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
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.
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
PART II
Item 5:
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6:
[Reserved]
27
Item 7:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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
Item 9A:
Controls and Procedures
Item 9B:
Other Information
44
Item 9C:
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Item 10:
Directors, Executive Officers and Corporate Governance
45
Item 11:
Executive Compensation
Item 12:
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13:
Certain Relationships and Related Transactions, and Director Independence
Item 14:
Principal Accountant Fees and Services
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
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
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.
3
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.
4
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:
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:
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%.
5
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:
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:
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:
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.
8
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
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:
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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:
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:
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:
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:
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:
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:
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.
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
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
Sherwin-Williams
10,290
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
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
Tenant Sector Diversification
The following table presents annualized base rents for all sectors as of December 31, 2021:
Tenant Sector
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
Discount Stores
7,731
Restaurants - Quick Service
7,386
Health & Fitness
7,248
Health Services
6,818
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
Shoes
1,058
Office Supplies
860
Miscellaneous
107
0.1
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Geographic Diversification
The following table presents annualized base rents, by state, for our portfolio as of December 31, 2021:
Texas
26,636
7.2
Illinois
21,904
5.9
Ohio
21,584
5.8
Michigan
20,985
5.6
Florida
20,903
North Carolina
19,365
5.2
New Jersey
19,200
California
16,095
4.3
Pennsylvania
15,324
New York
14,124
3.8
Georgia
12,471
Virginia
10,787
Wisconsin
10,370
Connecticut
9,765
132,298
35.6
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
Year
Leases
Dollars
Square Feet
2022
1,777
0.5
86
2023
49
10,332
1,309
4.5
2024
13,122
1,560
5.4
2025
68
17,064
4.6
1,721
2026
104
21,061
2,169
7.5
2027
96
23,036
2,016
7.0
2028
26,678
2,306
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
1,514
100
28,995
25
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
Texarkana, TX
Build-to-Suit
11 years
Q1 2021
Complete
Grocery Outlet
Port Angeles, WA
15 years
Q2 2021
Gerber Collision
Buford, GA
Floor & Décor
Naples, FL
7-Eleven
Saginaw, MI
Q1 2022
Under Construction
Pooler, GA
New Port Richey, FL
Q3 2022
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.
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.
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
Average Price Paid
Announced Plans
Under the Plans
Period
Per Share
or Programs
October 1, 2021 - October 31, 2021
—
November 1, 2021 - November 30, 2021
December 1, 2021 - December 31, 2021
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
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.
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
28
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
Property Operating Expense
13,996
9,023
4,973
55
Depreciation and Amortization Expense
95,729
66,758
28,971
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.
29
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,
30
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.
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
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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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
Revolving Credit Facility (1)
0.88
January 2026
160,000
92,000
Total Credit Facility
Unsecured Term Loans (2) (3)
2023 Term Loan
2.40
40,000
2024 Term Loan Facility
3.09
65,000
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
2027 Senior Unsecured Notes
May 2027
2028 Senior Unsecured Public Notes (4)
2.11
June 2028
350,000
2028 Senior Unsecured Notes
4.42
July 2028
60,000
2029 Senior Unsecured Notes
4.19
September 2029
2030 Senior Unsecured Notes
4.32
September 2030
125,000
2030 Senior Unsecured Public Notes (4)
3.49
October 2030
2031 Senior Unsecured Notes
October 2031
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
Single Asset Mortgage Loan
5.01
September 2023
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
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.
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.
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
850
29,167
963
1,026
629
1,460,000
Land Lease Obligations
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
54,665
82,076
59,500
102,209
202,234
1,696,598
2,197,282
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.
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:
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
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
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.
Average Interest Rate
3.91
1.84
3.15
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.
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:
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.
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
Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
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
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.”
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
ExhibitNo.
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).
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).
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).
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).
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).
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).
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).
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).
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).
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).
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.
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).
47
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).
48
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
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
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
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.
/s/ GRANT THORNTON LLP
Philadelphia, Pennsylvania
February 22, 2022
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.
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
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.
We have served as the Company’s auditor since 2013.
February 22, 2022.
F-4
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per-share data)
December 31,
2021
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.
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
Dividends and Distributions Payable
16,881
34,545
Accounts Payable, Accrued Expenses, and Other Liabilities
70,005
71,390
$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
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
F-6
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Revenues
Rental income
187,279
Other
256
259
199
Total Revenues
339,323
248,568
187,478
Operating Expenses
Real estate taxes
15,520
Property operating expenses
6,749
Land lease expense
1,552
1,301
1,242
General and administrative
25,456
20,793
15,566
Depreciation and amortization
45,703
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
Net Income
Less net income attributable to non-controlling interest
603
591
682
Net income attributable to Agree Realty Corporation
122,273
91,381
80,081
Net Income Attributable to Common Stockholders
120,125
Net Income Per Share Attributable to Common Stockholders
1.79
1.76
1.96
1.78
1.74
1.93
Other Comprehensive Income
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
CONSOLIDATED STATEMENT OF EQUITY
Accumulated
Dividends in
Preferred Stock
Common Stock
Additional
excess of net
Comprehensive
Non-Controlling
Shares
Amount
Paid-In Capital
income
Income (Loss)
Interest
Balance, December 31, 2018
37,545,790
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
Repurchase of common shares
(22,011)
(1,406)
Issuance of stock under the 2014 Omnibus Incentive Plan
58,735
Forfeiture of restricted stock
(2,410)
(29)
Stock-based compensation
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)
Balance, December 31, 2019
45,573,623
1,752,912
(57,094)
(6,492)
2,231
1,691,562
14,418,612
896,117
896,118
(20,927)
(1,641)
48,942
Issuance of stock under the 2020 Omnibus Incentive Plan
4,541
(3,308)
(9)
4,711
(125,630)
(838)
(126,468)
(29,774)
(222)
(29,996)
Balance, December 31, 2020
60,021,483
Issuance of Series A preferred stock, net of issuance costs
7,000
(4,692)
170,308
11,179,982
744,846
744,847
(28,051)
(1,813)
138,894
320
(26,997)
(560)
5,358
Series A preferred dividends declared for the period
(2,148)
Common dividends and distributions declared for the period
(176,148)
(903)
(177,051)
30,763
167
30,930
Balance, December 31, 2021
71,285,311
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:
0.621
0.651
0.681
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Cash Flows from Operating Activities
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization from above (below) market lease intangibles, net
Amortization from financing and credit facility costs
2,360
1,444
1,284
4,798
4,702
3,980
Gain (loss) on settlement of interest rate swaps
16,748
(22,668)
788
(Gain) loss on sale of assets
(14,941)
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
Proceeds from common stock offerings, net
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
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
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
25,014
Change in accrual of development, construction and other real estate investment costs
(5,537)
10,465
4,330
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.
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:
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.
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):
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)
Total Real Estate Held for Sale, net
F-11
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,
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)
52,111
33,298
24,119
F-12
The following schedule represents estimated future amortization of lease intangibles as of December 31, 2021 (presented in thousands):
Year Ending December 31,
34,016
31,799
29,227
27,010
24,807
134,233
281,092
37,996
35,621
31,569
29,236
27,486
229,020
390,928
(5,563)
(4,851)
(4,181)
(3,745)
(3,391)
(11,344)
(33,075)
66,449
62,569
56,615
52,501
48,902
351,909
638,945
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):
Cash and cash equivalents
Cash held in escrow
Total of cash and cash equivalents and cash held in escrow
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
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
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,
Less: Series A preferred stock dividends
Net income attributable to common stockholders
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
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
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.
F-15
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
F-16
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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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.
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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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).
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):
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.
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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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).
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
Finance leases:
215
Financing cash outflows
93
Weighted-average remaining lease term - finance leases (years)
Supplemental Disclosure:
Right-of-use assets obtained in exchange for new lease liabilities
19,672
Right-of-use assets removed in exchange for real property
(3,025)
Right-of-use assets net change
16,647
Maturity Analysis of Lease Liabilities for Operating Leases (presented in thousands)
Lease payments
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)
336
6,252
6,924
(255)
(252)
(207)
(714)
81
84
6,045
6,210
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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.
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.
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.
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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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).
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):
Note payable in monthly installments of interest only at 3.60% per annum, with a balloon payment due January 2023
Note payable in monthly installments of interest only at 5.01% per annum, with a balloon payment due September 2023
Note payable in monthly installments of $92 including interest at 6.27% per annum, with a final monthly payment due July 2026
4,373
Total principal
Unamortized debt issuance costs
(206)
(312)
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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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):
2024 Term Loan Facilities
Total Principal
(2,151)
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.
