respectively.  Similarly, we have concentrations in other sectors such as tire and auto services, general merchandise, and off-price retail.  Any decrease in consumer demand for the products and services offered by our tenants operating in any industries for which we have concentrations could have an adverse effect on our tenants’ revenues, costs and results of operations, thereby adversely affecting their ability to meet their lease obligations to us.  As we continue to invest in properties, our portfolio may become more or less concentrated by industry sector.  

There are risks associated with our development and acquisition activities.

We intend to continue the development of new properties and to consider possible acquisitions of existing properties. We anticipate that our new developments will be financed under the revolving credit facility or other forms of financing that will result in a risk that permanent fixed rate financing on newly developed projects might not be available or would be available only on disadvantageous terms. In addition, new project development is subject to a number of risks, including risks of construction delays or cost overruns that may increase anticipated project costs. Furthermore, new project commencement risks also include receipt of zoning, occupancy, other required governmental permits and authorizations and the incurrence of development costs in connection with projects that are not pursued to completion. If permanent debt or equity financing is not available on acceptable terms to finance new development or acquisitions undertaken without permanent financing, further development activities or acquisitions might be curtailed, or cash available for distribution might be adversely affected. Acquisitions entail risks that investments will fail to perform in accordance with expectations, as well as general investment risks associated with any new real estate investment.

Loss of revenues from tenants would reduce the Company’s cash flow.

Our tenants encounter significant macroeconomic, governmental and competitive forces. Adverse changes in consumer spending or consumer preferences for particular goods, services or store-based retailing could severely impact their ability

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to pay rent. Shifts from in-store to online shopping could increase due to changing consumer shopping patterns as well as the increase in consumer adoption and use of mobile electronic devices. This expansion of e-commerce could have an adverse impact on our tenant’s ongoing viability. The default, financial distress, bankruptcy or liquidation of one or more of our tenants could cause substantial vacancies in our property portfolio or impact our tenants’ ability to pay rent. Vacancies reduce our revenues, increase property expenses and could decrease the value of each vacant property. Upon the expiration of a lease, the tenant may choose not to renew the lease, renegotiate the economics of any option period(s) as a condition of exercising one or more of them, and/or we may not be able to release the vacant property at a comparable lease rate or without incurring additional expenditures in connection with such renewal or re-leasing.  These risks could be exacerbated by a deterioration in the financial condition of any major tenant with leases in multiple locations.

The availability and timing of cash dividends is uncertain.

We expect to continue to pay regular dividends to our stockholders. However, we bear all expenses incurred by our operations, and our funds generated by operations, after deducting these expenses, may not be sufficient to cover desired levels of dividends to our stockholders. We cannot assure our stockholders that sufficient funds will be available to pay dividends.

The decision to declare and pay dividends on our common stock in the future, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our board of directors and will depend on our earnings, funds from operations, liquidity, financial condition, capital requirements, contractual prohibitions, or other limitations under our indebtedness, annual dividend requirements or the REIT provisions of the Internal Revenue Code, state law and such other factors as our board of directors deems relevant. Further, we may issue new shares of common stock as compensation to our team members or in connection with public offerings or acquisitions. Any future issuances may substantially increase the cash required to pay dividends at current or higher levels.

Any preferred shares we may offer may have a fixed dividend rate that would not increase with any increases in the dividend rate of our common stock. Conversely, payment of dividends on our common stock is subject to payment in full of the dividends on any preferred shares and payment of interest on any debt securities we may offer.

If we do not maintain or increase the dividend on our common stock, it could have an adverse effect on the market price of our shares.

We face risks relating to information technology and cybersecurity attacks, loss of confidential information and other business disruptions.

We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information and to manage or support a variety of our business processes and we rely on commercially available systems, software, tools and monitoring to provide infrastructure and security for processing, transmitting and storing information. Any failure, inadequacy or interruption could materially harm our business. Furthermore, our business is subject to risks from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data and other electronic security breaches. Such cyber-attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. While we employ a number of measures to prevent, detect and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber-attack. Cybersecurity incidents could cause operational interruption, damage to our business relationships, private data exposure (including personally identifiable information, or proprietary and confidential information, of ours and our team members, as well as third parties) and affect the efficiency of our business operations. Any such incidents could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information and reduce the benefits of our technologies.

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General Real Estate Risk

Our performance and value are subject to general economic conditions and risks associated with our real estate assets.

There are risks associated with owning and leasing real estate. Although many of our leases contain terms that obligate the tenants to bear substantially all of the costs of operating our properties, investing in real estate involves a number of risks. Income from and the value of our properties may be adversely affected by:

changes in general or local economic conditions;
the attractiveness of our properties to potential tenants;
changes in supply of or demand for similar or competing properties in an area;
bankruptcies, financial difficulties or lease defaults by our tenants;
changes in operating costs and expense and our ability to control rents;
our ability to lease properties at favorable rental rates;
our ability to sell a property when we desire to do so at a favorable price;
unanticipated changes in costs associated with known adverse environmental conditions or retained liabilities for such conditions; and
changes in or increased costs of compliance with governmental rules, regulations and fiscal policies, including changes in the ADA and similar regulations and tax, real estate, environmental and zoning laws, and our potential liability thereunder.

Economic and financial market conditions have and may continue to exacerbate many of the foregoing risks. If a tenant fails to perform on its lease covenants, that would not excuse us from meeting any mortgage debt obligation secured by the property and could require us to fund reserves in favor of our mortgage lenders, thereby reducing funds available for payment of cash dividends on our shares of common stock.

The fact that real estate investments are relatively illiquid may reduce economic returns to investors.

We may desire to sell a property in the future because of changes in market conditions or poor tenant performance or to avail ourselves of other opportunities. We may also be required to sell a property in the future to meet secured debt obligations or to avoid a secured debt loan default. Real estate properties cannot generally be sold quickly, and we cannot assure you that we could always obtain a favorable price. We may be required to invest in the restoration or modification of a property before we can sell it, or we may need to obtain landlord consent to sell certain assets in which we have a leasehold interest in the land underlying the buildings. This lack of liquidity may limit our ability to vary our portfolio promptly in response to changes in economic or other conditions and, as a result, could adversely affect our financial condition, results of operations, cash flows and our ability to pay dividends on our common stock.

Our ability to renew leases or re-lease space on favorable terms as leases expire significantly affects our business.

We are subject to the risks that, upon expiration of leases for space located in our properties, the premises may not be re-let or the terms of re-letting (including the cost of concessions to tenants) may be less favorable than current lease terms. If a tenant does not renew its lease or if a tenant defaults on its lease obligations, there is no assurance we could obtain a substitute tenant on acceptable terms. If we cannot obtain another tenant with comparable building structural space and configuration needs, we may be required to modify the property for a different use, which may involve a significant capital expenditure and a delay in re-leasing the property. Further, if we are unable to re-let promptly all or a substantial portion of our retail space or if the rental rates upon such re-letting were significantly lower than expected rates, our net income and ability to make expected distributions to stockholders would be adversely affected. There can be no assurance that we will be able to retain tenants in any of our properties upon the expiration of their leases.

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Our leases contain certain limitations on tenants’ real estate tax, insurance and operating cost reimbursement obligations.

Our tenants under net leases generally are responsible for paying the real estate taxes, insurance costs and operating costs associated with the leased property. However, certain leases contain limitations on the tenant’s cost reimbursement obligations and, therefore, there are costs which may be incurred and which will not be reimbursed in full by tenants. This could reduce our operating cash flows from those properties and could reduce the value of those properties.

Potential liability for environmental contamination could result in substantial costs.

Under federal, state and local environmental laws, we may be required to investigate and clean up any release of hazardous or toxic substances or petroleum products at our properties, regardless of our knowledge or actual responsibility, simply because of our current or past ownership or operation of the real estate. If unidentified environmental problems arise, we may have to make substantial payments, which could adversely affect our cash flow and our ability to make distributions to our stockholders. This potential liability results from the following:

as owner, we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination;
the law may impose clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination;
even if more than one person is responsible for the contamination, each person who shares legal liability under environmental laws may be held responsible for all of the clean-up costs; and
governmental entities and third parties may sue the owner or operator of a contaminated site for damages and costs.

These costs could be substantial and in extreme cases could exceed the value of the contaminated property. The presence of hazardous substances or petroleum products or the failure to properly remediate contamination may adversely affect our ability to borrow against, sell or lease an affected property. In addition, some environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination.

We own and may in the future acquire properties that will be operated as convenience stores with gas station facilities. The operation of convenience stores with gas station facilities at our properties will create additional environmental concerns. Similarly, we may lease properties to users or producers of other hazardous materials.  We require that the tenants who operate these facilities do so in material compliance with current laws and regulations.

A majority of our leases require our tenants to comply with environmental laws and to indemnify us against environmental liability arising from the operation of the properties. However, we could be subject to strict liability under environmental laws because we own the properties. There are certain losses, including losses from environmental liabilities, that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so.  There is also a risk that tenants may not satisfy their environmental compliance and indemnification obligations under the leases. Any of these events could substantially increase our cost of operations, require us to fund environmental indemnities in favor of our secured lenders and reduce our ability to service our secured debt and pay dividends to stockholders and any debt security interest payments. Environmental problems at any properties could also put us in default under loans secured by those properties, as well as loans secured by unaffected properties.

Uninsured losses relating to real property may adversely affect our returns.

Our leases generally require tenants to carry comprehensive liability and extended coverage insurance on our properties. However, there are certain losses, including losses from environmental liabilities, terrorist acts or catastrophic acts of nature, that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so. If there is an uninsured loss or a loss in excess of insurance limits, we could lose both the revenues generated by the affected property and the capital we have invested in the property. In the event of a substantial unreimbursed loss, we would remain obligated to repay any mortgage indebtedness or other obligations related to the property.

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Risks Related to Our Debt Financings

Our level of indebtedness could materially and adversely affect our financial position, including reducing funds available for other business purposes and reducing our operational flexibility, and we may have future capital needs and may not be able to obtain additional financing on acceptable terms.

At December 31, 2021, our ratio of total debt to enterprise value (assuming conversion of Operating Partnership Common Units into shares of common stock) was approximately 24.5%. Incurring substantial debt may adversely affect our business and operating results by:

requiring us to use a substantial portion of our cash flow to pay interest and principal, which reduces the amount available for distributions, acquisitions and capital expenditures;
making us more vulnerable to economic and industry downturns and reducing our flexibility to respond to changing business and economic conditions;
requiring us to agree to less favorable terms, including higher interest rates, in order to incur additional debt, and otherwise limiting our ability to borrow for operations, working capital or to finance acquisitions in the future; or
limiting our flexibility in conducting our business, including our ability to finance or refinance our assets, contribute assets to joint ventures or sell assets as needed, which may place us at a disadvantage compared to competitors with less debt or debt with less restrictive terms.

In addition, the use of leverage presents an additional element of risk in the event that (1) the cash flow from lease payments on our properties is insufficient to meet debt obligations, (2) we are unable to refinance our debt obligations as necessary or on as favorable terms, (3) there is an increase in interest rates, (4) we default on our financial obligations or (5) debt service requirements increase. If a property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments, the property could be foreclosed upon with a consequential loss of income and asset value to us.

We generally intend to maintain a ratio of total indebtedness (including construction or acquisition financing) to total market capitalization of 65% or less. Nevertheless, we may operate with debt levels which are in excess of 65% of total market capitalization for extended periods of time. If our debt capitalization policy were changed, we could become more highly leveraged, resulting in an increase in debt service that could adversely affect our operating cash flow and our ability to make expected distributions to stockholders, and could result in an increased risk of default on our obligations.

Covenants in our credit agreements and note purchase agreements could limit our flexibility and adversely affect our financial condition.

The terms of the financing agreements and other indebtedness require us to comply with a number of customary financial and other covenants. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness even if we have satisfied our payment obligations. Our financing agreements contain certain cross-default provisions which could be triggered in the event that we default on our other indebtedness. These cross-default provisions may require us to repay or restructure the revolving credit facility in addition to any mortgage or other debt that is in default. If our properties were foreclosed upon, or if we are unable to refinance our indebtedness at maturity or meet our payment obligations, the amount of our distributable cash flows and our financial condition would be adversely affected.

Our unsecured revolving credit facility, certain term loan agreements and certain note purchase agreements contain various restrictive corporate covenants, including a maximum total leverage ratio, a maximum secured leverage ratio and a minimum fixed charge coverage ratio. In addition, our unsecured revolving credit facility, certain term loan agreements and certain note purchase agreements have unencumbered pool covenants, which include a maximum unencumbered leverage ratio and a minimum unencumbered interest coverage ratio. These covenants may restrict our ability to pursue certain business initiatives or certain transactions that might otherwise be advantageous. Furthermore, failure to meet certain of these financial covenants could cause an event of default under and/or accelerate some or all of such indebtedness which could have a material adverse effect on us.

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An increase in market interest rates could raise our interest costs on existing and future debt or adversely affect our stock price, and a decrease in interest rates may lead to additional competition for the acquisition of real estate or adversely affect our results of operations.

Our interest costs for any new debt and our current debt obligations may rise if interest rates increase. This increased cost could make the financing of any new acquisition more expensive as well as lower our current period earnings. Rising interest rates could limit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing. In addition, an increase in interest rates could decrease the access third parties have to credit, thereby decreasing the amount they are willing to pay to lease our assets and limit our ability to reposition our portfolio promptly in response to changes in economic or other conditions. An increase in market interest rates may lead prospective purchasers of our common stock to expect a higher dividend yield, which could adversely affect the market price of our common stock. Decreases in interest rates may lead to additional competition for the acquisition of real estate due to a reduction in desirable alternative income-producing investments. Increased competition for the acquisition of real estate may lead to a decrease in the yields on real estate targeted for acquisition. In such circumstances, if we are not able to offset the decrease in yields by obtaining lower interest costs on our borrowings, our results of operations may be adversely affected.

Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on your investment.

We use various derivative financial instruments to provide a level of protection against interest rate risks, but no hedging strategy can protect us completely. These instruments involve risks, such as the risk that the counterparties may fail to honor their obligations under these arrangements, that these arrangements may not be effective in reducing our exposure to interest rate changes, that a court could rule that such agreements are not legally enforceable, and that we may have to post collateral to enter into hedging transactions, which we may lose if we are unable to honor our obligations. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the REIT income tests. In addition, the nature and timing of hedging transactions may influence the effectiveness of our hedging strategies. Poorly designed strategies or improperly executed transactions could actually increase our risk and losses. Moreover, hedging strategies involve transaction and other costs. We cannot assure you that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedging transactions will not result in losses that may reduce the overall return on your investment.

The London Inter-Bank Offered Rate (“LIBOR”) is being phased-out as a reference rate for debt and hedging agreements and may require us to transition LIBOR-based contracts to an alternative reference rate.

In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee (“ARRC”), which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative rate for USD LIBOR in derivatives and other financial contracts.  The Company is not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets.  Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR.  If that were to occur, our interest payments could change.  In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

The Company has contracts that are indexed to LIBOR, including its revolving credit facility and interest rate swap agreements, and is monitoring and evaluating the related risks, which include interest paid on loans and amounts received and paid on derivative instruments.  These risks arise in connection with transitioning contracts to an alternative rate, including any resulting value transfer that may occur.  The value of loans, securities or derivative instruments tied to LIBOR could also be impacted if LIBOR is limited or discontinued.  

If a contract is not transitioned to an alternative reference rate and LIBOR is discontinued, the impact on our contracts is likely to vary by contract. If LIBOR is discontinued or if the methods of calculating LIBOR change from their current form, interest rates on our current or future indebtedness may be adversely affected.

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While we expect LIBOR to be available in substantially its current form until the end of 2022, it is possible that LIBOR will become unavailable prior to that point. This could occur if, for example, sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.  Alternative rates and other market changes related to the replacement of LIBOR, including the introduction of financial products and changes in market practices, may lead to risk modeling and valuation challenges, such as adjusting interest rate accrual calculations and building a term structure for an alternative rate.  The introduction of an alternative rate also may create additional basis risk and increased volatility as alternative rates are phased in and utilized in parallel with LIBOR.  Adjustments to systems and mathematical models to properly process and account for alternative rates will be required, which may strain the model risk management and information technology functions and result in substantial incremental costs for the Company.

Future offerings of debt and equity may not be available to us or may adversely affect the market price of our common stock.

We expect to continue to increase our capital resources by making additional offerings of equity and debt securities in the future, which could include classes or series of preferred stock, common stock and senior or subordinated notes. Our ability to raise additional capital may be restricted at a time when we would like or need, including as a result of market conditions. Future market dislocations could cause us to seek sources of potentially less attractive capital and impact our flexibility to react to changing economic and business conditions. All debt securities and other borrowings, as well as all classes or series of preferred stock, will be senior to our common stock in a liquidation of our company. Additional equity offerings could dilute our stockholders’ equity and reduce the market price of shares of our common stock. In addition, depending on the terms and pricing of an additional offering of our common stock and the value of our properties, our stockholders may experience dilution in both the book value and fair value of their shares. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market after an offering or the perception that such sales could occur, and this could materially and adversely affect our ability to raise capital through future offerings of equity or equity-related securities. In addition, we may issue preferred stock or other securities convertible into equity securities with a distribution preference or a liquidation preference that may limit our ability to make distributions on our common stock. Our ability to estimate the amount, timing or nature of additional offerings is limited as these factors will depend upon market conditions and other factors.

Risks Related to Our Corporate Structure

Our charter, bylaws and Maryland law contain provisions that may delay, defer or prevent a change of control transaction.

Our charter contains 9.8% ownership limits. Our charter, subject to certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT and contains provisions that limit any person to actual or constructive ownership of no more than 9.8% (in value or in number of shares, whichever is more restrictive) of the outstanding shares of our common stock and no more than 9.8% (in value) of the aggregate of the outstanding shares of all classes and series of our stock. Our board of directors, in its sole discretion, may exempt, subject to the satisfaction of certain conditions, any person from the ownership limits. These restrictions on transferability and ownership will not apply if our board of directors determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT. The ownership limits may delay or impede, and we may use the ownership limits deliberately to delay or impede, a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders.

We have a staggered board. Our directors are divided into three classes serving three-year staggered terms. The staggering of our board of directors may discourage offers for the Company or make an acquisition more difficult, even when an acquisition may be viewed to be in the best interest of our stockholders.

We could issue stock without stockholder approval. Our board of directors could, without stockholder approval, issue authorized but unissued shares of our common stock or preferred stock. In addition, our board of directors could, without stockholder approval, classify or reclassify any unissued shares of our common stock or preferred stock and set the preferences, rights and other terms of such classified or reclassified shares. Our board of directors could establish a series

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of stock that could, depending on the terms of such series, delay, defer or prevent a transaction or change of control that might involve a premium price for our common stock or otherwise be viewed to be in the best interest of our stockholders.

Provisions of Maryland law may limit the ability of a third party to acquire control of our company. Certain provisions of Maryland law may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under certain circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then prevailing market price of such shares, including:

“Business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof) for five years after the most recent date on which the stockholder becomes an interested stockholder and thereafter would require the recommendation of our board of directors and impose special appraisal rights and special stockholder voting requirements on these combinations; and
“Control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

The business combination statute permits various exemptions from its provisions, including business combinations that are approved or exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder. Our board of directors has exempted from the business combination provisions of the Maryland General Corporation Law, or MGCL, any business combination with Mr. Richard Agree or any other person acting in concert or as a group with Mr. Richard Agree.

In addition, our bylaws contain a provision exempting from the control share acquisition statute Richard Agree, Edward Rosenberg, any spouses or the foregoing, any brothers or sisters of the foregoing, any ancestors of the foregoing, any other lineal descendants of any of the foregoing, any estates of any of the foregoing, any trusts established for the benefit of any of the foregoing and any other entity controlled by any of the foregoing, our other officers, our team members, any of the associates or affiliates of the foregoing and any other person acting in concert of as a group with any of the foregoing.

Additionally, Title 3, Subtitle 8 of the MGCL, permits our board of directors, without stockholder approval and regardless of what is currently provided in our charter or our bylaws, to implement certain takeover defenses. These provisions may have the effect of inhibiting a third party from making an acquisition proposal for our company or of delaying, deferring or preventing a change in control of our company under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-current market price.

Our charter, our bylaws, the limited partnership agreement of the Operating Partnership and Maryland law also contain other provisions that may delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be viewed to be in the best interest of our stockholders.

An officer and director may have interests that conflict with the interests of stockholders.

An officer and member of our board of directors owns Operating Partnership Units. This individual may have personal interests that conflict with the interests of our stockholders with respect to business decisions affecting us and the Operating Partnership, such as interests in the timing and pricing of property sales or refinancing in order to obtain favorable tax treatment.

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Federal Income Tax Risks

Complying with REIT requirements may cause us to forego otherwise attractive opportunities.

To qualify as a REIT for federal income tax purposes we must continually satisfy numerous income, asset and other tests, thus having to forego investments we might otherwise make and hindering our investment performance.

Failure to qualify as a REIT could adversely affect our operations and our ability to make distributions.

We will be subject to increased taxation if we fail to qualify as a REIT for federal income tax purposes. Although we believe that we are organized and operate in such a manner so as to qualify as a REIT under the Internal Revenue Code, no assurance can be given that we will remain so qualified. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations. The complexity of these provisions and applicable treasury regulations is also increased in the context of a REIT that holds its assets in partnership form. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT. Additionally, our charter provides our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a regular corporation, without the approval of our stockholders. A REIT that annually distributes at least 90% of its taxable income to its stockholders generally is not taxed at the corporate level on such distributed income. We have not requested and do not plan to request a ruling from the Internal Revenue Service (the “IRS”) that we qualify as a REIT.

If we fail to qualify as a REIT, we will face tax consequences that will substantially reduce the funds available for payment of cash dividends:

We would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates.
We may be subject to increased state and local taxes.
Unless we are entitled to relief under statutory provisions, we could not elect to be treated as a REIT for four taxable years following the year in which we failed to qualify.

In addition, if we fail to qualify as a REIT, we will no longer be required to pay dividends (other than any mandatory dividends on any preferred shares we may offer). As a result of these factors, our failure to qualify as a REIT could adversely affect the market price for our common stock.

U.S. federal tax reform legislation could affect REITs generally, the geographic markets in which we operate, our stock and our results of operations, both positively and negatively in ways that are difficult to anticipate.

Changes to the federal income tax laws are proposed regularly. Additionally, the REIT rules are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Department of the Treasury, which may result in revisions to regulations and interpretations in addition to statutory changes. If enacted, certain such changes could have an adverse impact on our business and financial results. In particular, H.R. 1, which took effect for taxable years that began on or after January 1, 2018 (subject to certain exceptions), as amended by the Coronavirus Aid, Relief, and Economic Security Act made many significant changes to the federal income tax laws that profoundly impacted the taxation of individuals, corporations (both regular C corporations as well as corporations that have elected to be taxed as REITs), and the taxation of taxpayers with overseas assets and operations. A number of changes that affect non-corporate taxpayers will expire at the end of 2025 unless Congress acts to extend them. These changes impact us and our stockholders in various ways, some of which are adverse or potentially adverse compared to prior law. While the IRS has issued some guidance with respect to certain of the new provisions, there are numerous interpretive issues that will require further guidance, and technical corrections legislation may be needed to clarify certain aspects of the new law and give proper effect to Congressional intent. There can be no assurance, however, that technical clarifications or further changes needed to prevent unintended or unforeseen tax consequences will be enacted by Congress. In addition, while certain elements of tax reform legislation do not impact us directly as a REIT, they could impact the geographic markets in which we operate, the tenants that populate our properties and the customers who frequent our properties in ways, both positive and negative, that are difficult to anticipate. Other legislative proposals could be enacted in the future that could affect REITs and their

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stockholders. Prospective investors are urged to consult their tax advisors regarding the effect of these tax law changes and any other potential tax law changes on an investment in our common stock.

Changes in tax laws may prevent us from maintaining our qualification as a REIT.

As we have previously described, we intend to maintain our qualification as a REIT for federal income tax purposes. However, this intended qualification is based on the tax laws that are currently in effect. We are unable to predict any future changes in the tax laws that would adversely affect our status as a REIT. If there is a change in the tax law that prevents us from qualifying as a REIT or that requires REITs generally to pay corporate level income taxes, we may not be able to make the same level of distributions to our stockholders.

Complying with REIT requirements may force us to liquidate or restructure otherwise attractive investments.

In order to qualify as a REIT, at least 75% of the value of our assets must consist of cash, cash items, government securities and qualified real estate assets. The remainder of our investments in securities (other than government securities, securities of TRSs and qualified real estate assets) cannot include more than 10% of the voting securities or 10% of the value of all securities, of any one issuer. In addition, in general, no more than 5% of the total value of our assets (other than government securities, securities of TRSs and qualified real estate assets) can consist of securities of any one issuer, and no more than 20% of the total value of our assets can be represented by one or more TRSs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments.

We may have to borrow funds or sell assets to meet our distribution requirements.

Subject to some adjustments that are unique to REITs, a REIT generally must distribute 90% of its taxable income. For the purpose of determining taxable income, we may be required to accrue interest, rent and other items treated as earned for tax purposes but that we have not yet received. In addition, we may be required not to accrue as expenses for tax purposes some expenses that actually have been paid, including, for example, payments of principal on our debt, or some of our deductions might be disallowed by the IRS. As a result, we could have taxable income in excess of cash available for distribution. If this occurs, we may have to borrow funds or liquidate some of our assets in order to meet the distribution requirement applicable to a REIT.

Our ownership of and relationship with our TRSs will be limited, and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax.

A REIT may own up to 100% of the stock of one or more TRSs. A TRS may earn income that would not be qualifying income if earned directly by the parent REIT. Overall, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. A TRS will typically pay federal, state and local income tax at regular corporate rates on any income that it earns. In addition, the TRS rules impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis. Our TRSs will pay federal, state and local income tax on their taxable income, and their after-tax net income will be available for distribution to us but will not be required to be distributed to us. There can be no assurance that we will be able to comply with the 20% limitation discussed above or to avoid application of the 100% excise tax discussed above.

Liquidation of our assets may jeopardize our REIT qualification.

To qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our investments to repay obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% tax on any gain if we sell assets in transactions that are considered to be “prohibited transactions,” which are explained in the risk factor below.

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We may be subject to other tax liabilities even if we qualify as a REIT.

Even if we remain qualified as a REIT for federal income tax purposes, we will be required to pay certain federal, state and local taxes on our income and property. For example, we will be subject to federal income tax on any of our REIT taxable income (including capital gains) that we do not distribute annually to our stockholders. Additionally, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which dividends paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. Moreover, if we have net income from “prohibited transactions,” that income will be subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property held primarily for sale to customers in the ordinary course of business. The determination as to whether a particular sale is a prohibited transaction depends on the facts and circumstances related to that sale. While we will undertake sales of assets if those assets become inconsistent with our long-term strategic or return objectives, we do not believe that those sales should be considered prohibited transactions, but there can be no assurance that the IRS would not contend otherwise. The need to avoid prohibited transactions could cause us to forego or defer sales of properties that might otherwise be in our best interest to sell.

In addition, any net taxable income earned directly by our TRSs, or through entities that are disregarded for federal income tax purposes as entities separate from our TRSs, will be subject to federal and possibly state corporate income tax. To the extent that we and our affiliates are required to pay federal, state and local taxes, we will have less cash available for distributions to our stockholders.

Dividends payable by REITs do not qualify for the reduced tax rates on dividend income from regular corporations.

The maximum federal income tax rate applicable to “qualified dividend income” payable by non-REIT corporations to certain non-corporate U.S. stockholders is generally 20% and a 3.8% Medicare tax may also apply. Dividends paid by REITs, however, generally are not eligible for the reduced rates applicable to qualified dividend income. Commencing with taxable years that began on or after January 1, 2018 and continuing through 2025, H.R. 1 temporarily reduced the effective tax rate on ordinary REIT dividends (i.e., dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us) for U.S. holders of our common stock that are individuals, estates or trusts by permitting such holders to claim a deduction in determining their taxable income equal to 20% of any such dividends they receive. Taking into account H.R. 1’s reduction in the maximum individual federal income tax rate from 39.6% to 37%, this results in a maximum effective rate of regular income tax on ordinary REIT dividends of 29.6% through 2025 (as compared to the 20% maximum federal income tax rate applicable to qualified dividend income received from a non-REIT corporation). The more favorable rates applicable to regular corporate distributions could cause investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay distributions. This could materially and adversely affect the value of the stock of REITs, including our common stock.

Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

The REIT provisions of the Internal Revenue Code substantially limit our ability to hedge our liabilities. Any income from a hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets that is clearly identified in the manner specified in the Internal Revenue Code does not constitute gross income, and is not counted for purposes of income tests that apply to us as a REIT. To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of the income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a TRS. This could increase the cost of our hedging activities because our TRS would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in our TRSs will generally not provide any tax benefit, except for being carried forward against future taxable income in the TRSs.

Item 1B:       Unresolved Staff Comments

There are no unresolved staff comments.

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Item 2:          Properties

As of December 31, 2021, our portfolio consisted of 1,404 properties located in 47 states and totaling approximately 29.1 million square feet of GLA.

As of December 31, 2021, our portfolio was approximately 99.5% leased and had a weighted average remaining lease term of approximately 9.3 years. A significant majority of our properties are leased to national tenants and approximately 67.0% of our annualized base rent was derived from tenants, or parents thereof, with an investment grade credit rating. Substantially all of our tenants are subject to net lease agreements. A net lease typically requires the tenant to be responsible for minimum monthly rent and property operating expenses including property taxes, insurance and maintenance. In addition, our tenants are typically subject to future rent increases based on fixed amounts or increases in the consumer price index and certain leases provide for additional rent calculated as a percentage of the tenants’ gross sales above a specified level.

Tenant Diversification

The following table presents annualized base rents for all tenants that generated 1.5% or greater of our total annualized base rent as of December 31, 2021:

($ in thousands)

    

    

    

 

Annualized

% of Ann.

 

Tenant / Concept

    

Base Rent (1)

    

Base Rent

 

Walmart

$

24,479

 

6.6

%

Tractor Supply

 

14,406

 

3.9

%

Dollar General

 

14,380

 

3.9

%

Best Buy

 

13,166

 

3.5

%

TJX Companies

 

12,274

 

3.3

%

O'Reilly Auto Parts

 

11,869

 

3.2

%

Kroger

 

10,798

 

2.9

%

Hobby Lobby

 

10,595

 

2.8

%

Lowe's

 

10,543

 

2.8

%

Sherwin-Williams

 

10,290

 

2.8

%

CVS

 

9,645

 

2.6

%

Wawa

 

9,127

 

2.5

%

Burlington

 

8,974

 

2.4

%

Dollar Tree

 

7,906

 

2.1

%

TBC Corporation

 

7,893

 

2.1

%

Sunbelt Rentals

 

7,587

 

2.0

%

AutoZone

 

7,013

 

1.9

%

Home Depot

 

6,841

 

1.8

%

Other(2)

 

174,025

 

46.9

%

Total

$

371,811

 

100.0

%

(1)Represents annualized contractual base rent on a straight-line basis as of December 31, 2021.
(2)Includes tenants generating less than 1.5% of annualized contractual base rent.

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Tenant Sector Diversification

The following table presents annualized base rents for all sectors as of December 31, 2021:

($ in thousands)

    

    

    

 

Annualized

% of Ann.

 

Tenant Sector

    

Base Rent (1)

    

Base Rent

 

Grocery Stores

$

39,070

10.5

%

Home Improvement

 

35,291

9.5

%

Convenience Stores

 

29,732

8.0

%

Tire & Auto Service

 

29,017

7.8

%

General Merchandise

 

24,144

6.5

%

Off-Price Retail

 

23,459

6.3

%

Auto Parts

 

23,009

6.2

%

Dollar Stores

 

21,291

5.7

%

Farm And Rural Supply

 

16,396

4.4

%

Pharmacy

 

15,326

4.1

%

Consumer Electronics

 

14,967

4.0

%

Crafts And Novelties

 

12,825

3.4

%

Warehouse Clubs

 

8,314

2.3

%

Equipment Rental

 

7,913

2.1

%

Discount Stores

 

7,731

2.1

%

Restaurants - Quick Service

7,386

2.0

%

Health & Fitness

7,248

2.0

%

Health Services

6,818

1.8

%

Dealerships

6,475

1.7

%

Home Furnishings

5,696

1.5

%

Restaurants - Casual Dining

4,770

1.3

%

Specialty Retail

4,495

1.2

%

Financial Services

4,019

1.1

%

Theaters

3,854

1.0

%

Sporting Goods

3,243

0.9

%

Pet Supplies

2,597

0.7

%

Entertainment Retail

2,333

0.6

%

Apparel

1,201

0.3

%

Beauty And Cosmetics

1,166

0.3

%

Shoes

1,058

0.3

%

Office Supplies

860

0.3

%

Miscellaneous

 

107

0.1

%

Total

$

371,811

 

100.0

%

(1)Represents annualized contractual base rent on a straight-line basis as of December 31, 2021.

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Geographic Diversification

The following table presents annualized base rents, by state, for our portfolio as of December 31, 2021:

($ in thousands)

    

    

 

Annualized

% of Ann.

 

Tenant Sector

    

Base Rent (1)

    

Base Rent

 

Texas

$

26,636

 

7.2

%

Illinois

 

21,904

 

5.9

%

Ohio

 

21,584

 

5.8

%

Michigan

 

20,985

 

5.6

%

Florida

 

20,903

 

5.6

%

North Carolina

 

19,365

 

5.2

%

New Jersey

 

19,200

 

5.2

%

California

 

16,095

 

4.3

%

Pennsylvania

 

15,324

 

4.1

%

New York

 

14,124

 

3.8

%

Georgia

 

12,471

 

3.4

%

Virginia

 

10,787

 

2.9

%

Wisconsin

10,370

2.8

%

Connecticut

9,765

2.6

%

Other(2)

132,298

35.6

%

Total

$

371,811

 

100.0

%

(1)Represents annualized contractual base rent on a straight-line basis as of December 31, 2021.
(2)Includes states generating less than 2.5% of annualized contractual base rent.

Lease Expirations

The following table presents contractual lease expirations within the Company’s portfolio as of December 31, 2021, assuming that no tenants exercise renewal options:

($ and GLA in thousands)

 

Annualized Base Rent (1)

Gross Leasable Area

 

Number of

% of

% of

 

Year

    

Leases

    

Dollars

    

Total

    

Square Feet

    

Total

 

2022

 

13

$

1,777

 

0.5

%  

86

 

0.3

%

2023

 

49

 

10,332

 

2.8

%  

1,309

 

4.5

%

2024

 

42

 

13,122

 

3.5

%  

1,560

 

5.4

%

2025

 

68

 

17,064

 

4.6

%  

1,721

 

5.9

%

2026

 

104

 

21,061

 

5.7

%  

2,169

 

7.5

%

2027

 

96

 

23,036

 

6.2

%  

2,016

 

7.0

%

2028

 

104

 

26,678

 

7.2

%  

2,306

 

8.0

%

2029

 

130

 

36,676

 

9.9

%  

3,419

 

11.8

%

2030

 

220

 

44,712

 

12.0

%  

3,249

 

11.2

%

2031

 

133

 

31,976

 

8.6

%  

2,367

 

8.2

%

Thereafter

 

555

 

145,377

 

39.0

%  

8,793

 

30.2

%

Total

 

1,514

$

371,811

 

100

%  

28,995

 

100.0

%

(1)Represents annualized contractual base rent on a straight-line basis as of December 31, 2021.

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Developments

In the fourth quarter of 2021, construction continued on the Company’s third project with Gerber Collision in New Port Richey, Florida, which is expected to be completed during the second quarter of 2022, the Company’s first development with 7-Eleven in Saginaw, Michigan and the Company’s second Gerber Collision project in Pooler, Georgia, both of which are expected to be completed during the first quarter of 2022.

During the year ended December 31, 2021, the Company had seven development or PCS projects completed or under construction. Anticipated total costs for those projects are approximately $40.0 million and include the following completed or commenced projects:

    

    

    

    

Actual or

    

Lease

Anticipated Rent

 

Tenant

Location

Lease Structure

Term

Commencement

Status

Burlington

Texarkana, TX

Build-to-Suit

11 years

Q1 2021

Complete

Grocery Outlet

Port Angeles, WA

Build-to-Suit

15 years

Q2 2021

Complete

Gerber Collision

Buford, GA

Build-to-Suit

15 years

Q2 2021

Complete

Floor & Décor

Naples, FL

Build-to-Suit

15 years

Q2 2021

Complete

7-Eleven

Saginaw, MI

Build-to-Suit

15 years

Q1 2022

Under Construction

Gerber Collision

Pooler, GA

Build-to-Suit

15 years

Q1 2022

Under Construction

Gerber Collision

New Port Richey, FL

Build-to-Suit

15 years

Q3 2022

Under Construction

Item 3:        Legal Proceedings

From time to time, we are involved in legal proceedings in the ordinary course of business. We are not presently involved in any litigation nor, to our knowledge, is any other litigation threatened against us, other than routine litigation arising in the ordinary course of business, which is expected to be covered by our liability insurance and all of which collectively is not expected to have a material adverse effect on our liquidity, results of operations or business or financial condition.

Item 4:        Mine Safety Disclosures

Not applicable.

PART II

Item 5:        Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the NYSE under the symbol “ADC.” At February 21, 2022, there were 71,285,311 shares of our common stock issued and outstanding which were held by approximately 129 stockholders of record. The number of stockholders of record does not reflect persons or entities that held their shares in nominee or “street” name. In addition, at February 21, 2022 there were 347,619 outstanding Operating Partnership Common Units held by a limited partner other than our Company. The Operating Partnership Common Units are exchangeable into shares of common stock on a one-for-one basis.

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Common stock repurchases during the three months ended December 31, 2021 were:

    

    

    

Total Number of

Maximum Number

    

    

    

Shares Purchased

    

of Shares that May

as Part of Publicly

Yet Be Purchased

Total Number of

Average Price Paid

Announced Plans

Under the Plans

Period

Shares Purchased

Per Share

or Programs

or Programs

October 1, 2021 - October 31, 2021

$

November 1, 2021 - November 30, 2021

December 1, 2021 - December 31, 2021

88

70.46

Total

88

$

70.46

During the three months ended December 31, 2021, the Company withheld 88 shares from employees to satisfy estimated statutory income tax obligations related to vesting of restricted stock awards. The value of the common stock withheld was based on the closing price of our common stock on the applicable vesting date.

There were no unregistered sales of equity securities during the three months ended December 31, 2021.

We intend to continue to declare regular dividends, having transitioned from a quarterly dividend to a monthly dividend beginning in 2021. However, our distributions are determined by our board of directors and will depend upon cash generated by operating activities, our financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Internal Revenue Code and such other factors as the board of directors deems relevant. We have historically paid cash dividends, although we may choose to pay a portion in stock dividends in the future. To qualify as a REIT, we must distribute at least 90% of our REIT taxable income prior to net capital gains to our stockholders, as well as meet certain other requirements. We must pay these distributions in the taxable year the income is recognized; or in the following taxable year if they are declared during the last three months of the taxable year, payable to stockholders of record on a specified date during such period and paid during January of the following year. Such distributions are treated for REIT tax purposes as paid by us and received by our stockholders on December 31 of the year in which they are declared. In addition, at our election, a distribution for a taxable year may be declared in the following taxable year if it is declared before we timely file our tax return for such year and if paid on or before the first regular dividend payment after such declaration. These distributions qualify as dividends paid for the 90% REIT distribution test for the previous year and are taxable to holders of our capital stock in the year in which paid.

For information about our equity compensation plan, please see “Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K.

Item 6:        [Reserved]

Item 7:        Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements, and related notes thereto, included elsewhere in this Annual Report on Form 10-K and the “Cautionary Note Regarding Forward-Looking Statements” in “Item 1A – Risk Factors” above. Also refer to “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s previously filed Annual Report on Form 10-K for the year ended December 31, 2020 for additional discussion of our financial condition and results of operations, including a comparison of our results of operations for the years ended December 31, 2020 and December 31, 2019.

Overview

The Company is a fully integrated REIT primarily focused on the ownership, acquisition, development and management of retail properties net leased to industry leading tenants. The Company was founded in 1971 by its current Executive

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Chairman, Richard Agree, and its common stock was listed on the NYSE in 1994.  The Company’s assets are held by, and all of its operations are conducted through, directly or indirectly, the Operating Partnership, of which the Company is the sole general partner and in which the Company held 99.5% common interest as of December 31, 2021.  Refer to Note 1-Organization in the Notes to the Consolidated Financial Statements in this Form 10-K for further information on the ownership structure.  Under the agreement of limited partnership of the Operating Partnership, the Company, as the sole general partner, has exclusive responsibility and discretion in the management and control of the Operating Partnership.  

As of December 31, 2021, the Company’s portfolio consisted of 1,404 properties located in 47 states and totaling approximately 29.1 million square feet of GLA. The Company’s portfolio was approximately 99.5% leased and had a weighted average remaining lease term of approximately 9.3 years. A significant majority of the Company’s properties are leased to national tenants and approximately 67.0% of our annualized base rent was derived from tenants, or parent entities thereof, with an investment grade credit rating from S&P Global Ratings (acting through Standard & Poor’s Financial Services LLC), Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners. A net lease typically requires the tenant to be responsible for minimum monthly rent and property operating expenses including property taxes, insurance and maintenance.

The Company elected to be taxed as a REIT for federal income tax purposes commencing with the taxable year ended December 31, 1994. We believe that we have been organized and have operated in a manner that has allowed us to qualify as a REIT for federal income tax purposes and we intend to continue operating in such a manner.

COVID-19

We continue to closely monitor the impact of the novel coronavirus (“COVID-19”) pandemic on all aspects of our business and geographies, including how it is impacting our tenants and business partners. Although the duration and severity of this pandemic are still uncertain, there is reason to believe that the success of vaccination efforts in the U.S. is leading to a decline in COVID-19 cases and having a positive impact on businesses, as federal, state and local restrictions are lifted and individuals begin returning to pre-pandemic activities. However, we are still unable to predict the full impact that the COVID-19 pandemic will ultimately have on our financial condition, results of operations and cash flows due to numerous uncertainties. These uncertainties include the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. The outbreak of COVID-19 in many countries, including the United States, has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak continues to rapidly evolve and, many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. Many states and cities, including where we own properties, have development sites and where our principal place of business is located, have also reacted by instituting quarantines, restrictions on travel, “shelter in place” rules, restrictions on types of business that may continue to operate, and/or restrictions on the types of construction projects that may continue. Although many of these jurisdictions have lifted some of these restrictions, the Company cannot predict whether and to what extent the restrictions will be reinstated, whether additional states and cities will implement similar restrictions or when restrictions currently in place will expire. As a result, the COVID-19 pandemic has negatively impacted almost every industry directly or indirectly, including industries in which the Company and our tenants operate. Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer spending as well as other unanticipated consequences remain unknown. We cannot predict the impact that COVID-19 will have on our tenants and other business partners; however, any material effect on these parties could adversely impact us.

