Agree Realty Lifts Investment Guidance as Growth Rates Ease
Agree Realty raised its 2026 acquisition target to as much as $1.8 billion after a record $502 million quarter, even as per-share earnings growth slowed.
Agree Realty (ADC) posted a company-record $502 million of investment volume across 102 properties in the second quarter, prompting the net-lease REIT to raise its full-year 2026 acquisition guidance to a range of $1.6 billion to $1.8 billion from $1.4 billion to $1.6 billion.
The quarter capped an acceleration that had been building since late last year. Investment volume climbed from about $377 million on 94 properties in the fourth quarter of 2025 to $424 million on 100 properties in the first quarter of 2026 before reaching the second-quarter total, and the company has now raised its investment guidance for a second consecutive quarter. Alongside the larger deal pipeline, Agree Realty also raised its 2026 disposition guidance to $50 million to $100 million from $25 million to $75 million, a range that had held steady through the prior two guidance updates.
Core funds from operations per share grew 7.5% year over year in the second quarter, decelerating from 8.1% growth in the first quarter and roughly in line with the 7.3% pace in the fourth quarter of 2025. Adjusted funds from operations per share grew 7.4% year over year, down from 7.9% in the prior quarter but still ahead of the 6.5% pace posted in the fourth quarter. Net income per share grew just 2.2% year over year, a sharp slowdown from 19.1% growth in the first quarter and 13.5% in the fourth quarter of 2025, even as total net income dollars rose 11.5% year over year. Despite the deceleration in per-share growth, the company raised its 2026 AFFO per share guidance to $4.57 to $4.59 from $4.54 to $4.58, the first upward revision after two straight quarters of an unchanged range.
Acquisition activity carried a new layer of disclosure this quarter. Agree Realty acquired nine ground leases for approximately $66.6 million, representing 13.5% of acquired annualized base rent, a level of ground-lease detail not broken out in the highlights of the prior two releases. The weighted-average acquisition cap rate held at 7.0% for the quarter and for the first half of 2026, consistent with recent quarters' pricing discipline. The development and deferred-funding pipeline also scaled up, with five new projects totaling about $88 million in committed capital started in the second quarter, nearly double the $35 million across four projects started in the fourth quarter of 2025.
The balance sheet moved in mixed directions. Proforma net debt to recurring EBITDA improved to 3.7x from 3.2x in the first quarter and 3.8x in the fourth quarter of 2025, reversing the prior quarter's improvement, while the measure excluding unsettled forward equity ticked up to 5.2x from 5.1x in the first quarter, though it remained better than the 4.9x posted at the end of 2025. Total liquidity fell to approximately $1.9 billion from $2.3 billion at the end of the first quarter, after the company settled $313 million of forward equity during the quarter. That followed 5.9 million shares settled for $428 million in the fourth quarter of 2025 and roughly $660 million raised through its at-the-market program in the first quarter, indicating Agree Realty has been drawing down its forward equity balance faster than it built it up earlier in the year.
The company also narrowed its 2026 tax-expense guidance to approximately $2 million, down from a $2 million to $2.5 million range in the prior quarter, which itself had been tightened from $2 million to $3 million at the end of 2025.
Agree Realty kept its monthly dividend flat at $0.267 a share through April, May and June, after raising it from $0.262 in April, holding year-over-year dividend growth at 4.3% for a second straight quarter, up from 3.6% in the fourth quarter of 2025.