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):
2028 Senior Unsecured Public Notes
2030 Senior Unsecured Public Notes
2033 Senior Unsecured Public Notes
Unamortized debt issuance costs and original issue discount, net
(14,800)
(4,672)
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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.
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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 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
905
28,262
51,026
2026 (1)
160,629
Total scheduled principal payments
1,698,262
Original issue discount, net
(8,923)
1,689,339
1,693,712
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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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.
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 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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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.
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.
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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:
Ordinary Income
2.398
1.928
1.933
Return of Capital
0.206
0.477
0.347
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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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.
F-29
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
F-30
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
Interest Rate Derivatives
Interest rate swap
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
Fair Value
Derivatives designated as cash flow hedges:
1,868
2,286
Liability Derivatives
3,335
16,985
F-31
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
in OCI on Derivative
OCI into Income
OCI into Expense
Interest rate swaps
14,958
(34,558)
(8,657)
Interest expense
15,973
4,562
(118)
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):
F-32
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
Statement of
in the Statement
Statement of Financial Position
of Recognized
Financial
of Financial
Cash Collateral
Assets
Position
Instruments
Received
Net Amount
Derivatives
(1,679)
189
Offsetting of Derivative Liabilities
Liabilities
presented in the
Posted
1,656
As of December 31, 2020
(1,258)
1,028
15,727
F-33
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
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
Derivative assets - interest rate swaps
Derivative liabilities - interest rate swaps
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
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:
Outstanding
Grant Date
(in thousands)
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
52
78.43
(68)
45.78
(3)
63.80
Unvested restricted stock at December 31, 2020
175
60.53
87
65.23
(64)
53.82
(23)
63.88
Unvested restricted stock at December 31, 2021
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
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:
Expected term (years)
Volatility
33.9
18.4
19.7
Risk-free rate
0.2
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
of Awards
Performance shares at December 31, 2018
55.29
Performance units granted
66.96
Performance units and shares at December 31, 2019
61
61.04
90.17
Performance units and shares at December 31, 2020
69.61
63.42
Performance units and shares at December 31, 2021 - three-year performance period completed
(31)
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
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)
Shares vested
(16)
Shares forfeited
(4)
Performance shares - three-year performance period completed but not yet vested December 31, 2021
(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
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
Date of
Computed
Encumbrance
Improvements
Acquisition
Depreciation
(in years)
Real Estate Held for Investment
Borman Center, MI
550,000
562,404
1,087,596
1,650,000
2,200,000
1977
40 Years
Capital Plaza, KY
7,379
2,240,607
8,812,549
11,053,156
11,060,535
1,653,387
1978
Grayling Plaza, MI
200,000
1,778,657
143,997
1,922,654
2,122,654
1,628,016
1984
Omaha Store, NE
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
Monroeville, PA
6,332,158
2,249,724
(2,079,178)
3,153,890
3,348,814
6,502,704
1,458,209
1996
Boynton Beach, FL
1,534,942
2,043,122
3,717,733
5,760,855
7,295,797
1,746,509
Chesterfield Township, MI
1,350,590
1,757,830
(46,164)
1,711,666
3,062,256
1,006,186
1998
Pontiac, MI
1,144,190
1,808,955
(89,989)
1,718,966
2,863,156
990,717
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
Rochester, MI
2,438,740
2,188,050
1,950
2,190,000
4,628,740
1,231,853
1999
Ypsilanti, MI
2,050,000
2,222,097
(3,494,709)
777,388
Petoskey, MI
2,332,473
2,010,689
2,005,410
2,337,752
4,343,162
1,263,972
2000
Flint, MI
2,026,625
1,879,700
(2,906,325)
683,392
316,608
1,000,000
1,477,680
2,241,293
24,320
2,265,613
3,743,293
1,169,670
2001
New Baltimore, MI
1,250,000
2,285,781
(16,503)
2,269,278
3,519,278
1,156,089
1,435,925
1,729,851
1,798,091
660
1,798,751
3,528,602
886,221
2002
Indianapolis, IN
180,000
1,117,617
108,551
1,226,168
1,406,168
586,253
471,272
(201,809)
269,463
166,120
2003
Canton Twp, MI
1,550,000
2,132,096
23,021
2,155,117
3,705,117
974,240
1,664,211
1,537,400
1,961,674
3,499,074
874,660
2004
Albion, NY
1,900,000
3,037,864
4,937,864
1,300,591
1,272,314
1,029,000
2,165,463
(6,666)
2,158,797
3,187,797
924,191
Lansing, MI
785,000
348,501
3,045
351,546
1,136,546
153,764
1,569,000
2,363,524
3,943,404
6,306,928
7,875,928
2,065,248
Roseville, MI
1,771,000
2,327,052
395
2,327,447
4,098,447
938,160
2005
Mt Pleasant, MI
1,075,000
1,432,390
4,787
1,437,177
2,512,177
577,850
N Cape May, NJ
1,430,092
495
1,430,587
2,505,587
575,211
Summit Twp, MI
998,460
1,336,357
12,686
1,349,043
2,347,503
515,506
2006
Barnesville, GA
932,500
2,091,514
5,490
2,097,004
3,029,504
744,842
2007
East Lansing, MI
54,531
(54,531)
Macomb Township, MI
424,222
2008
Brighton, MI
1,365,000
2,802,036
5,615
2,807,651
4,172,651
900,710
2009
Southfield, MI
1,483,000
1,200,000
125,616
2,063
127,679
1,327,679
38,961
Atchison, KS
943,750
3,021,672
823,170
3,142,252
3,965,422
901,889
2010
Johnstown, OH
485,000
2,799,502
3,284,502
804,858