Refer to Note 2 – Summary of Significant Accounting Policies – Rent Concessions – COVID-19 to the consolidated financial statements within this Annual Report on Form 10-K regarding the Company’s accounting policies for rent concessions.  Pursuant to the Company’s accounting elections, rental revenue continued to be recognized for tenants subject to deferral agreements, as long as such agreements did not result in a substantial increase in our rights as the lessor.  Rent deferrals did not have a material impact on revenues for the year ended December 31, 2021.

The continuing impact of the COVID-19 pandemic on our rental revenue for future periods still cannot be fully determined at present. The situation surrounding the COVID-19 pandemic remains fluid, and we continue to actively manage our response in collaboration with tenants, government officials and business partners and assess potential impacts to our

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financial position and operating results, as well as potential adverse developments in our business. For further information regarding the impact of COVID-19 on the Company, see Part I, Item 1A, “Risk Factors.”

Results of Operations

Overall

The Company’s real estate investment portfolio grew from approximately $3.30 billion in gross investment amount representing 1,129 properties with 22.7 million square feet of gross leasable space as of December 31, 2020 to approximately $4.37 billion in gross investment amount representing 1,404 properties with 29.1 million square feet of gross leasable space at December 31, 2021. The Company’s real estate investments were made throughout the periods presented and were not all outstanding for the entire period; accordingly, a portion of the increase in rental income between periods is related to recognizing revenue in 2021 on acquisitions that were made during 2020. Similarly, the full rental income impact of acquisitions made during 2021 will not be seen until 2022.

Acquisitions

During the year ended December 31, 2021, the Company acquired 290 retail net lease assets for approximately $1.39 billion, which includes acquisition and closing costs. These properties are located in 43 states and are leased to 92 different tenants operating in 27 diverse retail sectors for a weighted average lease term of approximately 11.5 years. The underwritten weighted average capitalization rate on the Company’s 2021 acquisitions was approximately 6.2%.1

Dispositions

During the year ended December 31, 2021, the Company sold 18 properties for net proceeds of $56.0 million and recorded a net gain of $14.9 million. The weighted average capitalization rate on the Company’s 2021 dispositions was approximately 6.4%.1

Development and Partner Capital Solutions

During the year ended December 31, 2021, the Company commenced four development or PCS projects. At December 31, 2021 the Company had three development or Partner Capital Solutions projects under construction.

Comparison of Year Ended December 31, 2021 to Year Ended December 31, 2020

Year Ended

Variance

    

December 31, 2021

    

December 31, 2020

    

(in dollars)

    

(percentage)

Rental Income

$

339,067

$

248,309

$

90,758

37

%

Real Estate Tax Expense

$

25,513

$

21,428

$

4,085

19

%

Property Operating Expense

$

13,996

$

9,023

$

4,973

55

%

Depreciation and Amortization Expense

$

95,729

$

66,758

$

28,971

43

%

The variances in rental income, real estate tax expense, property operating expense and depreciation and amortization expense shown above were due to the acquisition and the ownership of an increased number of properties during the year ended December 31, 2021 compared to the year ended December 31, 2020, as further described under Results of Operations - Overall above.

General and administrative expenses increased $4.7 million, or 22%, to $25.5 million for the year ended December 31, 2021, compared to $20.8 million for the year ended December 31, 2020.  The increase was primarily the result of increased employee headcount and increased compensation costs.  General and administrative expenses for the year ended December 31, 2020 included a one-time $1.5 million extension bonus incurred in connection with an executive employment

1 When used within this discussion, “weighted average capitalization rate” for acquisitions and dispositions is defined by the Company as the sum of contractual fixed annual rents computed on a straight-line basis over the primary lease terms and anticipated annual net tenant recoveries, divided by the purchase and sale prices.

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agreement. General and administrative expenses as a percentage of total revenue decreased to 7.5% for the year ended December 31, 2021 compared to 8.4% for the year ended December 31, 2020.

Provision for impairment decreased to $1.9 million for the year ended December 31, 2021, compared to $4.1 million for the year ended December 31, 2020. Provisions for impairment reflect the amount by which current book value exceeds estimated fair value and are not necessarily comparable period-to-period.

Interest expense increased $10.3 million, or 26%, to $50.4 million for the year ended December 31, 2021, compared to $40.1 million for the year ended December 31, 2020.  The increase in interest expense was primarily a result of higher levels of borrowings in 2021 in comparison to 2020, partially offset by a reduction in interest rates on certain debt.

Gain on sale of assets increased to $14.9 million for the year ended December 31, 2021, compared to $8.0 million for the year ended December 31, 2020.  Gains on sales of assets are dependent on the levels of disposition activity and the assets’ basis relative to their sales prices.  As a result, such gains are not necessarily comparable period-to-period.

Income tax expense increased $1.3 million, or 121%, to $2.4 million for the year ended December 31, 2021, compared to $1.1 million for the year ended December 31, 2020. Income tax expense increased due to the acquisition and the ownership of additional properties during the year ended December 31, 2021 compared to the year ended December 31, 2020. Additionally, the Company recognized additional income tax expense of $0.5 million during the year ended December 31, 2021 relating to 2020 operations upon filing of annual tax returns in 2021.

In May 2021, the Company used the net proceeds from the offering of the 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes (see Liquidity and Capital Resources – Debt - Senior Unsecured Revolving Credit Facility and Unsecured Term Loans below) to repay all amounts outstanding under its unsecured term loans and settle the related swap agreements. The Company incurred a charge of $14.6 million upon this repayment and settlement, including swap termination costs of $13.4 million and the write-off of previously unamortized debt issuance costs of $1.2 million.

Net income increased $30.9 million, or 34%, to $122.9 million for the year ended December 31, 2021, compared to $92.0 million for the year ended December 31, 2020.  The increase was primarily driven by the increased number of properties during the year ended December 31, 2021, partially offset by the repayment and settlement charge discussed above.  After allocation of income to preferred stockholders, net income attributable to common stockholders increased $28.7 million, or 31% to $120.1 million for the year ended December 31, 2021, compared to $91.4 million for the year ended December 31, 2020. The allocation of income to the preferred stockholders began upon the September 2021 issuance of the Series A Preferred Stock – see Liquidity and Capital Resources - Equity below.

Liquidity and Capital Resources

The Company’s principal demands for funds include payment of operating expenses, payment of principal and interest on our outstanding indebtedness, dividends and distributions to its stockholders and holders of the units of the Operating Partnership (the “Operating Partnership Common Units”), and future property acquisitions and development.

The Company expects to meet its short-term liquidity requirements through cash provided from operations and borrowings under its revolving credit facility. As of December 31, 2021, available cash and cash equivalents, including cash held in escrow, was $45.3 million. As of December 31, 2021, the Company had $160.0 million outstanding on its revolving credit facility and $840.0 million was available for future borrowings, subject to its compliance with covenants.  The Company anticipates funding its long-term capital needs through cash provided from operations, borrowings under its revolving credit facility, the issuance of debt and common or preferred equity or other instruments convertible into or exchangeable for common or preferred equity.  In December 2021, the Company amended and restated its revolving credit agreement, increasing its current and potential future borrowing capacity – see Senior Unsecured Revolving Credit Facility below.

We continually evaluate alternative financing and believe that we can obtain financing on reasonable terms. However, there can be no assurance that additional financing or capital will be available, or that the terms will be acceptable or advantageous to us. Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our liquidity needs, is uncertain and cannot be predicted and could be affected by various risks and uncertainties,

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including, but not limited to, the effects of the COVID-19 pandemic and other risks detailed in Part I, Item 1A, “Risk Factors.”  Additionally, see COVID-19 above.

The full impact of the COVID-19 pandemic on the Company’s rental revenue and, as a result, future cash from operations cannot be determined at present.

Capitalization

As of December 31, 2021, the Company’s total enterprise value was approximately $6.94 billion.  Total enterprise value consisted of $5.11 billion of common equity (based on the December 31, 2021 closing price of Company common stock on the NYSE of $71.36 per share and assuming the conversion of Operating Partnership Common Units), $175 million of preferred equity (stated at liquidation value) and $1.70 billion of total debt including (i) $160.0 million of borrowings under its revolving credit facility; (ii) $1.51 billion of senior unsecured notes; (iv) $32.6 million of mortgage notes payable; less (v) cash, cash equivalents, and cash held in escrow of $45.3 million. The Company’s ratio of total debt to total enterprise value was 24.5% at December 31, 2021.

At December 31, 2021, the non-controlling interest in the Operating Partnership consisted of a 0.5% common ownership interest in the Operating Partnership. The Operating Partnership Common Units may, under certain circumstances, be exchanged for shares of Company common stock on a one-for-one basis. The Company, as sole general partner of the Operating Partnership, has the option to settle exchanged Operating Partnership Common Units held by others for cash based on the current trading price of our shares. Assuming the exchange of all Operating Partnership Common Units, there would have been 71,632,930 shares of common stock outstanding at December 31, 2021.

Equity

Shelf Registration

The Company has filed with the SEC an automatic shelf registration statement on Form S-3, registering an unspecified amount of common stock, preferred stock, depositary shares, warrants and guarantees of debt securities of the Operating Partnership, as well as an unspecified amount of debt securities of the Operating Partnership, at an indeterminate aggregate initial offering price. The Company may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered.  The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

Common Stock Offerings

In September 2018, the Company entered into a follow-on public offering of 3,500,000 shares of common stock in connection with a forward sale agreement (the “September 2018 Forward”).  The September 2018 Forward was settled in its entirety in April 2019.   Upon settlement the Company issued 3,500,000 shares and received net proceeds of approximately $186.0 million, after deducting fees and expenses.  

In April 2019, the Company entered into a follow-on public offering to sell an aggregate of 3,162,500 shares of common stock (the “April 2019 Forward”) which included the full exercise of the underwriters’ option to purchase an additional 412,500 shares of common stock. The April 2019 Forward was settled in its entirety on December 30, 2019.  Upon settlement, the Company issued 3,162,500 shares of common stock and received net proceeds of approximately $195.8 million, after deducting fees and expenses.

In April 2020, the Company completed a follow-on public offering of 2,875,000 shares of common stock, which included the full exercise of the underwriters’ option to purchase an additional 375,000 shares of common stock. Upon closing, the Company issued 2,875,000 shares and received net proceeds of $170.4 million, after deducting fees and expenses. Also in April 2020, the Company entered into a follow-on public offering to sell an aggregate of 6,166,666 shares of common stock in connection with a forward sale agreement (the “April 2020 Forward”). During the remainder of 2020, the

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Company settled the April 2020 Forward, realizing net proceeds of approximately $354.6 million, after deducting fees and expenses.

In January 2021, the Company completed a follow-on public offering of 3,450,000 shares of common stock, which included the underwriters’ option to purchase an additional 450,000 shares of common stock.  The offering resulted in net proceeds to the Company of approximately $221.4 million, after deducting fees and estimated offering expenses payable by the Company.

In June 2021, the Company completed a follow-on public offering of 4,600,000 shares of its common stock, which included the full exercise of the underwriters’ option to purchase an additional 600,000 shares of common stock.  The offering resulted in net proceeds to the Company of approximately $327.0 million, after deducting fees and estimated offering expenses payable by the Company.

In December 2021, the Company completed a follow-on public offering of 5,750,000 shares of common stock, including the full exercise of the underwriters' option to purchase additional 750,000 shares, in connection with forward sale agreements. Upon settlement, the offering is anticipated to raise net proceeds of approximately $374.8 million after deducting fees and expenses and making certain other adjustments as provided in the equity distribution agreements. As of December 31, 2021, the Company had not received any proceeds from the sale of shares of its common stock by the forward purchasers.

Preferred Stock Offering

In September 2021, the Company completed an underwritten public offering of depositary shares (the “Depositary Shares”), each representing 1/1,000th of a share of Series A Preferred Stock, which resulted in net proceeds to the Company of approximately $170.3 million, after deducting the underwriting discounts and commissions and costs payable by the Company. At the closing, the Company issued 7,000 shares of Series A Preferred Stock and 7,000,000 Depositary Shares. The Company contributed the net proceeds from the sale of the Depositary Shares to the Operating Partnership in exchange for 7,000 Series A Preferred Units corresponding to the number of shares of Series A Preferred Stock underlying the Depositary Shares.  

Dividends on the Series A Preferred Shares will be payable monthly in arrears on the first day of each month (or, if not on a business day, on the next succeeding business day). The dividend rate is 4.25% per annum of the $25,000 (equivalent to $25.00 per Depositary Share) liquidation preference. The first pro-rated dividend on the Series A Preferred Stock was paid on October 1, 2021 and was in an amount equivalent to $0.04132 per Depositary Share. Subsequent dividends on the Series A Preferred Shares will be in amount of $0.08854 per Depositary Share, equivalent to $1.0625 per annum.

The Company may not redeem the Series A Preferred Shares before September 2026 except in limited circumstances to preserve its status as a real estate investment trust for federal income tax purposes and except in certain circumstances upon the occurrence of a change of control of the Company.  Beginning in September 2026, the Company, at its option, may redeem the Series A Preferred Shares, in whole or from time to time in part, by paying $25.00 per Depositary Share, plus any accrued and unpaid dividends. Upon the occurrence of a change in control of the Company, if the Company does not otherwise redeem the Series A Preferred Shares, the holders have a right to convert their shares into common stock of the Company at the $25.00 per share liquidation value, plus any accrued and unpaid dividends.  This conversion value is limited by a share cap if the Company’s stock price falls below a certain threshold.

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ATM Programs

The Company enters into ATM programs through which the Company, from time to time, sells shares of common stock and enters into forward sale agreements.  The results of ATM programs entered into during 2019 and 2020 are shown in the following table.  These ATM programs have been terminated and no future issuances will occur under them.

Net Proceeds Received

Program Year

Size ($ million)

Shares Issued

($ million)

2019

$400.0

5,172,872

$362.9

2020

$400.0

3,334,056

$209.5

In February 2021, the Company entered into a new $500 million ATM program (the “2021 ATM Program”) through which the Company, from time to time, may sell shares of common stock and/or enter into forward sale agreements.  As of December 31, 2021, the Company entered into forward sale agreements to sell an aggregate of 2,125,296 shares of common stock under the 2021 ATM Program, for anticipated net proceeds of $144.4 million. The Company had not settled any shares of these forward sale agreements as of December 31, 2021. The Company is required to settle the remaining outstanding shares of common stock under the 2021 ATM Program by various dates between March and December 2022. After considering the 2,125,296 shares of common stock subject to forward sale agreements issued under the 2021 ATM Program, the Company had approximately $349.7 million of availability remaining under this program as of December 31, 2021.

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Debt

The below table summarizes the Company’s outstanding debt as of December 31, 2021 and December 31, 2020 (presented in thousands):

All-in

Principal Amount Outstanding

Senior Unsecured Revolving Credit Facility

    

Interest Rate

    

Maturity

    

December 31, 2021

    

December 31, 2020

Revolving Credit Facility (1)

 

0.88

%

January 2026

$

160,000

$

92,000

Total Credit Facility

$

160,000

$

92,000

Unsecured Term Loans (2) (3)

2023 Term Loan

 

2.40

%

$

 

40,000

2024 Term Loan Facility

 

3.09

%

 

 

65,000

2024 Term Loan Facility

 

2.43

%

 

 

35,000

2026 Term Loan

 

4.26

%

 

 

100,000

Total Unsecured Term Loans

$

$

240,000

Senior Unsecured Notes (3)

2025 Senior Unsecured Notes

 

4.16

%

May 2025

$

50,000

$

50,000

2027 Senior Unsecured Notes

 

4.26

%

May 2027

 

50,000

 

50,000

2028 Senior Unsecured Public Notes (4)

2.11

%

June 2028

350,000

2028 Senior Unsecured Notes

 

4.42

%

July 2028

 

60,000

 

60,000

2029 Senior Unsecured Notes

 

4.19

%

September 2029

 

100,000

 

100,000

2030 Senior Unsecured Notes

 

4.32

%

September 2030

 

125,000

 

125,000

2030 Senior Unsecured Public Notes (4)

 

3.49

%

October 2030

 

350,000

 

350,000

2031 Senior Unsecured Notes

 

4.42

%

October 2031

125,000

125,000

2033 Senior Unsecured Public Notes (4)

2.13

%

June 2033

300,000

Total Senior Unsecured Notes

$

1,510,000

$

860,000

Mortgage Notes Payable

CMBS Portfolio Loan

 

3.60

%

January 2023

$

23,640

$

23,640

Single Asset Mortgage Loan

 

5.01

%

September 2023

 

4,622

 

4,622

Portfolio Credit Tenant Lease

 

6.27

%

July 2026

 

4,372

 

5,172

Total Mortgage Notes Payable

$

32,635

$

33,434

Total Principal Amount Outstanding

$

1,702,635

$

1,225,434

(1)The annual interest rate of the Revolving Credit Facility (defined below) assumes one-month LIBOR as of December 31, 2021 of 0.11%.
(2)The Unsecured Term Loans were repaid in May 2021.
(3)Interest rate includes the effects of variable interest rates that have been swapped to fixed interest rates.
(4)The principal amount outstanding for the 2028 Senior Unsecured Public Notes, the 2030 Senior Unsecured Public Notes, and the 2033 Senior Unsecured Public Notes are presented excluding their original issue discounts.

Senior Unsecured Revolving Credit Facility

In December 2019, the Company entered into a Second Amended and Restated Revolving Credit and Term Loan Agreement. This agreement provided for a $500 million unsecured revolving credit facility. It also provided for a $65 million unsecured term loan facility and a $35 million unsecured term loan facility. All amounts outstanding under these unsecured term loan facilities were repaid in May 2021 (see Unsecured Term Loan Facilities below) and cannot be reborrowed against.

In December 2021, the Company entered into a Third Amended and Restated Revolving Credit Agreement which increases its senior unsecured revolving credit facility (the "Revolving Credit Facility") to $1.0 billion. The Revolving Credit Facility

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includes an accordion option that allows the Company to request additional lender commitments up to a total of $1.75 billion. The Revolving Credit Facility will mature in January 2026 with Company options to extend the maturity date to January 2027.  

The Revolving Credit Facility's interest rate is based on a pricing grid with a range of 72.5 to 140 basis points over LIBOR, determined by the Company's credit ratings. The margins for the Revolving Credit Facility are subject to improvement based on the Company's leverage ratio, provided its credit ratings meet a certain threshold. Based on the Company's credit ratings and leverage ratio at the time of closing, pricing on the Revolving Credit Facility was 77.5 basis points over LIBOR. In connection with the Company's ongoing environmental, social and governance ("ESG") initiatives, pricing may be reduced if specific ESG ratings are achieved.

The Company and Richard Agree, the Executive Chairman of the Company, are parties to a Reimbursement Agreement dated November 18, 2014 (the “Reimbursement Agreement”).  Pursuant to the Reimbursement Agreement, Mr. Agree has agreed to reimburse the Company for any loss incurred under the Revolving Credit Facility in an amount not to exceed $14.0 million to the extent that the value of the Operating Partnership’s assets available to satisfy the Operating Partnership’s obligations under the Revolving Credit Facility is less than $14.0 million.

Unsecured Term Loan Facilities

Prior to May 2021, the Company had a $40 million unsecured term loan facility that matures July 2023 (the “2023 Term Loan”), $100 million in unsecured term loan facilities maturing in January 2024 (the “2024 Term Loan Facilities”) and a $100 million unsecured term loan facility maturing in January 2026 (the “2026 Term Loan”).  The 2023 Term Loan, the 2024 Term Loans and 2026 Term Loan all bore interest based on LIBOR plus a credit spread and were subject to interest rate swap agreements.  

In May 2021, the Company used the net proceeds from the offering of the 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes (see Senior Unsecured Notes below) to repay all amounts outstanding under its unsecured term loans and settle the related swap agreements.  The Company incurred a charge of $14.6 million upon this repayment and settlement, including swap termination costs of $13.4 million and the write-off of previously unamortized debt issuance costs of $1.2 million.

Prior to the repayments of the 2023 Term Loan, the 2024 Term Loan Facilities and the 2026 Term Loan, these loans were subject to all-in interest rates of 2.40%, 2.86% and 4.26%, respectively, including the effects of related swap agreements.

Senior Unsecured Notes

In May 2015, the Company and the Operating Partnership completed a private placement of $100 million principal amount of senior unsecured notes. The senior unsecured notes were sold in two series; $50 million of 4.16% notes due May 2025 (the “2025 Senior Unsecured Notes”) and $50 million of 4.26% notes due May 2027 (the “2027 Senior Unsecured Notes”).

In July 2016, the Company and the Operating Partnership completed a private placement of $60 million aggregate principal amount of 4.42% senior unsecured notes due July 2028 (the “2028 Senior Unsecured Notes”).

In September 2017, the Company and the Operating Partnership completed a private placement of $100 million aggregate principal amount of 4.19% senior unsecured notes due September 2029 (the “2029 Senior Unsecured Notes”).

In September 2018, the Company and the Operating Partnership entered into two supplements to uncommitted master note facilities previously entered into with institutional purchasers. Pursuant to the supplements, the Operating Partnership completed a private placement of $125 million aggregate principal amount of 4.32% senior unsecured notes due September 2030 (the “2030 Senior Unsecured Notes”).

In October 2019, the Company and the Operating Partnership closed on a private placement of $125 million of 4.47% senior unsecured notes due October 2031 (the “2031 Senior Unsecured Notes”).  In March 2019, the Company entered into forward-starting interest rate swap agreements to fix the interest for $100 million of long-term debt until maturity.

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The Company terminated the swap agreements at the time of pricing the 2031 Senior Unsecured Notes, which resulted in an effective annual fixed rate of 4.41% for $100 million aggregate principal amount of the 2031 Senior Unsecured Notes. Considering the effect of the terminated swap agreements, the blended all-in rate to the Company for the $125 million aggregate principal amount of 2031 Senior Unsecured Notes is 4.42%.

All of the senior unsecured notes described in the preceding paragraphs were sold to only institutional investors in private placements pursuant to Section 4(a)(2) of the Securities Act.

In August 2020, the Operating Partnership completed an underwritten public offering of $350 million in aggregate principal amount of 2.900% Senior Unsecured Public Notes due 2030 (the “2030 Senior Unsecured Public Notes”). The 2030 Senior Unsecured Public Notes are fully and unconditionally guaranteed by Agree Realty Corporation and certain wholly owned subsidiaries of the Operating Partnership. The terms of the 2030 Senior Unsecured Public Notes are governed by an indenture, dated August 17, 2020, among the Operating Partnership, the Company and U.S. Bank National Association, as trustee (as amended and supplemented by an officer’s certificate dated August 17, 2020, the “Indenture”). The Indenture contains various restrictive covenants, including limitations on the ability of the guarantors and the issuer to incur additional indebtedness and requirements to maintain a pool of unencumbered assets. The Company terminated related swap agreements of $200.0 million that hedged the 2030 Senior Unsecured Public Notes, paying $23.4 million upon termination. Considering the effect of the terminated swap agreements, the blended all-in rate to the Company for the $350 million aggregate principal amount of 2031 Senior Unsecured Notes is 3.49%.

In May 2021, the Operating Partnership completed an underwritten public offering of $350 million aggregate principal amount of its 2.000% Notes due 2028 (the “2028 Senior Unsecured Public Notes”) and $300 million in aggregate principal amount of 2.600% Notes due 2033 (the “2033 Senior Unsecured Public Notes”).  The 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes are fully and unconditionally guaranteed by Agree Realty Corporation and certain wholly owned subsidiaries of the Operating Partnership.  The terms of the 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes are governed by an indenture, dated August 17, 2020, among the Operating Partnership, the Company and U.S. Bank National Association, as trustee (as amended and supplemented by an officer’s certificate dated May 14, 2021, the “Indenture”). The Indenture contains various restrictive covenants, including limitations on the ability of the guarantors and the issuer to incur additional indebtedness and requirements to maintain a pool of unencumbered assets.  The Company terminated related swap agreements of $300 million that hedged the 2033 Senior Unsecured Public Notes, receiving $16.7 million upon termination. Considering the effect of the terminated swap agreements, the blended all-in rates to the Company for the $350 million aggregate principal amount of the 2028 Senior Unsecured Public Notes and the $300 million aggregate principal amount of the 2033 Senior Unsecured Public Notes are 2.11% and 2.13%, respectively.

Mortgage Notes Payable

As of December 31, 2021, the Company had total gross mortgage indebtedness of $32.6 million which was collateralized by related real estate and tenants’ leases with an aggregate net book value of $38.9 million. Including mortgages that have been swapped to a fixed interest rate, the weighted average interest rate on the Company’s mortgage notes payable was 4.16% as of December 31, 2021 and 4.21% as of December 31, 2020.

The Company has entered into mortgage loans which are secured by multiple properties and contain cross-default and cross-collateralization provisions. Cross-collateralization provisions allow a lender to foreclose on multiple properties in the event that the Company defaults under the loan. Cross-default provisions allow a lender to foreclose on the related property in the event a default is declared under another loan.

Loan Covenants

Certain loan agreements contain various restrictive covenants, including the following financial covenants: maximum leverage ratio, maximum secured leverage ratios, consolidated net worth requirements, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, a minimum unsecured interest expense ratio, a minimum interest coverage ratio, a minimum unsecured debt yield and a minimum unencumbered interest expense ratio. As of December 31, 2021,

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the most restrictive covenant was the minimum unencumbered interest expense ratio. The Company was in compliance with all of its material loan covenants and obligations as of December 31, 2021.

Cash Flows

Operating -- Most of the Company’s cash from operations is generated by rental income from its investment portfolio.  Net cash provided by operating activities for the year ended December 31, 2021 increased by $103.4 million over 2020, primarily due to the increase in the size of the Company’s real estate investment portfolio, as well as in increase in cash received upon settlement of outstanding interest rate swap agreements. 

Investing -- Net cash used in investing activities was $86.8 million higher during the year ended December 31, 2021, compared to 2020.  Acquisitions of properties during 2021 were $74.0 million higher than 2020, due to overall increases in the level of acquisition activity.  Development costs during the year ended December 31, 2021 were $21.8 million higher than 2020, due to the timing of costs incurred related to the Company’s development activity.  Proceeds from asset sales increased by $8.3 million during the year ended December 31, 2021 compared to 2020. Proceeds from asset sales are dependent on levels of disposition activity and the specific assets sold. Proceeds from asset sales are not necessarily comparable period-to-period.

Financing -- Net cash provided by financing activities was $54.9 million higher during the year ended December 31, 2021, compared to 2020.  Net proceeds from the issuance of common stock and preferred stock increased by $19.0 million during the year ended December 31, 2021 compared to 2020, primarily to fund the increased level of acquisitions occurring in 2021.  Net proceeds from the issuance of senior unsecured notes increased by $290.9 million during the year ended December 31, 2021, compared to 2020, also to fund the increased level of acquisitions occurring in 2021 as well as to pay off $240.0 million in unsecured term loans.  Increases in equity and debt issuances also included an increase in net borrowings on the Revolving Credit Facility of $65.0 million during the year ended December 31, 2021 compared to 2020.  The Company increased its total dividends and distributions paid to its stockholders and non-controlling owners by $79.9 million during 2021 compared to 2020.  The Company’s annualized common dividend during the fourth quarter of 2021 is $2.72 per common share, a 9.7% increase over the annualized $2.48 per common share declared in the fourth quarter of 2020.

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Material Cash Requirements

In conducting our business, the Company enters into contractual obligations, including those for debt and operating leases for land. Detail of these obligations as of December 31, 2021, including expected settlement periods, is contained below (presented in thousands):

Payments due by period

2022

    

2023

    

2024

    

2025

    

2026

    

Thereafter

    

Total

Mortgage Notes Payable

$

850

$

29,167

$

963

$

1,026

$

629

$

$

32,635

Revolving Credit Facility (1)

 

 

 

 

 

160,000

 

 

160,000

Senior Unsecured Notes

 

 

 

 

50,000

 

 

1,460,000

 

1,510,000

Land Lease Obligations

 

1,533

 

1,533

 

7,449

 

1,197

 

1,195

 

29,850

 

42,757

Estimated Interest Payments on Outstanding Debt (2)

 

52,282

 

51,376

 

51,088

 

49,986

 

40,410

 

206,748

 

451,890

Total

$

54,665

$

82,076

$

59,500

$

102,209

$

202,234

$

1,696,598

$

2,197,282

(1)The balloon payment balance includes the balance outstanding under the Revolving Credit Facility as of December 31, 2021. The Revolving Credit Facility matures in January 2026, with options to extend the maturity to extend its maturity date by six months up to two times, for a maximum maturity of January 2027.
(2)Estimated interest payments are based on (i) the stated rates for mortgage notes payable, including the effect of interest rate swap agreements and (ii) the stated rates for senior unsecured notes, including the effect of interest rate swap agreements.

In addition to items reflected in the table above, the Company has issued preferred stock with cumulative cash dividends, as described under Equity – Preferred Stock Offering above.

During the year ended December 31, 2021 the Company had seven development or Partner Capital Solutions projects completed or under construction, for which three remain under construction as of December 31, 2021. Anticipated total costs for the seven projects are approximately $40.0 million. These construction commitments will be funded using cash provided from operations, current capital resources on hand, and/or other sources of funding available to the Company.

The Company’s recurring obligations under its tenant leases for maintenance, taxes, and/or insurance will also be funded

through the sources available to the Company described earlier.

Dividends

During the fourth quarter of 2021 the Company declared monthly dividends of $0.227 per common share for October, November, and December 2021. The holder of the Operating Partnership Common Units is entitled to an equal distribution per Operating Partnership Common Unit held. The dividends and distributions payable for October and November were paid during the quarter.   The December dividends and distributions were paid on January 14, 2022.

During the fourth quarter of  2021, the Company declared a monthly dividend on the Series A Preferred Shares for October, November, and December 2021 in the amount of $0.08854 per Depositary Share. The December dividend was paid on January 3, 2022.  

Recent Accounting Pronouncements

Refer to “Note 2 – Summary of Significant Accounting Policies” in the consolidated financial statements for a summary and anticipated impact of each accounting pronouncement on the Company’s financial statements.

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Critical Accounting Policies and Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires the Company’s management to use judgement in the application of accounting policies, including making estimates and assumptions.  Management bases estimates on the best information available at the time, its experience and on various other assumptions believed to be reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  If management’s judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting principles would have been applied, resulting in different presentations of the consolidated financial statements.  From time-to-time, the Company may re-evaluate its estimates and assumptions.  In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain.  A summary of the Company’s critical accounting policies is included below.  This summary should be read in conjunction with the more complete discussion of our accounting policies and procedures included in Note 2 to our consolidated financial statements.

Accounting for Acquisitions of Real Estate

The acquisition of property for investment purposes is typically accounted for as an asset acquisition. The Company allocates the purchase price to land, building and identified intangible assets and liabilities, based in each case on their relative estimated fair values and without giving rise to goodwill. In making estimates of fair values, the Company may use various sources, including data provided by independent third parties, as well as information obtained by the Company as a result of due diligence, including expected future cash flows of the property and various characteristics of the markets where the property is located. Certain estimates, including those around market land values, building replacement values, and market rental rates, are inherently subjective. While estimates of market land values and market rental rates are based on available market data, each land parcel and building are unique, and significant judgment may be required in developing the assumptions. The use of different assumptions in the allocation of the purchase price of the acquired properties could affect the timing of recognition of the related revenue and expenses.

Impairments

We review our real estate investments for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable through operations plus estimated disposition proceeds. Events or circumstances that may occur include, but are not limited to, significant changes in real estate market conditions, estimated residual values, or our ability or expectation to re-lease or sell properties that are vacant or become vacant. Management determines whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the real estate, with the carrying cost of the individual asset. An asset is considered impaired if its carrying value exceeds its estimated undiscounted cash flows and an impairment charge is recorded in the amount by which the carrying value of the asset exceeds its estimated fair value.  

The valuation of impaired assets is determined using valuation techniques including discounted cash flow analysis, analysis of recent comparable sales transactions and purchase offers received from third parties. The Company may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate.

The expected cash flows of a property are dependent on estimates and other factors subject to change, including (1) changes in the national, regional, and/or local economic climates and/or market conditions, (2) competition from other retail, (3) increases in operating costs, (4) bankruptcy and/or other changes in a tenant’s condition and (5) expected holding period. These factors could cause our expected future cash flows from a property to change, and, as a result, an impairment could be considered to have occurred. Determination of the fair value of a property for purposes of measuring impairment involves significant judgment.

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Non-GAAP Financial Measures

Funds from Operations (“FFO” or “Nareit FFO”)

FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (“Nareit”) to mean net income computed in accordance with GAAP, excluding gains (or losses) from sales of real estate assets and/or changes in control, plus real estate related depreciation and amortization and any impairment charges on depreciable real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most real estate industry investors consider FFO to be helpful in evaluating a real estate company’s operation.

FFO should not be considered an alternative to net income as the primary indicator of the Company’s operating performance, or as an alternative to cash flow as a measure of liquidity. Further, while the Company adheres to the Nareit definition of FFO, its presentation of FFO is not necessarily comparable to similarly titled measures of other REITs due to the fact that all REITs may not use the same definition.

Core Funds from Operations (“Core FFO”)

The Company defines Core FFO as Nareit FFO with the addback of (i) noncash amortization of above- and below- market lease intangibles and (ii) certain infrequently occurring items that reduce or increase net income in accordance with GAAP. Under Nareit’s definition of FFO, lease intangibles created upon acquisition of a net lease must be amortized over the remaining term of the lease. The Company believes that by recognizing amortization charges for above- and below-market lease intangibles, the utility of FFO as a financial performance measure can be diminished.  Management believes that its measure of Core FFO facilitates useful comparison of performance to its peers who predominantly transact in sale-leaseback transactions and are thereby not required by GAAP to allocate purchase price to lease intangibles.  Unlike many of its peers, the Company has acquired the substantial majority of its net-leased properties through acquisitions of properties from third parties or in connection with the acquisitions of ground leases from third parties.

Core FFO should not be considered an alternative to net income as the primary indicator of the Company’s operating performance, or as an alternative to cash flow as a measure of liquidity. Further, the Company’s presentation of Core FFO is not necessarily comparable to similarly titled measures of other REITs due to the fact that all REITs may not use the same definition.

Adjusted Funds from Operations (“AFFO”)

AFFO is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. AFFO further adjusts FFO and Core FFO for certain non-cash items that reduce or increase net income computed in accordance with GAAP. Management considers AFFO a useful supplemental measure of the Company’s performance, however, AFFO should not be considered an alternative to net income as an indication of its performance, or to cash flow as a measure of liquidity or ability to make distributions. The Company’s computation of AFFO may differ from the methodology for calculating AFFO used by other equity REITs, and therefore may not be comparable to such other REITs.

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The following table provides a reconciliation of net income to FFO, Core FFO, and AFFO for the years ended December 31, 2021, 2020, and 2019:

Year Ended

    

    

December 31, 2021

    

December 31, 2020

    

December 31, 2019

Reconciliation from Net Income to Funds from Operations

Net income

$

122,876

$

91,972

$

80,763

Less Series A preferred stock dividends

2,148

Net income attributable to Operating Partnership common unitholders

120,728

91,972

80,763

Depreciation of rental real estate assets

 

66,732

 

48,367

 

34,349

Amortization of lease intangibles - in-place leases and leasing costs

 

28,379

 

17,882

 

11,071

Provision for impairment

 

1,919

 

4,137

 

1,609

(Gain) loss on sale or involuntary conversion of assets, net

 

(15,111)

 

(8,004)

 

(13,306)

Funds from Operations - Operating Partnership common unitholders

$

202,647

$

154,354

$

114,486

Loss on extinguishment of debt and settlement of related hedges

14,614

Amortization of above (below) market lease intangibles, net

24,284

15,885

13,501

Core Funds from Operations - Operating Partnership common unitholders

$

241,545

$

170,239

$

127,987

Straight-line accrued rent

 

(11,857)

 

(7,818)

 

(7,093)

Deferred tax expense (benefit)

(475)

Stock based compensation expense

 

5,467

 

4,995

 

4,106

Amortization of financing costs

 

1,197

 

826

 

706

Non-real estate depreciation

 

618

 

509

 

283

Adjusted Funds from Operations - Operating Partnership common unitholders

$

236,970

$

168,751

$

125,514

Funds from Operations per common share and partnership unit - diluted

$

3.00

$

2.93

$

2.75

Core Funds from Operations per common share and partnership unit - diluted

$

3.58

$

3.23

$

3.08

Adjusted Funds from Operations per common share and partnership unit - diluted

$

3.51

$

3.20

$

3.02

Weighted average shares and Operating Partnership common units outstanding

Basic

 

67,149,861

 

52,185,838

 

40,924,965

Diluted

 

67,486,698

 

52,744,353

 

41,571,233

Additional supplemental disclosure

Scheduled principal repayments

$

799

$

907

$

2,401

Capitalized interest

$

249

$

172

$

410

Capitalized building improvements

$

5,821

$

5,581

$

2,451

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Item 7A:        Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to interest rate risk primarily through borrowing activities. There is inherent roll-over risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements.

The Company’s interest rate risk is monitored using a variety of techniques. The table below presents the principal payments (presented in thousands) and the weighted average interest rates on outstanding debt, by year of expected maturity, to evaluate the expected cash flows and sensitivity to interest rate changes.  Average interest rates shown reflect the impact of the swap agreements described later in this section.

    

    

2022

    

2023

    

2024

    

2025

    

2026

    

Thereafter

    

Total

Mortgage Notes Payable

 

$

850

 

$

29,167

 

$

963

 

$

1,026

 

$

629

 

$

$

32,635

Average Interest Rate

 

6.27

%

3.91

%

6.27

%

6.27

%

6.27

%

Revolving Credit Facility (1)

$

$

$

 

$

$

160,000

$

$

160,000

Average Interest Rate

1.84

%

Senior Unsecured Notes

$

$

$

$

50,000

$

$

1,460,000

$

1,510,000

Average Interest Rate

4.16

%

 

3.15

%

(1)The balloon payment balance includes the balance outstanding under the Revolving Credit Facility as of December 31, 2021. The Revolving Credit Facility matures in January 2026, with options to extend the maturity to extend its maturity date by six months up to two times, for a maximum maturity of January 2027.

The fair value is estimated at $33.9 million for the mortgage notes payable and $1.57 billion for the senior unsecured notes as of December 31, 2021. The fair value of the Revolving Credit Facility approximates its book value as its variable rate debt.

The table above incorporates those exposures that exist as of December 31, 2021; it does not consider those exposures or positions which could arise after that date. As a result, the Company’s ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period and interest rates.

The Company seeks to limit the impact of interest rate changes on earnings and cash flows and to lower the overall borrowing costs by closely monitoring our variable rate debt and converting such debt to fixed rates when the Company deems such conversion advantageous. From time to time, the Company may enter into interest rate swap agreements or other interest rate hedging contracts. While these agreements are intended to lessen the impact of rising interest rates, they also expose the Company to the risks that the other parties to the agreements will not perform. The Company could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly effective cash flow hedges under GAAP guidance.

In May 2021 and July 2021, the Company entered into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $300 million of long-term debt. The Company hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending December 2022.  As of December 31, 2021, these interest rate swaps were valued as a liability of approximately $1.5 million.

The Company does not use derivative instruments for trading or other speculative purposes, and the Company did not have any other derivative instruments or hedging activities as of December 31, 2021.

Refer to the section “Risks Related to Our Debt Financings” under Item 1A “Risk Factors” in this Annual Report for discussion of the future transition from LIBOR and the possible impact it may have on the Company’s debt, swap agreements, and interest payments.

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Item 8:       Financial Statements and Supplementary Data

The financial statements and supplementary data are listed in the Index to the Financial Statements and Financial Statement Schedules appearing on Page F-1 of this Annual Report on Form 10-K and are included in this Annual Report on Form 10-K following page F-1.

Item 9:       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A:    Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that its disclosure controls and procedures are effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a15-(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:

1)Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our Company;
2)Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
3)Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision of our principal executive officer and our principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment and those criteria, our management believes that we maintained effective internal control over financial reporting as of December 31, 2021.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Attestation Report of Independent Registered Public Accounting Firm

The attestation report issued by our independent registered public accounting firm, Grant Thornton LLP, required under this item is contained on page F-2 of this Annual Report on Form 10-K.

Item 9B:       Other Information

None.

Item 9C:       Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

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PART III

Item 10:       Directors, Executive Officers and Corporate Governance

The information required by this item is set forth under the following captions in our proxy statement to be filed with respect to our 2022 Annual Meeting of Stockholders (the “Proxy Statement”), all of which is incorporated by reference: “Proposal I – Election of Directors” “Board Matters –The Board of Directors” “Board Matters –Committees of the Board” “Board Matters –Corporate Governance” “Executive Officers” “Additional Information – Delinquent Section 16(a) Reports” and “Additional Information – Proposals for 2022 Annual Meeting.”

Item 11:       Executive Compensation

The information required by this item is set forth under the following captions in our Proxy Statement, all of which is incorporated herein by reference: “Compensation Discussion and Analysis,” “Executive Compensation Tables,” “Board Matters – Director Compensation,” “Board Matters – Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report.”

Item 12:       Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table summarizes the equity compensation plan under which our common stock may be issued as of December 31, 2021.

    

    

    

Number of Securities

    

Remaining Available for

Number of Securities to 

Future Issuance Under

be Issued Upon

Weighted Average

Equity Compensation

Exercise of Outstanding

Exercise Price of

Plans (Excluding

Options, Warrants and

Outstanding Options,

Securities Reflected in

Rights

Warrant and Rights

Column (a))

Plan Category

(a)

(b)

(c)

Equity Compensation Plans Approved by Security Holders

 

 

 

488,069

(1)

Equity Compensation Plans Not Approved by Security Holders

 

 

 

  

Total

 

 

 

488,069

  

(1)Relates to various stock-based awards available for issuance under the Agree Realty Corporation 2020 Omnibus Incentive Plan, including incentive stock options, non-qualified stock options, stock appreciation rights, deferred stock awards, restricted stock awards, performance shares and units, unrestricted stock awards and dividend equivalent rights.

Additional information required by this item is set forth under the following caption in our Proxy Statement, all of which is incorporated herein by reference: “Security Ownership of Certain Beneficial Owners and Management.”

Item 13:       Certain Relationships and Related Transactions, and Director Independence

The information required by this item is set forth under the following captions in our Proxy Statement, all of which is incorporated herein by reference: “Related Person Transactions” and “Board Matters –The Board of Directors.”

Item 14:       Principal Accounting Fees and Services

The information required by this item is set forth under the following caption in our Proxy Statement, all of which is incorporated herein by reference: “Audit Committee Matters.”

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PART IV

ITEM 15:        Exhibits and Financial Statement Schedules

15(a)(1).

