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Agree Realty Acquires New York Asset - Analyst Blog

Posted
9/12/2013 10:40:00 AM
By: Zacks.com
Referenced Stocks:ADC;AZO;MFRM;TSCO

In an effort to expand its portfolio Agree Realty Corporation ( ADC ), a retail real estate investment trust (REIT), made a purchase of an LA Fitness in Rochester, N.Y. for approximately $10.3 million.

Privately owned American health club chain - LA Fitness -has a notable presence in the U.S. and Canada. The above-mentioned acquisition is of a recently opened 45,000 square foot LA Fitness situated on East Ridge Road in Rochester.

 With around 15 years left on the base term of the lease, the property offers scope for Agree Realty to enjoy steady revenue going forward. This also reflects the addition of a second LA Fitness to its portfolio.

Agree Realty - that specializes in the acquisition and development of single tenant properties net leased to national and regional retail companies in the U.S. - at present owns a portfolio of 126 properties in 33 states, comprising roughly 3.6 million square feet of gross leasable space.

Of late, the company has been on an acquisition spree. Recently, the company shelled out $6 million to acquire 4 single tenant assets. Two of them are in Madisonville, Texas and Forest, Miss. and are leased to Tractor Supply Company ( TSCO ), which commands a large chain of retail stores.

Among the other two properties, one is occupied by Mattress Firm Holding Corp. ( MFRM ) in Baton Rouge, La. and the other by AutoZone, Inc. ( AZO ) in Sun Valley, Nev. Leased to well-known retailers for an average lease period of approximately 10 years, these properties offer scope for Agree Realty to enhance its top line.

Moreover, in June Agree Realty disclosed $22.4 million in acquisitions of 2 single-tenant properties - one occupied by Wal-Mart Stores and the other by AutoZone. The renovated Wal-Mart asset that operates as Sam's Club is based in Brooklyn, Ohio and spans 147,771 square feet. The second property is situated in South Kedzie Road in Chicago, Ill. and encompasses 7,840 square feet. To date, the Sam's Club buyout is the largest acquisition by Agree Realty at around $21 million.

Such opportunistic deals are expected to help Agree Realty strengthen its tenant base and its relationship with existing tenants and add to its earnings in the days ahead.

Agree Realty currently carries a Zacks Rank #3 (Hold).



AGREE RLTY CORP (ADC): Free Stock Analysis Report

AUTOZONE INC (AZO): Free Stock Analysis Report

MATTRESS FIRM (MFRM): Free Stock Analysis Report

TRACTOR SUPPLY (TSCO): Free Stock Analysis Report

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