Lake in the Hills, IL
2,135,000
3,328,560
1,690,000
3,773,560
5,463,560
1,079,338
Concord, NC
7,676,305
Antioch, IL
1,087,884
Mansfield, CT
700,000
1,902,191
508
1,902,699
2,602,699
529,186
Spring Grove, IL
2,313,000
1,191,199
968
1,192,167
Tallahassee, FL
1,628,000
1,482,462
409,218
Wilmington, NC
2,186,000
1,500,000
1,348,591
2,848,591
365,245
2011
Marietta, GA
900,000
575,000
696,297
6,359
702,656
1,277,656
184,370
Baltimore, MD
2,534,000
2,610,430
(3,447)
2,606,983
Dallas, TX
1,844,000
701,320
778,905
1,042,730
1,821,635
2,522,955
463,521
Chandler, AZ
332,868
793,898
360
794,258
1,127,126
203,566
New Lenox, IL
1,422,488
Roseville, CA
4,752,000
2,800,000
3,695,455
(96,364)
2,695,636
3,703,455
6,399,091
956,662
Fort Walton Beach, FL
1,768,000
542,200
1,958,790
88,778
2,047,568
2,589,768
509,625
Leawood, KS
989,622
3,003,541
16,197
3,019,738
4,009,360
754,932
Salt Lake City, UT
6,810,104
(44,416)
6,765,688
1,726,894
Burton, MI
80,000
1,793,000
1,605,134
2012
Madison, AL
1,552,000
675,000
1,317,927
1,992,927
329,481
Walker, MI
887,000
219,200
1,024,738
1,243,938
249,780
Portland, OR
7,969,403
161
7,969,564
Cochran, GA
365,714
2,053,726
2,419,440
487,761
Baton Rouge, LA
1,188,322
284,702
1,178,215
Clifton Heights, PA
2,543,941
3,038,561
(3,105)
3,035,456
5,579,397
717,762
Newark, DE
2,117,547
4,777,516
(4,881)
4,772,635
6,890,182
1,128,593
Vineland, NJ
4,102,710
1,501,854
7,986
1,509,840
5,612,550
357,018
Fort Mill, SC
750,000
1,187,380
1,937,380
279,528
Spartanburg, SC
250,000
765,714
4,387
770,101
1,020,101
181,440
Springfield, IL
302,520
653,654
49,741
703,395
1,005,915
159,815
Jacksonville, NC
676,930
1,482,748
(150,000)
1,332,748
2,009,678
338,474
Morrow, GA
525,000
1,383,489
(99,849)
1,283,640
1,808,640
297,467
Charlotte, NC
1,822,900
3,531,275
(570,844)
2,960,431
4,783,331
680,771
Lyons, GA
121,627
2,155,635
(103,392)
2,052,243
2,173,870
465,296
Fuquay-Varina, NC
2,042,225
1,763,768
(255,778)
1,507,990
3,550,215
342,972
Minneapolis, MN
1,088,015
345,958
71,142
826,635
678,480
1,505,115
16,962
Lake Zurich, IL
780,974
7,909,277
46,509
7,955,786
8,736,760
1,796,915
Harlingen, TX
430,000
1,614,378
12,854
1,627,232
2,057,232
366,125
F-40
Pensacola, FL
650,000
1,165,415
23,957
1,189,372
1,839,372
265,733
Venice, FL
1,300,196
4,892
1,305,088
St. Joseph, MO
377,620
7,639,521
8,017,141
1,702,976
2013
Statham, GA
191,919
3,851,073
4,042,992
858,467
North Las Vegas, NV
214,552
717,435
28,999
746,434
960,986
163,530
Memphis, TN
322,520
748,890
1,071,410
165,383
Rancho Cordova, CA
1,339,612
Kissimmee, FL
1,453,500
971,683
2,425,183
212,556
Pinellas Park, FL
2,625,000
874,542
4,163
878,705
3,503,705
188,484
Manchester, CT
397,800
325,705
723,505
70,571
Rapid City, SD
1,017,800
2,348,032
1,379
2,349,411
3,367,211
506,500
Chicago, IL
272,222
649,063
71,009
720,072
992,294
141,276
Brooklyn, OH
3,643,700
15,079,714
953,195
16,032,909
19,676,609
3,299,854
Madisonville, TX
96,680
1,087,642
18,200
1,105,842
1,202,522
234,610
Forest, MS
1,298,176
99,848
1,398,024
282,660
Sun Valley, NV
308,495
1,373,336
(51,008)
253,495
1,377,328
1,630,823
286,873
Rochester, NY
2,500,000
7,398,639
2,017
7,400,656
9,900,656
1,533,986
Allentown, PA
2,525,051
7,896,613
672,368
8,568,981
11,094,032
1,725,571
Casselberry, FL
1,804,000
793,101
(2,906)
790,195
2,594,195
166,700
Berwyn, IL
186,791
933,959
62,585
996,544
1,183,335
192,594
Grand Forks, ND
1,502,609
2,301,337
1,801,028
4,102,365
5,604,974
830,062
Ann Arbor, MI
3,000,000
4,595,757
277,040
4,872,797
7,872,797
984,087
Joplin, MO
1,208,225
1,160,843
2,369,068
237,004
Red Bay, AL
38,981
2,528,437
3,856
2,532,293
2,571,274
453,688
2014
Birmingham, AL
230,106
231,313
231,016
461,122
40,910
245,234
251,339
(324)
251,015
496,249
44,452
98,271
179,824
278,095
31,844
235,641
127,477
(313)
127,164
362,805
22,520
Montgomery, AL
325,389
217,850
543,239
38,578
Littleton, CO
4,622,391
819,000
8,756,266
(3,879,591)
4,876,675
5,695,675
1,462,670
St Petersburg, FL
1,225,000
1,025,247
6,592
1,031,839
2,256,839
199,641
St Augustine, FL
1,523,230
1,723,230
276,085
East Palatka, FL
730,000
575,236
6,911
582,147
1,312,147
105,473
136,365
398,773
535,138
70,616
Fort Oglethorpe, GA
1,842,240
2,844,126
20,442
2,864,568
4,706,808
567,219
2,010,000
6,206,252
107,873
6,314,125
8,324,125
1,134,427
Rockford, IL
303,395
2,436,873
(15,000)
2,421,873
2,725,268
440,465
F-41
Terre Haute, IN
103,147
2,477,263
32,376
2,509,639
2,612,786
437,889
Junction City, KS
78,271
2,504,294
(30,565)
2,473,729
2,552,000
438,235
226,919
347,691
574,610
61,570
Lincoln Park, MI
543,303
1,408,544
78,362
1,486,906
2,030,209
288,629
Novi, MI
1,803,857
1,488,505
22,490
1,510,995
3,314,852
264,389
Bloomfield Hills, MI
1,340,000
2,003,406
391,480
1,341,900
2,392,986
3,734,886
475,915
Jackson, MS
256,789
172,184
428,973
30,491
Irvington, NJ
315,000
1,313,025
1,628,025
254,397
Toledo, OH
500,000
1,372,363
(12)
1,372,351
1,872,351
265,892
213,750
754,675
968,425
139,929
168,750
16,477
801,477
970,227
148,436
Mansfield, OH
306,000
725,600
1,031,600
134,538
Orville, OH
344,250
716,600
1,060,850
132,869
Calcutta, OH
208,050
758,750
1,462
760,212
968,262
140,883
Columbus, OH
1,136,250
1,593,792
1,590,997
1,139,045
2,730,042
208,593
Tulsa, OK
459,148
640,550
(13,336)
627,214
1,086,362
123,220
Ligonier, PA
330,000
5,021,849
(9,500)
5,012,349
5,342,349
929,870
Limerick, PA
369,000
Harrisburg, PA
124,757
1,446,773
11,175
1,457,948
1,582,705
255,059
Anderson, SC
781,200
4,441,535
261,624
775,732
4,708,627
5,484,359
933,177
Easley, SC
332,275
268,612
600,887
47,567
141,307
446,706
588,013
79,105
94,770
261,640
356,410
46,332
Columbia, SC
303,932
1,221,964
(13,830)
1,208,134
1,512,066
214,540
Alcoa, TN
329,074
270,719
599,793
47,940
Knoxville, TN
214,077
286,037
500,114
50,653
Red Bank, TN
229,100
302,146
531,246
53,504
New Tazewell, TN
91,006
328,561
5,074
333,635
424,641
58,378
Maryville, TN
94,682
1,529,621
57,945
1,587,566
1,682,248
274,132
Morristown, TN
46,404
801,506
4,990
806,496
852,900
141,128
Clinton, TN
69,625
1,177,927
11,564
1,189,491
1,259,116
208,150
160,057
2,265,025
226,291
2,491,316
2,651,373
427,067
Sweetwater, TN
79,100
1,009,290
6,740
1,016,030
1,095,130
177,793
McKinney, TX
2,671,020
6,785,815
100,331
6,886,146
9,557,166
1,295,707
Forest, VA
282,600
956,027
1,238,627