The following documents are filed as a part of this Annual Report on Form 10-K:

     Reports of Independent Registered Public Accounting Firm

     Consolidated Balance Sheets as of December 31, 2021 and 2020

     Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2021, 2020, and 2019

     Consolidated Statement of Equity for the Years Ended December 31, 2021, 2020, and 2019

     Consolidated Statements of Cash Flow for the Years Ended December 31, 2021, 2020, and 2019

     Notes to the Consolidated Financial Statements

15(a)(2).

The following is a list of the financial statement schedules required by Item 8:

Schedule III – Real Estate and Accumulated Depreciation

15(a)(3).

Exhibits

Exhibit
No.

    

Description 

 

 

 

3.1

 

Articles of Incorporation of the Company, including all amendments and articles supplementary thereto (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013).

 

 

 

3.2

 

Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on May 9, 2013).

 

 

 

3.3

 

Amendment to the Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 6, 2015).

 

 

 

3.4

 

Amendment to Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 3, 2016).

3.5

Articles Supplementary of the Company, dated February 26, 2019 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on February 28, 2019).

3.6

First Amendment to Amended and Restated Bylaws of Agree Realty Corporation, effective February 26, 2019 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on February 28, 2019).

3.7

Articles of Amendment of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 25, 2019).

3.8

Amendment to Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 10, 2021).

3.9

Articles Supplementary of the Company, dated September 13, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 13, 2021).

4.1

Amended and Restated Registration Rights Agreement, dated July 8, 1994 by and among the Company, Richard Agree, Edward Rosenberg and Joel Weiner (incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1994).

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Table of Contents

 

 

 

4.2

 

Form of certificate representing shares of common stock (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-3 filed on August 24, 2009).

 

 

 

4.3

 

Form of 4.32% Senior Guaranteed Note, Series 2018-A, due September 26, 2030 (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018).

 

 

 

4.4

 

Form of 4.32% Senior Guaranteed Note, Series 2018-B, due September 26, 2030 (incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018).

4.5*

Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

 

 

 

4.6

Indenture, dated as of August 17, 2020, among the Agree Limited Partnership, Agree Realty Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 17, 2020).

4.7

Indenture Officer’s Certificate, dated as of August 17, 2020, among Agree Limited Partnership, Agree Realty Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 17, 2020).

4.8

Form of Global Note for 2.900% Notes due 2030 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 17, 2020).

4.9

Form of Guarantee by and among Agree Limited Partnership, the Guarantors named therein and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 17, 2020).

4.10

Indenture Officer’s Certificate, dated as of May 14, 2021, among Agree Limited Partnership, Agree Realty Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on May 14, 2021).

4.11

Form of Global Note for 2.000% Notes due 2028 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on May 14, 2021).

4.12

Form of Global Note for 2.600% Notes due 2033 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on May 14, 2021).

4.13

Form of 2028 Guarantee by and among Agree Limited Partnership, Agree Realty Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on May 14, 2021).

4.14

Form of 2033 Guarantee by and among Agree Limited Partnership, Agree Realty Corporation and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on May 14, 2021).

4.15

Master Deposit Agreement, by and among Agree Realty Corporation, Computershare Inc. and Computershare Trust Company, N.A., as depositary, and the holders from time to time of the depositary receipts described therein relating to shares of preferred stock of the Company, dated as of September 17, 2021 (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A filed on September 17, 2021).

 

 

 

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10.1

 

Note Purchase Agreement, dated as of August 3, 2017, among Agree Limited Partnership, the Company and the purchasers named therein (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017).

 

 

 

10.2

 

Uncommitted Master Note Facility, dated as of August 3, 2017, among Agree Limited Partnership, the Company and Teachers Insurance and Annuity Associate of America (“TIAA”) and each TIAA Affiliate (as defined therein) (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017).

 

 

 

10.3

 

Uncommitted Master Note Facility, dated as of August 3, 2017, among Agree Limited Partnership, the Company and Teachers Insurance and AIG Asset Management (U.S.), LLC (“AIG”) and each AIG Affiliate (as defined therein) (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017).

 

 

 

10.4+

 

Amended Employment Agreement, dated July 1, 2014, by and between the Company and Richard Agree (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).

 

 

 

10.5+

 

Amended Employment Agreement, dated July 1, 2014, by and between the Company and Joey Agree (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).

 

 

 

10.6*

 

Summary of Director Compensation.

 

 

 

10.7+

 

Agree Realty Corporation 2014 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014).

 

 

 

10.8+

 

Form of Restricted Stock Agreement under the Agree Realty Corporation 2014 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014).

 

 

 

10.9+

 

Form of Performance Share Award Agreement pursuant to the Agree Realty Corporation 2014 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017).

 

 

 

10.10+

 

Agree Realty Corporation 2017 Executive Incentive Plan, dated February 16, 2017 (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016).

 

 

 

10.11

 

Note Purchase Agreement dated as of May 28, 2015 by and among Agree Limited Partnership, the Company and the purchasers thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 1, 2015).

 

 

 

10.12

 

Note Purchase Agreement, dated as of July 28, 2016, by and among Agree Limited Partnership, the Company and the purchasers thereto (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016).

10.13

Form of Revolving Note (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 23, 2018).

10.14

First Supplement to Uncommitted Master Note Facility, dated as of September 26, 2018, among Agree Limited Partnership, Agree Realty Corporation and Teachers Insurance and Annuity Association of America (“TIAA”) (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018).

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Table of Contents

10.15

First Supplement to Uncommitted Master Note Facility, dated as of September 26, 2018, among Agree Limited Partnership, Agree Realty Corporation, AIG Asset Management (U.S.), LLC and the institutional investors named therein (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on  Form 10-Q for the quarter ended September 30, 2018).

10.16

Reimbursement Agreement, dated as of November 18, 2014, by and between the Company and Richard Agree (incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018).

10.17+

Form of Performance Unit Award Notice (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019).

10.18

Note Purchase Agreement, dated as of June 14, 2019, among Agree Limited Partnership, the Company and the purchasers named therein (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019).

10.19+

Summary of Material Terms of Compensation Arrangement with Danielle M. Spehar (effective December 7, 2019). (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020).

10.21+

Agree Realty Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed on March 23, 2020).

10.22+

Form of Restricted Stock Agreement under the Agree Realty Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on July 20, 2020).

10.23+

Form of Performance Unit Agreement under the Agree Realty Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on July 20, 2020).

10.24+

Employment Agreement, dated October 9, 2020, by and between Agree Realty Corporation and Joel Agree (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 15, 2020).

10.25+

Employment Agreement dated June 18, 2020, between Agree Realty Corporation and Craig Erlich (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on October 19, 2020).

10.26+

Addendum to Employment Agreement dated August 19, 2020, between Agree Realty Corporation and Craig Erlich (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on October 19, 2020).

10.27+

Employment Agreement, dated as of February 22, 2021, between Agree Realty Corporation and Simon Leopold (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 3, 2021).

10.28

Second Amended and Restated Agreement of Limited Partnership of Agree Limited Partnership, dated as of September 17, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 17, 2021).

10.29

Third Amended and Restated Credit Agreement, dated as of December 15, 2021, by and among Agree Realty Corporation, Agree Limited Partnership, PNC Bank, National Association as Administrative Agent, and a

49

Table of Contents

syndicate of lenders named therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 16, 2021).

10.30+*

Employment Agreement, dated December 7, 2021, between Agree Realty Corporation and Peter Coughenour.

10.31+*

Form of Restricted Stock Notice (Non-Employee Directors) under the Agree Realty Corporation 2020 Omnibus Incentive Plan.

21*

 

Subsidiaries of Agree Realty Corporation.

22*

Subsidiary Guarantors of Agree Realty Corporation.

 

 

 

23.1*

 

Consent of Grant Thornton LLP.

 

 

 

24*

 

Power of Attorney (included on the signature page of this Annual Report on Form 10-K).

 

 

 

31.1*

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Joel N. Agree, Chief Executive Officer.

 

 

 

31.2*

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Peter Coughenour, Chief Financial Officer.

 

 

 

32.1*

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Joel N. Agree, Chief Executive Officer.

 

 

 

32.2*

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Peter Coughenour, Chief Financial Officer.

 

 

 

101*

 

The following materials from Agree Realty Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statement of Equity, (iv) the Consolidated Statements of Cash Flows, and (v) related notes to these consolidated financial statements, tagged as blocks of text.

104*

Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

*      Filed herewith.

+      Management contract or compensatory plan or arrangement.

15(b)    The Exhibits listed in Item 15(a)(3) are hereby filed with this Annual Report on Form 10-K.

15(c)     The financial statement schedule listed at Item 15(a)(2) is hereby filed with this Annual Report on Form 10-K.

Item 16:      Form 10-K Summary

None.

50

Table of Contents

Page

Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248)

F-2

Financial Statements

Consolidated Balance Sheets

F-5

Consolidated Statements of Operations and Comprehensive Income

F-7

Consolidated Statements of Equity

F-8

Consolidated Statements of Cash Flows

F-9

Notes to Consolidated Financial Statements

F-10

Schedule III - Real Estate and Accumulated Depreciation

F-39

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Agree Realty Corporation

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Agree Realty Corporation (a Maryland corporation) and subsidiaries (the “Company”) as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2021, and our report dated February 22, 2022 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

February 22, 2022

F-2

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Agree Realty Corporation

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Agree Realty Corporation (a Maryland corporation) and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedules included under Item 15(a) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 22, 2022 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Fair value measurements used in the purchase price allocation of real estate acquisitions

As described further in Notes 2 and 4 to the consolidated financial statements, the acquisition of property for investment purposes is typically accounted for as an asset acquisition. The Company allocates the purchase price primarily to land, buildings and identified intangible assets and liabilities, based in each case on their relative estimated fair values and without giving rise to goodwill. During 2021, the Company purchased 290 retail net lease assets for approximately $1.39 billion. We identified the fair value measurements used in the purchase price allocation of real estate acquisitions as a critical audit matter.

The principal consideration for our determination that the fair value measurements used in the purchase price allocation of real estate acquisitions are a critical audit matter is that auditing management’s determination of fair value is

F-3

Table of Contents

challenging due to the high degree of auditor judgment necessary in evaluating certain assumptions made by management. Those significant assumptions include market land value and market rent.

Our audit procedures related to the fair value measurements used in the purchase price allocation of real estate acquisitions included the following, among others. We obtained an understanding and tested the design and operating effectiveness of relevant controls to allocate the purchase price of real estate acquisitions, including controls over the selection and review of inputs and assumptions used to estimate fair value. For a selection of real estate acquisitions, our real estate valuation professionals evaluated the reasonableness of key inputs and assumptions used to determine fair value by comparing the Company’s market land and market rent values to independently developed ranges using relevant market data derived from industry transaction databases and published industry reports. For a selection of real estate acquisitions and a selection of leases, we compared the Company’s market land and market rent values to independently developed ranges for reasonableness and to consider if management bias was present. Our procedures included performing sensitivity analyses over these significant assumptions.

Impairment of real estate investments

As of December 31, 2021, the Company’s net real estate investments totaled $4.37 billion. During 2021, the Company recognized real estate impairment charges of $1.9 million. As described in Notes 2 and 4 to the consolidated financial statements, the Company reviews its real estate investments and related lease intangibles for possible impairment when certain events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable through operations plus estimated disposition proceeds. Events or changes in circumstances that may occur include, but are not limited to, significant changes in real estate market conditions, estimated residual values, and an expectation to sell assets before the end of the previously estimated life. Management determines whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the residual value of the real estate, with the carrying cost of the individual asset. We identified impairment of real estate investments as a critical audit matter.

The principal consideration for our determination that impairment of real estate investments is a critical audit matter is that auditing management’s assessment of impairment is challenging due to the high degree of auditor judgment necessary in evaluating management’s indicators of possible impairment and the key inputs and assumptions used in forecasting undiscounted future cash flows for cost recoverability.

Our audit procedures related to impairment of real estate investments included the following, among others. We obtained an understanding and tested the design and operating effectiveness of relevant controls over the evaluation of possible impairments of real estate investments, such as internal controls over the Company’s monitoring of the real estate investment portfolio, and the Company’s assessments of recoverability. We evaluated the completeness of the population of real estate investments with indicators of impairment requiring further analysis. We evaluated the reasonableness of the methods and significant inputs and assumptions used in the undiscounted cash flow analyses including the probability of outcomes, estimated holding periods, and potential disposal proceeds to be received upon a sale. We evaluated these inputs and assumptions by comparing them to a combination of observable market data and historical performance of the identified real estate investments, which involved the use of our real estate valuation specialists. Our assessment included sensitivity analyses over these significant assumptions, and we considered whether such assumptions were consistent with evidence obtained in other areas of the audit.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2013.

Philadelphia, Pennsylvania

February 22, 2022.

F-4

Table of Contents

AGREE REALTY CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per-share data)

December 31, 

December 31, 

2021

2020

ASSETS

Real Estate Investments

  

Land

$

1,559,434

$

1,094,550

Buildings

 

3,034,391

 

2,371,553

Less accumulated depreciation

 

(233,862)

 

(172,577)

 

4,359,963

 

3,293,526

Property under development

 

7,148

 

10,653

Net Real Estate Investments

 

4,367,111

 

3,304,179

 

  

Real Estate Held for Sale, net

 

5,676

 

1,199

 

Cash and Cash Equivalents

 

43,252

 

6,137

 

  

Cash Held in Escrows

 

1,998

 

1,818

Accounts Receivable - Tenants, net

53,442

 

37,808

 

  

Lease Intangibles, net of accumulated amortization of

$180,532 and $125,995 at December 31, 2021 and December 31, 2020, respectively

 

672,020

 

473,592

 

Other Assets, net

 

83,407

 

61,450

 

  

Total Assets

$

5,226,906

$

3,886,183

See accompanying notes to consolidated financial statements.

F-5

Table of Contents

AGREE REALTY CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per-share data)

December 31, 

December 31, 

2021

2020

LIABILITIES

  

Mortgage Notes Payable, net

$

32,429

$

33,122

  

Unsecured Term Loans, net

 

237,849

  

Senior Unsecured Notes, net

1,495,200

 

855,328

  

Unsecured Revolving Credit Facility

160,000

 

92,000

  

Dividends and Distributions Payable

16,881

 

34,545

Accounts Payable, Accrued Expenses, and Other Liabilities

70,005

 

71,390

  

Lease Intangibles, net of accumulated amortization of

$29,726 and $24,651 at December 31, 2021 and December 31, 2020, respectively

33,075

 

35,700

  

Total Liabilities

1,807,590

 

1,359,934

  

EQUITY

  

Preferred Stock, $.0001 par value per share, 4,000,000 shares authorized,

7,000 shares Series A outstanding, at stated liquidation value of $25,000 per share, at December 31, 2021, no shares issued and outstanding at December 31, 2020

175,000

 

Common stock, $.0001 par value, 180,000,000 and 90,000,000 shares

 

authorized, 71,285,311 and 60,021,483 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively

7

6

Additional paid-in-capital

3,395,549

 

2,652,090

Dividends in excess of net income

(147,366)

 

(91,343)

Accumulated other comprehensive income (loss)

(5,503)

 

(36,266)

  

Total Equity - Agree Realty Corporation

3,417,687

 

2,524,487

Non-controlling interest

1,629

 

1,762

Total Equity

3,419,316

 

2,526,249

  

Total Liabilities and Equity

$

5,226,906

$

3,886,183

See accompanying notes to consolidated financial statements.

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Table of Contents

AGREE REALTY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except share and per-share data)

Year Ended

2021

    

2020

    

2019

Revenues

  

 

  

 

  

Rental income

$

339,067

$

248,309

$

187,279

Other

 

256

 

259

 

199

Total Revenues

 

339,323

 

248,568

 

187,478

 

  

 

  

 

  

Operating Expenses

 

  

 

  

 

  

Real estate taxes

 

25,513

 

21,428

 

15,520

Property operating expenses

 

13,996

 

9,023

 

6,749

Land lease expense

 

1,552

 

1,301

 

1,242

General and administrative

 

25,456

 

20,793

 

15,566

Depreciation and amortization

 

95,729

 

66,758

 

45,703

Provision for impairment

 

1,919

4,137

1,609

Total Operating Expenses

 

164,165

 

123,440

 

86,389

Gain (loss) on sale of assets, net

 

14,941

 

8,004

 

13,306

Gain (loss) on involuntary conversion, net

170

Income from Operations

 

190,269

 

133,132

 

114,395

 

 

  

 

  

Other (Expense) Income

 

 

  

 

  

Interest expense, net

 

(50,378)

 

(40,097)

 

(33,094)

Income tax (expense) benefit

(2,401)

(1,086)

(538)

Loss on early extinguishment of term loans and settlement of related interest rate swaps

(14,614)

Other (expense) income

 

 

23

 

Net Income

 

122,876

 

91,972

 

80,763

 

  

 

  

 

  

Less net income attributable to non-controlling interest

 

603

 

591

 

682

Net income attributable to Agree Realty Corporation

122,273

91,381

80,081

Less Series A preferred stock dividends

 

2,148

 

 

Net Income Attributable to Common Stockholders

$

120,125

$

91,381

$

80,081

 

  

 

  

 

  

Net Income Per Share Attributable to Common Stockholders

 

  

 

  

 

  

Basic

$

1.79

$

1.76

$

1.96

Diluted

$

1.78

$

1.74

$

1.93

 

 

  

 

  

Other Comprehensive Income

 

  

 

  

 

  

Net income

$

122,876

$

91,972

$

80,763

Amortization of interest rate swaps

950

698

(14)

Change in fair value and settlement of interest rate swaps

 

29,980

 

(30,694)

 

(7,973)

Total comprehensive income (loss)

 

153,806

 

61,976

 

72,776

Less comprehensive income (loss) attributable to non-controlling interest

 

770

 

369

 

611

 

  

 

  

 

  

Comprehensive Income (Loss) Attributable to Agree Realty Corporation

$

153,036

$

61,607

$

72,165

 

  

 

  

 

  

Weighted Average Number of Common Shares Outstanding - Basic

 

66,802,242

 

51,838,219

 

40,577,346

 

  

 

 

  

Weighted Average Number of Common Shares Outstanding - Diluted

 

67,139,079

 

52,396,734

 

41,223,614

See accompanying notes to consolidated financial statements.

F-7

Table of Contents

AGREE REALTY CORPORATION

CONSOLIDATED STATEMENT OF EQUITY

(In thousands, except share and per-share data)

Accumulated

Dividends in

Other

Preferred Stock

Common Stock

Additional

excess of net

Comprehensive

Non-Controlling

Total

  

Shares

  

Amount

  

Shares

  

Amount

  

Paid-In Capital

  

income

  

Income (Loss)

  

Interest

  

Equity

Balance, December 31, 2018

37,545,790

4

1,277,592

(42,945)

1,424

2,411

$

1,238,486

Issuance of common stock, net of issuance costs

7,993,519

472,746

472,746

Repurchase of common shares

(22,011)

(1,406)

(1,406)

Issuance of stock under the 2014 Omnibus Incentive Plan

58,735

1

1

Forfeiture of restricted stock

(2,410)

(29)

(29)

Stock-based compensation

4,009

4,009

Dividends and distributions declared for the period

(94,230)

(791)

(95,021)

Amortization, changes in fair value, and settlement of interest rate swaps

(7,916)

(71)

(7,987)

Net income

80,081

682

80,763

Balance, December 31, 2019

$

45,573,623

$

5

$

1,752,912

$

(57,094)

$

(6,492)

$

2,231

$

1,691,562

Issuance of common stock, net of issuance costs

14,418,612

1

896,117

896,118

Repurchase of common shares

(20,927)

(1,641)

(1,641)

Issuance of stock under the 2014 Omnibus Incentive Plan

48,942

Issuance of stock under the 2020 Omnibus Incentive Plan

4,541

Forfeiture of restricted stock

(3,308)

(9)

(9)

Stock-based compensation

4,711

4,711

Dividends and distributions declared for the period

(125,630)

(838)

(126,468)

Amortization, changes in fair value, and settlement of interest rate swaps

(29,774)

(222)

(29,996)

Net income

91,381

591

91,972

Balance, December 31, 2020

$

60,021,483

$

6

$

2,652,090

$

(91,343)

$

(36,266)

$

1,762

$

2,526,249

Issuance of Series A preferred stock, net of issuance costs

7,000

175,000

(4,692)

170,308

Issuance of common stock, net of issuance costs

11,179,982

1

744,846

744,847

Repurchase of common shares

(28,051)

(1,813)

(1,813)

Issuance of stock under the 2020 Omnibus Incentive Plan

138,894

320

320

Forfeiture of restricted stock

(26,997)

(560)

(560)

Stock-based compensation

5,358

5,358

Series A preferred dividends declared for the period

(2,148)

(2,148)

Common dividends and distributions declared for the period

(176,148)

(903)

(177,051)

Amortization, changes in fair value, and settlement of interest rate swaps

30,763

167

30,930

Net income

2,148

120,125

603

122,876

Balance, December 31, 2021

7,000

$

175,000

71,285,311

$

7

$

3,395,549

$

(147,366)

$

(5,503)

$

1,629

$

3,419,316

Cash dividends declared per depositary share of Series A preferred stock:

For the three months ended March 31, 2021

$

For the three months ended June 30, 2021

$

For the three months ended September 30, 2021

$

0.041

For the three months ended December 31, 2021

$

0.266

Cash dividends declared per common share:

For the three months ended March 31, 2021

$

0.621

For the three months ended June 30, 2021

$

0.651

For the three months ended September 30, 2021

$

0.651

For the three months ended December 31, 2021

$

0.681

See accompanying notes to consolidated financial statements.

F-8

Table of Contents

AGREE REALTY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Year Ended

    

December 31, 2021

    

December 31, 2020

    

December 31, 2019

Cash Flows from Operating Activities

 

  

 

  

  

Net income

$

122,876

$

91,972

$

80,763

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

95,729

 

66,758

 

45,703

Amortization from above (below) market lease intangibles, net

24,284

15,885

13,501

Amortization from financing and credit facility costs

 

2,360

 

1,444

 

1,284

Stock-based compensation

 

4,798

 

4,702

 

3,980

Provision for impairment

1,919

4,137

1,609

Gain (loss) on settlement of interest rate swaps

16,748

(22,668)

788

(Gain) loss on sale of assets

 

(14,941)

 

(8,004)

 

(13,306)

Write-off of unamortized financing costs upon debt extinguishment

1,250

(Increase) decrease in accounts receivable

 

(16,304)

 

(11,983)

 

(6,071)

(Increase) decrease in other assets

 

(3,231)

 

(1,503)

 

(2,150)

Increase (decrease) in accounts payable, accrued expenses, and other liabilities

10,827

2,216

606

Net Cash Provided by Operating Activities

 

246,315

 

142,956

 

126,707

 

  

 

  

 

  

Cash Flows from Investing Activities

 

  

 

  

 

  

Acquisition of real estate investments and other assets

 

(1,400,685)

 

(1,326,696)

 

(708,144)

Development of real estate investments and other assets, net of reimbursements

 

(including capitalized interest of $249 in 2021, $109 in 2020, and $410 in 2019)

 

(41,464)

 

(19,617)

 

(24,428)

Payment of leasing costs

 

(468)

 

(1,227)

 

(411)

Net proceeds from sale of assets

 

56,002

 

47,698

 

65,464

Net Cash Used in Investing Activities

 

(1,386,615)

 

(1,299,842)

 

(667,519)

 

  

 

  

 

  

Cash Flows from Financing Activities

 

 

  

 

  

Proceeds from Series A preferred stock offering, net

 

170,308

 

 

Proceeds from common stock offerings, net

744,847

896,118

472,746

Repurchase of common shares

 

(1,813)

 

(1,641)

 

(1,406)

Unsecured revolving credit facility borrowings (repayments), net

 

68,000

 

3,000

 

70,000

Payments of mortgage notes payable

 

(799)

 

(3,683)

 

(24,404)

Payments of unsecured term loans

 

(240,000)

 

 

(18,543)

Proceeds from senior unsecured notes

 

640,623

 

349,745

 

125,000

Payment of Series A preferred dividends

(1,529)

Payment of common stock dividends

 

(194,296)

 

(116,112)

 

(90,257)

Distributions to non-controlling interest

 

(1,042)

 

(824)

 

(782)

Payments for financing costs

 

(6,704)

 

(3,919)

 

(3,360)

Net Cash Provided by Financing Activities

 

1,177,595

 

1,122,684

 

528,994

 

  

 

  

 

  

Net Increase (Decrease) in Cash and Cash Equivalents and Cash Held in Escrow

 

37,295

 

(34,202)

 

(11,818)

Cash and cash equivalents and cash held in escrow, beginning of period

 

7,955

 

42,157

 

53,975

Cash and cash equivalents and cash held in escrow, end of period

$

45,250

$

7,955

$

42,157

 

  

 

  

 

  

Supplemental Disclosure of Cash Flow Information

 

  

 

  

 

  

Cash paid for interest (net of amounts capitalized)

$

56,150

$

37,710

$

29,925

Cash paid for income tax

$

1,816

$

1,150

$

666

 

 

  

 

  

Supplemental Disclosure of Non-Cash Investing and Financing Activities

 

  

 

  

 

  

Operating lease right of use assets added upon implementation of leases standard on January 1, 2019

$

$

$

7,505

Additional lease right of use assets added under new ground leases after January 1, 2019

$

6,302

$

1,064

12,167

Operating lease right of use assets disposed of upon acquisition of underlying ground leased land

$

$

(3,059)

Series A preferred dividends declared and unpaid

$

620

$

Common stock dividends and limited partners' distributions declared and unpaid

$

16,261

$

34,545

$

25,014

Change in accrual of development, construction and other real estate investment costs

$

(5,537)

$

10,465

$

4,330

See accompanying notes to consolidated financial statements.

F-9

Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Note 1 – Organization

Agree Realty Corporation (the “Company”), a Maryland corporation, is a fully integrated real estate investment trust (“REIT”) primarily focused on the ownership, acquisition, development and management of retail properties net leased to industry leading tenants. The Company was founded in 1971 by its current Executive Chairman, Richard Agree, and its common stock was listed on the New York Stock Exchange in 1994.

The Company’s assets are held by, and all of our operations are conducted through, directly or indirectly, Agree Limited Partnership (the “Operating Partnership”), of which Agree Realty Corporation is the sole general partner and in which it held a 99.5% common equity interest as of December 31, 2021.  There is a one-for-one relationship between the limited partnership interests in the Operating Partnership (“Operating Partnership Common Units”) owned by the Company and shares of Company common stock outstanding.  The Company also owns a Series A preferred equity interest in the Operating Partnership.  This preferred equity interest corresponds to the Company’s Series A Preferred Stock (see Note 6- Common and Preferred Stock), providing guaranteed income and distributions to the Company equal to the dividends payable on that stock.  Under the agreement of limited partnership of the Operating Partnership, the Company, as the sole general partner, has exclusive responsibility and discretion in the management and control of the Operating Partnership.

The terms “Agree Realty,” the “Company,” “Management,” “we,” “our” or “us” refer to Agree Realty Corporation and all of its consolidated subsidiaries, including the Operating Partnership.

Note 2 – Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements of Agree Realty Corporation include the accounts of the Company, the Operating Partnership and its wholly owned subsidiaries. The Company, as the sole general partner, held 99.5% and 99.4% of the Operating Partnership common equity as of December 31, 2021 and 2020, respectively, as well as the Series A preferred equity interest. All material intercompany accounts and transactions are eliminated, including the Company’s Series A preferred equity interest in the Operating Partnership.

Non-controlling Interest

At December 31, 2021 and 2020, the non-controlling interest in the Operating Partnership consisted of a 0.5% and 0.6% ownership interest in the Operating Partnership held by the Company’s founder and chairman, respectively. The Operating Partnership Common Units may, under certain circumstances, be exchanged for shares of common stock. The Company as sole general partner of the Operating Partnership has the option to settle exchanged Operating Partnership Common Units held by others for cash based on the current trading price of its shares. Assuming the exchange of all non-controlling Operating Partnership Units, there would have been 71,632,930 shares of common stock outstanding at December 31, 2021.

Significant Risks and Uncertainties

Currently, one of the most significant risks and uncertainties continues to be the potential adverse effect of the current pandemic of the novel coronavirus, or COVID-19, and its variants.  The COVID-19 pandemic has had repercussions across regional and global economies and financial markets. The outbreak of COVID-19 in many countries, including the United States, has significantly adversely impacted economic activity and had contributed to significant volatility and negative pressure in financial markets.  The COVID-19 pandemic has resulted in a number of our tenants temporarily closing their stores and requesting rent deferrals or rent abatements during this pandemic. Although the duration and severity of this pandemic are still uncertain, there is reason to believe that the success of vaccination efforts in the U.S. will have a positive impact on businesses, as federal, state and local restrictions are lifted and individuals return to pre-pandemic activities.  However, the virus’s variants, its surges and resurgences in the population, and challenges relating to vaccine immunization are still having a very fluid and continuously evolving impact on businesses and consumers.  

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Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

The COVID-19 pandemic could still have material and adverse effects on our financial condition, results of operations and cash flows in the near term due to, but not limited to, the following:

reduced economic activity severely impacting our tenants’ businesses, financial condition and liquidity and may cause tenants to be unable to fully meet their obligations to us.  Certain tenants have sought to modify such obligations and may seek additional relief and additional tenants may seek modifications of such obligations, resulting in increases in uncollectible receivables and reductions in rental income;
the negative financial impact of the pandemic which could impact our future compliance with financial covenants of our credit facility and other debt agreements; and
weaker economic conditions which could cause us to recognize impairment in value of our tangible or intangible assets.  

During the year ended December 31, 2021, the Company collected substantially all rent payments originally contracted for in the period. However, the extent to which the COVID-19 pandemic continues to impact our operations and those of our tenants will still depend on future developments which are still uncertain, including the scope, severity and remaining duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.

The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business and geographies. However, as a result of the many uncertainties surrounding the COVID-19 pandemic, we are still not able to fully predict the impact that it ultimately will have on our financial condition, results of operations and cash flows.

Real Estate Investments

The Company records the acquisition of real estate at cost, including acquisition and closing costs. For properties developed by the Company, all direct and indirect costs related to planning, development and construction, including interest, real estate taxes and other miscellaneous costs incurred during the construction period, are capitalized for financial reporting purposes and recorded as property under development until construction has been completed.  

Assets are classified as real estate held for sale based on specific criteria as outlined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, Property, Plant & Equipment.  Properties classified as real estate held for sale are recorded at the lower of their carrying value or their fair value, less anticipated selling costs. Any properties classified as held for sale are not depreciated. Assets are generally classified as real estate held for sale once management has actively engaged in marketing the asset and has received a firm purchase commitment that is expected to close within one year. The Company classified one operating property as held for sale at both December 31, 2021 and 2020, the assets for which are separately presented in the Consolidated Balance Sheets.

Real estate held for sale consisted of the following as of December 31, 2021 and 2020 (presented in thousands):

    

December 31, 2021

    

December 31, 2020

Land

$

4,485

$

313

Building

 

 

1,019

Lease intangibles - asset

1,213

132

Lease intangibles - (liability)

 

 

(285)

 

5,698

 

1,179

Accumulated depreciation and amortization, net

 

(22)

 

20

Total Real Estate Held for Sale, net

$

5,676

$

1,199

F-11

Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Acquisitions of Real Estate

The acquisition of property for investment purposes is typically accounted for as an asset acquisition. The Company allocates the purchase price to land, buildings and identified intangible assets and liabilities, based in each case on their relative estimated fair values and without giving rise to goodwill. Intangible assets and liabilities represent the value of in-place leases and above- or below-market leases. In making estimates of fair values, the Company may use various sources, including data provided by independent third parties, as well as information obtained by the Company as a result of its due diligence, including expected future cash flows of the property and various characteristics of the markets where the property is located.

In allocating the fair value of the identified tangible and intangible assets and liabilities of an acquired property, land is valued based upon comparable market data or independent appraisals.  Buildings are valued on an as-if vacant basis based on a cost approach utilizing estimates of cost and the economic age of the building or an income approach utilizing various market data. In-place lease intangibles are valued based on the Company’s estimates of costs related to tenant acquisition and the carrying costs that would be incurred during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases at the time of the acquisition. Above- and below-market lease intangibles are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the leases at the time of acquisition and the Company’s estimate of current market lease rates for the property.  In the case of sale-leaseback transactions, it is typically assumed that the lease is not in-place prior to the close of the transaction.

Depreciation and Amortization

Land, buildings, and improvements are recorded and stated at cost.  The Company’s properties are depreciated using the straight-line method over the estimated remaining useful life of the assets, which are generally 40 years for buildings and 10 to 20 years for improvements. Properties classified as held for sale and properties under development or redevelopment are not depreciated.  Major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives.

In-place lease intangible assets and the capitalized above- and below-market lease intangibles are amortized over the non-cancelable term of the lease unless the Company believes it is reasonably certain that the tenant will renew the lease for an option term, in which case the Company amortizes the value attributable to the renewal over the renewal period.  In-place lease intangible assets are amortized to amortization expense and above- and below-market lease intangibles are amortized as a net adjustment to rental income.  In the event of early lease termination, the remaining net book value of any above- or below-market lease intangible is recognized as an adjustment to rental income.

The following schedule summarizes the Company’s amortization of lease intangibles for the years ended December 31, 2021, 2020, and 2019 (presented in thousands):

For the Year Ended December 31, 

    

    

2021

    

2020

    

2019

Lease intangibles (in-place)

$

27,827

$

17,413

$

10,619

Lease intangibles (above-market)

 

30,596

 

21,523

 

18,107

Lease intangibles (below-market)

 

(6,312)

 

(5,638)

 

(4,607)

Total

$

52,111

$

33,298

$

24,119

F-12

Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

The following schedule represents estimated future amortization of lease intangibles as of December 31, 2021 (presented in thousands):

Year Ending December 31, 

    

2022

    

2023

    

2024

    

2025

    

2026

    

Thereafter

    

Total

Lease intangibles (in-place)

$

34,016

  

$

31,799

  

$

29,227

  

$

27,010

  

$

24,807

$

134,233

  

$

281,092

Lease intangibles (above-market)

 

37,996

  

 

35,621

  

 

31,569

  

 

29,236

  

 

27,486

 

229,020

  

 

390,928

Lease intangibles (below-market)

 

(5,563)

 

(4,851)

 

(4,181)

 

(3,745)

 

(3,391)

 

(11,344)

 

(33,075)

Total

$

66,449

  

$

62,569

  

$

56,615

  

$

52,501

  

$

48,902

$

351,909

  

$

638,945

Impairments

The Company reviews real estate investments and related lease intangibles for possible impairment when certain events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable through operations plus estimated disposition proceeds. Events or changes in circumstances that may occur include, but are not limited to, significant changes in real estate market conditions, estimated residual values, and an expectation to sell assets before the end of the previously estimated life. Impairments are measured to the extent the current book value exceeds the estimated fair value of the asset less disposition costs for any assets classified as held for sale.

The valuation of impaired assets is determined using valuation techniques including discounted cash flow analysis, analysis of recent comparable sales transactions, and purchase offers received from third parties, which are Level 3 inputs. The Company may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate.  Estimating future cash flows is highly subjective and estimates can differ materially from actual results.

Cash and Cash Equivalents and Cash Held in Escrow

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of deposit and checking accounts.  Cash held in escrows primarily relates to delayed like-kind exchange transactions pursued under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).  The account balances periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage, and as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company had $44.0 million and $7.0 million in cash and cash held in escrow as of December 31, 2021 and 2020, respectively, in excess of the FDIC insured limit.

Per the requirements of ASU 2016-18 (Topic 230, Statement of Cash Flows) the following table provides a reconciliation of cash and cash equivalents and cash held in escrow, both as reported within the consolidated balance sheets, to the total of the cash, cash equivalents and cash held in escrow as reported within the consolidated statements of cash flows (presented in thousands):

    

December 31, 2021

    

December 31, 2020

Cash and cash equivalents

$

43,252

$

6,137

Cash held in escrow

 

1,998

 

1,818

Total of cash and cash equivalents and cash held in escrow

$

45,250

$

7,955

Revenue Recognition and Accounts Receivable

The Company leases real estate to its tenants under long-term net leases which are accounted for as operating leases. Under this method, leases that have fixed and determinable rent increases are recognized on a straight-line basis over the lease term. Rental increases based upon changes in the consumer price indexes, or other variable factors, are recognized only after changes in such factors have occurred and are then applied according to the lease agreements. Certain leases also provide for additional rent based on tenants’ sales volumes. These rents are recognized when determinable after the tenant exceeds a sales breakpoint.

F-13

Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Recognizing rent escalations on a straight-line method results in rental revenue in the early years of a lease being higher than actual cash received, creating a straight-line rent receivable asset which is included in the Accounts Receivable - Tenants line item in the Consolidated Balance Sheets. The balance of straight-line rent receivables at December 31, 2021 and 2020 was $40.9 million and $29.8 million, respectively. To the extent any of the tenants under these leases become unable to pay their contractual cash rents, the Company may be required to write down the straight-line rent receivable from those tenants, which would reduce rental income.

The Company reviews the collectability of charges under its tenant operating leases on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. During 2021 and 2020, the Company’s assessment specifically included the impact of the COVID-19 pandemic, which represents a material risk to collectability (see Significant Risks and Uncertainties above).  In the event that collectability with respect to any tenant changes, the Company recognizes an adjustment to rental revenue. The Company’s review of collectability of charges under its operating leases includes any accrued rental revenues related to the straight-line method of reporting rental revenue.

As of December 31, 2021, the Company has three tenants where collection is no longer considered probable. For these tenants, the Company is recording rental income on a cash basis and has written off any outstanding receivables, including straight-line rent receivables. Adjustments to rental revenue related to potentially uncollectible charges under these tenant leases had an immaterial impact to Rental Income and Net Income for the year-ended December 31, 2021.

In addition to the tenant-specific collectability assessment performed, the Company also recognizes a general allowance, as a reduction to rental revenue, for its operating lease receivables which are not expected to be fully collectible based on the potential for settlement of arrears. As of December 31, 2021, this allowance was $0.8 million.

The Company’s leases provide for reimbursement from tenants for common area maintenance (“CAM”), insurance, real estate taxes and other operating expenses. A portion of the Company’s operating cost reimbursement revenue is estimated each period and is recognized as rental revenue in the period the recoverable costs are incurred and accrued, and the related revenue is earned.  The balance of unbilled operating cost reimbursement receivable at December 31, 2021 and 2020 was $9.1 million and $4.1 million, respectively.

The Company has adopted the practical expedient in FASB ASC 842, Leases (“ASC 842”) that allows lessors to combine non-lease components with the lease components when the timing and patterns of transfer for the lease and non-lease components are the same and the lease is classified as an operating lease. As a result, all rental and reimbursements pursuant to tenant leases are reflected as one line, “Rental Income,” in the Consolidated Statement of Operations and Comprehensive Income.

Rent Concessions – COVID-19

The Company has provided lease concessions to certain tenants in response to the impact of COVID-19, primarily in the form of rent deferrals.  The Company made an election to account for such lease concessions consistent with how those concessions would be accounted for under ASC 842 if enforceable rights and obligations for those concessions had already existed in the leases.  This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in our rights as lessor, including concessions that result in the total payments required by the modified lease being substantially the same as or less than total payments required by the original lease.

Substantially all of the Company’s concessions to date provide for a deferral of payments with no substantive changes to the consideration in the original lease. These deferrals affect the timing, but not the amount, of the lease payments.  The Company is accounting for these deferrals as if no changes to the lease were made. Under this accounting, the Company increases its lease receivable as tenant payments accrue and continues to recognize rental income.  As of December 31, 2021, the Company has $0.5 million of deferred rent receivables outstanding, net of repayments that have occurred, relating to COVID-19 lease concessions.

F-14

Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Sales Tax

The Company collects various taxes from tenants and remits these amounts, on a net basis, to the applicable taxing authorities.

Earnings per Share

Earnings per share of common stock has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share.  The guidance requires the classification of the Company’s unvested restricted stock, which contain rights to receive non-forfeitable dividends, as participating securities requiring the two-class method of computing net income per share of common stock.  In accordance with the two-class method, earnings per share has been computed by dividing the net income less net income attributable to unvested restricted shares by the weighted average number of shares of common stock outstanding less unvested restricted shares. Diluted earnings per share is computed by dividing net income by the weighted average shares of common stock and potentially dilutive securities in accordance with the treasury stock method.

The following is a reconciliation of the numerator and denominator used in the computation of basic and diluted net earnings per share of common stock for each of the periods presented (presented in thousands, except for share data):

Year Ended December 31, 

    

2021

    

2020

    

2019

Net income attributable to Agree Realty Corporation

$

122,273

$

91,381

$

80,081

Less: Series A preferred stock dividends

(2,148)

Net income attributable to common stockholders

120,125

91,381

80,081

Less: Income attributable to unvested restricted shares

(369)

(297)

(379)

Net income used in basic and diluted earnings per share

$

119,756

$

91,084

$

79,702

Weighted average number of common shares outstanding

67,004,069

  

52,013,137

  

40,771,300

Less: Unvested restricted stock

(201,827)

  

(174,918)

  

(193,954)

Weighted average number of common shares outstanding used in basic earnings per share

66,802,242

  

51,838,219

  

40,577,346

  

  

Weighted average number of common shares outstanding used in basic earnings per share

66,802,242

  

51,838,219

  

40,577,346

Effect of dilutive securities:

Share-based compensation

118,460

  

95,103

  

98,740

September 2018 Forward Equity Offering

269,785

April 2019 Forward Equity Offering

277,225

2019 ATM Forward Equity Offerings

14,289

518

2020 ATM Forward Equity Offerings

153,200

19,777

April 2020 Forward Equity Offerings

429,346

2021 ATM Forward Equity Offerings

50,757

December 2021 Forward Offering

14,420

Weighted average number of common shares outstanding used in diluted earnings per share

67,139,079

  

52,396,734

  

41,223,614

For the year ended December 31, 2021, 849 shares of common stock related to the 2021 at-the-market (“ATM”) forward equity offerings, 5,360 shares of common stock related to the 2020 ATM forward equity offerings, and 2,092 restricted shares were granted in 2021 were anti-dilutive and were not included in the computation of diluted earnings per share.

For the year ended December 31, 2020, 27,753 shares of common stock related to the 2020 ATM forward equity offerings, 17,114 shares of common stock related to the 2019 ATM forward equity offerings, and 1,547 performance units were granted in 2020 were anti-dilutive and were not included in the computation of diluted earnings per share.

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

For the year ended December 31, 2019, 7,931 shares of common stock related to the 2019 ATM forward equity offerings were anti-dilutive and were not included in the computation of diluted earnings per share.

Forward Equity Sales

The Company occasionally sells shares of common stock through forward sale agreements to enable the Company to set the price of such shares upon pricing the offering (subject to certain adjustments) while delaying the issuance of such shares and the receipt of the net proceeds by the Company.

