Zacks_Analysts' Blog : Agree Realty Issues Public Offering - Analyst Blog

Agree Realty Corporation. (ADC) recently announced that it has issued a public offering of 1 million shares of its common stock. In a bid to cover over allotments, the company will also provide a 30-day option to the underwriters for purchasing an additional 150,000 shares.

The financial proceeds generated from the transaction will be utilized by the company to repay a portion of the outstanding debt under its $85 million credit facility, to fund development activity and accretive acquisitions, and for other general corporate purposes. 

This public offering will help the company to attain financial flexibility and seize investment opportunities and pursue accretive acquisitions, which go a long way in enhancing top-line growth.

Agree Realty reported third quarter 2011 adjusted FFO (funds from operations) of 55 cents per share compared with 60 cents in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Agree Realty Corporation is primarily engaged in the ownership, management, acquisition and development of single tenant properties leased to retail tenants. The company owns and operates a portfolio of 88 properties, located in 22 states and containing approximately 3.6 million square feet of gross leasable area.

Agree Realty currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Kimco Realty Corp (KIM) also holds a Zacks #3 Rank.