179,254
Colonial Heights, VA
547,692
1,059,557
(5,963)
1,053,594
1,601,286
186,577
Glen Allen, VA
590,101
1,129,495
(6,867)
1,122,628
1,712,729
198,802
F-42
Burlington, WA
610,000
3,647,279
(4,602)
3,642,677
4,252,677
646,446
Wausau, WI
909,092
1,405,899
79,841
1,485,740
2,394,832
273,694
Foley AL
305,332
506,203
9,380
515,583
820,915
89,943
2015
Sulligent, AL
58,803
1,085,906
(432,709)
653,197
712,000
158,128
Eutaw, AL
103,746
1,212,006
(377,526)
834,480
938,226
183,273
Tallassee, AL
154,437
850,448
11,125
861,573
1,016,010
144,770
Orange Park, AL
649,652
1,775,000
9,664
1,784,664
2,434,316
281,203
Pace, FL
37,860
524,400
6,970
531,370
569,230
91,506
309,607
775,084
(25)
775,059
1,084,666
133,831
Freeport, FL
312,615
1,277,386
1,590,001
207,575
Glenwood, GA
29,489
1,027,370
(416,000)
611,370
640,859
144,723
Albany, GA
47,955
641,123
689,078
108,109
Belvidere, IL
184,136
644,492
828,628
108,645
Peru, IL
380,254
2,125,498
2,505,752
332,109
Davenport, IA
776,366
6,623,542
(117,790)
6,505,752
7,282,118
1,069,899
Buffalo Center, IA
159,353
700,460
859,813
112,366
Sheffield, IA
131,794
729,543
861,337
117,031
Lenexa, KS
303,175
2,186,864
2,490,039
328,030
Tompkinsville , KY
70,252
1,132,033
(164,520)
967,513
1,037,765
183,285
Hazard, KY
8,392,841
13,731,648
(16,857)
8,375,591
13,732,041
22,107,632
2,059,802
Portland, MA
3,831,860
3,172
3,835,032
623,153
120,078
2,561,015
20,490
2,581,505
2,701,583
387,226
Hutchinson, MN
67,914
720,799
788,713
115,628
Lowry City, MO
103,202
614,065
717,267
99,785
Branson, MO
564,066
940,585
940,760
1,504,826
145,033
721,135
717,081
940
718,021
1,439,156
110,687
Enfield, NH
93,628
1,295,320
52,741
1,348,061
1,441,689
229,235
Marietta, OH
319,157
1,225,026
1,544,183
206,665
Franklin, OH
264,153
1,191,777
1,455,930
196,147
Elyria, OH
82,023
910,404
992,427
147,941
126,641
695,072
821,713
112,949
Bedford Heights, OH
226,920
959,528
(26,197)
933,331
1,160,251
157,574
Newburgh Heights, OH
224,040
959,099
1,183,139
153,855
Warrensville Heights, OH
186,209
920,496
4,900
925,396
1,111,605
150,154
Heath, OH
325,381
757,994
135
758,129
1,083,510
116,878
Lima, OH
335,386
592,154
2,833
594,987
930,373
89,248
Elk City, OK
45,212
1,242,220
1,287,432
204,448
F-43
Salem, OR
1,450,000
2,951,167
1,346,640
4,297,807
5,747,807
644,677
Westfield, PA
47,346
1,117,723
10,973
1,128,696
1,176,042
194,270
Altoona, PA
555,903
9,489,791
1,017
9,490,808
10,046,711
1,482,924
Grindstone, PA
288,246
500,379
10,151
510,530
798,776
76,530
Liberty, SC
27,929
1,222,856
90
1,222,946
1,250,875
206,284
Blacksburg, SC
27,547
1,468,101
1,495,648
244,684
51,325
1,187,506
1,238,831
195,444
Fountain Inn, SC
107,633
1,076,633
1,184,266
177,196
Walterboro, SC
21,414
1,156,820
1,178,234
190,393
Jackson, TN
277,000
495,103
80,423
575,526
852,526
75,815
Brenham, TX
355,486
17,280,895
581
17,281,476
17,636,962
2,880,207
Corpus Christi, TX
316,916
2,140,056
2,456,972
338,842
126,102
869,779
995,881
137,715
Midland, TX
194,174
5,005,720
2,000
5,007,720
5,201,894
782,431
Rockwall, TX
578,225
1,768,930
210
1,769,140
2,347,365
265,367
Princeton, WV
111,653
1,029,090
1,140,743
173,597
Martinsburg, WV
620,892
943,163
1,564,055
141,474
Grand Chute, WI
2,766,417
7,084,942
342,188
7,427,130
10,193,547
1,210,229
New Richmond, WI
71,969
648,850
720,819
105,438
Baraboo, WI
142,563
653,176
795,739
104,780
Decatur, AL
337,738
510,706
848,444
65,966
2016
Greenville, AL
203,722
905,780
9,911
915,691
1,119,413
114,418
Bullhead City, AZ
177,500
1,364,406
1,541,906
196,121
Page, AZ
256,982
1,299,283
1,556,265
186,772
Safford, AZ
349,269
1,196,307
676
1,196,983
1,546,252
161,883
Tucson, AZ
3,208,580
4,410,679
7,619,259
606,468
Bentonville, AR
610,926
897,562
897,732
1,508,658
129,074
Sunnyvale, CA
7,351,903
4,638,432
4,638,626
11,990,529
647,327
Whittier, CA
4,237,918
7,343,869
11,581,787
1,025,082
Aurora, CO
847,349
834,301
7,770
842,071
1,689,420
104,806
1,132,676
5,716,367
247,122
5,963,489
7,096,165
731,887
Evergreen, CO
1,998,860
3,827,245
5,826,105
534,220
Lakeland, FL
61,000
1,227,037
1,288,037
158,492
Mt Dora, FL
1,678,671
3,691,615
340,000
4,031,615
5,710,286
550,705
North Miami Beach, FL
1,622,742
512,717
11,240
523,957
2,146,699
65,417
Orlando, FL
903,411
1,627,159
(24,843)
1,602,316
2,505,727
213,560
Port Orange, FL
1,493,863
3,114,697
237,695
3,352,392
4,846,255
442,683
F-44
Royal Palm Beach, FL
2,052,463
956,768
20,576
977,344
3,029,807
132,264
Sarasota, FL
1,769,175
3,587,992
139,891
3,727,883
5,497,058
524,139
281,936
1,291,748
1,292,424
1,574,360
172,153
Vero Beach, FL
4,469,033
Dalton, GA
211,362
220,927
432,289
30,359
Crystal Lake, IL
2,446,521
7,012,819
69,827
7,082,646
9,529,167
894,312
Glenwood, IL
815,483
970,108
1,785,591
125,306
Morris, IL
1,206,749
2,062,495
3,269,244
287,890
Bicknell, IN
215,037
2,381,471
2,596,508
317,440
Fort Wayne, IN
711,430
1,258,357
(10,000)
1,248,357
1,959,787
184,653
734,434
970,175
(2,700)
967,475
1,701,909
139,234
Des Moines, IA
322,797
1,374,153
1,696,950
191,809
Frankfort, KY
514,277
DeRidder, LA
814,891
2,156,542
480
2,157,022
2,971,913
296,607
Lake Charles, LA
1,308,418
4,235,719
5,761
4,241,480
5,549,898
538,902
Shreveport, LA
891,872
2,058,257
2,950,129
283,020
Marshall, MI
339,813
511,282
(254)
511,028
Norton Shores, MI
495,605
667,982
42,874
710,856
1,206,461
90,762
Portage, MI
262,181
1,102,990
1,365,171
149,363
Stephenson, MI
223,152
1,044,947
270
1,045,217
1,268,369
130,650
Sterling, MI
127,844
905,607
25,464
931,071
1,058,915
120,077
Eagle Bend, MN
96,558
1,165,437
1,261,995
152,914
Brandon, MS
428,464
969,346
1,397,810
137,324
Clinton, MS
370,264
1,057,143
1,427,407
149,762
Columbus, MS
1,103,458
2,128,089
(2,105)
2,125,984
3,229,442
311,696
Holly Springs, MS
413,316
952,574
1,365,890
130,870
242,796
963,188
1,205,984
136,452
732,944
2,862,813
33,902
2,896,715
3,629,659
379,551
Meridian, MS
396,329
1,152,729
1,549,058
163,284
Pearl, MS
299,839
616,351
7,355
623,706
923,545
77,913
Ridgeland, MS
407,041
864,498
1,271,539
122,471
Bowling Green, MO
360,201
2,809,170
5,000
2,814,170
3,174,371
368,728
St Robert, MO
394,859
1,305,366
24,333
1,329,699
1,724,558
167,132
Beatty, NV
198,928
1,265,084
8,051
1,273,135
1,472,063
166,991
Alamogordo, NM
654,965
2,716,166
4,436
2,720,602
3,375,567
357,410
524,763
941,615
7,522
949,137