To account for the forward sale agreements, the Company considers the accounting guidance governing financial instruments and derivatives.  To date, the Company has concluded that its forward sale agreements are not liabilities as they do not embody obligations to repurchase our shares nor do they embody obligations to issue a variable number of shares for which the monetary value are predominantly fixed, varying with something other than the fair value of the shares, or varying inversely in relation to its shares. The Company then evaluates whether the agreements meet the derivatives and hedging guidance scope exception to be accounted for as equity instruments.  The Company has concluded that the agreements are classifiable as equity contracts based on the following assessments: (i) none of the agreements’ exercise contingencies are based on observable markets or indices besides those related to the market for the Company’s own stock price and operations; and (ii) none of the settlement provisions precluded the agreements from being indexed to its own stock.

The Company also considers the potential dilution resulting from the forward sale agreements on the earnings per share calculations. The Company uses the treasury stock method to determine the dilution resulting from the forward sale agreement during the period of time prior to settlement.

Equity Offering Costs

Underwriting commissions and offering costs of equity offerings have been reflected as a reduction of additional paid-in-capital in our Consolidated Balance Sheets.

Income Taxes

The Company has made an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code and related regulations. The Company generally will not be subject to federal income taxes on amounts distributed to stockholders, providing it distributes 100% of its REIT taxable income and meets certain other requirements for qualifying as a REIT. For each of the years in the three-year period ended December 31, 2021, the Company believes it has qualified as a REIT. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.  Notwithstanding the Company’s qualification for taxation as a REIT, the Company is subject to certain state taxes on its income and real estate.

Earnings and profits that determine the taxability of distributions to stockholders differ from net income reported for financial reporting purposes due to differences in the estimated useful lives and methods used to compute depreciation and the carrying value (basis) of the investments in properties for tax purposes, among other things.

The Company and its taxable REIT subsidiaries (“TRS”) have made a timely TRS election pursuant to the provisions of the REIT Modernization Act. A TRS is able to engage in activities resulting in income that previously would have been disqualified from being eligible REIT income under the federal income tax regulations. As a result, certain activities of the Company which occur within its TRS entity are subject to federal and state income taxes (see Note 8). All provisions for federal income taxes in the accompanying consolidated financial statements are attributable to the Company’s TRS.

The Company regularly analyzes its various federal and state filing positions and only recognizes the income tax effect in its financial statements when certain criteria regarding uncertain income tax positions have been met. The Company

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

believes that its income tax positions would more likely than not be sustained upon examination by all relevant taxing authorities. Therefore, no provisions for uncertain income tax positions have been recorded in the consolidated financial statements.

Management’s Responsibility to Evaluate Our Ability to Continue as a Going Concern

When preparing financial statements for each annual and interim reporting period, management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In making its evaluation, the Company considers, among other things, any risks and/or uncertainties to its results of operations, contractual obligations in the form of near-term debt maturities, dividend requirements, or other factors impacting the Company’s liquidity and capital resources.  No conditions or events that raised substantial doubt about the ability to continue as a going concern within one year were identified as of the issuance date of the consolidated financial statements contained in this Annual Report on Form 10-K.

Reclassifications

Certain reclassifications of prior period amounts have been made in the consolidated financial statements and footnotes in order to conform to the current presentation.  

Segment Reporting

The Company is primarily in the business of acquiring, developing and managing retail real estate which is considered to be one reporting segment.  The Company has no other reportable segments.

Employment Agreement

In October 2020, the Company entered into a new employment agreement with Joel Agree to extend Mr. Agree’s term as President and Chief Executive Officer of the Company through September 30, 2023 (the “Agreement”). The Agreement supersedes Mr. Agree’s prior employment agreement with the Company, which had a term that was scheduled to expire on June 30, 2021.  The term of Mr. Agree’s employment under the Agreement extends through September 30, 2023, and will automatically renew for successive two-year periods unless either party provides notice of non-renewal at least 60 days prior to the expiration of any term.  The Agreement revised and updated, as applicable, Mr. Agree’s salary, incentive compensation, termination, death and disability, and change in control provisions, as well as provided for a one-time $1.5 million extension bonus that was recognized as general and administrative expense during the year ended December 31, 2020.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of (1) assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and (2) revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Values of Financial Instruments

The Company’s estimates of fair value of financial and non-financial assets and liabilities are based on the framework established in the fair value accounting guidance, ASC 820 Fair Value Measurement. The framework specifies a hierarchy of valuation inputs which was established to increase consistency, clarity and comparability in fair value measurements and related disclosures. The guidance describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value, two of which are considered observable and one that is considered unobservable. The following describes the three levels:

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Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Level 1 –

Valuation is based upon quoted prices in active markets for identical assets or liabilities.

 

 

Level 2 –

Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

 

Level 3 –

Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.

Recent Accounting Pronouncements

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”).  The guidance in ASU 2020-06 simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU 2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets.  The amendments in ASU 2020-06 are effective for the Company for fiscal years beginning after December 15, 2021. The Company adopted this guidance on January 1, 2022 and does not expect it to have a material impact on its financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)” (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.  The Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation.  The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.  

Note 3 – Leases

Tenant Leases

The Company is primarily focused on the ownership, acquisition, development and management of retail properties leased to industry leading tenants.  As of December 31, 2021, the Company’s portfolio was approximately 99.5% leased and had a weighted average remaining lease term (excluding extension options) of approximately 9.3 years. A significant majority of its properties are leased to national tenants and approximately 67.0% of its annualized base rent was derived from tenants, or parent entities thereof, with an investment grade credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners.

Substantially all of the Company’s tenants are subject to net lease agreements. A net lease typically requires the tenant to be responsible for minimum monthly rent and actual property operating expenses incurred, including property taxes, insurance and maintenance. In addition, the Company’s tenants are typically subject to future rent increases based on fixed amounts or increases in the consumer price index and certain leases provide for additional rent calculated as a percentage

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Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

of the tenants’ gross sales above a specified level.  Certain of the Company’s properties are subject to leases under which it retains responsibility for specific costs and expenses of the property.

The Company’s leases typically provide the tenant one or more multi-year renewal options to extend their leases, subject to generally the same terms and conditions, including rent increases, consistent with the initial lease term.  

The Company attempts to maximize the amount it expects to derive from the underlying real estate property following the end of the lease, to the extent it is not extended.  The Company maintains a proactive leasing program that, combined with the quality and locations of its properties, has made its properties attractive to tenants. The Company intends to continue to hold its properties for long-term investment and, accordingly, places a strong emphasis on the quality of construction and an on-going program of regular and preventative maintenance.  However, the residual value of a real estate property is still subject to various market-specific, asset-specific, and tenant-specific risks and characteristics.  As the classification of a lease is dependent on the fair value of its cash flows at lease commencement, the residual value of a property represents a significant assumption in its accounting for tenant leases.  

The Company has elected the practical expedient in ASC 842 on not separating non-lease components from associated lease components.  The lease and non-lease components combined as a result of this election largely include tenant rentals and maintenance charges, respectively. The Company applies the accounting requirements of ASC 842 to the combined component.

The following table includes information regarding contractual lease payments for the Company’s operating leases for which it is the lessor, for the years ended December 31, 2021, 2020 and 2019 (presented in thousands).

For the Year Ended December 31, 

2021

2020

2019

    

Total lease payments

$

352,797

$

257,390

$

193,843

Less: Operating cost reimbursements and percentage rents

 

36,929

 

28,248

 

21,137

Total non-variable lease payments

$

315,868

$

229,142

$

172,706

At December 31, 2021, future non-variable lease payments to be received from the Company’s operating leases for the next five years and thereafter are as follows (presented in thousands):

 

Year Ending December 31, 

    

2022

    

2023

    

2024

    

2025

    

2026

    

Thereafter

    

Total

Future non-variable lease payments

$

357,888

  

$

351,828

  

$

340,612

  

$

328,784

  

$

310,965

$

1,744,997

  

$

3,435,074

Deferred Revenue

As of December 31, 2021, and 2020, there was $13.5 million and $6.1 million, respectively, in deferred revenues resulting from rents paid in advance.

Land Lease Obligations

The Company is the lessee under land lease agreements for certain of its properties. ASC 842 requires a lessee to recognize right of use assets and lease obligation liabilities that arise from leases, whether qualifying as operating or finance.  As of December 31, 2021 and 2020, the Company had $61.1 million and $44.5 million of right of use assets, recognized within Other Assets in the Consolidated Balance Sheets, respectively, while the corresponding lease obligations of $25.0 million and $17.3 million, respectively, were recognized within Accounts Payable, Accrued Expenses, and Other Liabilities on the Consolidated Balance Sheets as of these dates.

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Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

The Company’s land leases do not include any variable lease payments. These leases typically provide multi-year renewal options to extend their term as lessee at the Company’s option. Option periods are included in the calculation of the lease obligation liability only when options are reasonably certain to be exercised. Certain of the Company’s land leases qualify as finance leases as a result of purchase options that are reasonably certain of being exercised or automatic transfer of title to the Company at the end of the lease term.

Amortization of the right of use assets for operating land leases is classified as land lease expense and was $1.6 million, $1.3 million, and $1.2 million for the years ending December 31, 2021, 2020, and 2019, respectively. There was no amortization of right of use assets for finance land leases, as the underlying leased asset (land) has an infinite life.  Interest expense on finance land leases was $0.2 million during the year ended December 31, 2021, while there was no such expense incurred during the years ended December 31, 2020 or 2019.

The following tables include information on the Company’s land leases for which it is the lessee, for the years ending December 31, 2021, 2020, and 2019 (presented in thousands).

Year Ended

    

December 31, 2021

    

    

December 31, 2020

    

    

December 31, 2019

    

Operating leases:

Operating cash outflows

$

1,112

$

1,069

$

1,073

Weighted-average remaining lease term - operating leases (years)

33.8

38.3

38.2

Weighted-average discount rate - operating leases

4.13

%

4.13

%

4.13

%

Finance leases:

Operating cash outflows

$

215

$

$

Financing cash outflows

$

93

$

$

Weighted-average remaining lease term - finance leases (years)

2.8

Weighted-average discount rate - operating leases

4.13

%

%

%

Supplemental Disclosure:

Right-of-use assets obtained in exchange for new lease liabilities

$

6,302

$

1,064

$

19,672

Right-of-use assets removed in exchange for real property

 

 

 

(3,025)

Right-of-use assets net change

$

6,302

$

$

16,647

Maturity Analysis of Lease Liabilities for Operating Leases (presented in thousands)

 

Year Ending December 31, 

    

2022

    

2023

    

2024

    

2025

    

2026

    

Thereafter

    

Total

Lease payments

$

1,197

  

$

1,197

  

$

1,197

  

$

1,197

  

$

1,195

$

29,850

  

$

35,833

Imputed interest

 

(730)

 

(711)

 

(690)

 

(669)

 

(647)

 

(14,491)

 

(17,938)

Total lease liabilities

$

467

  

$

486

  

$

507

  

$

528

  

$

548

$

15,359

  

$

17,895

Maturity Analysis of Lease Liabilities for Finance Leases (presented in thousands)

Year Ending December 31, 

    

2022

    

2023

    

2024

    

2025

    

2026

    

Thereafter

    

Total

Lease payments

$

336

  

$

336

  

$

6,252

  

$

$

$

  

$

6,924

Imputed interest

 

(255)

 

(252)

 

(207)

 

 

(714)

Total lease liabilities

$

81

  

$

84

  

$

6,045

  

$

  

$

$

  

$

6,210

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Note 4 – Real Estate Investments

Real Estate Portfolio

As of December 31, 2021, the Company owned 1,404 properties, with a total gross leasable area (“GLA”) of approximately 29.1 million square feet. Net Real Estate Investments totaled $4.37 billion as of December 31, 2021. As of December 31, 2020, the Company owned 1,129 properties, with a total GLA of approximately 22.7 million square feet. Net Real Estate Investments totaled $3.30 billion as of December 31, 2020.

Acquisitions

During 2021, the Company purchased 290 retail net lease assets for approximately $1.39 billion, which includes acquisition and closing costs. These properties are located in 43 states and had a weighted average lease term of approximately 11.5 years.  The aggregate 2021 acquisitions were allocated approximately $476.8 million to land, $654.3 million to buildings and improvements, $250.7 million to lease intangibles and $8.8 million to other assets.

During 2020, the Company purchased 317 retail net lease assets for approximately $1.31 billion, which includes acquisition and closing costs. These properties are located in 39 states and had a weighted average lease term of approximately 11.3 years. The aggregate 2020 acquisitions were allocated approximately $386.9 million to land, $768.2 million to buildings and improvements, and $158.1 million to lease intangibles.

The 2021 and 2020 acquisitions were substantially all cash purchases and there was no material contingent consideration associated with these acquisitions.

None of the Company’s investments during 2021 or 2020 caused any new or existing tenant to comprise 10% or more of the Company’s total assets or generate 10% or more of the Company’s total annualized contractual base rent at December 31, 2021 or 2020.

Developments

During 2021, the Company completed four development or Partner Capital Solutions (“PCS”) projects.  During 2020, nine such projects were completed. At December 31, 2021, the Company had three development or PCS projects under construction.

Dispositions

During 2021, the Company sold real estate properties for net proceeds of $56.0 million and recorded a net gain of $14.9 million.

During 2020, the Company sold real estate properties for net proceeds of $47.7 million and recorded a net gain of $8.0 million.

During 2019, the Company sold real estate properties for net proceeds of $65.5 million and recorded a net gain of $13.3 million.

Provisions for Impairment

As a result of the Company’s review of Real Estate Investments it recognized real estate impairment charges of $1.9 million, $4.1 million and $1.6 million for the years ended December 31, 2021, 2020, and 2019, respectively.  The estimated fair value of the impaired real estate assets at their time of impairment during 2021, 2020, and 2019 was $1.0 million, $11.9 million and $3.0 million, respectively.  

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Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Note 5 – Debt

As of December 31, 2021, the Company had total gross indebtedness of $1.70 billion, including (i) $32.6 million of mortgage notes payable; (ii) $1.51 billion of senior unsecured notes; and (iv) $160.0 million of borrowings under the Revolving Credit Facility (defined below).

Mortgage Notes Payable

As of December 31, 2021, the Company had total gross mortgage indebtedness of $32.6 million, which was collateralized by related real estate and tenants’ leases with an aggregate net book value of $38.9 million. Including mortgages that have been swapped to a fixed interest rate, the weighted average interest rate on the Company’s mortgage notes payable was 4.16% as of December 31, 2021 and 4.21% as of December 31, 2020.

Mortgages payable consisted of the following (presented in thousands):

    

December 31, 2021

    

December 31, 2020

Note payable in monthly installments of interest only at 3.60% per annum, with a balloon payment due January 2023

$

23,640

$

23,640

 

 

  

Note payable in monthly installments of interest only at 5.01% per annum, with a balloon payment due September 2023

 

4,622

 

4,622

 

 

  

Note payable in monthly installments of $92 including interest at 6.27% per annum, with a final monthly payment due July 2026

 

4,373

 

5,172

 

  

 

  

Total principal

 

32,635

 

33,434

Unamortized debt issuance costs

 

(206)

 

(312)

Total

$

32,429

$

33,122

The mortgage loans encumbering the Company’s properties are generally non-recourse, subject to certain exceptions for which we would be liable for any resulting losses incurred by the lender. These exceptions vary from loan to loan, but generally include fraud or material misrepresentations, misstatements or omissions by the borrower, intentional or grossly negligent conduct by the borrower that harms the property or results in a loss to the lender, filing of a bankruptcy petition by the borrower, either directly or indirectly, and certain environmental liabilities. At December 31, 2021, there were no mortgage loans with partial recourse to the Company.

The Company has entered into mortgage loans that are secured by multiple properties and contain cross-default and cross-collateralization provisions. Cross-collateralization provisions allow a lender to foreclose on multiple properties in the event that we default under the loan. Cross-default provisions allow a lender to foreclose on the related property in the event a default is declared under another loan.

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Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Unsecured Term Loan Facilities

The following table presents the Unsecured Term Loans balance net of unamortized debt issuance costs as of December 31, 2021 and 2020 (presented in thousands):

    

December 31, 2021

    

December 31, 2020

2023 Term Loan

$

$

40,000

2024 Term Loan Facilities

 

 

100,000

2026 Term Loan

 

 

100,000

Total Principal

 

 

240,000

Unamortized debt issuance costs

 

 

(2,151)

Total

$

$

237,849

In May 2021, the Company used the net proceeds from the offering of the 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes (see Senior Unsecured Notes below) to repay all amounts outstanding under its unsecured term loans and settle the related swap agreements.  The Company incurred a charge of $14.6 million upon this repayment and settlement, including swap termination costs of $13.4 million and the write-off of previously unamortized debt issuance costs of $1.2 million.

Prior to the repayments of the 2023 Term Loan, the 2024 Term Loan Facilities, and the 2026 Term Loan, these loans were subject to all-in interest rates of 2.40%, 2.86%, and 4.26%, respectively, including the effects of related swap agreements.

Senior Unsecured Notes

The following table presents the Senior Unsecured Notes balance net of unamortized debt issuance costs and original issue discount as of December 31, 2021, and 2020 (presented in thousands):

    

December 31, 2021

    

December 31, 2020

2025 Senior Unsecured Notes

$

50,000

$

50,000

2027 Senior Unsecured Notes

 

50,000

 

50,000

2028 Senior Unsecured Notes

 

60,000

 

60,000

2028 Senior Unsecured Public Notes

350,000

2029 Senior Unsecured Notes

 

100,000

 

100,000

2030 Senior Unsecured Notes

 

125,000

 

125,000

2030 Senior Unsecured Public Notes

350,000

350,000

2031 Senior Unsecured Notes

125,000

125,000

2033 Senior Unsecured Public Notes

 

300,000

Total Principal

 

1,510,000

 

860,000

Unamortized debt issuance costs and original issue discount, net

 

(14,800)

 

(4,672)

Total

$

1,495,200

$

855,328

In May 2015, the Company and the Operating Partnership completed a private placement of $100 million principal amount of senior unsecured notes. The senior unsecured notes were sold in two series; $50 million of 4.16% notes due May 2025 (the “2025 Senior Unsecured Notes”) and $50 million of 4.26% notes due May 2027 (the “2027 Senior Unsecured Notes”).

In July 2016, the Company and the Operating Partnership completed a private placement of $60 million aggregate principal amount of 4.42% senior unsecured notes due July 2028 (the “2028 Senior Unsecured Notes”).

In September 2017, the Company and the Operating Partnership completed a private placement of $100 million aggregate principal amount of 4.19% senior unsecured notes due September 2029 (the “2029 Senior Unsecured Notes”).

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Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

In September 2018, the Company and the Operating Partnership entered into two supplements to uncommitted master note facilities with institutional purchasers. Pursuant to the supplements, the Operating Partnership completed a private placement of $125 million aggregate principal amount of 4.32% senior unsecured notes due September 2030 (the “2030 Senior Unsecured Notes”).

In October 2019, the Company and the Operating Partnership closed on a private placement of $125 million of 4.47% senior unsecured notes due October 2031 (the “2031 Senior Unsecured Notes”).  In March 2019, the Company entered into forward-starting interest rate swap agreements to fix the interest for $100 million of long-term debt until maturity. The Company terminated the swap agreements at the time of pricing the 2031 Senior Unsecured Notes, which resulted in an effective annual fixed rate of 4.41% for $100 million aggregate principal amount of the 2031 Senior Unsecured Notes. Considering the effect of the terminated swap agreements, the blended all-in rate to the Company for the $125 million aggregate principal amount of 2031 Senior Unsecured Notes is 4.42%.

All of the senior unsecured notes described in the preceding paragraphs were sold only to institutional investors and did not involve a public offering in reliance on the exemption from registration in Section 4(a)(2) of the Securities Act.

In August 2020, the Operating Partnership completed an underwritten public offering of $350 million aggregate principal amount of 2.900% Notes due 2030 (the “2030 Senior Unsecured Public Notes”). The 2030 Senior Unsecured Public Notes are fully and unconditionally guaranteed by Agree Realty Corporation and certain wholly owned subsidiaries of the Operating Partnership.  The terms of the 2030 Senior Unsecured Public Notes are governed by an indenture, dated August 17, 2020, among the Operating Partnership, the Company and U.S. Bank National Association, as trustee (as amended and supplemented by an officer’s certificate dated August 17, 2020, the “Indenture”). The Indenture contains various restrictive covenants, including limitations on the ability of the guarantors and the issuer to incur additional indebtedness and requirements to maintain a pool of unencumbered assets.  The Company terminated related swap agreements of $200.0 million that hedged the 2030 Senior Unsecured Public Notes, paying $23.4 million upon termination. Considering the effect of the terminated swap agreements, the blended all-in rate to the Company for the $350 million aggregate principal amount of 2030 Senior Unsecured Public Notes is 3.49%.

In May 2021, the Operating Partnership completed an underwritten public offering of $350 million aggregate principal amount of 2.000% Notes due 2028 (the “2028 Senior Unsecured Public Notes”) and $300 million in aggregate principal amount of 2.600% Notes due 2033 (the “2033 Senior Unsecured Public Notes”).  The 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes are fully and unconditionally guaranteed by Agree Realty Corporation and certain wholly owned subsidiaries of the Operating Partnership.  The terms of the 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes are governed by an indenture, dated August 17, 2020, among the Operating Partnership, the Company and U.S. Bank National Association, as trustee (as amended and supplemented by an officer’s certificate dated May 14, 2021, the “Indenture”). The Indenture contains various restrictive covenants, including limitations on the ability of the guarantors and the Operating Partnership to incur additional indebtedness and requirements to maintain a pool of unencumbered assets.  The Company terminated related swap agreements of $300 million notional amount that hedged the 2033 Senior Unsecured Public Notes, receiving $16.7 million upon termination. Considering the effect of the terminated swap agreements, the blended all-in rates to the Company for the $350 million aggregate principal amount of the 2028 Senior Unsecured Public Notes and the $300 million aggregate principal amount of the 2033 Senior Unsecured Public Notes are 2.11% and 2.13%, respectively.

Senior Unsecured Revolving Credit Facility

In December 2019, the Company entered into a Second Amended and Restated Revolving Credit and Term Loan Agreement. This agreement provided for a $500 million unsecured revolving credit facility. It also provided for a $65 million unsecured term loan facility and a $35 million unsecured term loan facility.  All amounts outstanding under these unsecured term loan facilities were repaid in May 2021 (see Unsecured Term Loan Facilities below) and cannot be reborrowed against.

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

In December 2021, the Company entered into a Third Amended and Restated Revolving Credit Agreement which increases its senior unsecured revolving credit facility (the "Revolving Credit Facility") to $1.0 billion. The Revolving Credit Facility includes an accordion option that allows the Company to request additional lender commitments up to a total of $1.75 billion. The Revolving Credit Facility will mature in January 2026 with Company options to extend the maturity date to January 2027.  

The Revolving Credit Facility's interest rate is based on a pricing grid with a range of 72.5 to 140 basis points over LIBOR, determined by the Company's credit ratings. The margins for the Revolving Credit Facility are subject to improvement based on the Company's leverage ratio, provided its credit ratings meet a certain threshold. Based on the Company's credit ratings and leverage ratio at the time of closing, pricing on the Revolving Credit Facility was 77.5 basis points over LIBOR. In connection with the Company's ongoing environmental, social and governance ("ESG") initiatives, pricing may be reduced if specific ESG ratings are achieved.

The Company and Richard Agree, the Executive Chairman of the Company, are parties to a Reimbursement Agreement dated November 18, 2014.  Pursuant to the Reimbursement Agreement, Mr. Agree has agreed to reimburse the Company for any loss incurred under the Revolving Credit Facility in an amount not to exceed $14.0 million to the extent that the value of the Operating Partnership’s assets available to satisfy the Operating Partnership’s obligations under the revolving credit facility is less than $14.0 million.

Debt Maturities

The following table presents scheduled principal payments related to the Company’s debt as of December 31, 2021 (presented in thousands):

Scheduled

    

Balloon

    

Principal

Payment

Total

2022

$

850

$

$

850

2023

 

905

 

28,262

 

29,167

2024

 

963

 

 

963

2025

 

1,026

 

50,000

 

51,026

2026 (1)

629

160,000

160,629

Thereafter

 

 

1,460,000

 

1,460,000

Total scheduled principal payments

4,373

1,698,262

1,702,635

Original issue discount, net

(8,923)

(8,923)

Total

$

4,373

$

1,689,339

$

1,693,712

(1)The Revolving Credit Facility matures in January 2026, with options to extend the maturity to January 2027. The Revolving Credit Facility had a balance of $160.0 million as of December 31, 2021.

Loan Covenants

Certain loan agreements contain various restrictive covenants, including the following financial covenants: maximum total leverage ratio, maximum secured leverage ratios, consolidated net worth requirements, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, a minimum unsecured interest expense ratio, a minimum interest coverage ratio, a minimum unsecured debt yield and a minimum unencumbered interest expense ratio. As of December 31, 2021, the most restrictive covenant was the minimum unencumbered interest expense ratio. The Company was in compliance with all of its loan covenants and obligations as of December 31, 2021.

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Note 6 – Common and Preferred Stock

Authorized Shares of Common Stock

In May 2021, the Company’s stockholders approved an amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of the Company’s common stock from 90 million shares to 180 million shares.

Shelf Registration

On May 27, 2020, the Company filed an automatic shelf registration statement on Form S-3 with the Securities and Exchange Commission registering an unspecified amount of common stock, preferred stock, depositary shares, warrants and guarantees of debt securities of the Operating Partnership, as well as an unspecified amount of debt securities of the Operating Partnership, at an indeterminate aggregate initial offering price. The Company may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

Follow-on Common Stock Offerings

In September 2018, the Company entered into a follow-on public offering of 3,500,000 shares of common stock in connection with a forward sale agreement (the “September 2018 Forward”).  The September 2018 Forward was settled in its entirety in April 2019.   Upon settlement the Company issued 3,500,000 shares and received net proceeds of approximately $186.0 million, after deducting fees and expenses.  

In April 2019, the Company entered into a follow-on public offering to sell an aggregate of 3,162,500 shares of common stock (the “April 2019 Forward”) which included the full exercise of the underwriters’ option to purchase an additional 412,500 shares of common stock. The April 2019 Forward was settled in its entirety in December 2019. Upon settlement, the Company issued 3,162,500 share of common stock and received net proceeds of approximately $195.8 million, after deducting fees and expenses.

In April 2020, the Company completed a follow-on public offering of 2,875,000 shares of common stock, which included the full exercise of the underwriters’ option to purchase an additional 375,000 shares of common stock.  Upon closing, the Company issued 2,875,000 shares and received net proceeds of $170.4 million, after deducting fees and expenses.  

Also in April 2020, the Company entered into a follow-on public offering to sell an aggregate of 6,166,666 shares of common stock in connection with a forward sale agreement (the “April 2020 Forward”).  During the remainder of 2020, the Company settled the April 2020 Forward, realizing net proceeds of approximately $354.6 million, after deducting fees and expenses.  

In January 2021, the Company completed a follow-on public offering of 3,450,000 shares of common stock, which included the full exercise of the underwriters’ option to purchase an additional 450,000 shares of common stock.  The offering resulted in net proceeds to the Company of approximately $221.4 million, after deducting fees and offering expenses payable by the Company.

In June 2021, the Company completed a follow-on public offering of 4,600,000 shares of common stock, which included the full exercise of the underwriters’ option to purchase an additional 600,000 shares of common stock.  The offering resulted in net proceeds to the Company of approximately $327.0 million, after deducting fees and offering expenses payable by the Company.

In December 2021, the Company completed a follow-on public offering of 5,750,000 shares of common stock, including the full exercise of the underwriters' option to purchase additional 750,000 shares, in connection with forward sale agreements. Upon settlement, the offering is anticipated to raise net proceeds of approximately $374.8 million after

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

deducting fees and expenses and making certain other adjustments as provided in the equity distribution agreements. As of December 31, 2021, the Company has not received any proceeds from the sale of shares of its common stock by the forward purchasers.

Preferred Stock Offering

In September 2021, the Company completed an underwritten public offering of depositary shares (the “Depositary Shares”), each representing 1/1,000th of a share of Series A Preferred Stock, which resulted in net proceeds to the Company of approximately $170.3 million, after deducting the underwriting discounts and commissions and costs payable by the Company. At the closing, the Company issued 7,000 shares of Series A Preferred Stock to the depositary, resulting in the issuance of 7,000,000 Depositary Shares. The Company contributed the net proceeds from the sale of the Depositary Shares to the Operating Partnership in exchange for 7,000 Series A Preferred Units corresponding to the number of shares of Series A Preferred Stock underlying the Depositary Shares.  

Dividends on the Series A Preferred Shares will be payable monthly in arrears on the first day of each month (or, if not on a business day, on the next succeeding business day). The dividend rate is 4.25% per annum of the $25,000 (equivalent to $25.00 per Depositary Share) liquidation preference. The first pro-rated dividend on the Series A Preferred Shares was paid on October 1, 2021 and was in an amount equivalent to $0.04132 per Depositary Share. Subsequent dividends on the Series A Preferred Shares will be in the amount of $0.08854 per Depositary Share, equivalent to $1.0625 per annum.

The Company may not redeem the Series A Preferred Shares before September 2026, except in limited circumstances to preserve its status as a real estate investment trust for federal income tax purposes and except in certain circumstances upon the occurrence of a change of control of the Company.  Beginning in September 2026, the Company, at its option, may redeem the Series A Preferred Shares, in whole or from time to time in part, by paying $25.00 per Depositary Share, plus any accrued and unpaid dividends. Upon the occurrence of a change in control of the Company, if the Company does not otherwise redeem the Series A Preferred Shares, the holders have a right to convert their shares into common stock of the Company at the $25.00 per share liquidation value, plus any accrued and unpaid dividends.  This conversion value is limited by a share cap if the Company’s stock price falls below a certain threshold.

ATM Programs

The Company enters into ATM programs through which the Company, from time to time, sells shares of common stock and enters into forward sale agreements.  The results of ATM programs entered into during 2019 and 2020 are shown in the following table.  These ATM programs have been terminated and no future issuances will occur under them.

Net Proceeds Received

Program Year

Size ($ million)

Shares Issued

($ million)

2019

$400.0

5,172,872

$362.9

2020

$400.0

3,334,056

$209.5

In February 2021, the Company entered into a new $500 million ATM program (the “2021 ATM Program”) through which the Company, from time to time, may sell shares of common stock and/or enter into forward sale agreements.  As of December 31, 2021, the Company entered into forward sale agreements to sell an aggregate of 2,125,296 shares of common stock under the 2021 ATM Program, for anticipated net proceeds of $144.4 million. The Company had not settled any shares of these forward sale agreements as of December 31, 2021. The Company is required to settle the remaining outstanding shares of common stock under the 2021 ATM Program by various dates between March and December 2022. After considering the 2,125,296 shares of common stock subject to forward sale agreements issued under the 2021 ATM Program, the Company had approximately $349.7 million of availability remaining under this program as of December 31, 2021.

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Note 7 – Dividends and Distributions Payable

The Company declared dividends of $2.604, $2.405 and $2.280 per share during the years ended December 31, 2021, 2020, and 2019; the dividends have been reflected for federal income tax purposes as follows:

For the Year Ended December 31, 

    

2021

    

2020

    

2019

Ordinary Income

$

2.398

$

1.928

$

1.933

Return of Capital

 

0.206

 

0.477

 

0.347

Total

$

2.604

$

2.405

$

2.280

On December 1, 2021, the Company declared a dividend of $0.227 per share for the month ended December 31, 2021. The holders of Operating Partnership Common Units are entitled to an equal distribution per Operating Partnership Unit held. The monthly common dividend for December 2021 has been reflected as a reduction of stockholders’ equity and the distribution has been reflected as a reduction of the limited partners’ non-controlling interest. This dividend was paid on January 14, 2022.

The Company declared dividends of $0.30695 per Depositary Share during the year ended December 31, 2021, covering the periods subsequent to the September 2021 preferred stock issuance date (see Note 6- Common and Preferred Stock).   These dividends were reflected entirely as ordinary income for federal income tax purposes.  

On December 13, 2021, the Company declared a dividend of $0.08854 per Depositary Share for the month ended December 31, 2021.  This monthly preferred dividend has been reflected as a reduction of stockholders’ equity and was paid on January 3, 2022.  

Note 8 – Income Taxes

Uncertain Tax Positions

The Company is subject to the provisions of Financial Accounting Standards Board ASC Topic 740-10 (“ASC 740-10”) and has analyzed its various federal and state filing positions. The Company believes that its income tax filing positions and deductions are documented and supported. Additionally, the Company believes that its accruals for tax liabilities are adequate. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740-10. The Company’s Federal income tax returns are open for examination by taxing authorities for all tax years after December 31, 2017. The Company has elected to record related interest and penalties, if any, as income tax expense on the Consolidated Statements of Operations and Comprehensive Income. We have no material interest or penalties relating to income taxes recognized for years ended December 31, 2021, 2020, and 2019.

Deferred Taxes

As of December 31, 2018, the Company had accrued a deferred income tax liability in the amount of $0.5 million. This deferred income tax balance represents the federal and state tax effect of deferring income tax in 2007 on the sale of an asset under section 1031 of the Internal Revenue Code. This transaction was accrued within the Company’s TRS entities.  During 2019, the Company restructured its ownership of the TRS to which the deferred tax liability was related, resulting in a reversal of the previously accrued amount.

Income Tax Expense

During the years ended December 31, 2021, 2020, and 2019, the Company recognized net federal and state income tax expense of approximately $2.4 million, $1.1 million and $0.5 million, respectively. The income tax expense recorded in 2021 includes additional tax expense of approximately $0.5 million relating to 2020 operations, recognized upon filing of the 2020 annual tax returns in 2021.

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Note 9 – Derivative Instruments and Hedging Activity

Background

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risk, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and, to a limited extent, the use of derivative instruments. For additional information regarding the leveling of the Company’s derivatives, refer to Note 10 – Fair Value Measurements.

The Company’s objective in using interest rate derivatives is to manage its exposure to interest rate movements and add stability to interest expense. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the agreement without exchange of the underlying notional amount.

Hedges of 2022 Planned Debt Issuance

In May and July 2021, the Company entered into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $300 million of long-term debt. The Company hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending December 2022. As of December 31, 2021, these interest rate swaps were valued as a liability of approximately $1.5 million.

Settlements of Hedges for Previous Debt Issuances

2020 Settlements – Hedging 2020 Debt Issuances

In June 2019, the Company entered into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $100 million of long-term debt. The Company hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending March 2021. In August 2020, the Company terminated the swap agreements upon the debt issuance, paying $16.1 million upon termination. This settlement was included as a component of accumulated OCI, to be recognized as an adjustment to income over the term of the debt.

In February 2020, the Company entered into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $100 million of long-term debt. The Company hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending March 2021. In August 2020, the Company terminated the swap agreements upon the debt issuance, paying $7.3 million upon termination. This settlement was included as a component of accumulated OCI, to be recognized as an adjustment to income over the term of the debt.

2021 Settlements – Hedging 2021 Debt Issuances

In August 2020, the Company entered into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $100

million of long-term debt.  The Company hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending February 2022.  In May 2021, the Company terminated the swap agreements upon the debt issuance, receiving $8.0 million upon termination. This settlement was included as a component of accumulated OCI, to be recognized as an adjustment to income over the term of the debt.

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

In December 2020, the Company entered into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $100 million of long-term debt. The Company hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending February 2022. In May 2021, the Company terminated the swap agreements upon the debt issuance, receiving $5.6 million upon termination. This settlement was included as a component of accumulated OCI, to be recognized as an adjustment to income over the term of the debt.

In February 2021, the Company entered into forward-starting interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance date of $100 million of long-term debt. The Company hedged its exposure to the variability in future cash flows for a forecasted issuance of long-term debt over a maximum period ending February 2022. In May 2021, the Company terminated the swap agreements upon the debt issuance, receiving $3.1 million upon termination. This settlement was included as a component of accumulated OCI, to be recognized as an adjustment to income over the term of the debt.

2021 Settlements – Extinguishment of Term Loans

In July 2014, the Company entered into interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates on $65 million in variable-rate borrowings. Under the terms of the interest rate swap agreements, the Company received from the counterparty interest on the notional amount based on one month LIBOR and pays to the counterparty a fixed rate of 2.09%. These swaps effectively converted $65 million of variable-rate borrowings to fixed-rate borrowings from July 21, 2014 to July 21, 2021. In May 2021, the Company terminated the swap agreements upon the payoff of the related term loan, paying $0.3 million upon termination. This settlement was recognized as an expense during the year ended December 31, 2021.

In June 2016, the Company entered into an interest rate swap agreement to hedge against changes in future cash flows resulting from changes in interest rates on $40 million in variable-rate borrowings. Under the terms of the interest rate swap agreement, the Company received from the counterparty interest on the notional amount based on one month LIBOR and pays to the counterparty a fixed rate of 1.40%. This swap effectively converted $40 million of variable-rate borrowings to fixed-rate borrowings from August 1, 2016 to July 1, 2023. In May 2021, the Company terminated the swap agreements upon the payoff of the related term loan, paying $1.0 million upon termination. This settlement was recognized as an expense during the year ended December 31, 2021.

In December 2018, the Company entered into interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates on $100 million in variable-rate borrowings. Under the terms of the interest rate swap agreements, the Company received from the counterparty interest on the notional amount based on one month LIBOR and pays to the counterparty a fixed rate of 2.66%. These swaps effectively converted $100 million of variable-rate borrowings to fixed-rate borrowings from December 27, 2018 to January 15, 2026. In May 2021, the Company terminated the swap agreements upon the payoff of the related term loan, paying $9.2 million upon termination. This settlement was recognized as an expense during the year ended December 31, 2021.

In October 2019, the Company entered into interest rate swap agreements to hedge against changes in future cash flows resulting from changes in interest rates on $65 million in variable-rate borrowings. Under the terms of the interest rate swap agreements, the Company received from the counterparty interest on the notional amount based on one month LIBOR and pays to the counterparty a fixed rate of 1.4275%. This swap effectively converted $65 million of variable-rate borrowings to fixed-rate borrowings from July 12, 2021 to January 12, 2024. In May 2021, the Company terminated the swap agreements upon the payoff of the related term loan, paying $1.8 million upon termination. This settlement was recognized as an expense during the year ended December 31, 2021.

Also in October 2019, the Company entered into an interest rate swap agreement to hedge against changes in future cash flows resulting from changes in interest rates on $35 million in variable-rate borrowings. Under the terms of the interest rate swap agreement, the Company receives from the counterparty interest on the notional amount based on one month LIBOR and pays to the counterparty a fixed rate of 1.4265%. This swap effectively converted $35 million of variable-rate

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

borrowings to fixed-rate borrowings from September 29, 2020 to January 12, 2024. In May 2021, the Company terminated the swap agreements upon the payoff of the related term loan, paying $1.1 million upon termination. This settlement was recognized as an expense during the year ended December 31, 2021.

See discussion of the 2028 Senior Unsecured Public Notes and the 2033 Senior Unsecured Public Notes in Note 5 – Debt above.

Recognition

Companies are required to recognize all derivative instruments as either assets or liabilities at fair value on the balance sheet.  The Company recognizes its derivatives within Other Assets, net and Accounts Payable, Accrued Expenses and Other Liabilities on the Consolidated Balance Sheets.

The Company recognizes all changes in fair value for hedging instruments designated and qualifying for cash flow hedge accounting treatment as a component of Other Comprehensive Income (OCI).

Amounts reported in accumulated OCI related to currently outstanding interest rate derivatives are recognized as an adjustment to income as interest payments are made on the Company’s variable-rate debt. Realized gains or losses on settled derivative instruments included in accumulated OCI are recognized as an adjustment over the term of the hedged debt transaction. During the next twelve months, the Company estimates that an additional $0.4 million will be reclassified as an increase to interest expense.

During 2021, the Company accelerated the reclassification of amounts in accumulated OCI into expense given that the hedged forecasted transactions were no longer likely to occur. During 2021, the Company accelerated a loss of $13.4 million out of OCI into earnings due to missed forecasted transactions associated with terminated swap agreements in connection with the early payoff of the hedged term loans (see 2021 Settlements – Extinguishment of Term Loans above).

The Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (presented in thousands, except number of instruments):

Number of Instruments 1

Notional 1

December 31, 

December 31, 

December 31, 

December 31, 

Interest Rate Derivatives

    

2021

    

2020

    

2021

    

2020

Interest rate swap

 

3

 

16

$

300,000

$

505,000

1 Number of Instruments and total Notional disclosed includes all interest rate swap agreements outstanding at the balance sheet date, including forward-starting swaps prior to their effective date.

The table below presents the estimated fair value of the Company’s derivative financial instruments as well as their classification in the Consolidated Balance Sheets (presented in thousands).

Asset Derivatives

December 31, 2021

December 31, 2020

    

Fair Value

    

Fair Value

Derivatives designated as cash flow hedges:

 

  

 

  

Other Assets, net

$

1,868

$

2,286

Liability Derivatives

December 31, 2021

December 31, 2020

    

Fair Value

    

Fair Value

Derivatives designated as cash flow hedges:

 

  

 

  

Accounts Payable, Accrued Expenses, and Other Liabilities

$

3,335

$

16,985

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

The table below presents the effect of the Company’s derivative financial instruments in the Consolidated Statements of Operations and Other Comprehensive Income for the years ended December 31, 2021, 2020, and 2019 (presented in thousands).

Location of Income/(Loss)

Amount of Income/(Loss)

Amount of Income/(Loss) Recognized

Reclassified from Accumulated

Reclassified from Accumulated

in OCI on Derivative

OCI into Income

OCI into Expense

Year Ended December 31, 

2021

    

2020

    

2019

    

2021

    

2020

    

2019

Interest rate swaps

$

14,958

$

(34,558)

$

(8,657)

Interest expense

$

15,973

$

4,562

$

(118)

Loss on extinguishment of debt and settlement of related hedges

$

13,363

$

$

The Company does not use derivative instruments for trading or other speculative purposes and did not have any other derivative instruments or hedging activities as of December 31, 2021.

Credit Risk-related Contingent Features

The Company has agreements with its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.

As of December 31, 2021, the fair value of derivatives in a net liability position related to these agreements, which includes accrued interest but excludes any adjustment for nonperformance risk, was $1.7 million.

Although the derivative contracts are subject to master netting arrangements, which serve as credit mitigants to both the Company and its counterparties under certain situations, the Company does not net its derivative fair values or any existing rights or obligations to cash collateral on the Consolidated Balance Sheets.

