Real estate investment trust (REIT)
Agree Realty Corp.
) announced the pricing of an equity offering of 1.65 million
shares, which is projected to generate $49.2 million as gross
proceeds. The company also granted the underwriters an option to
buy up to an additional 0.2 million shares. The offering is
anticipated to complete on Nov 27, 2013.
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Agree Realty expects to utilize the net proceeds from the
offering for debt payment, investment in developmental
activities, asset acquisitions, and meeting other corporate
needs. In particular, the company plans to lower its outstanding
debt under its current unsecured revolving credit worth $85
) acted as the sole underwriter for the offering.
We believe that though the offering will result in share dilution
for the company, the payment of debt is encouraging as it will
reduce interest expenses. Also, strategic investments will help
Agree Realty enhance its portfolio quality.
Notably, in October, Agree Realty reported its third-quarter 2013
results with adjusted FFO (fund from operations) per share of 55
cents increasing 1.8% year over year. Results reflected top-line
growth along with portfolio enhancing efforts. However,
higher operating expenses were the headwind for the quarter.
During the third quarter, Agree Realty acquired seven retail
properties and completed its third Wawa (Casselberry, Fla.)
development activity. Also, it continued with the redevelopment
work of a building in Ann Arbor, Michigan, which is preleased to
). As of Sep 30, 2013, total assets stood at $443.6 million while
cash and cash equivalents stood at $5.8 million.
Agree Realty currently has a Zacks Rank #3 (Hold). Among other
REIT-equity trust retail stocks ,
American Assets Trust, Inc
) is a better ranked stock carrying a Zacks Rank #2 (Buy).
Funds from operations, a widely accepted and reported measure
of REITs performance, are derived by adding depreciation,
amortization and other non-cash expenses to net income.