1,473,900
120,580
F-45
Alcalde, NM
435,486
836,499
1,271,985
104,562
Cimarron, NM
345,693
1,236,437
7,613
1,244,050
1,589,743
158,058
La Luz, NM
487,401
835,455
1,322,856
106,172
Fayetteville, NC
1,267,529
2,527,462
16,897
2,544,359
3,811,888
323,179
Gastonia, NC
401,119
979,803
1,631
981,434
1,382,553
124,724
Devils Lake, ND
323,508
1,133,773
955
1,134,728
1,458,236
150,895
Cambridge, OH
168,717
1,113,232
1,281,949
162,346
1,109,044
1,291,313
2,400,357
177,488
Grove City, OH
334,032
176,274
510,306
24,222
Lorain, OH
808,162
1,390,481
10,000
1,400,481
2,208,643
202,548
Reynoldsburg, OH
843,336
1,197,966
2,041,302
164,667
Springfield, OH
982,451
3,957,512
7,191
3,964,703
4,947,154
576,567
Ardmore, OK
571,993
1,590,151
2,162,144
221,960
Dillon, SC
85,896
1,697,160
1,783,056
251,038
Jasper, TN
190,582
966,125
6,888
973,013
1,163,595
121,603
Carthage, TX
597,995
1,965,290
14,204
1,979,494
2,577,489
270,234
Cedar Park, TX
1,386,802
4,656,229
756,188
1,410,827
5,388,392
6,799,219
749,866
Granbury, TX
944,223
2,362,540
3,306,763
324,857
Hemphill, TX
250,503
1,955,918
11,886
1,967,804
2,218,307
257,896
Lampasas, TX
245,312
1,063,701
37,258
1,100,959
1,346,271
150,572
Lubbock, TX
1,501,556
2,341,031
3,842,587
321,902
Odessa, TX
921,043
2,434,384
2,439,999
3,361,042
335,310
Port Arthur, TX
1,889,732
8,121,417
93,857
8,215,274
10,105,006
1,090,714
Provo, UT
1,692,785
5,874,584
43,650
5,918,234
7,611,019
807,093
Tappahannock, VA
1,076,745
14,904
1,091,649
2,022
Manitowoc, WI
879,237
4,467,960
5,347,197
595,578
Oak Creek, WI
487,277
3,082,180
139,675
3,221,855
3,709,132
469,187
Oxford, AL
148,407
641,820
790,227
74,851
2017
255,786
7,273,871
81,627
7,355,498
7,611,284
854,163
24,875
600,936
(16,074)
584,862
609,737
69,506
Jonesboro, AR
3,656,554
3,219,456
11,058
3,230,514
6,887,068
341,777
Lowell, AR
949,519
1,435,056
10,229
1,445,285
2,394,804
144,465
Southington, CT
1,088,181
1,287,837
185,818
1,473,655
2,561,836
142,003
Millsboro, DE
3,501,109
(20,531)
3,480,578
Jacksonville, FL
2,298,885
2,894,565
29,661
2,924,226
5,223,111
298,406
Orange Park, FL
214,858
2,304,095
2,518,953
259,184
Port Richey, FL
1,140,182
1,649,773
2,789,955
185,588
F-46
Americus, GA
1,318,463
Brunswick, GA
1,279,688
2,158,863
205
2,159,068
3,438,756
256,229
126,335
1,626,530
1,752,865
166,042
341,860
1,023,813
1,365,673
115,147
Carrollton, GA
597,465
886,644
1,484,109
97,816
Decatur, GA
558,859
1,429,106
1,987,965
145,888
Metter, GA
256,743
766,818
1,023,561
84,625
Villa Rica, GA
410,936
1,311,444
1,722,380
150,243
2,899,155
9,822,986
12,722,141
1,166,401
2,081,151
5,197,315
7,278,466
616,821
Galesburg, IL
214,280
979,108
1,193,388
110,131
Mundelein, IL
1,238,743
1,743,222
1,803,068
574,805
1,554,786
9,660
1,564,446
2,139,251
155,781
Woodstock, IL
683,419
1,002,207
284
1,002,491
1,685,910
102,335
Frankfort, IN
50,458
2,008,275
2,058,733
234,299
Kokomo, IN
95,196
1,484,778
(30,615)
1,454,163
1,549,359
150,232
Nashville, IN
484,117
2,458,215
2,942,332
276,311
Roeland Park, KS
7,829,806
(1,247,898)
6,581,908
Georgetown, KY
1,996,456
6,315,768
928
6,316,696
8,313,152
717,658
Hopkinsville, KY
413,269
996,619
1,409,888
112,095
Salyersville, KY
289,663
906,455
596
907,051
1,196,714
103,846
Amite, LA
601,238
1,695,242
2,296,480
194,198
Bossier City, LA
797,899
2,925,864
146
2,926,010
3,723,909
298,694
Kenner, LA
323,188
859,298
1,182,486
91,160
Mandeville, LA
834,891
1,294,812
(795)
1,294,017
2,128,908
137,514
New Orleans, LA
6,846,313
770,170
782,819
745,092
7,968
753,060
1,535,879
77,611
Canton, MI
3,655,296
14,162,109
7,345,761
10,471,644
17,817,405
1,007,630
Grand Rapids, MI
7,015,035
2,635,983
1,750,000
7,901,018
9,651,018
691,339
Bloomington, MN
1,491,302
619
1,491,921
Monticello, MN
449,025
979,816
9,368
989,184
1,438,209
121,164
Mountain Iron, MN
177,918
1,139,849
1,317,767
128,216
Gulfport, MS
671,824
1,176,505
1,848,329
134,790
802,230
1,434,997
2,237,227
164,404
McComb, MS
67,026
685,426
752,452
77,065
F-47
Kansas City, MO
1,390,880
1,588,573
2,979,453
197,896
Springfield, MO
616,344
2,448,360
13,285
2,461,645
3,077,989
246,081
St. Charles, MO
736,242
2,122,426
282,034
2,404,460
3,140,702
287,399
St. Peters, MO
1,364,670
Boulder City, NV
566,639
993,399
1,560,038
111,681
Egg Harbor, NJ
520,510
1,087,374
1,607,884
129,103
Secaucus, NJ
19,915,781
17,306,541
84,023
17,390,564
37,306,345
1,738,227
Sewell, NJ
1,809,771
6,892,134
8,701,905
775,358
Santa Fe, NM
1,072,340
4,013,237
4,013,843
5,086,183
501,638
Statesville, NC
287,467
867,849
1,155,316
104,861
308,321
875,652
31,340
906,992
1,215,313
104,526
Minot, ND
928,796
1,619,726
2,548,522
185,535
Grandview Heights, OH
1,276,870
8,557,690
(20,518)
8,537,172
9,814,042
979,556
Hillard, OH
1,001,228
Edmond, OK
1,063,243
3,816,155
9,878
3,826,033
4,889,276
397,845
Oklahoma City, OK
868,648
1,820,174
7,835
1,828,009
2,696,657
198,242
Erie, PA
425,267
1,284,883
1,710,150
139,063
Pittsburgh, PA
692,454
2,509,358
3,201,812
282,126
Sumter, SC
132,204
1,095,478
1,227,682
125,497
Chattanooga, TN
2,089,237
3,595,808
195
3,596,003
5,685,240
367,089
Etowah, TN
74,057
862,436
16,053
878,489
952,546
105,089
1,661,764
3,874,356
(250)
3,874,106
5,535,870
468,075
Alamo, TX
104,878
821,355
13,274
834,629
939,507
83,380
Andrews, TX
172,373
817,252
(292)
816,960
989,333
97,019
Arlington, TX
497,852
1,601,007
1,783
1,602,790
2,100,642
183,577
Canyon Lake, TX
382,522
1,026,179
(281)
1,025,898
1,408,420
102,592
185,375
1,413,298
1,598,673
161,789
Fort Stockton, TX
185,474
1,186,339
1,371,813
135,904
Fort Worth, TX
1,016,587
4,622,507
257,308
4,879,815
5,896,402
521,090
Lufkin, TX
1,497,171
4,948,906
4,088
4,952,994
6,450,165
588,349
Newport News, VA
2,458,053
5,390,475
758,009
6,148,484
8,606,537
759,142
Appleton, WI
417,249
1,525,582
9,779
1,535,361
1,952,610
171,935
Onalaska, WI
821,084
2,651,772
3,472,856
303,793
Athens, AL
253,858
1,204,570
1,458,428
90,343
2018
1,635,912
2,739,834
4,375,746
256,833
Boaz, AL
379,197
898,689
1,277,886
84,168
Roanoke, AL
110,924
938,451
1,049,375
76,324
F-48
Selma, AL
206,831
1,790,939
(24,494)
1,766,445
1,973,276
133,096
Maricopa, AZ
2,166,955
9,505,724
14,600
9,520,324
11,687,279
733,175
Parker, AZ
322,510
1,159,624
1,163
1,160,787
1,483,297
103,896
St. Michaels, AZ
127,874
1,043,962
12,012
1,055,974
1,183,848