The table below presents a gross presentation of the effects of offsetting and a net presentation of the Company’s derivatives as of December 31, 2021 and December 31, 2020. The gross amounts of derivative assets or liabilities can be reconciled to the Tabular Disclosure of Fair Values of Derivative Instruments above, which also provides the location that derivative assets and liabilities are presented on the Consolidated Balance Sheets (presented in thousands):

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Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Offsetting of Derivative Assets

 

As of December 31, 2021

Gross Amounts

    

Net Amounts of

Offset in the

Assets presented

Gross Amounts Not Offset in the

Gross Amounts

    

Statement of

in the Statement

Statement of Financial Position

of Recognized

Financial

of Financial

    

Financial

    

Cash Collateral

    

Assets

    

Position

    

Position

    

Instruments

    

Received

    

Net Amount

Derivatives

$

1,868

$

$

1,868

$

(1,679)

$

$

189

Offsetting of Derivative Liabilities

 

As of December 31, 2021

Net Amounts of

 

Gross Amounts

 

Liabilities

 

Offset in the

 

presented in the

 

Gross Amounts Not Offset in the

 

Gross Amounts

 

Statement of

 

Statement of

 

Statement of Financial Position

 

of Recognized

 

Financial

 

Financial

 

Financial

 

Cash Collateral

    

Liabilities

    

Position

    

Position

    

Instruments

    

Posted

    

Net Amount

Derivatives

$

3,335

$

$

3,335

$

(1,679)

$

$

1,656

Offsetting of Derivative Assets

 

As of December 31, 2020

Gross Amounts

Net Amounts of

 

Offset in the

 

Assets presented

 

Gross Amounts Not Offset in the

 

Gross Amounts

 

Statement of

 

in the Statement

 

Statement of Financial Position

 

of Recognized

 

Financial

 

of Financial

 

Financial

 

Cash Collateral

    

Assets

    

Position

    

Position

    

Instruments

    

Received

    

Net Amount

Derivatives

$

2,286

$

$

2,286

$

(1,258)

$

$

1,028

Offsetting of Derivative Liabilities

 

As of December 31, 2020

Net Amounts of

 

Gross Amounts

 

Liabilities

 

Offset in the

 

presented in the

 

Gross Amounts Not Offset in the

 

Gross Amounts

 

Statement of

 

Statement of

 

Statement of Financial Position

 

of Recognized

 

Financial

 

Financial

 

Financial

 

Cash Collateral

    

Liabilities

    

Position

    

Position

    

Instruments

    

Posted

    

Net Amount

Derivatives

$

16,985

$

$

16,985

$

(1,258)

$

$

15,727

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8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Note 10 – Fair Value Measurements

Assets and Liabilities Measured at Fair Value

The Company accounts for fair values in accordance with ASC 820. ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls, is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Derivative Financial Instruments

Currently, the Company uses interest rate swap agreements to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves.

To comply with the provisions of ASC 820, the Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2021, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

F-34

Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and December 31, 2020 (presented in thousands):

    

Total Fair Value

    

Level 2

December 31, 2021

Derivative assets - interest rate swaps

$

1,868

$

1,868

Derivative liabilities - interest rate swaps

$

3,335

$

3,335

December 31, 2020

Derivative assets - interest rate swaps

$

2,286

$

2,286

Derivative liabilities - interest rate swaps

$

16,985

$

16,985

Other Financial Instruments

The carrying values of cash and cash equivalents, receivables and accounts payable and accrued liabilities are reasonable estimates of their fair values because of the short maturity of these financial instruments.

The Company estimated the fair value of its debt based on our incremental borrowing rates for similar types of borrowing arrangements with the same remaining maturity and on the discounted estimated future cash payments to be made for other debt. The discount rate used to calculate the fair value of debt approximates current lending rates for loans and assumes the debt is outstanding through maturity. Since such amounts are estimates that are based on limited available market information for similar transactions, which is a Level 2 non-recurring measurement, there can be no assurance that the disclosed value of any financial instrument could be realized by immediate settlement of the instrument.

Fixed rate debt (including variable rate debt swapped to fixed, excluding the value of the derivatives) with carrying values of $1.53 billion and $1.13 billion as of December 31, 2021 and December 31, 2020, respectively, had fair values of approximately $1.60 billion and $1.28 billion, respectively. Variable rate debt’s fair value is estimated to be equal to the carrying values of $160.0 million and $92.0 million as of December 31, 2021 and December 31, 2020, respectively.

Note 11 – Equity Incentive Plan

In May 2020, the Company’s stockholders approved the Agree Realty Corporation 2020 Omnibus Incentive Plan (the “2020 Plan”), which replaced the Agree Realty Corporation 2014 Omnibus Equity Incentive Plan (the “2014 Plan”). The 2020 Plan provides for the award to employees, directors and consultants of the Company of options, restricted stock, restricted stock units, stock appreciation rights, performance awards (which may take the form of performance units or performance shares) and other awards to acquire up to an aggregate of 700,000 shares of the Company’s common stock. All subsequent awards of equity or equity rights will be granted under the 2020 Plan, and no further awards will be made under the 2014 Plan. As of December 31, 2021, 488,069 shares of common stock were available for issuance under the 2020 Plan.

Restricted Stock

Shares of restricted common stock (“restricted shares”) have been granted to certain employees.

The holder of a restricted share award is generally entitled at all times on and after the date of issuance of the restricted shares to exercise the rights of a stockholder of the Company, including the right to vote the shares and the right to receive dividends on the shares. The restricted shares vest over a five-year period based on continued service to the Company.

The Company estimates the fair value of restricted share grants at the date of grant and amortizes those amounts into expense on a straight-line basis or amount vested, if greater, over the appropriate vesting period. During 2021, 2020, and 2019 the Company recognized $3.5 million, $3.2 million and $3.0 million, respectively, of expense relating to restricted share grants.  

F-35

Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

As of December 31, 2021, there was $8.6 million of unrecognized compensation costs related to the outstanding restricted shares, which is expected to be recognized over a weighted average period of 3.4 years. The Company used 0% for the forfeiture rate for determining the fair value of restricted stock. The intrinsic value of restricted shares redeemed was $1.8 million, $1.6 million and $1.4 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Restricted share activity is summarized as follows:

    

Shares

    

Weighted Average

Outstanding

Grant Date

(in thousands)

Fair Value

Unvested restricted stock at December 31, 2018

 

212

$

42.74

Restricted stock granted

 

54

$

65.85

Restricted stock vested

 

(70)

$

39.55

Restricted stock forfeited

 

(2)

$

54.08

Unvested restricted stock at December 31, 2019

 

194

$

50.71

Restricted stock granted

 

52

$

78.43

Restricted stock vested

 

(68)

$

45.78

Restricted stock forfeited

 

(3)

$

63.80

Unvested restricted stock at December 31, 2020

 

175

$

60.53

Restricted stock granted

 

87

$

65.23

Restricted stock vested

(64)

$

53.82

Restricted stock forfeited

 

(23)

$

63.88

Unvested restricted stock at December 31, 2021

 

175

$

64.90

Performance Units and Shares

Performance units were granted to certain executive officers during the years ended December 31, 2021, 2020 and 2019, while performance shares were granted prior to those years. Performance units or shares are subject to a three-year performance period, at the conclusion of which shares awarded are to be determined by the Company’s total shareholder return compared to the constituents of the MSCI US REIT Index and a defined peer group. 50% of the award is based upon the total shareholder return percentile rank versus the constituents in the MSCI US REIT index for the three-year performance period; and 50% of the award is based upon TSR percentile rank versus a specified net lease peer group for the three-year performance period. Vesting of the performance units and shares following their issuance will occur ratably over a three-year period, with the initial vesting occurring immediately following the conclusion of the performance period such that all units and shares vest within five years of the original award date.  

The grant date fair value of these awards is determined using a Monte Carlo simulation pricing model and compensation expense is amortized on an attribution method over a five-year period. Compensation expense related to performance units or shares is determined at the grant date and is not adjusted throughout the measurement or vesting periods.

F-36

Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

The Monte Carlo simulation pricing model for issued grants utilizes the following assumptions: (i) expected term (equal to the remaining performance measurement period at the grant date), (ii) volatility (based on historical volatility), and (iii) risk-free rate (interpolated based on 2-and 3- year rates). The Company used 0% for the forfeiture rate for determining the fair value of performance units and shares.

During the years ended December 31, 2021, 2020 and 2019 the following assumptions were used:

Year Ended December 31, 

2021

2020

2019

Expected term (years)

2.9

2.9

2.9

Volatility

33.9

%

18.4

%

19.7

%

Risk-free rate

0.2

%

1.3

%

2.5

%

During the years ended December 31, 2021, 2020, and 2019, the Company recognized $1.2 million, $1.5 million and $0.9 million, respectively, of expense related to performance units and shares for which the three-year performance period has not yet been completed.  As of December 31, 2021, there was $3.0 million of total unrecognized compensation costs related to the outstanding performance units and shares for which the three-year performance period has not yet been completed, which is expected to be recognized over a weighted average period of 3.1 years.

During the year ended December 31, 2021, the Company recognized $0.2 million of compensation expense related to performance units and shares for which the three-year performance period was completed. As of December 31, 2021, there was $0.1 million of total unrecognized compensation costs related to performance units and shares for which the three-year performance period has been completed, which is expected to be recognized over a weighted average period of 1.4 years.

Performance share and unit activity is summarized as follows:

    

Target Number

    

Weighted Average

of Awards

Grant Date

(in thousands)

Fair Value

Performance shares at December 31, 2018

 

31

$

55.29

Performance units granted

30

$

66.96

Performance units and shares at December 31, 2019

 

61

$

61.04

Performance units granted

26

$

90.17

Performance units and shares at December 31, 2020

 

87

$

69.61

Performance units granted

 

43

$

63.42

Performance units and shares at December 31, 2021 - three-year performance period completed

 

(31)

$

55.29

Performance units and shares forfeited

 

(21)

$

68.79

Performance units and shares at December 31, 2021 - three-year performance period to be completed

78

$

63.35

 

F-37

Table of Contents

8

Agree Realty Corporation

Notes to Consolidated Financial Statements

 

December 31, 2021

Shares

    

Weighted Average

Outstanding

Grant Date

(in thousands)

Fair Value

Performance shares - three-year performance period completed but not yet vested at December 31, 2020

 

$

Shares earned at completion of three-year performance period (1)

 

47

$

55.29

Shares vested

(16)

$

55.29

Shares forfeited

 

(4)

$

55.29

Performance shares - three-year performance period completed but not yet vested December 31, 2021

27

$

55.29

(1)Performance shares granted in 2018 for which the three-year performance period was completed in 2021 paid out at the 150% maximum performance level

Note 12 – Commitments and Contingencies

In the ordinary course of business, we are party to various legal actions which we believe are routine in nature and incidental to the operation of our business. We believe that the outcome of the proceedings will not have a material adverse effect upon our consolidated financial position or results of operations.

Note 13 – Subsequent Events

In connection with the preparation of its financial statements, the Company has evaluated events that occurred subsequent to December 31, 2021 through the date on which these financial statements were issued to determine whether any of these events required disclosure in the financial statements.

There were no reportable subsequent events or transactions.

F-38

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Real Estate Held for Investment

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Borman Center, MI

550,000

562,404

1,087,596

550,000

1,650,000

2,200,000

1,650,000

1977

40 Years

Capital Plaza, KY

7,379

2,240,607

8,812,549

7,379

11,053,156

11,060,535

1,653,387

1978

40 Years

Grayling Plaza, MI

200,000

1,778,657

143,997

200,000

1,922,654

2,122,654

1,628,016

1984

40 Years

Omaha Store, NE

150,000

150,000

150,000

1995

Wichita Store, KS

1,039,195

1,690,644

451,090

1,139,677

2,041,252

3,180,929

1,012,398

1995

40 Years

Monroeville, PA

6,332,158

2,249,724

(2,079,178)

3,153,890

3,348,814

6,502,704

1,458,209

1996

40 Years

Boynton Beach, FL

1,534,942

2,043,122

3,717,733

1,534,942

5,760,855

7,295,797

1,746,509

1996

40 Years

Chesterfield Township, MI

1,350,590

1,757,830

(46,164)

1,350,590

1,711,666

3,062,256

1,006,186

1998

40 Years

Pontiac, MI

1,144,190

1,808,955

(89,989)

1,144,190

1,718,966

2,863,156

990,717

1998

40 Years

Mt Pleasant Shopping Ctr, MI

907,600

8,081,968

6,917,843

1,872,803

14,034,608

15,907,411

5,133,745

1998

40 Years

Rochester, MI

2,438,740

2,188,050

1,950

2,438,740

2,190,000

4,628,740

1,231,853

1999

40 Years

Ypsilanti, MI

2,050,000

2,222,097

(3,494,709)

777,388

777,388

1999

Petoskey, MI

2,332,473

2,010,689

2,005,410

2,337,752

4,343,162

1,263,972

2000

40 Years

Flint, MI

2,026,625

1,879,700

(2,906,325)

683,392

316,608

1,000,000

2000

40 Years

Flint, MI

1,477,680

2,241,293

24,320

1,477,680

2,265,613

3,743,293

1,169,670

2001

40 Years

New Baltimore, MI

1,250,000

2,285,781

(16,503)

1,250,000

2,269,278

3,519,278

1,156,089

2001

40 Years

Flint, MI

1,435,925

1,729,851

1,798,091

660

1,729,851

1,798,751

3,528,602

886,221

2002

40 Years

Indianapolis, IN

180,000

1,117,617

108,551

180,000

1,226,168

1,406,168

586,253

2002

40 Years

Flint, MI

471,272

(201,809)

269,463

269,463

166,120

2003

40 Years

Canton Twp, MI

1,550,000

2,132,096

23,021

1,550,000

2,155,117

3,705,117

974,240

2003

40 Years

Flint, MI

1,664,211

1,537,400

1,961,674

1,537,400

1,961,674

3,499,074

874,660

2004

40 Years

Albion, NY

1,900,000

3,037,864

1,900,000

3,037,864

4,937,864

1,300,591

2004

40 Years

Flint, MI

1,272,314

1,029,000

2,165,463

(6,666)

1,029,000

2,158,797

3,187,797

924,191

2004

40 Years

Lansing, MI

785,000

348,501

3,045

785,000

351,546

1,136,546

153,764

2004

40 Years

Boynton Beach, FL

1,569,000

2,363,524

3,943,404

1,569,000

6,306,928

7,875,928

2,065,248

2004

40 Years

Roseville, MI

1,771,000

2,327,052

395

1,771,000

2,327,447

4,098,447

938,160

2005

40 Years

Mt Pleasant, MI

1,075,000

1,432,390

4,787

1,075,000

1,437,177

2,512,177

577,850

2005

40 Years

N Cape May, NJ

1,075,000

1,430,092

495

1,075,000

1,430,587

2,505,587

575,211

2005

40 Years

Summit Twp, MI

998,460

1,336,357

12,686

998,460

1,349,043

2,347,503

515,506

2006

40 Years

Barnesville, GA

932,500

2,091,514

5,490

932,500

2,097,004

3,029,504

744,842

2007

40 Years

East Lansing, MI

240,000

54,531

(54,531)

240,000

240,000

2007

Macomb Township, MI

424,222

424,222

424,222

2008

Brighton, MI

1,365,000

2,802,036

5,615

1,365,000

2,807,651

4,172,651

900,710

2009

40 Years

Southfield, MI

1,483,000

1,200,000

125,616

2,063

1,200,000

127,679

1,327,679

38,961

2009

40 Years

Atchison, KS

943,750

3,021,672

823,170

3,142,252

3,965,422

901,889

2010

40 Years

Johnstown, OH

485,000

2,799,502

485,000

2,799,502

3,284,502

804,858

2010

40 Years

Lake in the Hills, IL

2,135,000

3,328,560

1,690,000

3,773,560

5,463,560

1,079,338

2010

40 Years

F-39

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Concord, NC

7,676,305

7,676,305

7,676,305

2010

Antioch, IL

1,087,884

1,087,884

1,087,884

2010

Mansfield, CT

700,000

1,902,191

508

700,000

1,902,699

2,602,699

529,186

2010

40 Years

Spring Grove, IL

2,313,000

1,191,199

968

1,192,167

1,192,167

2010

Tallahassee, FL

1,628,000

1,482,462

1,482,462

1,482,462

409,218

2010

40 Years

Wilmington, NC

2,186,000

1,500,000

1,348,591

1,500,000

1,348,591

2,848,591

365,245

2011

40 Years

Marietta, GA

900,000

575,000

696,297

6,359

575,000

702,656

1,277,656

184,370

2011

40 Years

Baltimore, MD

2,534,000

2,610,430

(3,447)

2,606,983

2,606,983

2011

Dallas, TX

1,844,000

701,320

778,905

1,042,730

701,320

1,821,635

2,522,955

463,521

2011

40 Years

Chandler, AZ

332,868

793,898

360

332,868

794,258

1,127,126

203,566

2011

40 Years

New Lenox, IL

1,422,488

1,422,488

1,422,488

2011

Roseville, CA

4,752,000

2,800,000

3,695,455

(96,364)

2,695,636

3,703,455

6,399,091

956,662

2011

40 Years

Fort Walton Beach, FL

1,768,000

542,200

1,958,790

88,778

542,200

2,047,568

2,589,768

509,625

2011

40 Years

Leawood, KS

989,622

3,003,541

16,197

989,622

3,019,738

4,009,360

754,932

2011

40 Years

Salt Lake City, UT

6,810,104

(44,416)

6,765,688

6,765,688

1,726,894

2011

40 Years

Burton, MI

80,000

80,000

80,000

2011

Macomb Township, MI

1,793,000

1,605,134

1,605,134

1,605,134

2012

Madison, AL

1,552,000

675,000

1,317,927

675,000

1,317,927

1,992,927

329,481

2012

40 Years

Walker, MI

887,000

219,200

1,024,738

219,200

1,024,738

1,243,938

249,780

2012

40 Years

Portland, OR

7,969,403

161

7,969,564

7,969,564

2012

Cochran, GA

365,714

2,053,726

365,714

2,053,726

2,419,440

487,761

2012

40 Years

Baton Rouge, LA

1,188,322

1,188,322

1,188,322

284,702

2012

40 Years

Southfield, MI

1,178,215

1,178,215

1,178,215

2012

Clifton Heights, PA

2,543,941

3,038,561

(3,105)

2,543,941

3,035,456

5,579,397

717,762

2012

40 Years

Newark, DE

2,117,547

4,777,516

(4,881)

2,117,547

4,772,635

6,890,182

1,128,593

2012

40 Years

Vineland, NJ

4,102,710

1,501,854

7,986

4,102,710

1,509,840

5,612,550

357,018

2012

40 Years

Fort Mill, SC

750,000

1,187,380

750,000

1,187,380

1,937,380

279,528

2012

40 Years

Spartanburg, SC

250,000

765,714

4,387

250,000

770,101

1,020,101

181,440

2012

40 Years

Springfield, IL

302,520

653,654

49,741

302,520

703,395

1,005,915

159,815

2012

40 Years

Jacksonville, NC

676,930

1,482,748

(150,000)

676,930

1,332,748

2,009,678

338,474

2012

40 Years

Morrow, GA

525,000

1,383,489

(99,849)

525,000

1,283,640

1,808,640

297,467

2012

40 Years

Charlotte, NC

1,822,900

3,531,275

(570,844)

1,822,900

2,960,431

4,783,331

680,771

2012

40 Years

Lyons, GA

121,627

2,155,635

(103,392)

121,627

2,052,243

2,173,870

465,296

2012

40 Years

Fuquay-Varina, NC

2,042,225

1,763,768

(255,778)

2,042,225

1,507,990

3,550,215

342,972

2012

40 Years

Minneapolis, MN

1,088,015

345,958

71,142

826,635

678,480

1,505,115

16,962

2012

40 Years

Lake Zurich, IL

780,974

7,909,277

46,509

780,974

7,955,786

8,736,760

1,796,915

2012

40 Years

Harlingen, TX

430,000

1,614,378

12,854

430,000

1,627,232

2,057,232

366,125

2012

40 Years

F-40

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Pensacola, FL

650,000

1,165,415

23,957

650,000

1,189,372

1,839,372

265,733

2012

40 Years

Venice, FL

1,300,196

4,892

1,305,088

1,305,088

2012

St. Joseph, MO

377,620

7,639,521

377,620

7,639,521

8,017,141

1,702,976

2013

40 Years

Statham, GA

191,919

3,851,073

191,919

3,851,073

4,042,992

858,467

2013

40 Years

North Las Vegas, NV

214,552

717,435

28,999

214,552

746,434

960,986

163,530

2013

40 Years

Memphis, TN

322,520

748,890

322,520

748,890

1,071,410

165,383

2013

40 Years

Rancho Cordova, CA

1,339,612

1,339,612

1,339,612

2013

Kissimmee, FL

1,453,500

971,683

1,453,500

971,683

2,425,183

212,556

2013

40 Years

Pinellas Park, FL

2,625,000

874,542

4,163

2,625,000

878,705

3,503,705

188,484

2013

40 Years

Manchester, CT

397,800

325,705

397,800

325,705

723,505

70,571

2013

40 Years

Rapid City, SD

1,017,800

2,348,032

1,379

1,017,800

2,349,411

3,367,211

506,500

2013

40 Years

Chicago, IL

272,222

649,063

71,009

272,222

720,072

992,294

141,276

2013

40 Years

Brooklyn, OH

3,643,700

15,079,714

953,195

3,643,700

16,032,909

19,676,609

3,299,854

2013

40 Years

Madisonville, TX

96,680

1,087,642

18,200

96,680

1,105,842

1,202,522

234,610

2013

40 Years

Forest, MS

1,298,176

99,848

1,398,024

1,398,024

282,660

2013

40 Years

Sun Valley, NV

308,495

1,373,336

(51,008)

253,495

1,377,328

1,630,823

286,873

2013

40 Years

Rochester, NY

2,500,000

7,398,639

2,017

2,500,000

7,400,656

9,900,656

1,533,986

2013

40 Years

Allentown, PA

2,525,051

7,896,613

672,368

2,525,051

8,568,981

11,094,032

1,725,571

2013

40 Years

Casselberry, FL

1,804,000

793,101

(2,906)

1,804,000

790,195

2,594,195

166,700

2013

40 Years

Berwyn, IL

186,791

933,959

62,585

186,791

996,544

1,183,335

192,594

2013

40 Years

Grand Forks, ND

1,502,609

2,301,337

1,801,028

1,502,609

4,102,365

5,604,974

830,062

2013

40 Years

Ann Arbor, MI

3,000,000

4,595,757

277,040

3,000,000

4,872,797

7,872,797

984,087

2013

40 Years

Joplin, MO

1,208,225

1,160,843

1,208,225

1,160,843

2,369,068

237,004

2013

40 Years

Red Bay, AL

38,981

2,528,437

3,856

38,981

2,532,293

2,571,274

453,688

2014

40 Years

Birmingham, AL

230,106

231,313

(297)

230,106

231,016

461,122

40,910

2014

40 Years

Birmingham, AL

245,234

251,339

(324)

245,234

251,015

496,249

44,452

2014

40 Years

Birmingham, AL

98,271

179,824

98,271

179,824

278,095

31,844

2014

40 Years

Birmingham, AL

235,641

127,477

(313)

235,641

127,164

362,805

22,520

2014

40 Years

Montgomery, AL

325,389

217,850

325,389

217,850

543,239

38,578

2014

40 Years

Littleton, CO

4,622,391

819,000

8,756,266

(3,879,591)

819,000

4,876,675

5,695,675

1,462,670

2014

40 Years

St Petersburg, FL

1,225,000

1,025,247

6,592

1,225,000

1,031,839

2,256,839

199,641

2014

40 Years

St Augustine, FL

200,000

1,523,230

200,000

1,523,230

1,723,230

276,085

2014

40 Years

East Palatka, FL

730,000

575,236

6,911

730,000

582,147

1,312,147

105,473

2014

40 Years

Pensacola, FL

136,365

398,773

136,365

398,773

535,138

70,616

2014

40 Years

Fort Oglethorpe, GA

1,842,240

2,844,126

20,442

1,842,240

2,864,568

4,706,808

567,219

2014

40 Years

New Lenox, IL

2,010,000

6,206,252

107,873

2,010,000

6,314,125

8,324,125

1,134,427

2014

40 Years

Rockford, IL

303,395

2,436,873

(15,000)

303,395

2,421,873

2,725,268

440,465

2014

40 Years

F-41

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Terre Haute, IN

103,147

2,477,263

32,376

103,147

2,509,639

2,612,786

437,889

2014

40 Years

Junction City, KS

78,271

2,504,294

(30,565)

78,271

2,473,729

2,552,000

438,235

2014

40 Years

Baton Rouge, LA

226,919

347,691

226,919

347,691

574,610

61,570

2014

40 Years

Lincoln Park, MI

543,303

1,408,544

78,362

543,303

1,486,906

2,030,209

288,629

2014

40 Years

Novi, MI

1,803,857

1,488,505

22,490

1,803,857

1,510,995

3,314,852

264,389

2014

40 Years

Bloomfield Hills, MI

1,340,000

2,003,406

391,480

1,341,900

2,392,986

3,734,886

475,915

2014

40 Years

Jackson, MS

256,789

172,184

256,789

172,184

428,973

30,491

2014

40 Years

Irvington, NJ

315,000

1,313,025

315,000

1,313,025

1,628,025

254,397

2014

40 Years

Toledo, OH

500,000

1,372,363

(12)

500,000

1,372,351

1,872,351

265,892

2014

40 Years

Toledo, OH

213,750

754,675

213,750

754,675

968,425

139,929

2014

40 Years

Toledo, OH

168,750

785,000

16,477

168,750

801,477

970,227

148,436

2014

40 Years

Mansfield, OH

306,000

725,600

306,000

725,600

1,031,600

134,538

2014

40 Years

Orville, OH

344,250

716,600

344,250

716,600

1,060,850

132,869

2014

40 Years

Calcutta, OH

208,050

758,750

1,462

208,050

760,212

968,262

140,883

2014

40 Years

Columbus, OH

1,136,250

1,593,792

1,590,997

1,139,045

2,730,042

208,593

2014

40 Years

Tulsa, OK

459,148

640,550

(13,336)

459,148

627,214

1,086,362

123,220

2014

40 Years

Ligonier, PA

330,000

5,021,849

(9,500)

330,000

5,012,349

5,342,349

929,870

2014

40 Years

Limerick, PA

369,000

369,000

369,000

2014

Harrisburg, PA

124,757

1,446,773

11,175

124,757

1,457,948

1,582,705

255,059

2014

40 Years

Anderson, SC

781,200

4,441,535

261,624

775,732

4,708,627

5,484,359

933,177

2014

40 Years

Easley, SC

332,275

268,612

332,275

268,612

600,887

47,567

2014

40 Years

Spartanburg, SC

141,307

446,706

141,307

446,706

588,013

79,105

2014

40 Years

Spartanburg, SC

94,770

261,640

94,770

261,640

356,410

46,332

2014

40 Years

Columbia, SC

303,932

1,221,964

(13,830)

303,932

1,208,134

1,512,066

214,540

2014

40 Years

Alcoa, TN

329,074

270,719

329,074

270,719

599,793

47,940

2014

40 Years

Knoxville, TN

214,077

286,037

214,077

286,037

500,114

50,653

2014

40 Years

Red Bank, TN

229,100

302,146

229,100

302,146

531,246

53,504

2014

40 Years

New Tazewell, TN

91,006

328,561

5,074

91,006

333,635

424,641

58,378

2014

40 Years

Maryville, TN

94,682

1,529,621

57,945

94,682

1,587,566

1,682,248

274,132

2014

40 Years

Morristown, TN

46,404

801,506

4,990

46,404

806,496

852,900

141,128

2014

40 Years

Clinton, TN

69,625

1,177,927

11,564

69,625

1,189,491

1,259,116

208,150

2014

40 Years

Knoxville, TN

160,057

2,265,025

226,291

160,057

2,491,316

2,651,373

427,067

2014

40 Years

Sweetwater, TN

79,100

1,009,290

6,740

79,100

1,016,030

1,095,130

177,793

2014

40 Years

McKinney, TX

2,671,020

6,785,815

100,331

2,671,020

6,886,146

9,557,166

1,295,707

2014

40 Years

Forest, VA

282,600

956,027

282,600

956,027

1,238,627

179,254

2014

40 Years

Colonial Heights, VA

547,692

1,059,557

(5,963)

547,692

1,053,594

1,601,286

186,577

2014

40 Years

Glen Allen, VA

590,101

1,129,495

(6,867)

590,101

1,122,628

1,712,729

198,802

2014

40 Years

F-42

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Burlington, WA

610,000

3,647,279

(4,602)

610,000

3,642,677

4,252,677

646,446

2014

40 Years

Wausau, WI

909,092

1,405,899

79,841

909,092

1,485,740

2,394,832

273,694

2014

40 Years

Foley AL

305,332

506,203

9,380

305,332

515,583

820,915

89,943

2015

40 Years

Sulligent, AL

58,803

1,085,906

(432,709)

58,803

653,197

712,000

158,128

2015

40 Years

Eutaw, AL

103,746

1,212,006

(377,526)

103,746

834,480

938,226

183,273

2015

40 Years

Tallassee, AL

154,437

850,448

11,125

154,437

861,573

1,016,010

144,770

2015

40 Years

Orange Park, AL

649,652

1,775,000

9,664

649,652

1,784,664

2,434,316

281,203

2015

40 Years

Pace, FL

37,860

524,400

6,970

37,860

531,370

569,230

91,506

2015

40 Years

Pensacola, FL

309,607

775,084

(25)

309,607

775,059

1,084,666

133,831

2015

40 Years

Freeport, FL

312,615

1,277,386

312,615

1,277,386

1,590,001

207,575

2015

40 Years

Glenwood, GA

29,489

1,027,370

(416,000)

29,489

611,370

640,859

144,723

2015

40 Years

Albany, GA

47,955

641,123

47,955

641,123

689,078

108,109

2015

40 Years

Belvidere, IL

184,136

644,492

184,136

644,492

828,628

108,645

2015

40 Years

Peru, IL

380,254

2,125,498

380,254

2,125,498

2,505,752

332,109

2015

40 Years

Davenport, IA

776,366

6,623,542

(117,790)

776,366

6,505,752

7,282,118

1,069,899

2015

40 Years

Buffalo Center, IA

159,353

700,460

159,353

700,460

859,813

112,366

2015

40 Years

Sheffield, IA

131,794

729,543

131,794

729,543

861,337

117,031

2015

40 Years

Lenexa, KS

303,175

2,186,864

303,175

2,186,864

2,490,039

328,030

2015

40 Years

Tompkinsville , KY

70,252

1,132,033

(164,520)

70,252

967,513

1,037,765

183,285

2015

40 Years

Hazard, KY

8,392,841

13,731,648

(16,857)

8,375,591

13,732,041

22,107,632

2,059,802

2015

40 Years

Portland, MA

3,831,860

3,172

3,835,032

3,835,032

623,153

2015

40 Years

Flint, MI

120,078

2,561,015

20,490

120,078

2,581,505

2,701,583

387,226

2015

40 Years

Hutchinson, MN

67,914

720,799

67,914

720,799

788,713

115,628

2015

40 Years

Lowry City, MO

103,202

614,065

103,202

614,065

717,267

99,785

2015

40 Years

Branson, MO

564,066

940,585

175

564,066

940,760

1,504,826

145,033

2015

40 Years

Branson, MO

721,135

717,081

940

721,135

718,021

1,439,156

110,687

2015

40 Years

Enfield, NH

93,628

1,295,320

52,741

93,628

1,348,061

1,441,689

229,235

2015

40 Years

Marietta, OH

319,157

1,225,026

319,157

1,225,026

1,544,183

206,665

2015

40 Years

Franklin, OH

264,153

1,191,777

264,153

1,191,777

1,455,930

196,147

2015

40 Years

Elyria, OH

82,023

910,404

82,023

910,404

992,427

147,941

2015

40 Years

Elyria, OH

126,641

695,072

126,641

695,072

821,713

112,949

2015

40 Years

Bedford Heights, OH

226,920

959,528

(26,197)

226,920

933,331

1,160,251

157,574

2015

40 Years

Newburgh Heights, OH

224,040

959,099

224,040

959,099

1,183,139

153,855

2015

40 Years

Warrensville Heights, OH

186,209

920,496

4,900

186,209

925,396

1,111,605

150,154

2015

40 Years

Heath, OH

325,381

757,994

135

325,381

758,129

1,083,510

116,878

2015

40 Years

Lima, OH

335,386

592,154

2,833

335,386

594,987

930,373

89,248

2015

40 Years

Elk City, OK

45,212

1,242,220

45,212

1,242,220

1,287,432

204,448

2015

40 Years

F-43

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

Which

 

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Salem, OR

1,450,000

2,951,167

1,346,640

1,450,000

4,297,807

5,747,807

644,677

2015

40 Years

Westfield, PA

47,346

1,117,723

10,973

47,346

1,128,696

1,176,042

194,270

2015

40 Years

Altoona, PA

555,903

9,489,791

1,017

555,903

9,490,808

10,046,711

1,482,924

2015

40 Years

Grindstone, PA

288,246

500,379

10,151

288,246

510,530

798,776

76,530

2015

40 Years

Liberty, SC

27,929

1,222,856

90

27,929

1,222,946

1,250,875

206,284

2015

40 Years

Blacksburg, SC

27,547

1,468,101

27,547

1,468,101

1,495,648

244,684

2015

40 Years

Easley, SC

51,325

1,187,506

51,325

1,187,506

1,238,831

195,444

2015

40 Years

Fountain Inn, SC

107,633

1,076,633

107,633

1,076,633

1,184,266

177,196

2015

40 Years

Walterboro, SC

21,414

1,156,820

21,414

1,156,820

1,178,234

190,393

2015

40 Years

Jackson, TN

277,000

495,103

80,423

277,000

575,526

852,526

75,815

2015

40 Years

Brenham, TX

355,486

17,280,895

581

355,486

17,281,476

17,636,962

2,880,207

2015

40 Years

Corpus Christi, TX

316,916

2,140,056

316,916

2,140,056

2,456,972

338,842

2015

40 Years

Harlingen, TX

126,102

869,779

126,102

869,779

995,881

137,715

2015

40 Years

Midland, TX

194,174

5,005,720

2,000

194,174

5,007,720

5,201,894

782,431

2015

40 Years

Rockwall, TX

578,225

1,768,930

210

578,225

1,769,140

2,347,365

265,367

2015

40 Years

Princeton, WV

111,653

1,029,090

111,653

1,029,090

1,140,743

173,597

2015

40 Years

Martinsburg, WV

620,892

943,163

620,892

943,163

1,564,055

141,474

2015

40 Years

Grand Chute, WI

2,766,417

7,084,942

342,188

2,766,417

7,427,130

10,193,547

1,210,229

2015

40 Years

New Richmond, WI

71,969

648,850

71,969

648,850

720,819

105,438

2015

40 Years

Baraboo, WI

142,563

653,176

142,563

653,176

795,739

104,780

2015

40 Years

Decatur, AL

337,738

510,706

337,738

510,706

848,444

65,966

2016

40 Years

Greenville, AL

203,722

905,780

9,911

203,722

915,691

1,119,413

114,418

2016

40 Years

Bullhead City, AZ

177,500

1,364,406

177,500

1,364,406

1,541,906

196,121

2016

40 Years

Page, AZ

256,982

1,299,283

256,982

1,299,283

1,556,265

186,772

2016

40 Years

Safford, AZ

349,269

1,196,307

676

349,269

1,196,983

1,546,252

161,883

2016

40 Years

Tucson, AZ

3,208,580

4,410,679

3,208,580

4,410,679

7,619,259

606,468

2016

40 Years

Bentonville, AR

610,926

897,562

170

610,926

897,732

1,508,658

129,074

2016

40 Years

Sunnyvale, CA

7,351,903

4,638,432

194

7,351,903

4,638,626

11,990,529

647,327

2016

40 Years

Whittier, CA

4,237,918

7,343,869

4,237,918

7,343,869

11,581,787

1,025,082

2016

40 Years

Aurora, CO

847,349

834,301

7,770

847,349

842,071

1,689,420

104,806

2016

40 Years

Aurora, CO

1,132,676

5,716,367

247,122

1,132,676

5,963,489

7,096,165

731,887

2016

40 Years

Evergreen, CO

1,998,860

3,827,245

1,998,860

3,827,245

5,826,105

534,220

2016

40 Years

Lakeland, FL

61,000

1,227,037

61,000

1,227,037

1,288,037

158,492

2016

40 Years

Mt Dora, FL

1,678,671

3,691,615

340,000

1,678,671

4,031,615

5,710,286

550,705

2016

40 Years

North Miami Beach, FL

1,622,742

512,717

11,240

1,622,742

523,957

2,146,699

65,417

2016

40 Years

Orlando, FL

903,411

1,627,159

(24,843)

903,411

1,602,316

2,505,727

213,560

2016

40 Years

Port Orange, FL

1,493,863

3,114,697

237,695

1,493,863

3,352,392

4,846,255

442,683

2016

40 Years

F-44

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Royal Palm Beach, FL

2,052,463

956,768

20,576

2,052,463

977,344

3,029,807

132,264

2016

40 Years

Sarasota, FL

1,769,175

3,587,992

139,891

1,769,175

3,727,883

5,497,058

524,139

2016

40 Years

Venice, FL

281,936

1,291,748

676

281,936

1,292,424

1,574,360

172,153

2016

40 Years

Vero Beach, FL

4,469,033

4,469,033

4,469,033

2016

Dalton, GA

211,362

220,927

211,362

220,927

432,289

30,359

2016

40 Years

Crystal Lake, IL

2,446,521

7,012,819

69,827

2,446,521

7,082,646

9,529,167

894,312

2016

40 Years

Glenwood, IL

815,483

970,108

815,483

970,108

1,785,591

125,306

2016

40 Years

Morris, IL

1,206,749

2,062,495

1,206,749

2,062,495

3,269,244

287,890

2016

40 Years

Bicknell, IN

215,037

2,381,471

215,037

2,381,471

2,596,508

317,440

2016

40 Years

Fort Wayne, IN

711,430

1,258,357

(10,000)

711,430

1,248,357

1,959,787

184,653

2016

40 Years

Indianapolis, IN

734,434

970,175

(2,700)

734,434

967,475

1,701,909

139,234

2016

40 Years

Des Moines, IA

322,797

1,374,153

322,797

1,374,153

1,696,950

191,809

2016

40 Years

Frankfort, KY

514,277

514,277

514,277

2016

DeRidder, LA

814,891

2,156,542

480

814,891

2,157,022

2,971,913

296,607

2016

40 Years

Lake Charles, LA

1,308,418

4,235,719

5,761

1,308,418

4,241,480

5,549,898

538,902

2016

40 Years

Shreveport, LA

891,872

2,058,257

891,872

2,058,257

2,950,129

283,020

2016

40 Years

Marshall, MI

339,813

339,813

339,813

2016

Mt Pleasant, MI

511,282

(254)

511,028

511,028

2016

Norton Shores, MI

495,605

667,982

42,874

495,605

710,856

1,206,461

90,762

2016

40 Years

Portage, MI

262,181

1,102,990

262,181

1,102,990

1,365,171

149,363

2016

40 Years

Stephenson, MI

223,152

1,044,947

270

223,152

1,045,217

1,268,369

130,650

2016

40 Years

Sterling, MI

127,844

905,607

25,464

127,844

931,071

1,058,915

120,077

2016

40 Years

Eagle Bend, MN

96,558

1,165,437

96,558

1,165,437

1,261,995

152,914

2016

40 Years

Brandon, MS

428,464

969,346

428,464

969,346

1,397,810

137,324

2016

40 Years

Clinton, MS

370,264

1,057,143

370,264

1,057,143

1,427,407

149,762

2016

40 Years

Columbus, MS

1,103,458

2,128,089

(2,105)

1,103,458

2,125,984

3,229,442

311,696

2016

40 Years

Holly Springs, MS

413,316

952,574

413,316

952,574

1,365,890

130,870

2016

40 Years

Jackson, MS

242,796

963,188

242,796

963,188

1,205,984

136,452

2016

40 Years

Jackson, MS

732,944

2,862,813

33,902

732,944

2,896,715

3,629,659

379,551

2016

40 Years

Meridian, MS

396,329

1,152,729

396,329

1,152,729

1,549,058

163,284

2016

40 Years

Pearl, MS

299,839

616,351

7,355

299,839

623,706

923,545

77,913

2016

40 Years

Ridgeland, MS

407,041

864,498

407,041

864,498

1,271,539

122,471

2016

40 Years

Bowling Green, MO

360,201

2,809,170

5,000

360,201

2,814,170

3,174,371

368,728

2016

40 Years

St Robert, MO

394,859

1,305,366

24,333

394,859

1,329,699

1,724,558

167,132

2016

40 Years

Beatty, NV

198,928

1,265,084

8,051

198,928

1,273,135

1,472,063

166,991

2016

40 Years

Alamogordo, NM

654,965

2,716,166

4,436

654,965

2,720,602

3,375,567

357,410

2016

40 Years

Alamogordo, NM

524,763

941,615

7,522

524,763

949,137

1,473,900

120,580

2016

40 Years

F-45

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Alcalde, NM

435,486

836,499

435,486

836,499

1,271,985

104,562

2016

40 Years

Cimarron, NM

345,693

1,236,437

7,613

345,693

1,244,050

1,589,743

158,058

2016

40 Years

La Luz, NM

487,401

835,455

487,401

835,455

1,322,856

106,172

2016

40 Years

Fayetteville, NC

1,267,529

2,527,462

16,897

1,267,529

2,544,359

3,811,888

323,179

2016

40 Years

Gastonia, NC

401,119

979,803

1,631

401,119

981,434

1,382,553

124,724

2016

40 Years

Devils Lake, ND

323,508

1,133,773

955

323,508

1,134,728

1,458,236

150,895

2016

40 Years

Cambridge, OH

168,717

1,113,232

168,717

1,113,232

1,281,949

162,346

2016

40 Years

Columbus, OH

1,109,044

1,291,313

1,109,044

1,291,313

2,400,357

177,488

2016

40 Years

Grove City, OH

334,032

176,274

334,032

176,274

510,306

24,222

2016

40 Years

Lorain, OH

808,162

1,390,481

10,000

808,162

1,400,481

2,208,643

202,548

2016

40 Years

Reynoldsburg, OH

843,336

1,197,966

843,336

1,197,966

2,041,302

164,667

2016

40 Years

Springfield, OH

982,451

3,957,512

7,191

982,451

3,964,703

4,947,154

576,567

2016

40 Years

Ardmore, OK

571,993

1,590,151

571,993

1,590,151

2,162,144

221,960

2016

40 Years

Dillon, SC

85,896

1,697,160

85,896

1,697,160

1,783,056

251,038

2016

40 Years

Jasper, TN

190,582

966,125

6,888

190,582

973,013

1,163,595

121,603

2016

40 Years

Carthage, TX

597,995

1,965,290

14,204

597,995

1,979,494

2,577,489

270,234

2016

40 Years

Cedar Park, TX

1,386,802

4,656,229

756,188

1,410,827

5,388,392

6,799,219

749,866

2016

40 Years

Granbury, TX

944,223

2,362,540

944,223

2,362,540

3,306,763

324,857

2016

40 Years

Hemphill, TX

250,503

1,955,918

11,886

250,503

1,967,804

2,218,307

257,896

2016

40 Years

Lampasas, TX

245,312

1,063,701

37,258

245,312

1,100,959

1,346,271

150,572

2016

40 Years

Lubbock, TX

1,501,556

2,341,031

1,501,556

2,341,031

3,842,587

321,902

2016

40 Years

Odessa, TX

921,043

2,434,384

5,615

921,043

2,439,999

3,361,042

335,310

2016

40 Years

Port Arthur, TX

1,889,732

8,121,417

93,857

1,889,732

8,215,274

10,105,006

1,090,714

2016

40 Years

Provo, UT

1,692,785

5,874,584

43,650

1,692,785

5,918,234

7,611,019

807,093

2016

40 Years

Tappahannock, VA

1,076,745

14,904

1,076,745

14,904

1,091,649

2,022

2016

40 Years

Manitowoc, WI

879,237

4,467,960

879,237

4,467,960

5,347,197

595,578

2016

40 Years

Oak Creek, WI

487,277

3,082,180

139,675

487,277

3,221,855

3,709,132

469,187

2016

40 Years

Oxford, AL

148,407

641,820

148,407

641,820

790,227

74,851

2017

40 Years

Oxford, AL

255,786

7,273,871

81,627

255,786

7,355,498

7,611,284

854,163

2017

40 Years

Oxford, AL

24,875

600,936

(16,074)