84,582
Little Rock, AR
390,921
856,987
1,247,908
64,274
Grand Junction, CO
835,792
1,915,976
2,751,768
143,698
Brookfield, CT
343,489
835,106
1,178,595
62,633
316,847
558,659
875,506
41,899
Waterbury, CT
663,667
607,457
1,271,124
45,559
Apopka, FL
587,585
2,363,721
73,672
2,437,393
3,024,978
182,322
Cape Coral, FL
554,721
1,009,404
1,564,125
75,705
Crystal River, FL
369,723
1,015,324
1,385,047
99,406
DeFuniak Springs, FL
226,898
835,016
7,130
842,146
1,069,044
66,596
Eustis, FL
649,394
1,580,694
2,230,088
118,552
Hollywood, FL
895,783
947,204
1,842,987
71,040
Homestead, FL
650,821
948,265
1,599,086
71,120
827,799
1,554,516
2,382,315
116,589
Marianna, FL
257,760
886,801
1,144,561
66,510
Melbourne, FL
497,607
1,549,974
2,047,581
116,248
Merritt Island, FL
598,790
988,114
1,586,904
80,284
St. Petersburg, FL
958,547
902,502
1,861,049
77,032
Tampa, FL
488,002
1,209,902
1,697,904
103,346
703,273
1,283,951
1,987,224
96,296
Titusville, FL
137,421
1,017,394
12,059
1,029,453
1,166,874
77,134
Winter Haven, FL
832,247
1,433,449
2,265,696
107,509
448,253
1,462,641
6,023
1,468,664
1,916,917
110,109
Austell, GA
1,162,782
7,462,351
8,625,133
684,049
Conyers, GA
330,549
941,133
1,271,682
70,585
Covington, GA
744,321
1,235,171
(43,000)
1,192,171
1,936,492
93,061
Doraville, GA
1,991,031
291,663
21,466
313,129
2,304,160
27,819
Douglasville, GA
519,420
1,492,529
2,011,949
111,940
Lilburn, GA
304,597
1,206,785
1,511,382
90,509
1,257,433
1,563,755
2,821,188
149,795
447,582
832,782
1,280,364
62,459
989,819
1,220,271
734
1,221,005
2,210,824
106,820
Riverdale, GA
474,072
879,835
(3,750)
470,322
1,350,157
65,988
Savannah, GA
944,815
2,997,426
14,050
3,011,476
3,956,291
225,759
F-49
Statesboro, GA
681,381
1,592,291
1,786
1,594,077
2,275,458
129,496
Union City, GA
97,528
1,036,165
1,133,693
77,712
Nampa, ID
496,676
5,163,257
37,265
5,200,522
5,697,198
443,499
Aurora, IL
174,456
862,599
1,037,055
64,695
Bloomington, IL
1,408,067
986,931
678
987,609
2,395,676
90,511
Carlinville, IL
208,519
1,113,537
1,162
1,114,699
1,323,218
99,768
Centralia, IL
277,527
351,547
629,074
26,366
1,569,578
632,848
2,202,426
61,938
Flora, IL
232,155
1,121,688
4,087
1,125,775
1,357,930
86,744
Gurnee, IL
1,341,679
951,320
2,292,999
89,170
290,272
857,467
19,450
876,917
1,167,189
67,393
Macomb, IL
85,753
661,375
747,128
49,603
331,622
1,842,994
3,880
1,846,874
2,178,496
150,010
Newton, IL
510,192
1,069,075
2,500
1,071,575
1,581,767
89,261
Northlake, IL
353,337
564,677
4,343
569,020
922,357
44,524
270,180
708,041
978,221
69,321
Greenwood, IN
1,586,786
1,232,818
1,233,980
2,820,766
110,453
Hammond, IN
230,142
132,291
311,647
443,938
23,374
Mishawaka, IN
1,263,680
4,106,900
5,370,580
333,686
South Bend, IN
420,571
2,772,376
3,192,947
271,415
Warsaw, IN
583,174
1,118,270
58,246
1,176,516
1,759,690
110,449
Ackley, IA
202,968
896,444
1,099,412
85,826
Ottumwa, IA
227,562
5,794,123
6,021,685
567,319
Riceville, IA
154,294
742,421
896,715
71,043
Riverside, IA
579,935
1,594,085
2,174,020
139,482
Urbandale, IA
68,172
2,938,611
(85,150)
593,022
2,328,611
2,921,633
273,458
Overland Park, KS
1,053,287
6,141,649
219
6,141,868
7,195,155
499,023
Ekron, KY
95,655
802,880
898,535
Florence, KY
601,820
1,054,572
1,656,392
79,093
Chalmette, LA
290,396
1,297,684
1,588,080
97,326
Donaldsonville, LA
542,118
2,418,183
5,647
2,423,830
2,965,948
207,400
Franklinton, LA
193,192
925,598
1,118,790
75,205
242,651
2,462,533
2,705,184
210,341
396,560
1,122,737
1,519,297
91,222
163,258
747,944
911,202
60,770
Harvey, LA
728,822
1,468,688
2,197,510
137,618
F-50
Jena, LA
772,878
2,392,129
3,165,007
204,328
Jennings, LA
128,158
2,329,137
118,189
2,447,326
2,575,484
202,516
293,726
Pine Grove, LA
238,223
758,573
996,796
61,634
Rayville, LA
310,034
2,365,203
2,675,237
202,028
Roseland, LA
307,331
872,252
1,179,583
70,870
Talisheek, LA
150,802
1,031,214
41,717
1,072,931
1,223,733
86,654
699,157
651,927
1,351,084
48,895
Salisbury, MD
305,215
1,193,870
1,499,085
89,540
Springfield, MA
153,428
826,741
980,169
62,006
735,859
2,489,707
3,225,566
243,737
Belleville, MI
598,203
3,970,176
4,568,379
388,654
Grand Blanc, MI
1,589,886
3,738,477
5,328,363
365,981
Jackson, MI
1,451,971
2,548,436
4,000,407
249,476
Kentwood, MI
939,481
3,438,259
4,377,740
336,599
Lake Orion, MI
1,172,982
2,349,762
3,522,744
230,029
Onaway, MI
17,557
935,308
952,865
83,788
Champlin, MN
307,271
1,602,196
18,429
1,620,625
1,927,896
121,432
North Branch, MN
533,175
533,380
Richfield, MN
2,141,431
613,552
2,754,983
46,016
Bay St. Louis, MS
547,498
2,080,989
2,628,487
177,751
Corinth, MS
504,885
4,540,022
129,132
4,669,154
5,174,039
448,843
189,817
1,340,848
1,530,665
114,531
Southaven, MS
150,931
826,123
977,054
61,959
Waynesboro, MS
243,835
1,205,383
1,449,218
102,960
Blue Springs, MO
431,698
1,704,870
2,136,568
149,174
Florissant, MO
733,592
1,961,094
(14,149)
1,946,945
2,680,537
146,109
789,880
384,638
1,174,518
37,652
Liberty, MO
308,470
2,750,231
3,058,701
257,725
Neosho, MO
687,812
1,115,054
1,802,866
97,567
1,311,497
5,462,972
6,774,469
546,271
1,205,257
1,760,658
2,965,915
132,049
Webb City, MO
1,324,146
1,501,744
2,825,890
147,035
Nashua, NH
3,635,953
2,720,644
4,240
2,724,884
6,360,837
266,969
Forked River, NJ
4,227,966
3,991,690
(81,552)
3,910,138
8,138,104
74,534
3,505,805
(2,766,838)
3,193,972
427,134
3,932,939
33,784
1,128,858
1,396,960
2,525,818
110,593
F-51
1,682,284
3,527,964
(3,456,211)
71,753
1,754,037
249,622
682,822
Woodland Park, NJ
7,761,801
3,958,902
11,720,703
338,144
Bernalillo, NM
899,770
2,037,465
(78,875)
820,895
2,858,360
200,783
Farmington, NM
4,428,998
Canandaigue, NY
154,996
1,352,174
156
1,352,330
1,507,326
112,662
Catskill, NY
80,524
1,097,609
1,097,765
1,178,289
91,448
Clifton Park, NY
925,613
1,858,613
7,421
1,866,034
2,791,647
139,906
Elmira, NY
43,388
947,627
991,015
71,072
Geneseo, NY
264,795
1,328,115
1,328,271
1,593,066
110,676
Greece, NY
182,916
1,254,678
1,254,834
1,437,750
104,537
Hamburg, NY
520,599
2,039,602
2,560,201
152,970
Latham, NY
373,318
764,382
1,137,700
57,329
N. Syracuse, NY
165,417
452,510
10,034
462,544
627,961
34,377
Niagara Falls, NY
392,301
1,022,745
1,415,046
76,706
100,136
895,792
995,928
74,649
575,463
772,555
1,348,018
57,942
375,721
881,257
1,256,978
66,094
Schenectady, NY
74,387
1,279,967
8,540
1,288,507
1,362,894
107,221
453,006
726,404
1,179,410
54,480
Syracuse, NY
339,207
918,302
1,257,509
68,873
607,053
259,331
866,384
Tonawanda, NY
94,443
727,373
727,529
821,972
60,595
131,021
576,915
707,936
43,269
W. Seneca, NY
98,194
737,592
835,786
55,319
Williamsville, NY
705,842
488,800
1,194,642
36,660
287,732
518,005
805,737
38,850
526,102
1,955,989
8,699
1,964,688
2,490,790
151,372
Durham, NC
1,787,380
848,986
2,636,366
63,674
108,898
1,769,274
1,878,172
132,696
Greensboro, NC
402,957
1,351,015
1,753,972
101,326
Greenville, NC
541,233
1,403,441
1,944,674
105,258
High Point, NC
252,336
1,024,696
1,277,032
76,852
Kernersville, NC
270,581
966,807
1,237,388
72,511
Pineville, NC
1,390,592
6,390,201
7,780,793
532,494
Rockingham, NC
245,976
955,579
1,201,555
83,613
Salisbury, NC
572,085
700,288
1,272,373
52,522
F-52
Zebulon, NC
160,107
1,077
161,220
Akron, OH
445,299
Bellevue, OH
272,308
1,127,365
62,975
1,190,340
1,462,648
103,136
Canton, OH
981,941
1,076,113
2,058,054
80,708
542,161
1,088,316
1,630,477
81,624
Fairview Park, OH
338,732
400,013
738,745
30,001
5,405,718
Middletown, OH
311,389
1,451,469
1,452,632
1,764,021
130,024
Niles, OH
334,783
798,136
1,132,919
59,860
North Olmsted, OH
544,903
810,840
34,500
845,340
1,390,243
76,553
Warren, OH
208,710
601,092
809,802
45,082
735,534
627
736,161
Youngstown, OH
323,983
989,430
1,313,413
74,207
Broken Arrow, OK
919,176
1,276,754
1,778
1,278,532
2,197,708
111,827
Chickasha, OK
230,000
2,881,525
3,111,525
240,127
Coweta, OK
282,468
803,762
1,086,230
70,329
Midwest City, OK
755,192
5,687,280
5,851
5,693,131
6,448,323
461,482
1,104,085
1,874,359
1,874,866
2,978,951
144,517
Shawnee, OK
409,190
957,557
1,366,747
71,817
Wright City, OK
38,302
1,010,645
(1,300)
1,009,345
1,047,647
81,898
Hillsboro, OR
4,632,369
7,656,179
12,288,548
701,816
Carlisle, PA
340,349
643,498
983,847
48,262
58,279
833,933
892,212
62,545
Johnstown, PA
1,030,667
8,829
1,039,496
King of Prussia, PA
5,097,320
1,202
5,098,522
Philadelphia, PA
155,212
218,083
373,295
16,356
127,690
122,516
250,206
9,189
927,083
5,126,243
6,053,326
405,828
1,397,965
3,850
1,401,815
Upper Darby, PA
861,339
85,966
37,671
123,637
984,976
8,902
Wysox, PA
1,668,272
1,699,343
24,395
1,723,738
3,392,010
138,885
Richmond, RI
1,293,932
7,477,281
687,657
8,164,938
9,458,870
751,088
Warwick, RI
687,454
2,108,256
2,795,710
158,119
Greenville, SC
628,081
1,451,481
2,079,562
108,861
Lake City, SC
57,911
932,874
869
933,743
991,654
Manning, SC
245,546
989,236
989,382
1,234,928
82,430
Mt. Pleasant, SC
555,387
1,042,804
1,598,191
78,210
F-53
Myrtle Beach, SC
254,334
149,107
403,441
11,183
709,338
1,618,382
2,327,720
121,379
521,299
809,466
1,330,765
60,710
207,130
827,775
1,034,905
72,428
1,179,566
1,236,591
2,416,157
92,744
Johnson City, TN
181,117
1,232,151
1,413,268
92,411
Beaumont, TX
936,389
2,725,502
21,662
2,747,164
3,683,553
205,902
Donna, TX
962,302
1,620,925
2,583,227
135,043
Fairfield, TX
125,098
970,816
1,095,914
76,856
Groves, TX
596,586
2,250,794
2,847,380
168,810
Humble, TX
173,885
867,347
1,041,232
65,051
Jacksboro, TX
119,147
1,036,482
1,155,629
82,055
Kemah, TX
2,324,774
2,835,597
(45,000)
2,790,597
5,115,371
228,142
Lamesa, TX
66,019
1,493,146
1,559,165
136,866
Live Oak, TX
371,174
1,880,746
2,251,920
164,563
382,643
1,054,911
1,437,554
79,118
Plano, TX
452,721
822,683
1,275,404
61,701
512,094
721,936
1,234,030
54,145
Porter, TX
524,532
1,683,767
566
1,684,333
2,208,865
136,844
Tomball, TX
1,336,029
1,849,554
3,185,583
161,831
Universal City, TX
380,788
1,496,318
1,877,106
112,224
Waxahachie, TX
388,138
792,125
1,180,263
59,409
Willis, TX
406,466
925,047
7,287
932,334
1,338,800
75,657
Logan, UT
914,515
2,774,985
3,689,500
231,248
Christiansburg, VA
520,538
661,780
1,182,318
49,634
Fredericksburg, VA
452,911
1,076,589
1,529,500
80,744
1,112,948
837,542
1,950,490
78,423
Hampton, VA
353,242
514,898
868,140
38,617
Louisa, VA
538,246
2,179,541
2,717,787
178,496
Manassas, VA
1,454,278
Virginia Beach, VA
2,142,002
1,154,585
3,296,587
86,594
271,176
3,308,434
3,579,610
248,133
Everett, WA
414,899
811,710
1,226,609
60,878
Bluefield, WV
287,740
947,287
12,404
959,691
1,247,431
92,987
Green Bay, WI
817,143
1,383,440
2,200,583
103,758
La Crosse, WI
175,551
1,145,438
1,320,989
85,908
Madison, WI
2,475,815
4,249,537
(30,000)
4,219,537
6,695,352
340,274
F-54
Mt. Pleasant, WI
208,806
1,173,275
1,382,081
87,996
Schofield, WI
533,503
1,071,930
1,605,433
80,395
Sheboygan, WI
331,692
929,092
1,260,784
69,682
338,789
1,119,459
(2,717)
1,116,742
1,455,531
67,549
Attala, AL
289,473
928,717
1,218,190
56,110
1,400,530
859,880
316
860,196
2,260,726
46,591
Blountsville, AL
262,412
816,070
1,078,482
49,304
Coffeeville, AL
129,263
864,122
993,385
52,207
Phenix, AL
292,234
1,280,705
1,572,939
90,717
Silas, AL
383,742
1,351,195
1,734,937
81,625
Tuba City, AZ
138,006
1,253,376
531
1,253,907
1,391,913
70,441
Searcy, AR
851,561
5,582,069
45,099
5,627,168
6,478,729
398,999
Sheridan, AR
124,667
1,070,754
1,195,421
64,558
Trumann, AR
170,957
1,064,039
1,234,996
64,152
Visalia, CA
2,552,353
6,994,518
6,994,802
9,547,155
451,739
Lakewood, CO
3,021,260
6,125,185
18,070
6,143,255
9,164,515
307,070
Rifle, CO
4,427,019
1,599,591
6,026,610
103,198
Danbury, CT
1,095,933
Greenwich, CT
16,350,193
3,076,568
19,426,761
196,060
Orange, CT
6,881,022
10,519,218
19,570
10,538,788
17,419,810
591,317
Torrington, CT
195,171
1,541,214
9,168
1,550,382
1,745,553
80,673
Bear, DE
743,604
657
744,261
Wilmington, DE
2,501,623
2,784,576
5,286,199
191,275
646,629
1,215,458
10,730
1,226,188
1,872,817
91,517
Clearwater, FL
497,216
1,027,192
1,524,408
70,453
Cocoa, FL
2,174,730
Lake Placid, FL
255,339
1,059,913
1,315,252
57,412
746,846
1,805,756
2,552,602
105,336
751,265
2,089,523
2,840,788
142,240
Poinciana, FL
608,450
1,073,714
1,682,164
58,160
Sanford, FL
2,791,684
4,763,063
20,323
4,783,386
7,575,070
278,600
Tavares, FL
736,113
1,849,694
2,585,807
127,172
Wauchula, FL
333,236
1,156,806
1,490,042
86,760
West Palm Beach, FL
2,484,935
2,344,077
4,829,012
136,666
186,767
1,615,510
1,802,277
110,882
Columbus, GA
336,125
2,497,365
32,240
2,529,605
2,865,730
136,684
714,666
2,137,506
2,852,172
133,480
F-55
Dacula, GA
1,280,484
1,716,312
2,996,796
121,512
390,416
1,441,936
1,832,352
98,956
Tucker, GA
374,268
1,652,522
2,026,790