24,875

584,862

609,737

69,506

2017

40 Years

Jonesboro, AR

3,656,554

3,219,456

11,058

3,656,554

3,230,514

6,887,068

341,777

2017

40 Years

Lowell, AR

949,519

1,435,056

10,229

949,519

1,445,285

2,394,804

144,465

2017

40 Years

Southington, CT

1,088,181

1,287,837

185,818

1,088,181

1,473,655

2,561,836

142,003

2017

40 Years

Millsboro, DE

3,501,109

(20,531)

3,480,578

3,480,578

2017

Jacksonville, FL

2,298,885

2,894,565

29,661

2,298,885

2,924,226

5,223,111

298,406

2017

40 Years

Orange Park, FL

214,858

2,304,095

214,858

2,304,095

2,518,953

259,184

2017

40 Years

Port Richey, FL

1,140,182

1,649,773

1,140,182

1,649,773

2,789,955

185,588

2017

40 Years

F-46

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Americus, GA

1,318,463

1,318,463

1,318,463

2017

Brunswick, GA

1,279,688

2,158,863

205

1,279,688

2,159,068

3,438,756

256,229

2017

40 Years

Brunswick, GA

126,335

1,626,530

126,335

1,626,530

1,752,865

166,042

2017

40 Years

Buford, GA

341,860

1,023,813

341,860

1,023,813

1,365,673

115,147

2017

40 Years

Carrollton, GA

597,465

886,644

597,465

886,644

1,484,109

97,816

2017

40 Years

Decatur, GA

558,859

1,429,106

558,859

1,429,106

1,987,965

145,888

2017

40 Years

Metter, GA

256,743

766,818

256,743

766,818

1,023,561

84,625

2017

40 Years

Villa Rica, GA

410,936

1,311,444

410,936

1,311,444

1,722,380

150,243

2017

40 Years

Chicago, IL

2,899,155

9,822,986

2,899,155

9,822,986

12,722,141

1,166,401

2017

40 Years

Chicago, IL

2,081,151

5,197,315

2,081,151

5,197,315

7,278,466

616,821

2017

40 Years

Galesburg, IL

214,280

979,108

214,280

979,108

1,193,388

110,131

2017

40 Years

Mundelein, IL

1,238,743

1,238,743

1,238,743

2017

Mundelein, IL

1,743,222

1,743,222

1,743,222

2017

Mundelein, IL

1,803,068

1,803,068

1,803,068

2017

Springfield, IL

574,805

1,554,786

9,660

574,805

1,564,446

2,139,251

155,781

2017

40 Years

Woodstock, IL

683,419

1,002,207

284

683,419

1,002,491

1,685,910

102,335

2017

40 Years

Frankfort, IN

50,458

2,008,275

50,458

2,008,275

2,058,733

234,299

2017

40 Years

Kokomo, IN

95,196

1,484,778

(30,615)

95,196

1,454,163

1,549,359

150,232

2017

40 Years

Nashville, IN

484,117

2,458,215

484,117

2,458,215

2,942,332

276,311

2017

40 Years

Roeland Park, KS

7,829,806

(1,247,898)

6,581,908

6,581,908

2017

Georgetown, KY

1,996,456

6,315,768

928

1,996,456

6,316,696

8,313,152

717,658

2017

40 Years

Hopkinsville, KY

413,269

996,619

413,269

996,619

1,409,888

112,095

2017

40 Years

Salyersville, KY

289,663

906,455

596

289,663

907,051

1,196,714

103,846

2017

40 Years

Amite, LA

601,238

1,695,242

601,238

1,695,242

2,296,480

194,198

2017

40 Years

Bossier City, LA

797,899

2,925,864

146

797,899

2,926,010

3,723,909

298,694

2017

40 Years

Kenner, LA

323,188

859,298

323,188

859,298

1,182,486

91,160

2017

40 Years

Mandeville, LA

834,891

1,294,812

(795)

834,891

1,294,017

2,128,908

137,514

2017

40 Years

New Orleans, LA

6,846,313

6,846,313

6,846,313

770,170

2017

40 Years

Baltimore, MD

782,819

745,092

7,968

782,819

753,060

1,535,879

77,611

2017

40 Years

Canton, MI

3,655,296

14,162,109

7,345,761

10,471,644

17,817,405

1,007,630

2017

40 Years

Grand Rapids, MI

7,015,035

2,635,983

1,750,000

7,901,018

9,651,018

691,339

2017

40 Years

Bloomington, MN

1,491,302

619

1,491,921

1,491,921

2017

Monticello, MN

449,025

979,816

9,368

449,025

989,184

1,438,209

121,164

2017

40 Years

Mountain Iron, MN

177,918

1,139,849

177,918

1,139,849

1,317,767

128,216

2017

40 Years

Gulfport, MS

671,824

1,176,505

671,824

1,176,505

1,848,329

134,790

2017

40 Years

Jackson, MS

802,230

1,434,997

802,230

1,434,997

2,237,227

164,404

2017

40 Years

McComb, MS

67,026

685,426

67,026

685,426

752,452

77,065

2017

40 Years

F-47

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Kansas City, MO

1,390,880

1,588,573

1,390,880

1,588,573

2,979,453

197,896

2017

40 Years

Springfield, MO

616,344

2,448,360

13,285

616,344

2,461,645

3,077,989

246,081

2017

40 Years

St. Charles, MO

736,242

2,122,426

282,034

736,242

2,404,460

3,140,702

287,399

2017

40 Years

St. Peters, MO

1,364,670

1,364,670

1,364,670

2017

Boulder City, NV

566,639

993,399

566,639

993,399

1,560,038

111,681

2017

40 Years

Egg Harbor, NJ

520,510

1,087,374

520,510

1,087,374

1,607,884

129,103

2017

40 Years

Secaucus, NJ

19,915,781

17,306,541

84,023

19,915,781

17,390,564

37,306,345

1,738,227

2017

40 Years

Sewell, NJ

1,809,771

6,892,134

1,809,771

6,892,134

8,701,905

775,358

2017

40 Years

Santa Fe, NM

1,072,340

4,013,237

606

1,072,340

4,013,843

5,086,183

501,638

2017

40 Years

Statesville, NC

287,467

867,849

287,467

867,849

1,155,316

104,861

2017

40 Years

Jacksonville, NC

308,321

875,652

31,340

308,321

906,992

1,215,313

104,526

2017

40 Years

Minot, ND

928,796

1,619,726

928,796

1,619,726

2,548,522

185,535

2017

40 Years

Grandview Heights, OH

1,276,870

8,557,690

(20,518)

1,276,870

8,537,172

9,814,042

979,556

2017

40 Years

Hillard, OH

1,001,228

1,001,228

1,001,228

2017

Edmond, OK

1,063,243

3,816,155

9,878

1,063,243

3,826,033

4,889,276

397,845

2017

40 Years

Oklahoma City, OK

868,648

1,820,174

7,835

868,648

1,828,009

2,696,657

198,242

2017

40 Years

Erie, PA

425,267

1,284,883

425,267

1,284,883

1,710,150

139,063

2017

40 Years

Pittsburgh, PA

692,454

2,509,358

692,454

2,509,358

3,201,812

282,126

2017

40 Years

Sumter, SC

132,204

1,095,478

132,204

1,095,478

1,227,682

125,497

2017

40 Years

Chattanooga, TN

2,089,237

3,595,808

195

2,089,237

3,596,003

5,685,240

367,089

2017

40 Years

Etowah, TN

74,057

862,436

16,053

74,057

878,489

952,546

105,089

2017

40 Years

Memphis, TN

1,661,764

3,874,356

(250)

1,661,764

3,874,106

5,535,870

468,075

2017

40 Years

Alamo, TX

104,878

821,355

13,274

104,878

834,629

939,507

83,380

2017

40 Years

Andrews, TX

172,373

817,252

(292)

172,373

816,960

989,333

97,019

2017

40 Years

Arlington, TX

497,852

1,601,007

1,783

497,852

1,602,790

2,100,642

183,577

2017

40 Years

Canyon Lake, TX

382,522

1,026,179

(281)

382,522

1,025,898

1,408,420

102,592

2017

40 Years

Corpus Christi, TX

185,375

1,413,298

185,375

1,413,298

1,598,673

161,789

2017

40 Years

Fort Stockton, TX

185,474

1,186,339

185,474

1,186,339

1,371,813

135,904

2017

40 Years

Fort Worth, TX

1,016,587

4,622,507

257,308

1,016,587

4,879,815

5,896,402

521,090

2017

40 Years

Lufkin, TX

1,497,171

4,948,906

4,088

1,497,171

4,952,994

6,450,165

588,349

2017

40 Years

Newport News, VA

2,458,053

5,390,475

758,009

2,458,053

6,148,484

8,606,537

759,142

2017

40 Years

Appleton, WI

417,249

1,525,582

9,779

417,249

1,535,361

1,952,610

171,935

2017

40 Years

Onalaska, WI

821,084

2,651,772

821,084

2,651,772

3,472,856

303,793

2017

40 Years

Athens, AL

253,858

1,204,570

253,858

1,204,570

1,458,428

90,343

2018

40 Years

Birmingham, AL

1,635,912

2,739,834

1,635,912

2,739,834

4,375,746

256,833

2018

40 Years

Boaz, AL

379,197

898,689

379,197

898,689

1,277,886

84,168

2018

40 Years

Roanoke, AL

110,924

938,451

110,924

938,451

1,049,375

76,324

2018

40 Years

F-48

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Selma, AL

206,831

1,790,939

(24,494)

206,831

1,766,445

1,973,276

133,096

2018

40 Years

Maricopa, AZ

2,166,955

9,505,724

14,600

2,166,955

9,520,324

11,687,279

733,175

2018

40 Years

Parker, AZ

322,510

1,159,624

1,163

322,510

1,160,787

1,483,297

103,896

2018

40 Years

St. Michaels, AZ

127,874

1,043,962

12,012

127,874

1,055,974

1,183,848

84,582

2018

40 Years

Little Rock, AR

390,921

856,987

390,921

856,987

1,247,908

64,274

2018

40 Years

Grand Junction, CO

835,792

1,915,976

835,792

1,915,976

2,751,768

143,698

2018

40 Years

Brookfield, CT

343,489

835,106

343,489

835,106

1,178,595

62,633

2018

40 Years

Manchester, CT

316,847

558,659

316,847

558,659

875,506

41,899

2018

40 Years

Waterbury, CT

663,667

607,457

663,667

607,457

1,271,124

45,559

2018

40 Years

Apopka, FL

587,585

2,363,721

73,672

587,585

2,437,393

3,024,978

182,322

2018

40 Years

Cape Coral, FL

554,721

1,009,404

554,721

1,009,404

1,564,125

75,705

2018

40 Years

Crystal River, FL

369,723

1,015,324

369,723

1,015,324

1,385,047

99,406

2018

40 Years

DeFuniak Springs, FL

226,898

835,016

7,130

226,898

842,146

1,069,044

66,596

2018

40 Years

Eustis, FL

649,394

1,580,694

649,394

1,580,694

2,230,088

118,552

2018

40 Years

Hollywood, FL

895,783

947,204

895,783

947,204

1,842,987

71,040

2018

40 Years

Homestead, FL

650,821

948,265

650,821

948,265

1,599,086

71,120

2018

40 Years

Jacksonville, FL

827,799

1,554,516

827,799

1,554,516

2,382,315

116,589

2018

40 Years

Marianna, FL

257,760

886,801

257,760

886,801

1,144,561

66,510

2018

40 Years

Melbourne, FL

497,607

1,549,974

497,607

1,549,974

2,047,581

116,248

2018

40 Years

Merritt Island, FL

598,790

988,114

598,790

988,114

1,586,904

80,284

2018

40 Years

St. Petersburg, FL

958,547

902,502

958,547

902,502

1,861,049

77,032

2018

40 Years

Tampa, FL

488,002

1,209,902

488,002

1,209,902

1,697,904

103,346

2018

40 Years

Tampa, FL

703,273

1,283,951

703,273

1,283,951

1,987,224

96,296

2018

40 Years

Titusville, FL

137,421

1,017,394

12,059

137,421

1,029,453

1,166,874

77,134

2018

40 Years

Winter Haven, FL

832,247

1,433,449

832,247

1,433,449

2,265,696

107,509

2018

40 Years

Albany, GA

448,253

1,462,641

6,023

448,253

1,468,664

1,916,917

110,109

2018

40 Years

Austell, GA

1,162,782

7,462,351

1,162,782

7,462,351

8,625,133

684,049

2018

40 Years

Conyers, GA

330,549

941,133

330,549

941,133

1,271,682

70,585

2018

40 Years

Covington, GA

744,321

1,235,171

(43,000)

744,321

1,192,171

1,936,492

93,061

2018

40 Years

Doraville, GA

1,991,031

291,663

21,466

1,991,031

313,129

2,304,160

27,819

2018

40 Years

Douglasville, GA

519,420

1,492,529

519,420

1,492,529

2,011,949

111,940

2018

40 Years

Lilburn, GA

304,597

1,206,785

304,597

1,206,785

1,511,382

90,509

2018

40 Years

Marietta, GA

1,257,433

1,563,755

1,257,433

1,563,755

2,821,188

149,795

2018

40 Years

Marietta, GA

447,582

832,782

447,582

832,782

1,280,364

62,459

2018

40 Years

Pooler, GA

989,819

1,220,271

734

989,819

1,221,005

2,210,824

106,820

2018

40 Years

Riverdale, GA

474,072

879,835

(3,750)

470,322

879,835

1,350,157

65,988

2018

40 Years

Savannah, GA

944,815

2,997,426

14,050

944,815

3,011,476

3,956,291

225,759

2018

40 Years

F-49

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Statesboro, GA

681,381

1,592,291

1,786

681,381

1,594,077

2,275,458

129,496

2018

40 Years

Union City, GA

97,528

1,036,165

97,528

1,036,165

1,133,693

77,712

2018

40 Years

Nampa, ID

496,676

5,163,257

37,265

496,676

5,200,522

5,697,198

443,499

2018

40 Years

Aurora, IL

174,456

862,599

174,456

862,599

1,037,055

64,695

2018

40 Years

Bloomington, IL

1,408,067

986,931

678

1,408,067

987,609

2,395,676

90,511

2018

40 Years

Carlinville, IL

208,519

1,113,537

1,162

208,519

1,114,699

1,323,218

99,768

2018

40 Years

Centralia, IL

277,527

351,547

277,527

351,547

629,074

26,366

2018

40 Years

Chicago, IL

1,569,578

632,848

1,569,578

632,848

2,202,426

61,938

2018

40 Years

Flora, IL

232,155

1,121,688

4,087

232,155

1,125,775

1,357,930

86,744

2018

40 Years

Gurnee, IL

1,341,679

951,320

1,341,679

951,320

2,292,999

89,170

2018

40 Years

Lake Zurich, IL

290,272

857,467

19,450

290,272

876,917

1,167,189

67,393

2018

40 Years

Macomb, IL

85,753

661,375

85,753

661,375

747,128

49,603

2018

40 Years

Morris, IL

331,622

1,842,994

3,880

331,622

1,846,874

2,178,496

150,010

2018

40 Years

Newton, IL

510,192

1,069,075

2,500

510,192

1,071,575

1,581,767

89,261

2018

40 Years

Northlake, IL

353,337

564,677

4,343

353,337

569,020

922,357

44,524

2018

40 Years

Rockford, IL

270,180

708,041

270,180

708,041

978,221

69,321

2018

40 Years

Greenwood, IN

1,586,786

1,232,818

1,162

1,586,786

1,233,980

2,820,766

110,453

2018

40 Years

Hammond, IN

230,142

230,142

230,142

2018

Indianapolis, IN

132,291

311,647

132,291

311,647

443,938

23,374

2018

40 Years

Mishawaka, IN

1,263,680

4,106,900

1,263,680

4,106,900

5,370,580

333,686

2018

40 Years

South Bend, IN

420,571

2,772,376

420,571

2,772,376

3,192,947

271,415

2018

40 Years

Warsaw, IN

583,174

1,118,270

58,246

583,174

1,176,516

1,759,690

110,449

2018

40 Years

Ackley, IA

202,968

896,444

202,968

896,444

1,099,412

85,826

2018

40 Years

Ottumwa, IA

227,562

5,794,123

227,562

5,794,123

6,021,685

567,319

2018

40 Years

Riceville, IA

154,294

742,421

154,294

742,421

896,715

71,043

2018

40 Years

Riverside, IA

579,935

1,594,085

579,935

1,594,085

2,174,020

139,482

2018

40 Years

Urbandale, IA

68,172

2,938,611

(85,150)

593,022

2,328,611

2,921,633

273,458

2018

40 Years

Overland Park, KS

1,053,287

6,141,649

219

1,053,287

6,141,868

7,195,155

499,023

2018

40 Years

Ekron, KY

95,655

802,880

95,655

802,880

898,535

70,252

2018

40 Years

Florence, KY

601,820

1,054,572

601,820

1,054,572

1,656,392

79,093

2018

40 Years

Chalmette, LA

290,396

1,297,684

290,396

1,297,684

1,588,080

97,326

2018

40 Years

Donaldsonville, LA

542,118

2,418,183

5,647

542,118

2,423,830

2,965,948

207,400

2018

40 Years

Franklinton, LA

193,192

925,598

193,192

925,598

1,118,790

75,205

2018

40 Years

Franklinton, LA

242,651

2,462,533

242,651

2,462,533

2,705,184

210,341

2018

40 Years

Franklinton, LA

396,560

1,122,737

396,560

1,122,737

1,519,297

91,222

2018

40 Years

Franklinton, LA

163,258

747,944

163,258

747,944

911,202

60,770

2018

40 Years

Harvey, LA

728,822

1,468,688

728,822

1,468,688

2,197,510

137,618

2018

40 Years

F-50

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Jena, LA

772,878

2,392,129

772,878

2,392,129

3,165,007

204,328

2018

40 Years

Jennings, LA

128,158

2,329,137

118,189

128,158

2,447,326

2,575,484

202,516

2018

40 Years

New Orleans, LA

293,726

293,726

293,726

2018

Pine Grove, LA

238,223

758,573

238,223

758,573

996,796

61,634

2018

40 Years

Rayville, LA

310,034

2,365,203

310,034

2,365,203

2,675,237

202,028

2018

40 Years

Roseland, LA

307,331

872,252

307,331

872,252

1,179,583

70,870

2018

40 Years

Talisheek, LA

150,802

1,031,214

41,717

150,802

1,072,931

1,223,733

86,654

2018

40 Years

Baltimore, MD

699,157

651,927

699,157

651,927

1,351,084

48,895

2018

40 Years

Salisbury, MD

305,215

1,193,870

305,215

1,193,870

1,499,085

89,540

2018

40 Years

Springfield, MA

153,428

826,741

153,428

826,741

980,169

62,006

2018

40 Years

Ann Arbor, MI

735,859

2,489,707

735,859

2,489,707

3,225,566

243,737

2018

40 Years

Belleville, MI

598,203

3,970,176

598,203

3,970,176

4,568,379

388,654

2018

40 Years

Grand Blanc, MI

1,589,886

3,738,477

1,589,886

3,738,477

5,328,363

365,981

2018

40 Years

Jackson, MI

1,451,971

2,548,436

1,451,971

2,548,436

4,000,407

249,476

2018

40 Years

Kentwood, MI

939,481

3,438,259

939,481

3,438,259

4,377,740

336,599

2018

40 Years

Lake Orion, MI

1,172,982

2,349,762

1,172,982

2,349,762

3,522,744

230,029

2018

40 Years

Onaway, MI

17,557

935,308

17,557

935,308

952,865

83,788

2018

40 Years

Champlin, MN

307,271

1,602,196

18,429

307,271

1,620,625

1,927,896

121,432

2018

40 Years

North Branch, MN

533,175

205

533,380

533,380

2018

Richfield, MN

2,141,431

613,552

2,141,431

613,552

2,754,983

46,016

2018

40 Years

Bay St. Louis, MS

547,498

2,080,989

547,498

2,080,989

2,628,487

177,751

2018

40 Years

Corinth, MS

504,885

4,540,022

129,132

504,885

4,669,154

5,174,039

448,843

2018

40 Years

Forest, MS

189,817

1,340,848

189,817

1,340,848

1,530,665

114,531

2018

40 Years

Southaven, MS

150,931

826,123

150,931

826,123

977,054

61,959

2018

40 Years

Waynesboro, MS

243,835

1,205,383

243,835

1,205,383

1,449,218

102,960

2018

40 Years

Blue Springs, MO

431,698

1,704,870

431,698

1,704,870

2,136,568

149,174

2018

40 Years

Florissant, MO

733,592

1,961,094

(14,149)

733,592

1,946,945

2,680,537

146,109

2018

40 Years

Joplin, MO

789,880

384,638

789,880

384,638

1,174,518

37,652

2018

40 Years

Liberty, MO

308,470

2,750,231

308,470

2,750,231

3,058,701

257,725

2018

40 Years

Neosho, MO

687,812

1,115,054

687,812

1,115,054

1,802,866

97,567

2018

40 Years

Springfield, MO

1,311,497

5,462,972

1,311,497

5,462,972

6,774,469

546,271

2018

40 Years

St. Peters, MO

1,205,257

1,760,658

1,205,257

1,760,658

2,965,915

132,049

2018

40 Years

Webb City, MO

1,324,146

1,501,744

1,324,146

1,501,744

2,825,890

147,035

2018

40 Years

Nashua, NH

3,635,953

2,720,644

4,240

3,635,953

2,724,884

6,360,837

266,969

2018

40 Years

Forked River, NJ

4,227,966

3,991,690

(81,552)

4,227,966

3,910,138

8,138,104

74,534

2018

40 Years

Forked River, NJ

3,505,805

(2,766,838)

3,193,972

3,505,805

427,134

3,932,939

33,784

2018

40 Years

Forked River, NJ

1,128,858

1,396,960

1,128,858

1,396,960

2,525,818

110,593

2018

40 Years

F-51

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Forked River, NJ

1,682,284

3,527,964

(3,456,211)

1,682,284

71,753

1,754,037

249,622

2018

40 Years

Forked River, NJ

682,822

682,822

682,822

2018

Woodland Park, NJ

7,761,801

3,958,902

7,761,801

3,958,902

11,720,703

338,144

2018

40 Years

Bernalillo, NM

899,770

2,037,465

(78,875)

820,895

2,037,465

2,858,360

200,783

2018

40 Years

Farmington, NM

4,428,998

4,428,998

4,428,998

2018

Canandaigue, NY

154,996

1,352,174

156

154,996

1,352,330

1,507,326

112,662

2018

40 Years

Catskill, NY

80,524

1,097,609

156

80,524

1,097,765

1,178,289

91,448

2018

40 Years

Clifton Park, NY

925,613

1,858,613

7,421

925,613

1,866,034

2,791,647

139,906

2018

40 Years

Elmira, NY

43,388

947,627

43,388

947,627

991,015

71,072

2018

40 Years

Geneseo, NY

264,795

1,328,115

156

264,795

1,328,271

1,593,066

110,676

2018

40 Years

Greece, NY

182,916

1,254,678

156

182,916

1,254,834

1,437,750

104,537

2018

40 Years

Hamburg, NY

520,599

2,039,602

520,599

2,039,602

2,560,201

152,970

2018

40 Years

Latham, NY

373,318

764,382

373,318

764,382

1,137,700

57,329

2018

40 Years

N. Syracuse, NY

165,417

452,510

10,034

165,417

462,544

627,961

34,377

2018

40 Years

Niagara Falls, NY

392,301

1,022,745

392,301

1,022,745

1,415,046

76,706

2018

40 Years

Rochester, NY

100,136

895,792

100,136

895,792

995,928

74,649

2018

40 Years

Rochester, NY

575,463

772,555

575,463

772,555

1,348,018

57,942

2018

40 Years

Rochester, NY

375,721

881,257

375,721

881,257

1,256,978

66,094

2018

40 Years

Schenectady, NY

74,387

1,279,967

8,540

74,387

1,288,507

1,362,894

107,221

2018

40 Years

Schenectady, NY

453,006

726,404

453,006

726,404

1,179,410

54,480

2018

40 Years

Syracuse, NY

339,207

918,302

339,207

918,302

1,257,509

68,873

2018

40 Years

Syracuse, NY

607,053

259,331

607,053

259,331

866,384

19,450

2018

40 Years

Tonawanda, NY

94,443

727,373

156

94,443

727,529

821,972

60,595

2018

40 Years

Tonawanda, NY

131,021

576,915

131,021

576,915

707,936

43,269

2018

40 Years

W. Seneca, NY

98,194

737,592

98,194

737,592

835,786

55,319

2018

40 Years

Williamsville, NY

705,842

488,800

705,842

488,800

1,194,642

36,660

2018

40 Years

Charlotte, NC

287,732

518,005

287,732

518,005

805,737

38,850

2018

40 Years

Concord, NC

526,102

1,955,989

8,699

526,102

1,964,688

2,490,790

151,372

2018

40 Years

Durham, NC

1,787,380

848,986

1,787,380

848,986

2,636,366

63,674

2018

40 Years

Fayetteville, NC

108,898

1,769,274

108,898

1,769,274

1,878,172

132,696

2018

40 Years

Greensboro, NC

402,957

1,351,015

402,957

1,351,015

1,753,972

101,326

2018

40 Years

Greenville, NC

541,233

1,403,441

541,233

1,403,441

1,944,674

105,258

2018

40 Years

High Point, NC

252,336

1,024,696

252,336

1,024,696

1,277,032

76,852

2018

40 Years

Kernersville, NC

270,581

966,807

270,581

966,807

1,237,388

72,511

2018

40 Years

Pineville, NC

1,390,592

6,390,201

1,390,592

6,390,201

7,780,793

532,494

2018

40 Years

Rockingham, NC

245,976

955,579

245,976

955,579

1,201,555

83,613

2018

40 Years

Salisbury, NC

572,085

700,288

572,085

700,288

1,272,373

52,522

2018

40 Years

F-52

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Zebulon, NC

160,107

1,077

36

161,220

161,220

2018

Akron, OH

445,299

445,299

445,299

2018

Bellevue, OH

272,308

1,127,365

62,975

272,308

1,190,340

1,462,648

103,136

2018

40 Years

Canton, OH

981,941

1,076,113

981,941

1,076,113

2,058,054

80,708

2018

40 Years

Columbus, OH

542,161

1,088,316

542,161

1,088,316

1,630,477

81,624

2018

40 Years

Fairview Park, OH

338,732

400,013

338,732

400,013

738,745

30,001

2018

40 Years

Franklin, OH

5,405,718

5,405,718

5,405,718

2018

Middletown, OH

311,389

1,451,469

1,163

311,389

1,452,632

1,764,021

130,024

2018

40 Years

Niles, OH

334,783

798,136

334,783

798,136

1,132,919

59,860

2018

40 Years

North Olmsted, OH

544,903

810,840

34,500

544,903

845,340

1,390,243

76,553

2018

40 Years

Warren, OH

208,710

601,092

208,710

601,092

809,802

45,082

2018

40 Years

Warrensville Heights, OH

735,534

627

736,161

736,161

2018

Youngstown, OH

323,983

989,430

323,983

989,430

1,313,413

74,207

2018

40 Years

Broken Arrow, OK

919,176

1,276,754

1,778

919,176

1,278,532

2,197,708

111,827

2018

40 Years

Chickasha, OK

230,000

2,881,525

230,000

2,881,525

3,111,525

240,127

2018

40 Years

Coweta, OK

282,468

803,762

282,468

803,762

1,086,230

70,329

2018

40 Years

Midwest City, OK

755,192

5,687,280

5,851

755,192

5,693,131

6,448,323

461,482

2018

40 Years

Oklahoma City, OK

1,104,085

1,874,359

507

1,104,085

1,874,866

2,978,951

144,517

2018

40 Years

Shawnee, OK

409,190

957,557

409,190

957,557

1,366,747

71,817

2018

40 Years

Wright City, OK

38,302

1,010,645

(1,300)

38,302

1,009,345

1,047,647

81,898

2018

40 Years

Hillsboro, OR

4,632,369

7,656,179

4,632,369

7,656,179

12,288,548

701,816

2018

40 Years

Carlisle, PA

340,349

643,498

340,349

643,498

983,847

48,262

2018

40 Years

Erie, PA

58,279

833,933

58,279

833,933

892,212

62,545

2018

40 Years

Johnstown, PA

1,030,667

8,829

1,039,496

1,039,496

2018

King of Prussia, PA

5,097,320

1,202

5,098,522

5,098,522

2018

Philadelphia, PA

155,212

218,083

155,212

218,083

373,295

16,356

2018

40 Years

Philadelphia, PA

127,690

122,516

127,690

122,516

250,206

9,189

2018

40 Years

Pittsburgh, PA

927,083

5,126,243

927,083

5,126,243

6,053,326

405,828

2018

40 Years

Pittsburgh, PA

1,397,965

3,850

1,401,815

1,401,815

2018

Upper Darby, PA

861,339

85,966

37,671

861,339

123,637

984,976

8,902

2018

40 Years

Wysox, PA

1,668,272

1,699,343

24,395

1,668,272

1,723,738

3,392,010

138,885

2018

40 Years

Richmond, RI

1,293,932

7,477,281

687,657

1,293,932

8,164,938

9,458,870

751,088

2018

40 Years

Warwick, RI

687,454

2,108,256

687,454

2,108,256

2,795,710

158,119

2018

40 Years

Greenville, SC

628,081

1,451,481

628,081

1,451,481

2,079,562

108,861

2018

40 Years

Lake City, SC

57,911

932,874

869

57,911

933,743

991,654

71,969

2018

40 Years

Manning, SC

245,546

989,236

146

245,546

989,382

1,234,928

82,430

2018

40 Years

Mt. Pleasant, SC

555,387

1,042,804

555,387

1,042,804

1,598,191

78,210

2018

40 Years

F-53

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Myrtle Beach, SC

254,334

149,107

254,334

149,107

403,441

11,183

2018

40 Years

Spartanburg, SC

709,338

1,618,382

709,338

1,618,382

2,327,720

121,379

2018

40 Years

Sumter, SC

521,299

809,466

521,299

809,466

1,330,765

60,710

2018

40 Years

Walterboro, SC

207,130

827,775

207,130

827,775

1,034,905

72,428

2018

40 Years

Chattanooga, TN

1,179,566

1,236,591

1,179,566

1,236,591

2,416,157

92,744

2018

40 Years

Johnson City, TN

181,117

1,232,151

181,117

1,232,151

1,413,268

92,411

2018

40 Years

Beaumont, TX

936,389

2,725,502

21,662

936,389

2,747,164

3,683,553

205,902

2018

40 Years

Donna, TX

962,302

1,620,925

962,302

1,620,925

2,583,227

135,043

2018

40 Years

Fairfield, TX

125,098

970,816

125,098

970,816

1,095,914

76,856

2018

40 Years

Groves, TX

596,586

2,250,794

596,586

2,250,794

2,847,380

168,810

2018

40 Years

Humble, TX

173,885

867,347

173,885

867,347

1,041,232

65,051

2018

40 Years

Jacksboro, TX

119,147

1,036,482

119,147

1,036,482

1,155,629

82,055

2018

40 Years

Kemah, TX

2,324,774

2,835,597

(45,000)

2,324,774

2,790,597

5,115,371

228,142

2018

40 Years

Lamesa, TX

66,019

1,493,146

66,019

1,493,146

1,559,165

136,866

2018

40 Years

Live Oak, TX

371,174

1,880,746

371,174

1,880,746

2,251,920

164,563

2018

40 Years

Lufkin, TX

382,643

1,054,911

382,643

1,054,911

1,437,554

79,118

2018

40 Years

Plano, TX

452,721

822,683

452,721

822,683

1,275,404

61,701

2018

40 Years

Port Arthur, TX

512,094

721,936

512,094

721,936

1,234,030

54,145

2018

40 Years

Porter, TX

524,532

1,683,767

566

524,532

1,684,333

2,208,865

136,844

2018

40 Years

Tomball, TX

1,336,029

1,849,554

1,336,029

1,849,554

3,185,583

161,831

2018

40 Years

Universal City, TX

380,788

1,496,318

380,788

1,496,318

1,877,106

112,224

2018

40 Years

Waxahachie, TX

388,138

792,125

388,138

792,125

1,180,263

59,409

2018

40 Years

Willis, TX

406,466

925,047

7,287

406,466

932,334

1,338,800

75,657

2018

40 Years

Logan, UT

914,515

2,774,985

914,515

2,774,985

3,689,500

231,248

2018

40 Years

Christiansburg, VA

520,538

661,780

520,538

661,780

1,182,318

49,634

2018

40 Years

Fredericksburg, VA

452,911

1,076,589

452,911

1,076,589

1,529,500

80,744

2018

40 Years

Glen Allen, VA

1,112,948

837,542

1,112,948

837,542

1,950,490

78,423

2018

40 Years

Hampton, VA

353,242

514,898

353,242

514,898

868,140

38,617

2018

40 Years

Louisa, VA

538,246

2,179,541

538,246

2,179,541

2,717,787

178,496

2018

40 Years

Manassas, VA

1,454,278

1,454,278

1,454,278

2018

Virginia Beach, VA

2,142,002

1,154,585

2,142,002

1,154,585

3,296,587

86,594

2018

40 Years

Virginia Beach, VA

271,176

3,308,434

271,176

3,308,434

3,579,610

248,133

2018

40 Years

Everett, WA

414,899

811,710

414,899

811,710

1,226,609

60,878

2018

40 Years

Bluefield, WV

287,740

947,287

12,404

287,740

959,691

1,247,431

92,987

2018

40 Years

Green Bay, WI

817,143

1,383,440

817,143

1,383,440

2,200,583

103,758

2018

40 Years

La Crosse, WI

175,551

1,145,438

175,551

1,145,438

1,320,989

85,908

2018

40 Years

Madison, WI

2,475,815

4,249,537

(30,000)

2,475,815

4,219,537

6,695,352

340,274

2018

40 Years

F-54

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Mt. Pleasant, WI

208,806

1,173,275

208,806

1,173,275

1,382,081

87,996

2018

40 Years

Schofield, WI

533,503

1,071,930

533,503

1,071,930

1,605,433

80,395

2018

40 Years

Sheboygan, WI

331,692

929,092

331,692

929,092

1,260,784

69,682

2018

40 Years

Athens, AL

338,789

1,119,459

(2,717)

338,789

1,116,742

1,455,531

67,549

2019

40 Years

Attala, AL

289,473

928,717

289,473

928,717

1,218,190

56,110

2019

40 Years

Birmingham, AL

1,400,530

859,880

316

1,400,530

860,196

2,260,726

46,591

2019

40 Years

Blountsville, AL

262,412

816,070

262,412

816,070

1,078,482

49,304

2019

40 Years

Coffeeville, AL

129,263

864,122

129,263

864,122

993,385

52,207

2019

40 Years

Phenix, AL

292,234

1,280,705

292,234

1,280,705

1,572,939

90,717

2019

40 Years

Silas, AL

383,742

1,351,195

383,742

1,351,195

1,734,937

81,625

2019

40 Years

Tuba City, AZ

138,006

1,253,376

531

138,006

1,253,907

1,391,913

70,441

2019

40 Years

Searcy, AR

851,561

5,582,069

45,099

851,561

5,627,168

6,478,729

398,999

2019

40 Years

Sheridan, AR

124,667

1,070,754

124,667

1,070,754

1,195,421

64,558

2019

40 Years

Trumann, AR

170,957

1,064,039

170,957

1,064,039

1,234,996

64,152

2019

40 Years

Visalia, CA

2,552,353

6,994,518

284

2,552,353

6,994,802

9,547,155

451,739

2019

40 Years

Lakewood, CO

3,021,260

6,125,185

18,070

3,021,260

6,143,255

9,164,515

307,070

2019

40 Years

Rifle, CO

4,427,019

1,599,591

4,427,019

1,599,591

6,026,610

103,198

2019

40 Years

Danbury, CT

1,095,933

1,095,933

1,095,933

2019

Greenwich, CT

16,350,193

3,076,568

16,350,193

3,076,568

19,426,761

196,060

2019

40 Years

Orange, CT

6,881,022

10,519,218

19,570

6,881,022

10,538,788

17,419,810

591,317

2019

40 Years

Torrington, CT

195,171

1,541,214

9,168

195,171

1,550,382

1,745,553

80,673

2019

40 Years

Bear, DE

743,604

657

744,261

744,261

2019

Wilmington, DE

2,501,623

2,784,576

2,501,623

2,784,576

5,286,199

191,275

2019

40 Years

Apopka, FL

646,629

1,215,458

10,730

646,629

1,226,188

1,872,817

91,517

2019

40 Years

Clearwater, FL

497,216

1,027,192

497,216

1,027,192

1,524,408

70,453

2019

40 Years

Cocoa, FL

2,174,730

2,174,730

2,174,730

2019

Lake Placid, FL

255,339

1,059,913

255,339

1,059,913

1,315,252

57,412

2019

40 Years

Merritt Island, FL

746,846

1,805,756

746,846

1,805,756

2,552,602

105,336

2019

40 Years

Orlando, FL

751,265

2,089,523

751,265

2,089,523

2,840,788

142,240

2019

40 Years

Poinciana, FL

608,450

1,073,714

608,450

1,073,714

1,682,164

58,160

2019

40 Years

Sanford, FL

2,791,684

4,763,063

20,323

2,791,684

4,783,386

7,575,070

278,600

2019

40 Years

Tavares, FL

736,113

1,849,694

736,113

1,849,694

2,585,807

127,172

2019

40 Years

Wauchula, FL

333,236

1,156,806

333,236

1,156,806

1,490,042

86,760

2019

40 Years

West Palm Beach, FL

2,484,935

2,344,077

2,484,935

2,344,077

4,829,012

136,666

2019

40 Years

Brunswick, GA

186,767

1,615,510

186,767

1,615,510

1,802,277

110,882

2019

40 Years

Columbus, GA

336,125

2,497,365

32,240

336,125

2,529,605

2,865,730

136,684

2019

40 Years

Conyers, GA

714,666

2,137,506

714,666

2,137,506

2,852,172

133,480

2019

40 Years

F-55

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Dacula, GA

1,280,484

1,716,312

1,280,484

1,716,312

2,996,796

121,512

2019

40 Years

Marietta, GA

390,416

1,441,936

390,416

1,441,936

1,832,352

98,956

2019

40 Years

Tucker, GA

374,268

1,652,522

374,268

1,652,522

2,026,790

116,994

2019

40 Years

Chubbuck, ID

1,067,983

5,880,828

1,067,983

5,880,828

6,948,811

428,808

2019

40 Years

Chubbuck, ID

185,310

185,310

185,310

2019

Chubbuck, ID

873,334

1,653,886

873,334

1,653,886

2,527,220

120,596

2019

40 Years

Edwardsville, IL

449,741

1,202,041

449,741

1,202,041

1,651,782

82,512

2019

40 Years

Elk Grove Village, IL

394,567

1,395,659

22,896

394,567

1,418,555

1,813,122

82,266

2019

40 Years

Evergreen Park, IL

5,687,045

18,880,969

5,687,045

18,880,969

24,568,014

1,101,118

2019

40 Years

Freeport, IL

92,295

1,537,120

92,295

1,537,120

1,629,415

86,396

2019

40 Years

Geneva, IL

644,434

1,213,859

644,434

1,213,859

1,858,293

80,924

2019

40 Years

Greenville, IL

135,642

1,026,006

135,642

1,026,006

1,161,648

53,438

2019

40 Years

Murphysboro, IL

176,281

988,808

176,281

988,808

1,165,089

61,658

2019

40 Years

Rockford, IL

814,666

1,719,410

814,666

1,719,410

2,534,076

96,650

2019

40 Years

Round Lake, IL

325,722

2,669,132

5,756

325,722

2,674,888

3,000,610

135,408

2019

40 Years

Fishers, IN

429,857

621,742

429,857

621,742

1,051,599

44,019

2019

40 Years

Gas City, IN

504,378

1,341,890

504,378

1,341,890

1,846,268

97,846

2019

40 Years

Hammond, IN

149,230

1,002,706

149,230

1,002,706

1,151,936

60,580

2019

40 Years

Kokomo, IN

716,631

1,143,537

716,631

1,143,537

1,860,168

78,510

2019

40 Years

Marion, IN

140,507

898,097

27,530

140,507

925,627

1,066,134

45,946

2019

40 Years

Westfield, IN

594,597

1,260,563

594,597

1,260,563

1,855,160

89,290

2019

40 Years

Waterloo, IA

369,497

1,265,450

369,497

1,265,450

1,634,947

73,746

2019

40 Years

Concordia, KS

150,440

1,144,639

26,864

150,440

1,171,503

1,321,943

58,329

2019

40 Years

Parsons, KS

203,953

1,073,554

203,953

1,073,554

1,277,507

75,923

2019

40 Years

Pratt, KS

245,375

1,293,871

245,375

1,293,871

1,539,246

75,476

2019

40 Years

Wellington, KS

95,197

1,090,333

95,197

1,090,333

1,185,530

61,265

2019

40 Years

Wichita, KS

1,257,608

5,700,299

1,257,608

5,700,299

6,957,907

379,903

2019

40 Years

Crestwood, KY

670,021

1,096,031

9,668

670,021

1,105,699

1,775,720

55,225

2019

40 Years

Georgetown, KY

257,839

3,025,734

266,479

257,839

3,292,213

3,550,052

179,646

2019

40 Years

Grayson, KY

241,857

1,155,603

241,857

1,155,603

1,397,460

67,410

2019

40 Years

Henderson, KY

146,676

958,794

146,676

958,794

1,105,470

49,937

2019

40 Years

Leitchfield, KY

303,830

1,062,711

303,830

1,062,711

1,366,541

53,136

2019

40 Years

Kentwood, LA

327,392

638,214

20,612

327,392

658,826

986,218

47,224

2019

40 Years

Lake Charles, LA

565,778

890,034

(110,745)

750,569

594,498

1,345,067

16,217

2019

40 Years

Bowie, MD

2,840,009

4,474,364

2,840,009

4,474,364

7,314,373

279,537

2019

40 Years

Eldersburg, MD

563,227

1,855,987

520

563,227

1,856,507

2,419,734

104,325

2019

40 Years

Brockton, MA

3,254,807

8,504,236

47,679

3,254,807

8,551,915

11,806,722

427,349

2019

40 Years

F-56

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Ipswich, MA

467,109

967,282

467,109

967,282

1,434,391

60,360

2019

40 Years

Ispwich, MA

2,606,990

3,414,474

2,606,990

3,414,474

6,021,464

213,393

2019

40 Years

Adrian, MI

459,814

1,562,895

38,710

459,814

1,601,605

2,061,419

104,193

2019

40 Years

Allegan, MI

184,466

1,239,762

184,466

1,239,762

1,424,228

77,485

2019

40 Years

Bloomfield Hills, MI

1,160,912

4,181,635

1,539,162

1,160,912

5,720,797

6,881,709

296,955

2019

40 Years

Caro, MI

183,318

1,328,630

183,318

1,328,630

1,511,948

74,689

2019

40 Years

Clare, MI

153,379

1,412,383

11,127

153,379

1,423,510

1,576,889

74,042

2019

40 Years

Cooks, MI

304,340

1,109,838

9,630

304,340

1,119,468

1,423,808

55,913

2019

40 Years

Crystal Falls, MI

62,462

757,276

62,462

757,276

819,738

45,752

2019

40 Years

Harrison, MI

59,984

900,901

(25,895)

59,984

875,006

934,990

43,916

2019

40 Years

Jackson, MI

524,446

1,265,119

524,446

1,265,119

1,789,565

68,527

2019

40 Years

Monroe, MI

501,688

2,651,440

501,688

2,651,440

3,153,128

182,088

2019

40 Years

Plymouth, MI

580,459

1,043,474

47,200

580,459

1,090,674

1,671,133

72,525

2019

40 Years

Spalding, MI

86,973

842,434

86,973

842,434

929,407

50,897

2019

40 Years

Walker, MI

4,821,073

15,814,475

17,091

4,821,073

15,831,566

20,652,639

857,353

2019

40 Years

Lakeville, MN

1,774,051

6,386,118

110,100

1,774,051

6,496,218

8,270,269

403,915

2019

40 Years

Longville, MN

30,748

836,277

30,748

836,277

867,025

50,525

2019

40 Years

Waite Park, MN

142,863

1,064,736

142,863

1,064,736

1,207,599

72,914

2019

40 Years

Bolton, MS

172,890

831,005

172,890

831,005

1,003,895

50,207

2019

40 Years

Bruce, MS

189,929

896,080

189,929

896,080

1,086,009

61,545

2019

40 Years

Columbus, MS

123,385

898,226

123,385

898,226

1,021,611

61,693

2019

40 Years

Flowood, MS

638,891

1,308,566

638,891

1,308,566

1,947,457

73,550

2019

40 Years

Houston, MS

170,449

913,763

170,449

913,763

1,084,212

62,761

2019

40 Years

Jackson, MS

393,954

1,169,374

393,954

1,169,374

1,563,328

65,724

2019

40 Years

Michigan City, MS

336,323

963,447

336,323

963,447

1,299,770

66,177

2019

40 Years

Pontotoc, MS

174,112

924,043

174,112

924,043

1,098,155

59,678

2019

40 Years

Tutwiler, MS

152,108

844,300

152,108

844,300

996,408

51,010

2019

40 Years

Fair Play, MO

56,563

642,856

56,563

642,856

699,419

38,839

2019

40 Years

Florissant, MO

1,394,072

2,210,514

1,394,072

2,210,514

3,604,586

151,910

2019

40 Years

Florissant, MO

1,647,163

2,256,716

1,647,163

2,256,716

3,903,879

150,448

2019

40 Years

Grovespring, MO

207,974

823,419

207,974

823,419

1,031,393

49,748

2019

40 Years

Hermitage, MO

98,531

833,177

2,600

98,531

835,777

934,308

50,452

2019

40 Years

Madison, MO

199,972

844,901

199,972

844,901

1,044,873

51,046

2019

40 Years

Oak Grove, MO

275,293

1,000,150

275,293

1,000,150

1,275,443

62,509

2019

40 Years

Salem, MO

153,713

1,085,494

153,713

1,085,494

1,239,207

60,993

2019

40 Years

South Fork, MO

345,053

1,087,384

345,053

1,087,384

1,432,437

65,696

2019

40 Years

St. Louis, MO

743,673

3,387,981

743,673

3,387,981

4,131,654

176,457

2019

40 Years

F-57

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Manchester, HN

1,486,550

2,419,269

12,678

1,486,550

2,431,947

3,918,497

131,466

2019

40 Years

Nashua, NH

808,886

2,020,221

278

808,886

2,020,499

2,829,385

109,441

2019

40 Years

Lanoka Harbor, NJ

1,355,335

1,052,415

1,355,335

1,052,415

2,407,750

59,071

2019

40 Years

Paramus, NJ

6,224,221

599,410

6,823,631

6,823,631

438,673

2019

40 Years

San Ysidro, NM

316,770

956,983

316,770

956,983

1,273,753

57,818

2019

40 Years

Hinsdale, NY

353,602

905,350

353,602

905,350

1,258,952

54,698

2019

40 Years

Liverpool, NY

1,697,114

3,355,641

24,323

1,697,114

3,379,964

5,077,078

168,846

2019

40 Years

Malone, NY

413,667

1,035,771

413,667

1,035,771

1,449,438

71,032

2019

40 Years

Vestal, NY

3,540,906

5,610,529

147,000

3,540,906

5,757,529

9,298,435

317,724

2019

40 Years

Columbus, NC

423,026

1,070,992

423,026

1,070,992

1,494,018

60,170

2019

40 Years

Fayetteville, NC

505,574

1,544,177

505,574

1,544,177

2,049,751

83,643

2019

40 Years

Hope Mills, NC

1,522,142

7,906,676

1,522,142

7,906,676

9,428,818

461,098

2019

40 Years

Stallings, NC

1,481,940

1,481,940

1,481,940

2019

Sylva, NC

450,055

1,351,631

19,487

450,055

1,371,118

1,821,173

68,434

2019

40 Years

Edgeley, ND

193,509

944,881

193,509

944,881

1,138,390

59,055

2019

40 Years

Grand Forks, ND

1,187,389

2,052,184

1,187,389

2,052,184

3,239,573

123,968

2019

40 Years

Williston, ND

515,210

1,584,865

515,210

1,584,865

2,100,075

95,752

2019

40 Years

Batavia, OH

601,071

1,125,756

(5,377)

597,667

1,123,783

1,721,450

72,857

2019

40 Years

Bellevue, OH

186,215

1,343,783

8,491

186,215

1,352,274

1,538,489

67,561

2019

40 Years

Columbus, OH

357,767

1,423,046

357,767

1,423,046

1,780,813

97,657

2019

40 Years

Conneaut, OH

200,915

1,363,715

7,983

200,915

1,371,698

1,572,613

74,217

2019

40 Years

Hamilton, OH

335,677

1,066,581

335,677

1,066,581

1,402,258

70,962

2019

40 Years

Heath, OH

657,358

3,259,449

313,281

657,358

3,572,730

4,230,088

198,554

2019

40 Years

Kenton, OH

191,968

1,290,534

7,723

191,968

1,298,257

1,490,225

67,553

2019

40 Years

Maumee, OH

1,498,739

815,222

972

1,498,739

816,194

2,314,933

59,517

2019

40 Years

Oxford, OH

912,241

2,566,991

912,241

2,566,991

3,479,232

181,669

2019

40 Years

West Chester, OH

796,035

814,730

660

796,035

815,390

1,611,425

59,436

2019

40 Years

West Chester, OH

395,924

1,173,848

395,924

1,173,848

1,569,772

83,030

2019

40 Years

Ada, OK

336,304

1,234,870

336,304

1,234,870

1,571,174

66,889

2019

40 Years

Bartlesville, OK

451,582

1,249,112

451,582

1,249,112

1,700,694

77,898

2019

40 Years

Bokoshe, OK

47,725

797,175

47,725

797,175

844,900

49,533

2019

40 Years

Lawton, OK

230,834

612,256

230,834

612,256

843,090

38,094

2019

40 Years

Whitefield, OK

144,932

863,327

144,932

863,327

1,008,259

53,958

2019

40 Years

Cranberry Township, PA

2,066,679

2,049,310

2,066,679

2,049,310

4,115,989

145,100

2019

40 Years

Ebensburg, PA

551,162

2,023,064

551,162

2,023,064

2,574,226

138,919

2019

40 Years

Flourtown, PA

1,342,409

2,229,147

1,342,409

2,229,147

3,571,556

162,526

2019

40 Years

Monaca, PA

449,116

842,901

449,116

842,901

1,292,017

59,646

2019

40 Years

F-58

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Natrona Heights, PA

1,412,247

1,719,447

1,412,247

1,719,447

3,131,694

125,376

2019

40 Years

North Huntingdon, PA

428,166

1,508,044

428,166

1,508,044

1,936,210

106,760

2019

40 Years

Oakdale, PA

708,623

987,577

68,352

708,623

1,055,929

1,764,552

53,250

2019

40 Years

Philadelphia, PA

1,891,985

20,799,223

211,464

1,891,985

21,010,687

22,902,672

1,400,697

2019

40 Years

Pittsburgh, PA

1,251,674

3,842,592

1,251,674

3,842,592

5,094,266

216,046

2019

40 Years

Robinson Township, PA

1,630,648

2,703,381

1,630,648

2,703,381

4,334,029

168,877

2019

40 Years

Titusville, PA

877,651

2,568,060

877,651

2,568,060

3,445,711

165,797

2019

40 Years

West View, PA

120,349

1,347,706

120,349

1,347,706

1,468,055

78,531

2019

40 Years

York, PA

3,331,496

6,690,968

3,331,496

6,690,968

10,022,464

431,882

2019

40 Years

Columbia, SC

2,783,934

13,228,453

2,783,934

13,228,453

16,012,387

936,888

2019

40 Years

Hampton, SC

215,462

1,050,367

215,462

1,050,367

1,265,829

78,778

2019

40 Years

Myrtle Beach, SC

1,371,226

2,752,440

503,611

1,371,226

3,256,051

4,627,277

200,353

2019

40 Years

Orangeburg, SC

316,428

1,116,664

316,428

1,116,664

1,433,092

72,040

2019

40 Years

Kadoka, SD

134,528

926,523

134,528

926,523

1,061,051

57,908

2019

40 Years

Thorn Hill, TN

115,367

974,925

115,367

974,925

1,090,292

66,931

2019

40 Years

Woodbury, TN

154,043

1,092,958

154,043

1,092,958

1,247,001

75,141

2019

40 Years

Burleson, TX

1,396,753

3,312,794

13,864

1,396,753

3,326,658

4,723,411

166,246

2019

40 Years

Carrizo Springs, TX

337,070

812,963

5,087

337,070

818,050

1,155,120

51,007

2019

40 Years

Garland, TX

773,385

2,587,011

773,385

2,587,011

3,360,396

172,467

2019

40 Years

Kenedy, TX

325,159

954,774

11,255

325,159

966,029

1,291,188

48,231

2019

40 Years

Laredo, TX

1,117,403

2,152,573

1,117,403

2,152,573

3,269,976

138,925

2019

40 Years

Lewisville, TX

2,347,993

5,271,935

2,347,993

5,271,935

7,619,928

384,412

2019

40 Years

Lubbock, TX

1,420,820

1,858,395

1,420,820

1,858,395

3,279,215

135,508

2019

40 Years

Wichita Falls, TX

585,664

1,952,988

585,664

1,952,988

2,538,652

122,062

2019

40 Years

Wylie, TX

686,154

1,623,684

686,154

1,623,684

2,309,838

114,951

2019

40 Years

Draper, UT

1,344,025

3,321,208

23,553

1,344,025

3,344,761

4,688,786

167,091

2019

40 Years

Bristol, VA

996,915

1,374,467

996,915

1,374,467

2,371,382

80,177

2019

40 Years

Gloucester, VA

458,785

1,994,093

458,785

1,994,093

2,452,878

116,278

2019

40 Years

Hampton, VA

3,549,928

6,096,218

107

3,549,928

6,096,325

9,646,253

342,669

2019

40 Years

Hampton, VA

429,613

1,081,015

429,613

1,081,015

1,510,628

63,059

2019

40 Years

Hampton, VA

744,520

1,249,355

744,520

1,249,355

1,993,875

72,879

2019

40 Years

Hampton, VA

561,596

1,545,002

561,596

1,545,002

2,106,598

90,125

2019

40 Years

Newport News, VA

12,618,320

12,618,320

12,618,320

2019

Newport News, VA

855,793

1,754,228

855,793

1,754,228

2,610,021

102,330

2019

40 Years

Poquoson, VA

330,867

848,105

2,156

330,867

850,261

1,181,128

49,567

2019

40 Years

South Boston, VA

490,590

2,637,385

15,414

490,590

2,652,799

3,143,389

143,533

2019

40 Years

Surry, VA

685,233

994,788

685,233

994,788

1,680,021

58,029

2019

40 Years

F-59

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Williamsburg, VA

1,574,769

2,001,920

(9,200)

1,565,569

2,001,920

3,567,489

116,779

2019

40 Years

Williamsburg, VA

675,861

1,098,464

675,861

1,098,464

1,774,325

64,077

2019

40 Years

Wytheville, VA

206,660

1,248,178

206,660

1,248,178

1,454,838

62,409

2019

40 Years

Ephrata, WA

368,492

4,821,470

18,383

368,492

4,839,853

5,208,345

251,865

2019

40 Years

Charleston, WV

561,767

561,767

561,767

2019

Ripley, WV

1,042,204

20,423

1,062,627

1,062,627

2019

Black River Falls, WI

278,472

1,141,572

9,519

278,472

1,151,091

1,429,563

59,873

2019

40 Years

Lake Geneva, WI

7,078,726

7,078,726

7,078,726

2019

Menomonee Falls, WI

3,518,493

12,020,248

12,918

3,518,493

12,033,166

15,551,659

776,210

2019

40 Years

Sun Prairie, WI

2,864,563

7,215,614

2,864,563

7,215,614

10,080,177

405,679

2019

40 Years

West Milwaukee, WI

783,260

3,055,907

16,402

783,260

3,072,309

3,855,569

159,730

2019

40 Years

Adger, AL

189,119

1,222,891

189,119

1,222,891

1,412,010

48,406

2020

40 Years

Dothan, AL

792,626

3,017,431

(31,788)

778,553

2,999,716

3,778,269

72,536

2020

40 Years

Enterprise, AL

728,934

2,504,283

15,377

728,934

2,519,660

3,248,594

119,997

2020

40 Years

Lanett, AL

597,615

2,264,102

128

597,615

2,264,230

2,861,845

75,450

2020

40 Years

Saraland, AL

838,216

2,709,602

1,275

838,216

2,710,877

3,549,093

129,629

2020

40 Years

Sylacauga, AL

2,181,806

9,940,930

4,330

2,181,806

9,945,260

12,127,066

393,426

2020

40 Years

Theodore, AL

743,751

2,667,802

743,751

2,667,802

3,411,553

122,186

2020

40 Years

Altheimer, AR

202,235

1,151,471

202,235

1,151,471

1,353,706

47,589

2020

40 Years

Benton, AR

561,085

2,141,511

249,809

561,085

2,391,320

2,952,405

67,140

2020

40 Years

Benton, AR

2,271,157

1,324,716

7,992

2,271,157

1,332,708

3,603,865

33,268

2020

40 Years

Bismarck, AR

129,139

876,127

129,139

876,127

1,005,266

30,910

2020

40 Years

Centerton, AR

502,391

2,152,058

249,808

502,391

2,401,866

2,904,257

71,931

2020

40 Years

Elaine, AR

51,248

802,757

51,248

802,757

854,005

33,149

2020

40 Years

Jonesboro, AR

477,565

942,703

477,565

942,703

1,420,268

29,405

2020

40 Years

Little Rock, AR

136,550

638,605

136,550

638,605

775,155

26,551

2020

40 Years

Mayflower, AR

708,465

448,741

66,856

708,465

515,597

1,224,062

12,472

2020

40 Years

Mena, AR

1,459,039

1,459,039

1,459,039

2020

Pine Bluff, AR

195,689

1,102,338

3,250

195,689

1,105,588

1,301,277

48,124

2020

40 Years

Pine Bluff, AR

279,293

1,290,094

279,293

1,290,094

1,569,387

53,461

2020

40 Years

Searcy, AR

548,495

5,834,876

548,495

5,834,876

6,383,371

206,400

2020

40 Years

Sparkman, AR

80,956

720,376

80,956

720,376

801,332

23,953

2020

40 Years

West Helena, AR

93,907

885,680

93,907

885,680

979,587

36,515

2020

40 Years

Coolidge, AZ

252,228

1,164,641

510

252,228

1,165,151

1,417,379

43,568

2020

40 Years

Maricopa, AZ

761,177

1,600,925

11,257

761,177

1,612,182

2,373,359

43,559

2020

40 Years

Phoenix, AZ

11,641,459

7,261,072

11,641,459

7,261,072

18,902,531

257,028

2020

40 Years

Tucson, AZ

3,267,761

6,624,814

94,241

3,267,761

6,719,055

9,986,816

168,488

2020

40 Years

F-60

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Yuma, AZ

840,427

5,489,179

577

840,427

5,489,756

6,330,183

205,716

2020

40 Years

Yuma, AZ

5,052,648

29,919

5,082,567

5,082,567

126,877

2020

40 Years

Antioch, CA

3,369,667

6,952,571

3,369,667

6,952,571

10,322,238

231,654

2020

40 Years

Calexico, CA

937,091

22,274

959,365

959,365

2020

Hawthorne, CA

7,297,568

5,841,964

1,750

7,297,568

5,843,714

13,141,282

182,451

2020

40 Years

Napa, CA

5,287,831

13,608,836

650

5,287,831

13,609,486

18,897,317

510,154

2020

40 Years

Palmdale, CA

2,159,541

6,648,091

486

2,159,541

6,648,577

8,808,118

290,702

2020

40 Years

Quincy, CA

315,559

1,597,973

315,559

1,597,973

1,913,532

69,662

2020

40 Years

Quincy, CA

605,988

4,898,500

605,988

4,898,500

5,504,488

193,826

2020

40 Years

Rancho Cordova, CA

10,668,451

27,033

10,695,484

10,695,484

2020

San Francisco, CA

7,234,677

748,185

19,918

7,234,677

768,103

8,002,780

20,617

2020

40 Years

Signal Hill, CA

8,490,622

6,714,882

8,490,622

6,714,882

15,205,504

321,755

2020

40 Years

Stockton, CA

961,910

3,310,275

16,114

961,910

3,326,389

4,288,299

83,059

2020

40 Years

Broomfield, CO

708,881

965,675

7,993

708,881

973,668

1,682,549

24,292

2020

40 Years

Cortez, CO

177,422

1,594,274

9,852

177,422

1,604,126

1,781,548

40,042

2020

40 Years

La Junta, CO

187,988

823,735

187,988

823,735

1,011,723

35,789

2020

40 Years

Pueblo, CO

235,805

1,568,540

235,805

1,568,540

1,804,345

58,820

2020

40 Years

Newington, CT

403,932

1,915,897

403,932

1,915,897

2,319,829

87,708

2020

40 Years

Old Saybrook, CT

443,801

3,497,920

74

443,801

3,497,994

3,941,795

109,163

2020

40 Years

Stafford Springs, CT

1,230,939

7,075,776

1,230,939

7,075,776

8,306,715

221,118

2020

40 Years

Davenport, FL

721,966

1,435,651

721,966

1,435,651

2,157,617

71,783

2020

40 Years

Deerfield Beach, FL

1,963,542

514,491

1,963,542

514,491

2,478,033

18,120

2020

40 Years

Labelle, FL

489,345

2,754,977

489,345

2,754,977

3,244,322

97,472

2020

40 Years

Lake Placid, FL

2,060,445

15,405

2,075,850

2,075,850

2020

Leesburg, FL

708,698

541,993

7,993

708,698

549,986

1,258,684

13,700

2020

40 Years

Madison, FL

171,150

619,660

171,150

619,660

790,810

25,742

2020

40 Years

Orlando, FL

4,558,262

7,261,682

4,558,262

7,261,682

11,819,944

302,440

2020

40 Years

Panama City, FL

830,080

856,243

830,080

856,243

1,686,323

42,805

2020

40 Years

Pensacola, FL

379,154

969,254

7,993

379,154

977,247

1,356,401

24,381

2020

40 Years

Port St. Lucie, FL

670,030

1,664,571

670,030

1,664,571

2,334,601

76,168

2020

40 Years

Punta Gorda, FL

615,829

1,921,751

615,829

1,921,751

2,537,580

92,084

2020

40 Years

Sebring, FL

1,986,013

15,406

2,001,419

2,001,419

2020

Venice, FL

1,301,719

1,233,030

1,301,719

1,233,030

2,534,749

61,651

2020

40 Years

Vero Beach, FL

1,241,406

1,356,081

20

1,241,406

1,356,101

2,597,507

64,979

2020

40 Years

Albany, GA

311,920

1,278,107

311,920

1,278,107

1,590,027

53,191

2020

40 Years

Albany, GA

248,888

1,445,530

248,888

1,445,530

1,694,418

60,172

2020

40 Years

Albany, GA

898,015

5,713,749

898,015

5,713,749

6,611,764

193,539

2020

40 Years

F-61

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Americus, GA

238,633

968,812

238,633

968,812

1,207,445

40,361

2020

40 Years

Cairo, GA

237,315

1,040,643

237,315

1,040,643

1,277,958

52,032

2020

40 Years

Dallas, GA

235,642

1,134,202

7,993

235,642

1,142,195

1,377,837

28,505

2020

40 Years

Doraville, GA

533,512

1,709,449

533,512

1,709,449

2,242,961

49,859

2020

40 Years

Flowery Branch, GA

1,253,091

(2,000)

1,251,091

1,251,091

2020

Jesup, GA

155,604

864,415

155,604

864,415

1,020,019

35,938

2020

40 Years

Lawrenceville, GA

852,136

1,633,580

852,136

1,633,580

2,485,716

78,276

2020

40 Years

Lithia Springs, GA

3,789,145

7,881,640

3,789,145

7,881,640

11,670,785

295,457

2020

40 Years

Moultrie, GA

150,752

868,415

150,752

868,415

1,019,167

36,105

2020

40 Years

Quitman, GA

407,661

1,125,845

407,661

1,125,845

1,533,506

56,292

2020

40 Years

Savannah, GA

749,834

1,802,814

749,834

1,802,814

2,552,648

63,769

2020

40 Years

Savannah, GA

3,502,278

4,132,018

2,179

3,502,278

4,134,197

7,636,475

137,532

2020

40 Years

George, IA

283,785

942,785

283,785

942,785

1,226,570

47,139

2020

40 Years

Graettinger, IA

154,261

933,746

154,261

933,746

1,088,007

46,687

2020

40 Years

Alexis, IL

425,656

1,237,404

425,656

1,237,404

1,663,060

59,292

2020

40 Years

Chicago, IL

2,780,722

2,305,569

2,780,722

2,305,569

5,086,291

71,922

2020

40 Years

Chicago, IL

424,932

4,223,123

424,932

4,223,123

4,648,055

131,851

2020

40 Years

Chicago, IL

596,808

1,415,648

596,808

1,415,648

2,012,456

44,118

2020

40 Years

Chicago, IL

932,560

2,553,809

7,273

932,560

2,561,082

3,493,642

63,974

2020

40 Years

East Alton, IL

113,457

1,422,573

113,457

1,422,573

1,536,030

53,248

2020

40 Years

Fairfield, IL

198,833

1,180,242

6,975

198,833

1,187,217

1,386,050

32,067

2020

40 Years

Grayslake, IL

478,307

1,131,061

478,307

1,131,061

1,609,368

44,645

2020

40 Years

Homewood, IL

1,224,131

10,005,811

6,230

1,224,131

10,012,041

11,236,172

416,806

2020

40 Years

Kankakee, IL

107,139

1,185,653

107,139

1,185,653

1,292,792

34,501

2020

40 Years

Manteno, IL

71,681

1,213,963

37,938

71,681

1,251,901

1,323,582

31,058

2020

40 Years

Oswego, IL

373,727

2,715,101

16,092

373,727

2,731,193

3,104,920

68,179

2020

40 Years

Rockton, IL

367,154

1,526,399

367,154

1,526,399

1,893,553

38,160

2020

40 Years

Elkhart, IN

173,631

972,629

7,992

173,631

980,621

1,154,252

24,465

2020

40 Years

Franklin, IN

979,332

1,548,523

7,993

979,332

1,556,516

2,535,848

38,863

2020

40 Years

Indianapolis, IN

251,149

1,550,984

251,149

1,550,984

1,802,133

41,989

2020

40 Years

Noblesville, IN

259,582

1,611,431

259,582

1,611,431

1,871,013

77,214

2020

40 Years

Peru, IN

202,110

1,501,247

202,110

1,501,247

1,703,357

56,297

2020

40 Years

Rockville, IN

436,457

1,601,972

(75,085)

436,457

1,526,887

1,963,344

38,617

2020

40 Years

Derby, KS

440,419

2,367,428

440,419

2,367,428

2,807,847

78,777

2020

40 Years

Independence, KS

200,329

1,426,975

(75,085)

200,329

1,351,890

1,552,219

34,242

2020

40 Years

Shwanee, KS

2,594,271

2,766,524

2,594,271

2,766,524

5,360,795

103,646

2020

40 Years

Wichita, KS

834,377

2,338,612

834,377

2,338,612

3,172,989

87,600

2020

40 Years

F-62

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Wichita, KS

2,031,526

1,974,595

2,031,526

1,974,595

4,006,121

73,949

2020

40 Years

Wichita, KS

1,194,939

2,062,020

1,194,939

2,062,020

3,256,959

77,228

2020

40 Years

Wichita, KS

2,171,260

2,235,093

2,171,260

2,235,093

4,406,353

83,816

2020

40 Years

Louisa, KY

242,391

1,177,975

6,975

242,391

1,184,950

1,427,341

34,488

2020

40 Years

Louisville, KY

2,185,678

3,081,512

5,300

2,185,678

3,086,812

5,272,490

154,076

2020

40 Years

Louisville, KY

208,346

621,820

208,346

621,820

830,166

21,963

2020

40 Years

Amite City, LA

264,208

930,655

7,080

264,208

937,735

1,201,943

31,019

2020

40 Years

Baton Rouge, LA

377,270

1,225,020

377,270

1,225,020

1,602,290

58,522

2020

40 Years

Denham Springs, LA

398,006

1,484,613

398,006

1,484,613

1,882,619

49,462

2020

40 Years

Dequincy, LA

288,426

969,725

288,426

969,725

1,258,151

34,344

2020

40 Years

Gibson, LA

414,855

1,252,765

4,509

414,855

1,257,274

1,672,129

49,553

2020

40 Years

Gonzales, LA

688,032

2,457,035

249,808

688,032

2,706,843

3,394,875

76,276

2020

40 Years

Hammond, LA

367,215

2,243,382

249,809

367,215

2,493,191

2,860,406

60,763

2020

40 Years

Laplace, LA

1,971,887

8,537,415

1,971,887

8,537,415

10,509,302

355,589

2020

40 Years

Springhill, LA

438,507

2,335,035

14,125

438,507

2,349,160

2,787,667

58,730

2020

40 Years

Dorchester, MA

4,815,990

923,841

13,041

4,815,990

936,882

5,752,872

25,242

2020

40 Years

East Wareham, MA

590,052

1,525,359

8,780

590,052

1,534,139

2,124,191

41,390

2020

40 Years

Pittsfield, MA

4,127,428

4,127,428

4,127,428

2020

Pittsfield, MA

5,087,945

5,087,945

5,087,945

2020

Taunton, MA

1,005,673

8,352,646

1,005,673

8,352,646

9,358,319

417,632

2020

40 Years

Aberdeen, MD

758,616

1,712,723

758,616

1,712,723

2,471,339

85,636

2020

40 Years

Baltimore, MD

3,031,879

36,709

3,068,588

3,068,588

2020

Cockeysville, MD

2,209,572

20,283

2,229,855

2,229,855

2020

Hagerstown, MD

1,009,779

1,285,162

1,009,779

1,285,162

2,294,941

61,581

2020

40 Years

Owings Mills, MD

2,154,954

3,017,368

1,750

2,154,954

3,019,118

5,174,072

94,178

2020

40 Years

Augusta, ME

1,627,817

1,627,817

1,627,817

2020

Benton Harbor, MI

385,355

1,090,802

7,992

385,355

1,098,794

1,484,149

27,420

2020

40 Years

Cedar Springs, MI

346,310

1,907,232

346,310

1,907,232

2,253,542

47,681

2020

40 Years

Grayling, MI

277,355

521,492

925

277,355

522,417

799,772

19,427

2020

40 Years

Hart, MI

1,336,141

1,294,095

1,336,141

1,294,095

2,630,236

56,356

2020

40 Years

Holland, MI

108,733

1,773,459

108,733

1,773,459

1,882,192

88,673

2020

40 Years

Howell, MI

601,610

1,491,797

300

601,610

1,492,097

2,093,707

58,900

2020

40 Years

Jonesville, MI

1,171,853

8,871,307

1,171,853

8,871,307

10,043,160

369,504

2020

40 Years

Monroe, MI

1,315,043

9,131,436

1,315,043

9,131,436

10,446,479

285,132

2020

40 Years

Omer, MI

165,126

828,778

165,126

828,778

993,904

39,712

2020

40 Years

Owosso, MI

299,521

2,240,764

299,521

2,240,764

2,540,285

112,038

2020

40 Years

Taylor, MI

338,092

1,017,043

338,092

1,017,043

1,355,135

31,616

2020

40 Years

F-63

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Traverse City, MI

337,556

3,980,018

(48,115)

337,556

3,931,903

4,269,459

114,681

2020

40 Years

Apple Valley, MN

814,086

2,665,167

814,086

2,665,167

3,479,253

77,664

2020

40 Years

Blaine, MN

497,750

2,998,249

7,993

497,750

3,006,242

3,503,992

75,106

2020

40 Years

Chanhassen, MN

1,664,359

11,222

1,675,581

1,675,581

2020

Glyndon, MN

131,845

853,575

131,845

853,575

985,420

42,678

2020

40 Years

Hill City, MN

66,391

996,428

66,391

996,428

1,062,819

49,821

2020

40 Years

Holdingford, MN

276,722

1,078,003

276,722

1,078,003

1,354,725

53,900

2020

40 Years

Ottertail, MN

209,929

897,043

209,929

897,043

1,106,972

44,852

2020

40 Years

Arnold, MO

846,894

2,392,044

7,993

846,894

2,400,037

3,246,931

59,951

2020

40 Years

Leeton, MO

192,069

1,109,261

192,069

1,109,261

1,301,330

43,908

2020

40 Years

Liberty, MO

367,591

4,348,251

367,591

4,348,251

4,715,842

153,749

2020

40 Years

Northmoor, MO

551,491

1,723,994

551,491

1,723,994

2,275,485

60,968

2020

40 Years

Platte City, MO

766,613

2,501,154

21,647

766,613

2,522,801

3,289,414

62,796

2020

40 Years

Richmond Heights, MO

3,305,260

2,531,065

3,305,260

2,531,065

5,836,325

94,915

2020

40 Years

Sheldon, MO

168,799

1,017,992

168,799

1,017,992

1,186,791

40,296

2020

40 Years

Thayer, MO

685,788

1,968,043

2,200

685,788

1,970,243

2,656,031

81,892

2020

40 Years

Union, MO

270,233

1,041,690

270,233

1,041,690

1,311,923

36,830

2020

40 Years

Brandon, MS

526,657

1,575,241

526,657

1,575,241

2,101,898

49,112

2020

40 Years

Flowood, MS

1,625,494

6,417,821

7,430

1,625,494

6,425,251

8,050,745

244,251

2020

40 Years

Flowood, MS

759,912

2,383,348

759,912

2,383,348

3,143,260

74,392

2020

40 Years

Gore Springs, MS

188,141

951,645

48,115

188,141

999,760

1,187,901

40,469

2020

40 Years

Greenwood, MS

150,855

903,459

150,855

903,459

1,054,314

37,256

2020

40 Years

Greenwood, MS

137,312

1,154,001

137,312

1,154,001

1,291,313

43,112

2020

40 Years

Grenada, MS

187,855

947,888

187,855

947,888

1,135,743

39,107

2020

40 Years

Gulfport, MS

597,617

2,692,177

1,275

597,617

2,693,452

3,291,069

128,764

2020

40 Years

Madison, MS

1,437,048

6,194,546

1,437,048

6,194,546

7,631,594

193,513

2020

40 Years

Oxford, MS

547,606

993,807

7,992

547,606

1,001,799

1,549,405

24,995

2020

40 Years

Southaven, MS

259,300

864,055

21,364

259,300

885,419

1,144,719

27,489

2020

40 Years

Wiggins, MS

639,466

2,563,263

128

639,466

2,563,391

3,202,857

85,422

2020

40 Years

Asheville, NC

5,132,913

17,171

5,150,084

5,150,084

2020

Atlantic Beach, NC

261,338

1,156,375

261,338

1,156,375

1,417,713

38,453

2020

40 Years

Beaufort, NC

375,437

1,417,587

375,437

1,417,587

1,793,024

47,160

2020

40 Years

Boone, NC

4,795,569

9,543,185

1,001

4,795,569

9,544,186

14,339,755

457,155

2020

40 Years

Buxton, NC

209,947

1,186,030

209,947

1,186,030

1,395,977

39,442

2020

40 Years

Cary, NC

253,081

1,018,159

253,081

1,018,159

1,271,240

34,211

2020

40 Years

Chapel Hill, NC

22,437,345

(808,470)

21,628,875

21,628,875

2020

Charlotte, NC

978,304

1,328,283

978,304

1,328,283

2,306,587

57,999

2020

40 Years

F-64

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Concord, NC

952,393

1,398,319

952,393

1,398,319

2,350,712

64,090

2020

40 Years

Dallas, NC

309,847

1,008,936

309,847

1,008,936

1,318,783

37,749

2020

40 Years

Durham, NC

229,232

1,169,836

229,232

1,169,836

1,399,068

38,902

2020

40 Years

Elkin, NC

292,234

1,884,674

10,255

292,234

1,894,929

2,187,163

47,309

2020

40 Years

Elm City, NC

447,081

1,401,379

447,081

1,401,379

1,848,460

46,620

2020

40 Years

Emerald Isle, NC

316,187

1,125,842

316,187

1,125,842

1,442,029

37,435

2020

40 Years

Fuquay-Varina, NC

4,398,922

10,142,102

4,398,922

10,142,102

14,541,024

485,976

2020

40 Years

Garner, NC

216,566

1,170,660

216,566

1,170,660

1,387,226

38,929

2020

40 Years

Goldsboro, NC

246,160

1,227,984

246,160

1,227,984

1,474,144

40,840

2020

40 Years

Goldsboro, NC

243,355

1,135,304

243,355

1,135,304

1,378,659

37,751

2020

40 Years

Greensboro, NC

272,962

1,126,017

272,962

1,126,017

1,398,979

37,441

2020

40 Years

Greenville, NC

161,533

1,095,964

161,533

1,095,964

1,257,497

36,439

2020

40 Years

Harkers Island, NC

964,627

2,109,360

964,627

2,109,360

3,073,987

70,312

2020

40 Years

Jacksonville, NC

405,135

1,122,908

405,135

1,122,908

1,528,043

37,430

2020

40 Years

Jacksonville, NC

3,213,710

10,021,579

3,213,710

10,021,579

13,235,289

313,027

2020

40 Years

Jacksonville, NC

295,296

1,426,015

12,096

295,296

1,438,111

1,733,407

35,877

2020

40 Years

Kinston, NC

358,915

1,016,305

358,915

1,016,305

1,375,220

33,877

2020

40 Years

Knotts Island, NC

129,285

1,232,265

129,285

1,232,265

1,361,550

41,076

2020

40 Years

Morehead City, NC

201,436

934,453

201,436

934,453

1,135,889

31,148

2020

40 Years

Randleman, NC

1,368,987

8,954,905

1,368,987

8,954,905

10,323,892

429,089

2020

40 Years

Randleman, NC

1,834,106

19,174

1,853,280

1,853,280

2020

Rocky Mount, NC

305,766

1,114,117

305,766

1,114,117

1,419,883

37,137

2020

40 Years

Rocky Mount, NC

206,675

960,873

206,675

960,873

1,167,548

32,029

2020

40 Years

Salisbury, NC

990,303

1,019,025

7,993

990,303

1,027,018

2,017,321

25,625

2020

40 Years

Salter Path, NC

245,172

1,012,413

245,172

1,012,413

1,257,585

33,747

2020

40 Years

Smithfield, NC

270,560

1,201,146

270,560

1,201,146

1,471,706

40,038

2020

40 Years

Sylva, NC

1,776,968

12,026,284

6,026

1,776,968

12,032,310

13,809,278

526,000

2020

40 Years

Waves, NC

320,928

1,092,703

320,928

1,092,703

1,413,631

36,423

2020

40 Years

Waxhaw, NC

679,943

2,377,641

679,943

2,377,641

3,057,584

69,277

2020

40 Years

Winston Salem, NC

232,299

1,069,191

232,299

1,069,191

1,301,490

35,640

2020

40 Years

Winston-Salem, NC

282,142

1,316,279

12,095

282,142

1,328,374

1,610,516

33,134

2020

40 Years

Winterville, NC

312,123

1,271,222

312,123

1,271,222

1,583,345

42,374

2020

40 Years

Stanley, ND

346,030

3,299,205

8,430

346,030

3,307,635

3,653,665

144,332

2020

40 Years

Lebanon, NH

694,609

3,892,685

61,494

694,609

3,954,179

4,648,788

162,594

2020

40 Years

Budd Lake, NJ

2,771,964

20,750

2,792,714

2,792,714

2020

Fairfield, NJ

2,358,323

24,454

2,382,777

2,382,777

2020

Paterson, NJ

2020

F-65

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Clovis, NM

74,256

943,641

11,851

74,256

955,492

1,029,748

25,758

2020

40 Years

Albany, NY

539,308

1,123,766

539,308

1,123,766

1,663,074

37,350

2020

40 Years

Bemus Point, NY

49,293

980,218

(53,367)

49,293

926,851

976,144

36,380

2020

40 Years

Candor, NY

271,132

1,012,522

(53,367)

271,132

959,155

1,230,287

37,624

2020

40 Years

Conklin, NY

247,429

939,529

(53,367)

247,429

886,162

1,133,591

34,887

2020

40 Years

Greene, NY

449,997

1,173,666

449,997

1,173,666

1,623,663

44,001

2020

40 Years

Hamburg, NY

526,596

561,841

4,891

526,596

566,732

1,093,328

14,138

2020

40 Years

Masonville, NY

222,228

1,059,364

222,228

1,059,364

1,281,592

39,714

2020

40 Years

Medford, NY

1,211,908

3,751,279

74

1,211,908

3,751,353

4,963,261

117,081

2020

40 Years

Mount Upton, NY

152,379

918,162

152,379

918,162

1,070,541

34,431

2020

40 Years

Olean, NY

1,224,360

12,197,768

181,275

1,224,360

12,379,043

13,603,403

533,363

2020

40 Years

Pompey, NY

774,544

1,437,312

774,544

1,437,312

2,211,856

53,899

2020

40 Years

Ripley, NY

110,279

756,748

110,279

756,748

867,027

28,378

2020

40 Years

Rochester, NY

2,391,104

13,146,442

2,391,104

13,146,442

15,537,546

410,627

2020

40 Years

Syracuse, NY

1,432,858

6,115,247

1,432,858

6,115,247

7,548,105

267,328

2020

40 Years

Wainscott, NY

4,544,060

4,084,794

4,544,060

4,084,794

8,628,854

178,577

2020

40 Years

Watertown, NY

523,013

1,323,771

7,380

523,013

1,331,151

1,854,164

41,384

2020

40 Years

Boardman, OH

483,754

1,817,047

483,754

1,817,047

2,300,801

64,294

2020

40 Years

Carrollton, OH

251,046

1,593,367

251,046

1,593,367

1,844,413

69,465

2020

40 Years

Chillicothe, OH

760,959

10,507,546

760,959

10,507,546

11,268,505

459,534

2020

40 Years

Cincinnati, OH

381,550

1,651,643

381,550

1,651,643

2,033,193

58,436

2020

40 Years

Columbus, OH

1,689,259

6,937,214

1,689,259

6,937,214

8,626,473

250,267

2020

40 Years

Defiance, OH

127,517

1,407,734

(75,085)

127,517

1,332,649

1,460,166

33,761

2020

40 Years

Dunkirk, OH

230,958

1,069,772

4,508

230,958

1,074,280

1,305,238

42,356

2020

40 Years

Hudson, OH

548,279

763,934

4,891

548,279

768,825

1,317,104

19,190

2020

40 Years

Mason, OH

4,470,714

11,479,943

7,630

4,470,714

11,487,573

15,958,287

382,640

2020

40 Years

Massillon, OH

118,153

1,177,205

7,992

118,153

1,185,197

1,303,350

29,580

2020

40 Years

Mayfield Heights, OH

696,965

987,268

4,891

696,965

992,159

1,689,124

24,773

2020

40 Years

Oregon, OH

4,915,676

11,980,299

4,915,676

11,980,299

16,895,975

349,284

2020

40 Years

Parma, OH

1,292,437

9,410

(1)

1,301,846

1,301,846

2020

Toledo, OH

8,645,091

30,638

8,675,729

8,675,729

2020

Toledo, OH

4,950,900

8,979,618

4,950,900

8,979,618

13,930,518

261,843

2020

40 Years

Westerville, OH

946,988

1,786,197

4,891

946,988

1,791,088

2,738,076

44,747

2020

40 Years

Westerville, OH

690,653

1,402,190

801,642

690,653

2,203,832

2,894,485

49,461

2020

40 Years

Checotah, OK

151,906

862,730

151,906

862,730

1,014,636

37,717

2020

40 Years

Elk City, OK

507,204

3,969,937

507,204

3,969,937

4,477,141

148,741

2020

40 Years

Moore, OK

1,649,938

1,480,239

7,993

1,649,938

1,488,232

3,138,170

37,156

2020

40 Years

F-66

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Oklahoma City, OK

356,795

1,349,469

356,795

1,349,469

1,706,264

47,734

2020

40 Years

Eugene, OR

4,253,602

7,543,456

4,253,602

7,543,456

11,797,058

235,639

2020

40 Years

Seaside, OR

376,612

5,093,532

1,875

376,612

5,095,407

5,472,019

190,903

2020

40 Years

Bristol, PA

1,201,361

9,382

1,210,743

1,210,743

2020

Lawrence Township, PA

225,955

1,552,979

16,800

225,955

1,569,779

1,795,734

61,472

2020

40 Years

Nescopeck, PA

428,452

1,362,404

428,452

1,362,404

1,790,856

48,252

2020

40 Years

New Milford, PA

206,824

1,139,407

4,509

206,824

1,143,916

1,350,740

45,112

2020

40 Years

Orangeville, PA

201,441

1,065,583

201,441

1,065,583

1,267,024

33,299

2020

40 Years

Port Trevorton, PA

143,540

955,027

4,508

143,540

959,535

1,103,075

37,814

2020

40 Years

Tobyhanna, PA

181,003

1,066,380

4,509

181,003

1,070,889

1,251,892

42,222

2020

40 Years

Wellsboro, PA

165,062

1,091,790

165,062

1,091,790

1,256,852

27,295

2020

40 Years

Whitehall, PA

1,139,318

2,964,839

526,241

1,139,318

3,491,080

4,630,398

156,123

2020

40 Years

Chapin, SC

237,432

1,540,336

237,432

1,540,336

1,777,768

54,423

2020

40 Years

Clemson, SC

501,288

1,898,545

6,845

501,288

1,905,390

2,406,678

79,128

2020

40 Years

Columbia, SC

1,233,052

5,532,637

1,233,052

5,532,637

6,765,689

241,813

2020

40 Years

Columbia, SC

354,953

1,670,857

354,953

1,670,857

2,025,810

52,141

2020

40 Years

Greer, SC

426,062

1,800,058

426,062

1,800,058

2,226,120

86,253

2020

40 Years

Irmo, SC

274,327

729,177

274,327

729,177

1,003,504

22,787

2020

40 Years

Myrtle Beach, SC

858,941

1,377,893

858,941

1,377,893

2,236,834

66,024

2020

40 Years

Myrtle Beach, SC

389,784

915,150

7,993

389,784

923,143

1,312,927

23,028

2020

40 Years

Pageland, SC

305,018

2,185,114

24,897

305,018

2,210,011

2,515,029

59,498

2020

40 Years

Vermillion, SD

182,981

1,352,667

186,311

182,981

1,538,978

1,721,959

53,760

2020

40 Years

Yankton, SD

197,328

985,756

7,993

197,328

993,749

1,191,077

24,794

2020

40 Years

Cleveland, TN

1,060,966

1,508,917

1,060,966

1,508,917

2,569,883

72,302

2020

40 Years

Henderson, TN

109,252

705,187

109,252

705,187

814,439

21,983

2020

40 Years

Kimball, TN

1,509,366

11,782,512

1,509,366

11,782,512

13,291,878

441,631

2020

40 Years

Knoxville, TN

4,110,394

12,554,772

4,110,394

12,554,772

16,665,166

470,659

2020

40 Years

Knoxville, TN

210,544

1,396,261

210,544

1,396,261

1,606,805

43,515

2020

40 Years

Lakeland, TN

237,682

795,446

237,682

795,446

1,033,128

24,804

2020

40 Years

Nashville, TN

556,406

980,902

556,406

980,902

1,537,308

44,867

2020

40 Years

Nashville, TN

355,577

1,331,745

355,577

1,331,745

1,687,322

47,106

2020

40 Years

Seymour, TN

187,929

1,302,250

187,929

1,302,250

1,490,179

46,042

2020

40 Years

Tullahoma, TN

1,206,870

9,840,853

12,758

1,206,870

9,853,611

11,060,481

266,747

2020

40 Years

Belton, TX

587,479

2,228,889

587,479

2,228,889

2,816,368

64,936

2020

40 Years

Comanche, TX

93,935

1,213,190

93,935

1,213,190

1,307,125

60,660

2020

40 Years

Conroe, TX

1,227,703

4,880

1,232,583

1,232,583

2020

Converse, TX

1,425,000

471,349

1,425,000

471,349

1,896,349

16,523

2020

40 Years

F-67

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Converse, TX

200,802

1,642,854

8,674

200,802

1,651,528

1,852,330

44,508

2020

40 Years

Cuero, TX

361,553

2,937,261

361,553

2,937,261

3,298,814

91,734

2020

40 Years

Dayton, TX

167,367

1,222,272

9,162

167,367

1,231,434

1,398,801

30,729

2020

40 Years

Devine, TX

307,379

1,194,057

307,379

1,194,057

1,501,436

37,314

2020

40 Years

El Paso, TX

5,085,368

9,188,052

17,206

5,085,368

9,205,258

14,290,626

382,800

2020

40 Years

Euless, TX

802,881

1,599,698

802,881

1,599,698

2,402,579

59,989

2020

40 Years

Gonzales, TX

382,828

2,667,952

382,828

2,667,952

3,050,780

83,313

2020

40 Years

Harker Heights, TX

659,665

863,417

659,665

863,417

1,523,082

26,982

2020

40 Years

Harker Heights, TX

1,564,673

806,551

12,204

1,564,673

818,755

2,383,428

20,384

2020

40 Years

Harlingen, TX

231,002

2,423,937

196,346

231,002

2,620,283

2,851,285

79,078

2020

40 Years

Houston, TX

5,229,809

6,223,821

22,179

5,229,809

6,246,000

11,475,809

212,020

2020

40 Years

Houston, TX

812,409

2,365,951

812,409

2,365,951

3,178,360

73,872

2020

40 Years

Houston, TX

835,464

5,596

17,094

858,154

858,154

2020

Humble, TX

595,712

2,044,118

595,712

2,044,118

2,639,830

80,813

2020

40 Years

La Feria, TX

44,473

1,170,246

6,975

44,473

1,177,221

1,221,694

34,263

2020

40 Years

Lake Jackson, TX

898,275

1,791,093

7,992

898,275

1,799,085

2,697,360

44,927

2020

40 Years

Lewisville, TX

1,033,074

1,746,113

1,033,074

1,746,113

2,779,187

65,480

2020

40 Years

Lubbock, TX

332,773

933,072

4,891

332,773

937,963

1,270,736

23,419

2020

40 Years

Lubbock, TX

1,884,836

5,897,417

38,387

1,884,836

5,935,804

7,820,640

148,108

2020

40 Years

Mansfield, TX

1,116,200

1,554,255

7,992

1,116,200

1,562,247

2,678,447

39,006

2020

40 Years

Mckinney, TX

2,304,155

1,862,729

7,993

2,304,155

1,870,722

4,174,877

46,718

2020

40 Years

Rhome, TX

477,504

2,267,040

21,819

477,504

2,288,859

2,766,363

57,061

2020

40 Years

Saginaw, TX

318,799

734,538

318,799

734,538

1,053,337

22,901

2020

40 Years

San Antonio, TX

947,884

884,952

7,993

947,884

892,945

1,840,829

22,274

2020

40 Years

Terrell, TX

1,065,186

3,244,273

1,065,186

3,244,273

4,309,459

162,215

2020

40 Years

Tomball, TX

789,415

1,258,695

7,992

789,415

1,266,687

2,056,102

31,617

2020

40 Years

Weslaco, TX

921,078

2,179,132

(581)

921,078

2,178,551

3,099,629

55,153

2020

40 Years

Wylie, TX

1,386,391

1,793,944

7,993

1,386,391

1,801,937

3,188,328

44,998

2020

40 Years

Chester, VA

389,357

37,083

426,440

426,440

2020

Galax, VA

160,074

1,185,312

14,576

160,074

1,199,888

1,359,962

32,359

2020

40 Years

Henrico, VA

439,174

1,681,279

36,356

439,174

1,717,635

2,156,809

43,065

2020

40 Years

Lynchburg, VA

241,396

890,833

12,096

241,396

902,929

1,144,325

22,498

2020

40 Years

Burlington, WI

1,121,515

3,220,272

7,993

1,121,515

3,228,265

4,349,780

80,657

2020

40 Years

Germantown, WI

617,945

1,199,846

7,993

617,945

1,207,839

1,825,784

30,146

2020

40 Years

Minocqua, WI

226,898

2,866,258

680

226,898

2,866,938

3,093,836

83,482

2020

40 Years

Mt. Pleasant, WI

1,705,035

14,386,315

1,705,035

14,386,315

16,091,350

449,427

2020

40 Years

Portage, WI

800,764

3,052,566

800,764

3,052,566

3,853,330

101,715

2020

40 Years

F-68

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Vienna, WV

141,299

1,283,342

141,299

1,283,342

1,424,641

64,168

2020

40 Years

Cheyenne, WY

884,988

2,104,537

7,993

884,988

2,112,530

2,997,518

52,763

2020

40 Years

Gadsden, AL

1,516,549

1,516,549

1,516,549

2021

Jasper, AL

733,824

5,508,628

733,824

5,508,628

6,242,452

34,359

2021

40 Years

Pelham, AL

919,330

2,327,831

919,330

2,327,831

3,247,161

53,346

2021

40 Years

Theodore, AL

121,550

1,211,283

121,550

1,211,283

1,332,833

2021

40 Years

Bentonville, AR

2,278,930

1,199,562

2,278,930

1,199,562

3,478,492

22,477

2021

40 Years

Jonesboro, AR

345,738

1,279,134

345,738

1,279,134

1,624,872

2021

40 Years

Little Rock, AR

2,050,887

1,527,796

2,050,887

1,527,796

3,578,683

18,958

2021

40 Years

Springdale, AR

1,331,671

1,696,714

1,331,671

1,696,714

3,028,385

14,123

2021

40 Years

Avondale, AZ

399,574

2,237,087

399,574

2,237,087

2,636,661

2021

40 Years

Winslow, AZ

375,135

999,436

375,135

999,436

1,374,571

12,395

2021

40 Years

Colton, CA

2,917,244

6,274,140

2,917,244

6,274,140

9,191,384

143,746

2021

40 Years

Colton, CA

904,398

904,398

904,398

2021

Elk Grove, CA

1,692,244

3,387,901

1,692,244

3,387,901

5,080,145

77,639

2021

40 Years

Pleasant Hill, CA

17,618,136

17,618,136

17,618,136

2021

Sacramento, CA

2,962,751

14,367,331

2,962,751

14,367,331

17,330,082

29,858

2021

40 Years

Van Nuys, CA

10,821,454

6,196,785

10,821,454

6,196,785

17,018,239

2021

40 Years

Silverthorne, CO

4,368,862

6,781,801

4,368,862

6,781,801

11,150,663

2021

40 Years

Colchester, CT

503,706

5,280,982

503,706

5,280,982

5,784,688

88,016

2021

40 Years

Orange, CT

2,155,182

2,723,325

2,155,182

2,723,325

4,878,507

28,051

2021

40 Years

Stratford, CT

993,610

6,285,488

993,610

6,285,488

7,279,098

39,233

2021

40 Years

Wallingford, CT

4,598,776

19,587,021

4,598,776

19,587,021

24,185,797

203,887

2021

40 Years

Wallingford, CT

13,491,385

4,628,672

13,491,385

4,628,672

18,120,057

11,403

2021

40 Years

Bridgeville, DE

2,496,605

2,496,605

2,496,605

2021

Daytona Beach, FL

3,248,529

3,248,529

3,248,529

2021

Daytona Beach, FL

2,949,873

7,123,762

2,949,873

7,123,762

10,073,635

29,533

2021

40 Years

Fort Walton Beach, FL

691,891

1,034,268

691,891

1,034,268

1,726,159

17,154

2021

40 Years

Hialeah, FL

4,971,380

4,971,380

4,971,380

2021

Hollywood, FL

804,622

3,907,841

804,622

3,907,841

4,712,463

57,000

2021

40 Years

Homestead, FL

545,581

1,461,745

545,581

1,461,745

2,007,326

36,329

2021

40 Years

Jacksonville, FL

1,072,558

756,285

1,072,558

756,285

1,828,843

14,058

2021

40 Years

Merritt Island, FL

422,211

2,372,216

422,211

2,372,216

2,794,427

14,767

2021

40 Years

Naples, FL

1,453,431

1,453,431

1,453,431

2021

Naples, FL

1,190,857

1,190,857

1,190,857

2021

Naples, FL

8,035,701

10,505,521

8,035,701

10,505,521

18,541,222

65,181

2021

40 Years

Orlando, FL

1,039,722

1,039,722

1,039,722

2021

F-69

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Pembroke Pines, FL

2,285,774

2,285,774

2,285,774

2021

Sarasota, FL

1,178,923

922,936

1,178,923

922,936

2,101,859

7,675

2021

40 Years

Tampa, FL

439,430

439,430

439,430

2021

Vero Beach, FL

1,046,780

1,046,780

1,046,780

2021

Yulee, FL

2,262,371

7,246,236

2,262,371

7,246,236

9,508,607

90,005

2021

40 Years

Athens, GA

68,943

6,048,020

68,943

6,048,020

6,116,963

87,778

2021

40 Years

Buford, GA

933,105

1,460,129

933,105

1,460,129

2,393,234

17,631

2021

40 Years

Conyers, GA

347,441

2,622,249

347,441

2,622,249

2,969,690

2021

40 Years

Dublin, GA

217,337

605,199

217,337

605,199

822,536

3,783

2021

40 Years

Gray, GA

148,268

1,074,924

148,268

1,074,924

1,223,192

17,888

2021

40 Years

Jefferson, GA

527,074

931,010

527,074

931,010

1,458,084

3,783

2021

40 Years

Jonesboro, GA

344,270

1,576,064

344,270

1,576,064

1,920,334

3,232

2021

40 Years

Kingsland, GA

185,047

2,599,400

185,047

2,599,400

2,784,447

21,588

2021

40 Years

Marietta, GA

1,177,865

1,833,593

1,177,865

1,833,593

3,011,458

42,020

2021

40 Years

Rome, GA

1,380,532

1,380,532

1,380,532

2021

Stockbridge, GA

278,080

1,479,158

278,080

1,479,158

1,757,238

2021

40 Years

Thomson, GA

257,455

1,291,280

257,455

1,291,280

1,548,735

2021

40 Years

Centerville, IA

182,203

2,115,086

182,203

2,115,086

2,297,289

30,671

2021

40 Years

Des Moines, IA

902,749

902,749

902,749

2021

Mason City, IA

869,564

3,270,795

869,564

3,270,795

4,140,359

45,487

2021

40 Years

Nampa, ID

229,425

1,558,507

229,425

1,558,507

1,787,932

16,214

2021

40 Years

Bloomingdale, IL

5,377,240

9,661,090

5,377,240

9,661,090

15,038,330

180,902

2021

40 Years

Bloomington, IL

239,089

1,826,238

239,089

1,826,238

2,065,327

19,003

2021

40 Years

Bourbonnais, IL

1,593,823

1,525,782

1,593,823

1,525,782

3,119,605

3,143

2021

40 Years

Carbondale, IL

496,342

1,025,021

496,342

1,025,021

1,521,363

8,526

2021

40 Years

Champaign, IL

3,112,523

4,504,390

3,112,523

4,504,390

7,616,913

27,901

2021

40 Years

Charleston, IL

2,650,341

2,650,341

2,650,341

2021

Chicago, IL

698,854

1,412,178

698,854

1,412,178

2,111,032

32,224

2021

40 Years

Coal City, IL

453,744

1,080,622

453,744

1,080,622

1,534,366

20,089

2021

40 Years

East Dundee, IL

1,567,806

1,567,806

1,567,806

2021

East Peoria, IL

2,404,155

2,404,155

2,404,155

2021

Hampshire, IL

3,866,229

3,866,229

3,866,229

2021

Huntley, IL

2,089,500

2,089,500

2,089,500

2021

Joliet, IL

536,897

3,011,274

536,897

3,011,274

3,548,171

62,365

2021

40 Years

Lakemoor, IL

987,967

987,967

987,967

2021

Lombard, IL

5,480,904

5,480,904

5,480,904

2021

Mount Prospect, IL

885,540

885,540

885,540

2021

F-70

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Naperville, IL

3,973,788

12,799,047

3,973,788

12,799,047

16,772,835

79,617

2021

40 Years

Rockford, IL

563,262

1,471,698

563,262

1,471,698

2,034,960

27,362

2021

40 Years

Romeoville, IL

4,835,683

4,835,683

4,835,683

2021

Schiller Park, IL

2,585,445

2,585,445

2,585,445

2021

Sheffield, IL

217,455

998,824

217,455

998,824

1,216,279

2,060

2021

40 Years

South Chicago Heights, IL

205,849

1,452,724

205,849

1,452,724

1,658,573

15,113

2021

40 Years

South Elgin, IL

648,899

3,916,025

648,899

3,916,025

4,564,924

8,077

2021

40 Years

South Elgin, IL

985,408

2,746,744

985,408

2,746,744

3,732,152

17,074

2021

40 Years

Streator, IL

203,924

1,040,180

203,924

1,040,180

1,244,104

2,146

2021

40 Years

Westchester, IL

296,452

1,252,538

296,452

1,252,538

1,548,990

10,438

2021

40 Years

Westmont, IL

2,284,013

8,912,960

2,284,013

8,912,960

11,196,973

185,326

2021

40 Years

Bedford, IN

239,065

956,272

239,065

956,272

1,195,337

1,972

2021

40 Years

Brownburg, IN

329,868

3,033,286

329,868

3,033,286

3,363,154

69,513

2021

40 Years

Fort Wayne, IN

329,123

1,521,763

329,123

1,521,763

1,850,886

3,144

2021

40 Years

Granger, IN

406,211

1,459,388

406,211

1,459,388

1,865,599

24,323

2021

40 Years

Indianapolis, IN

362,907

2,710,927

362,907

2,710,927

3,073,834

28,219

2021

40 Years

Atchison, KS

298,258

1,193,243

298,258

1,193,243

1,491,501

2,480

2021

40 Years

Kiowa, KS

20,642

1,469,150

20,642

1,469,150

1,489,792

6,066

2021

40 Years

Liberal, KS

418,695

6,919,579

418,695

6,919,579

7,338,274

72,059

2021

40 Years

Manhattan, KS

1,419,099

1,419,099

1,419,099

2021

Merriam, KS

1,688,893

6,844,926

1,688,893

6,844,926

8,533,819

128,195

2021

40 Years

Louisville, KY

1,716,439

10,797,925

1,716,439

10,797,925

12,514,364

2021

40 Years

Bossier City, LA

695,883

1,918,101

695,883

1,918,101

2,613,984

39,679

2021

40 Years

Chalmette, LA

1,041,287

1,521,346

1,041,287

1,521,346

2,562,633

9,393

2021

40 Years

Clinton, LA

164,982

1,057,099

164,982

1,057,099

1,222,081

24,225

2021

40 Years

Independence, LA

273,598

1,022,901

273,598

1,022,901

1,296,499

2021

40 Years

Lake Charles, LA

976,288

2,744,759

976,288

2,744,759

3,721,047

57,017

2021

40 Years

Pineville, LA

136,853

1,307,116

136,853

1,307,116

1,443,969

29,879

2021

40 Years

Walker, LA

90,393

1,383,507

90,393

1,383,507

1,473,900

17,214

2021

40 Years

Abingdon, MA

8,465,529

8,465,529

8,465,529

2021

Fall River, MA

721,506

5,380,883

721,506

5,380,883

6,102,389

89,435

2021

40 Years

Pittsfield, MA

1,514,648

16,947,554

1,514,648

16,947,554

18,462,202

141,214

2021

40 Years

Springfield, MA

4,451,982

4,451,982

4,451,982

2021

Baltimore, MD

1,393,361

2,819,672

1,393,361

2,819,672

4,213,033

5,864

2021

40 Years

Baltimore (Gwynn Oak), MD

1,225,061

1,225,061

1,225,061

2021

Bel Air, MD

499,309

499,309

499,309

2021

Dundalk, MD

746,235

1,564,948

746,235

1,564,948

2,311,183

38,909

2021

40 Years

F-71

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Battle Creek, MI

101,794

1,083,512

101,794

1,083,512

1,185,306

13,315

2021

40 Years

Battle Creek, MI

271,928

1,143,856

271,928

1,143,856

1,415,784

2,362

2021

40 Years

Grand Rapids, MI

925,205

5,848,684

925,205

5,848,684

6,773,889

84,791

2021

40 Years

Lansing, MI

7,204,001

7,204,001

7,204,001

2021

Lansing, MI

4,285,184

4,285,184

4,285,184

2021

Okemos, MI

4,607,749

5,825,877

4,607,749

5,825,877

10,433,626

84,827

2021

40 Years

Saginaw, MI

285,004

896,731

285,004

896,731

1,181,735

2021

40 Years

Saginaw, MI

1,859,019

1,859,019

1,859,019

2021

Saginaw, MI

855,000

1,267,920

855,000

1,267,920

2,122,920

2021

40 Years

Sterling Heights, MI

484,463

2,991,098

484,463

2,991,098

3,475,561

51,546

2021

40 Years

Taylor, MI

403,176

1,862,968

403,176

1,862,968

2,266,144

23,190

2021

40 Years

Brooklyn Park, MN

2,386,951

2,002,599

2,386,951

2,002,599

4,389,550

41,721

2021

40 Years

Burnsville, MN

588,062

1,977,978

588,062

1,977,978

2,566,040

2021

40 Years

Fridley, MN

4,775,640

4,775,640

4,775,640

2021

Lakeville, MN

1,566,580

2,730,817

1,566,580

2,730,817

4,297,397

56,811

2021

40 Years

Oakdale, MN

4,800,338

12,814,387

4,800,338

12,814,387

17,614,725

240,018

2021

40 Years

Savage, MN

1,470,298

1,283,392

1,470,298

1,283,392

2,753,690

26,656

2021

40 Years

California, MO

62,996

1,479,867

62,996

1,479,867

1,542,863

24,596

2021

40 Years

Marshfield, MO

795,252

4,724,969

795,252

4,724,969

5,520,221

78,534

2021

40 Years

Pevely, MO

724,554

1,130,540

724,554

1,130,540

1,855,094

23,505

2021

40 Years

Sugar Creek, MO

488,219

1,038,408

488,219

1,038,408

1,526,627

17,238

2021

40 Years

Byhalia, MS

150,179

1,417,039

150,179

1,417,039

1,567,218

2,912

2021

40 Years

Byram, MS

5,279,846

10,832,879

5,279,846

10,832,879

16,112,725

157,846

2021

40 Years

Vicksburg, MS

705,202

825,075

705,202

825,075

1,530,277

5,061

2021

40 Years

Sidney, MT

190,517

3,935,720

190,517

3,935,720

4,126,237

24,529

2021

40 Years

Cary, NC

1,972,755

1,972,755

1,972,755

2021

Cary, NC

810,927

810,927

810,927

2021

Charlotte, NC

1,344,585

1,344,585

1,344,585

2021

Denver, NC

199,637

1,323,072

199,637

1,323,072

1,522,709

19,271

2021

40 Years

Denver, NC

188,155

702,254

188,155

702,254

890,409

10,217

2021

40 Years

Garner, NC

545,483

2,714,833

545,483

2,714,833

3,260,316

62,215

2021

40 Years

Gastonia, NC

261,641

1,033,980

261,641

1,033,980

1,295,621

25,850

2021

40 Years

Hickory, NC

417,127

1,548,699

417,127

1,548,699

1,965,826

6,402

2021

40 Years

High Point, NC

367,561

1,427,032

367,561

1,427,032

1,794,593

35,676

2021

40 Years

Holly Springs, NC

1,298,760

1,298,760

1,298,760

2021

Holly Springs, NC

996,275

996,275

996,275

2021

Holly Springs, NC

1,200,518

1,200,518

1,200,518

2021

F-72

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Holly Springs, NC

1,024,340

1,024,340

1,024,340

2021

Holly Springs, NC

1,405,020

1,405,020

1,405,020

2021

Holly Springs, NC

1,611,871

1,611,871

1,611,871

2021

Mt. Airy, NC

188,167

1,318,013

188,167

1,318,013

1,506,180

2,691

2021

40 Years

Statesville, NC

1,073,746

6,186,151

1,073,746

6,186,151

7,259,897

154,654

2021

40 Years

Statesville, NC

742,521

1,547,361

742,521

1,547,361

2,289,882

9,671

2021

40 Years

Wilmington, NC

1,387,879

1,387,879

1,387,879

2021

Bottineau, ND

680,781

2,851,784

680,781

2,851,784

3,532,565

5,934

2021

40 Years

Blair, NE

65,927

1,171,950

65,927

1,171,950

1,237,877

9,664

2021

40 Years

Crete, NE

283,765

4,583,875

283,765

4,583,875

4,867,640

19,004

2021

40 Years

Valentine, NE

30,526

1,276,252

30,526

1,276,252

1,306,778

2,628

2021

40 Years

Wayne, NE

24,660

1,211,103

24,660

1,211,103

1,235,763

9,990

2021

40 Years

Hooksett, NH

2,474,821

2,474,821

2,474,821

2021

Hooksett, NH

3,660,471

3,660,471

3,660,471

2021

Bellmawr, NJ

3,517,630

3,517,630

3,517,630

2021

Berlin, NJ

4,487,319

4,487,319

4,487,319

2021

East Hanover, NJ

2,424,060

2,424,060

2,424,060

2021

East Hanover, NJ

6,185,969

6,748,014

6,185,969

6,748,014

12,933,983

140,061

2021

40 Years

Eatontown, NJ

4,073,886

4,073,886

4,073,886

2021

Elizabeth, NJ

1,389,441

1,389,441

1,389,441

2021

Hammonton, NJ

4,231,954

4,231,954

4,231,954

2021

Lawrenceville, NJ

19,909

19,909

19,909

2021

Lawrenceville, NJ

12,118

12,118

12,118

2021

Lawrenceville, NJ

1,111,855

1,111,855

1,111,855

22,969

2021

40 Years

Lawrenceville, NJ

19,909

19,909

19,909

2021

Lawrenceville, NJ

19,909

19,909

19,909

2021

North Plainfield, NJ

1,189,310

1,655,062

1,189,310

1,655,062

2,844,372

30,944

2021

40 Years

Parsippany, NJ

4,683,017

4,683,017

4,683,017

2021

Parsippany, NJ

896,104

1,977,903

896,104

1,977,903

2,874,007

24,724

2021

40 Years

Parsippany, NJ

20,901,499

20,901,499

20,901,499

2021

Pennsauken, NJ

3,731,685

3,731,685

3,731,685

2021

Randolph, NJ

3,550,608

3,550,608

3,550,608

2021

Upper Deerfield, NJ

194,607

1,729,659

194,607

1,729,659

1,924,266

14,396

2021

40 Years

Whippany, NJ

3,557,958

3,557,958

3,557,958

2021

Woodbine, NJ

354,591

1,545,735

354,591

1,545,735

1,900,326

38,429

2021

40 Years

Woodbridge, NJ

737,212

2,644,765

737,212

2,644,765

3,381,977

49,460

2021

40 Years

Albuquerque, NM

2,812,052

2,812,052

2,812,052

2021

F-73

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Albuquerque, NM

433,221

1,163,623

433,221

1,163,623

1,596,844

14,410

2021

40 Years

Albuquerque, NM

698,506

3,183,377

698,506

3,183,377

3,881,883

6,631

2021

40 Years

Espanola, NM

5,630,895

5,630,895

5,630,895

2021

Kingston, NY

515,184

3,795,511

515,184

3,795,511

4,310,695

23,472

2021

40 Years

New Rochelle, NY

14,519,339

21,244,741

14,519,339

21,244,741

35,764,080

309,914

2021

40 Years

Niagara Falls, NY

353,653

6,062,345

353,653

6,062,345

6,415,998

113,483

2021

40 Years

North Babylon, NY

2,090,724

2,090,724

2,090,724

2021

Plattsburgh, NY

161,089

2,240,530

161,089

2,240,530

2,401,619

14,003

2021

40 Years

Rochester, NY

1,097,316

7,362,973

1,097,316

7,362,973

8,460,289

137,698

2021

40 Years

Scarsdale, NY

886,492

1,108,577

886,492

1,108,577

1,995,069

6,848

2021

40 Years

Wappingers Falls, NY

595,962

3,792,944

595,962

3,792,944

4,388,906

63,216

2021

40 Years

Bedford, OH

222,469

1,643,801

222,469

1,643,801

1,866,270

13,519

2021

40 Years

Canton, OH

289,416

1,625,007

289,416

1,625,007

1,914,423

3,345

2021

40 Years

Chesepeake, OH

314,084

2,102,730

314,084

2,102,730

2,416,814

48,085

2021

40 Years

Columbus, OH

1,009,008

1,009,008

1,009,008

2021

Dayton, OH

168,736

1,738,910

168,736

1,738,910

1,907,646

10,752

2021

40 Years

Fairview Park, OH

1,445,514

5,043,700

1,445,514

5,043,700

6,489,214

10,477

2021

40 Years

Gallipolis, OH

818,390

2,159,967

818,390

2,159,967

2,978,357

49,397

2021

40 Years

Geneva, OH

193,381

1,317,460

193,381

1,317,460

1,510,841

10,853

2021

40 Years

Groveport, OH

386,687

1,166,510

386,687

1,166,510

1,553,197

19,297

2021

40 Years

Hillard, OH

1,030,560

1,030,560

1,030,560

2021

Hilliard, OH

1,152,478

1,152,478

1,152,478

2021

Hilliard, OH

1,041,080

1,041,080

1,041,080

2021

Hilliard, OH

707,910

707,910

707,910

2021

Hilliard, OH

1,428,428

1,428,428

1,428,428

2021

Mentor, OH

484,808

2,222,441

484,808

2,222,441

2,707,249

2021

40 Years

Milford Center, OH

193,215

924,186

193,215

924,186

1,117,401

2021

40 Years

NW Lexington, OH

670,811

2,171,553

670,811

2,171,553

2,842,364

49,662

2021

40 Years

Octa, OH

3,303,590

3,303,590

3,303,590

2021

Pataskala, OH

626,985

1,071,479

626,985

1,071,479

1,698,464

8,837

2021

40 Years

Reynoldsburg, OH

1,986,486

1,986,486

1,986,486

2021

Rocky River, OH

4,045,087

4,045,087

4,045,087

2021

Rocky River, OH

2,151,951

2,151,951

2,151,951

2021

Rocky River, OH

1,372,577

1,372,577

1,372,577

2021

Sidney, OH

45,594

1,562,442

45,594

1,562,442

1,608,036

12,929

2021

40 Years

Streetsboro, OH

199,026

975,438

199,026

975,438

1,174,464

2021

40 Years

Toledo, OH

4,839,262

6,842,158

4,839,262

6,842,158

11,681,420

99,648

2021

40 Years

F-74

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Urbana, OH

4,690,277

6,963,348

4,690,277

6,963,348

11,653,625

101,415

2021

40 Years

Winchester, OH

259,544

1,236,805

259,544

1,236,805

1,496,349

2,536

2021

40 Years

Atoka, OK

335,303

3,504,781

335,303

3,504,781

3,840,084

21,835

2021

40 Years

Stillwater, OK

501,114

3,252,177

501,114

3,252,177

3,753,291

20,242

2021

40 Years

Tillamook, OR

1,491,707

5,261,299

1,491,707

5,261,299

6,753,006

65,696

2021

40 Years

Cranberry, PA

1,677,064

1,677,064

1,677,064

2021

Dunmore, PA

2,386,896

2,386,896

2,386,896

2021

Erie, PA

1,545,236

20,023,873

1,545,236

20,023,873

21,569,109

83,199

2021

40 Years

Greenville, PA

1,117,096

10,381,185

1,117,096

10,381,185

11,498,281

2021

40 Years

Harrisburg, PA

1,276,788

1,276,788

1,276,788

2021

Philadelphia, PA

547,237

1,503,662

547,237

1,503,662

2,050,899

28,116

2021

40 Years

Quakertown, PA

1,763,324

1,763,324

1,763,324

2021

West Mifflin, PA

1,275,400

1,275,400

1,275,400

2021

Anderson, SC

1,327,346

5,564,166

1,327,346

5,564,166

6,891,512

34,510

2021

40 Years

Bluffton, SC

473,900

3,740,291

473,900

3,740,291

4,214,191

23,267

2021

40 Years

Columbia, SC

307,888

2,411,359

307,888

2,411,359

2,719,247

15,000

2021

40 Years

Fort Mill, SC

1,675,276

5,987,483

1,675,276

5,987,483

7,662,759

24,948

2021

40 Years

Lancaster, SC

187,595

991,659

187,595

991,659

1,179,254

6,132

2021

40 Years

Olanta, SC

81,182

820,443

81,182

820,443

901,625

5,061

2021

40 Years

Sumter, SC

305,903

571,538

305,903

571,538

877,441

3,506

2021

40 Years

Pierre, SD

181,579

2,071,921

181,579

2,071,921

2,253,500

25,818

2021

40 Years

Watertown, SD

561,618

1,596,716

561,618

1,596,716

2,158,334

2021

40 Years

Antioch, TN

935,614

935,614

935,614

2021

Clarksville, TN

238,147

1,331,623

238,147

1,331,623

1,569,770

30,516

2021

40 Years

Crossville, TN

691,538

2,633,769

691,538

2,633,769

3,325,307

2021

40 Years

Hendersonville, TN

1,724,979

1,724,979

1,724,979

2021

Hermitage, TN

722,734

722,734

722,734

2021

Jackson, TN

1,730,483

3,100,154

1,730,483

3,100,154

4,830,637

19,188

2021

40 Years

Knoxville, TN

1,762,166

3,753,566

1,762,166

3,753,566

5,515,732

46,896

2021

40 Years

Lakesite, TN

834,052

999,412

834,052

999,412

1,833,464

18,666

2021

40 Years

Madison, TN

797,234

797,234

797,234

2021

Murfreesboro, TN

1,191,176

1,191,176

1,191,176

2021

Nashville, TN

669,035

669,035

669,035

2021

Smyrna, TN

2,059,771

2,059,771

2,059,771

2021

Amarillo, TX

1,479,874

3,920,015

1,479,874

3,920,015

5,399,889

16,278

2021

40 Years

Baytown, TX

5,245,019

13,452,319

5,245,019

13,452,319

18,697,338

196,046

2021

40 Years

Burleson, TX

1,899,691

1,955,961

1,899,691

1,955,961

3,855,652

32,572

2021

40 Years

F-75

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

    

COLUMN G

    

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Cypress, TX

621,351

621,351

621,351

2021

El Paso, TX

1,290,305

4,701,339

1,290,305

4,701,339

5,991,644

97,758

2021

40 Years

El Paso, TX

4,640,263

4,640,263

4,640,263

2021

Kerrville, TX

629,024

2,862,560

629,024

2,862,560

3,491,584

35,782

2021

40 Years

Midland, TX

3,506,179

1,938,388

3,506,179

1,938,388

5,444,567

24,206

2021

40 Years

Monahans, TX

783,242

2,930,495

783,242

2,930,495

3,713,737

2021

40 Years

Odessa, TX

2,378,043

1,905,793

2,378,043

1,905,793

4,283,836

23,798

2021

40 Years

Odessa, TX

2,256,629

1,689,906

2,256,629

1,689,906

3,946,535

21,100

2021

40 Years

Odessa, TX

2,365,571

1,566,637

2,365,571

1,566,637

3,932,208

19,559

2021

40 Years

Richmond, TX

478,530

2,624,852

478,530

2,624,852

3,103,382

27,322

2021

40 Years

Shenandoah, TX

2,293,709

2,293,709

2,293,709

2021

Spring, TX

1,886,748

1,930,279

1,886,748

1,930,279

3,817,027

16,086

2021

40 Years

Texarkana, TX

1,312,692

2,124,343

1,312,692

2,124,343

3,437,035

39,060

2021

40 Years

White Oak, TX

120,160

1,224,831

120,160

1,224,831

1,344,991

15,059

2021

40 Years

Orem, UT

764,062

2,054,014

764,062

2,054,014

2,818,076

47,071

2021

40 Years

Charlottesville, VA

1,364,219

1,364,219

1,364,219

2021

Chester, VA

646,751

4,938,519

646,751

4,938,519

5,585,270

92,515

2021

40 Years

Lynchburg, VA

2,102,839

6,892,262

2,102,839

6,892,262

8,995,101

129,194

2021

40 Years

Manassas, VA

3,659,187

3,746,418

3,659,187

3,746,418

7,405,605

62,440

2021

40 Years

Newport News, VA

287,461

2,086,888

287,461

2,086,888

2,374,349

2021

40 Years

Wytheville, VA

450,045

450,045

450,045

2021

Lakewood, WA

788,705

2,937,767

788,705

2,937,767

3,726,472

36,246

2021

40 Years

Port Angeles, WA

476,652

5,940,135

476,652

5,940,135

6,416,787

67,120

2021

40 Years

Puyallup, WA

1,626,445

2,757,598

1,626,445

2,757,598

4,384,043

34,345

2021

40 Years

Roy, WA

327,278

1,862,388

327,278

1,862,388

2,189,666

23,229

2021

40 Years

Antigo, WI

150,406

907,287

150,406

907,287

1,057,693

3,680

2021

40 Years

Brown Deer, WI

413,053

2,893,299

413,053

2,893,299

3,306,352

2021

40 Years

Eau Claire, WI

2,897,122

6,600,361

2,897,122

6,600,361

9,497,483

122,900

2021

40 Years

Milwaukee, WI

63,728

1,834,352

63,728

1,834,352

1,898,080

19,051

2021

40 Years

Sheboygan, WI

373,040

3,470,250

373,040

3,470,250

3,843,290

14,395

2021

40 Years

Athens, WV

416,517

1,472,494

416,517

1,472,494

1,889,011

33,642

2021

40 Years

Beckley, WV

663,138

2,263,526

663,138

2,263,526

2,926,664

51,537

2021

40 Years

Buckhannon, WV

469,129

1,853,528

469,129

1,853,528

2,322,657

42,374

2021

40 Years

Elkins, WV

397,225

1,832,516

397,225

1,832,516

2,229,741

41,893

2021

40 Years

Huntington, WV

447,207

1,851,268

447,207

1,851,268

2,298,475

42,139

2021

40 Years

Huntington, WV

572,162

1,386,007

572,162

1,386,007

1,958,169

30,647

2021

40 Years

Princeton, WV

778,229

2,357,830

778,229

2,357,830

3,136,059

53,931

2021

40 Years

F-76

Table of Contents

Agree Realty Corporation

Schedule III – Real Estate and Accumulated Depreciation

December 31, 2021

COLUMN A

    

COLUMN B

COLUMN C

COLUMN D

COLUMN E

COLUMN F

COLUMN G

COLUMN H

 

Life on

 

Which

Depreciation in

 

Latest

Costs

Gross Amount at Which Carried at

Income

Initial Cost

Capitalized

Close of Period

 

Statement is

Building and

Subsequent to

Building and

 

Accumulated

Date of

Computed

Description

    

Encumbrance

    

Land

    

Improvements

    

Acquisition

    

Land

    

Improvements

    

Total

    

Depreciation

    

Acquisition

    

(in years)

Princeton, WV

233,205

1,245,497

233,205

1,245,497

1,478,702

12,954

2021

40 Years

 

 

 

 

 

 

 

 

 

 

Subtotal

 

32,634,841

 

1,567,678,348

 

2,980,961,459

 

49,670,614

 

1,563,919,447

 

3,034,390,974

 

4,598,310,421

 

233,861,792

 

  

 

  

Property Under Development

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Various

 

 

 

7,147,614

 

 

 

7,147,614

 

7,147,614

 

 

 

Sub Total

 

 

 

7,147,614

 

 

 

7,147,614

 

7,147,614

 

 

  

 

  

Total

$

32,634,841

$

1,567,678,348

$

2,988,109,073

$

49,670,614

$

1,563,919,447

$

3,041,538,588

$

4,605,458,035

$

233,861,792

 

  

 

  

1. Reconciliation of Real Estate Properties

The following table reconciles the Real Estate Properties from January 1, 2019 to December 31, 2021.

    

2021

    

2020

    

2019

Balance at January 1

$

3,478,088,144

$

2,350,924,064

$

1,761,646,695

Construction and acquisition cost

 

1,172,183,773

 

1,175,354,194

 

644,483,047

Impairment charge

 

(2,905,125)

 

(4,136,998)

 

(1,609,000)

Disposition of real estate

 

(41,908,757)

 

(44,053,116)

 

(53,596,678)

Balance at December 31

$

4,605,458,035

$

3,478,088,144

$

2,350,924,064

2. Reconciliation of Accumulated Depreciation

The following table reconciles the Real Estate Properties from January 1, 2019 to December 31, 2021.

    

2021

    

2020

    

2019

Balance at January 1

$

172,698,378

$

128,581,697

$

100,311,974

Current year depreciation expense

 

66,032,885

 

49,119,345

 

34,398,782

Disposition of real estate

 

(4,869,471)

 

(5,002,664)

 

(6,129,059)

Balance at December 31

$

233,861,792

$

172,698,378

$

128,581,697

3. Tax Basis of Building and Improvements

The aggregate cost of Building and Improvements for federal income tax purposes is approximately $15,420,000 more than the cost basis used for financial statement purposes.

F-77

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AGREE REALTY CORPORATION

1

By:

/s/ Joel N. Agree

    

Date: February 22, 2022

Joel N. Agree

President and Chief Executive Officer

KNOW ALL PERSONS BY THESE PRESENTS, that we, the undersigned officers and directors of Agree Realty Corporation, hereby severally constitute Richard Agree, Joel N. Agree and Peter Coughenour, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the Annual Report on Form 10-K filed herewith and any and all amendments to said Annual Report on Form 10-K, and generally to do all such things in our names and in our capacities as officers and directors to enable Agree Realty Corporation to comply with the provisions of the Securities Exchange Act of 1934, as amended and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Annual Report on Form 10-K and any and all amendments thereto.

PURSUANT to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:

/s/ Richard Agree

    

Date: February 22, 2022

Richard Agree

Executive Chairman of the Board of Directors

By:

/s/ Joel N. Agree

Date: February 22, 2022

Joel N. Agree

President, Chief Executive Officer and Director

(Principal Executive Officer)

 

By:

/s/ Peter Coughenour

Date: February 22, 2022

Peter Coughenour

Chief Financial Officer and Secretary

(Principal Financial Officer)

By:

/s/ David Wolff

Date: February 22, 2022

David Wolff

Chief Accounting Officer

(Principal Accounting Officer)

By:

/s/ Karen Dearing

Date: February 22, 2022

Karen Dearing

Director

By:

/s/ Merrie S. Frankel

Date: February 22, 2022

Merrie S. Frankel

Director

 

By:

/s/ Mike Hollman

Date: February 22, 2022

Mike Hollman

Director

 

By:

/s/ Michael Judlowe

Date: February 22, 2022

Michael Judlowe

Director

Table of Contents

By:

/s/ Greg Lehmkuhl

Date: February 22, 2022

Greg Lehmkuhl

Director

By:

/s/ John Rakolta

Date: February 22, 2022

John Rakolta

Director

 

By:

/s/ Jerome Rossi

Date: February 22, 2022

Jerome Rossi

Director