116,994
Chubbuck, ID
1,067,983
5,880,828
6,948,811
428,808
185,310
873,334
1,653,886
2,527,220
120,596
Edwardsville, IL
449,741
1,202,041
1,651,782
82,512
Elk Grove Village, IL
394,567
1,395,659
22,896
1,418,555
1,813,122
82,266
Evergreen Park, IL
5,687,045
18,880,969
24,568,014
1,101,118
Freeport, IL
92,295
1,537,120
1,629,415
86,396
Geneva, IL
644,434
1,213,859
1,858,293
80,924
Greenville, IL
135,642
1,026,006
1,161,648
53,438
Murphysboro, IL
176,281
988,808
1,165,089
61,658
814,666
1,719,410
2,534,076
96,650
Round Lake, IL
325,722
2,669,132
5,756
2,674,888
3,000,610
135,408
Fishers, IN
429,857
621,742
1,051,599
44,019
Gas City, IN
504,378
1,341,890
1,846,268
97,846
149,230
1,002,706
1,151,936
60,580
716,631
1,143,537
1,860,168
78,510
Marion, IN
140,507
898,097
27,530
925,627
1,066,134
45,946
Westfield, IN
594,597
1,260,563
1,855,160
89,290
Waterloo, IA
369,497
1,265,450
1,634,947
73,746
Concordia, KS
150,440
1,144,639
26,864
1,171,503
1,321,943
58,329
Parsons, KS
203,953
1,073,554
1,277,507
75,923
Pratt, KS
245,375
1,293,871
1,539,246
75,476
Wellington, KS
95,197
1,090,333
1,185,530
61,265
Wichita, KS
1,257,608
5,700,299
6,957,907
379,903
Crestwood, KY
670,021
1,096,031
9,668
1,105,699
1,775,720
55,225
257,839
3,025,734
266,479
3,292,213
3,550,052
179,646
Grayson, KY
241,857
1,155,603
1,397,460
67,410
Henderson, KY
146,676
958,794
1,105,470
49,937
Leitchfield, KY
303,830
1,062,711
1,366,541
53,136
Kentwood, LA
327,392
638,214
20,612
658,826
986,218
47,224
565,778
890,034
(110,745)
750,569
594,498
1,345,067
16,217
Bowie, MD
2,840,009
4,474,364
7,314,373
279,537
Eldersburg, MD
563,227
1,855,987
520
1,856,507
2,419,734
104,325
Brockton, MA
3,254,807
8,504,236
47,679
8,551,915
11,806,722
427,349
F-56
Ipswich, MA
467,109
967,282
1,434,391
60,360
Ispwich, MA
2,606,990
3,414,474
6,021,464
213,393
Adrian, MI
459,814
1,562,895
38,710
1,601,605
2,061,419
104,193
Allegan, MI
184,466
1,239,762
1,424,228
77,485
1,160,912
4,181,635
1,539,162
5,720,797
6,881,709
296,955
Caro, MI
183,318
1,328,630
1,511,948
74,689
Clare, MI
153,379
1,412,383
11,127
1,423,510
1,576,889
74,042
Cooks, MI
304,340
1,109,838
9,630
1,119,468
1,423,808
55,913
Crystal Falls, MI
62,462
757,276
819,738
45,752
Harrison, MI
59,984
900,901
(25,895)
875,006
934,990
43,916
524,446
1,265,119
1,789,565
68,527
Monroe, MI
501,688
2,651,440
3,153,128
182,088
Plymouth, MI
580,459
1,043,474
47,200
1,090,674
1,671,133
72,525
Spalding, MI
86,973
842,434
929,407
50,897
4,821,073
15,814,475
17,091
15,831,566
20,652,639
857,353
Lakeville, MN
1,774,051
6,386,118
110,100
6,496,218
8,270,269
403,915
Longville, MN
30,748
836,277
867,025
50,525
Waite Park, MN
142,863
1,064,736
1,207,599
72,914
Bolton, MS
172,890
831,005
1,003,895
50,207
Bruce, MS
189,929
896,080
1,086,009
61,545
123,385
898,226
1,021,611
61,693
Flowood, MS
638,891
1,308,566
1,947,457
73,550
Houston, MS
170,449
913,763
1,084,212
62,761
393,954
1,169,374
1,563,328
65,724
Michigan City, MS
336,323
963,447
1,299,770
66,177
Pontotoc, MS
174,112
924,043
1,098,155
59,678
Tutwiler, MS
152,108
844,300
996,408
51,010
Fair Play, MO
56,563
642,856
699,419
38,839
1,394,072
2,210,514
3,604,586
151,910
1,647,163
2,256,716
3,903,879
150,448
Grovespring, MO
207,974
823,419
1,031,393
49,748
Hermitage, MO
98,531
833,177
2,600
835,777
934,308
50,452
Madison, MO
199,972
844,901
1,044,873
51,046
Oak Grove, MO
275,293
1,000,150
1,275,443
62,509
Salem, MO
153,713
1,085,494
1,239,207
60,993
South Fork, MO
345,053
1,087,384
1,432,437
65,696
St. Louis, MO
743,673
3,387,981
4,131,654
176,457
F-57
Manchester, HN
1,486,550
2,419,269
12,678
2,431,947
3,918,497
131,466
808,886
2,020,221
278
2,020,499
2,829,385
109,441
Lanoka Harbor, NJ
1,355,335
1,052,415
2,407,750
59,071
Paramus, NJ
6,224,221
599,410
6,823,631
438,673
San Ysidro, NM
316,770
956,983
1,273,753
57,818
Hinsdale, NY
353,602
905,350
1,258,952
54,698
Liverpool, NY
1,697,114
3,355,641
24,323
3,379,964
5,077,078
168,846
Malone, NY
413,667
1,035,771
1,449,438
71,032
Vestal, NY
3,540,906
5,610,529
147,000
5,757,529
9,298,435
317,724
Columbus, NC
423,026
1,070,992
1,494,018
60,170
505,574
1,544,177
2,049,751
83,643
Hope Mills, NC
1,522,142
7,906,676
9,428,818
461,098
Stallings, NC
1,481,940
Sylva, NC
450,055
1,351,631
19,487
1,371,118
1,821,173
68,434
Edgeley, ND
193,509
944,881
1,138,390
59,055
1,187,389
2,052,184
3,239,573
123,968
Williston, ND
515,210
1,584,865
2,100,075
95,752
Batavia, OH
601,071
1,125,756
(5,377)
597,667
1,123,783
1,721,450
72,857
186,215
1,343,783
8,491
1,352,274
1,538,489
67,561
357,767
1,423,046
1,780,813
97,657
Conneaut, OH
200,915
1,363,715
7,983
1,371,698
1,572,613
74,217
Hamilton, OH
335,677
1,066,581
1,402,258
70,962
657,358
3,259,449
313,281
3,572,730
4,230,088
198,554
Kenton, OH
191,968
1,290,534
7,723
1,298,257
1,490,225
67,553
Maumee, OH
1,498,739
815,222
972
816,194
2,314,933
59,517
Oxford, OH
912,241
2,566,991
3,479,232
181,669
West Chester, OH
796,035
814,730
815,390
1,611,425
59,436
395,924
1,173,848
1,569,772
83,030
Ada, OK
336,304
1,234,870
1,571,174
66,889
Bartlesville, OK
451,582
1,249,112
1,700,694
77,898
Bokoshe, OK
47,725
797,175
844,900
49,533
Lawton, OK
230,834
612,256
843,090
38,094
Whitefield, OK
144,932
863,327
1,008,259
53,958
Cranberry Township, PA
2,066,679
2,049,310
4,115,989
145,100
Ebensburg, PA
551,162
2,023,064
2,574,226
138,919
Flourtown, PA
1,342,409
2,229,147
3,571,556
162,526
Monaca, PA
449,116
842,901
1,292,017
59,646
F-58
Natrona Heights, PA
1,412,247
1,719,447
3,131,694
125,376
North Huntingdon, PA
428,166
1,508,044
1,936,210
106,760
Oakdale, PA
708,623
987,577
68,352
1,055,929
1,764,552
53,250
1,891,985
20,799,223
211,464
21,010,687
22,902,672
1,400,697
1,251,674
3,842,592
5,094,266
216,046
Robinson Township, PA
1,630,648
2,703,381
4,334,029
168,877
Titusville, PA
877,651
2,568,060
3,445,711
165,797
West View, PA
120,349
1,347,706
1,468,055
78,531
York, PA
3,331,496
6,690,968
10,022,464
431,882
2,783,934
13,228,453
16,012,387
936,888
Hampton, SC
215,462
1,050,367
1,265,829
78,778
1,371,226
2,752,440
503,611
3,256,051
4,627,277
200,353
Orangeburg, SC
316,428
1,116,664
1,433,092
72,040
Kadoka, SD
134,528
926,523
1,061,051
57,908
Thorn Hill, TN
115,367
974,925
1,090,292
66,931
Woodbury, TN
154,043
1,092,958
1,247,001
75,141
Burleson, TX
1,396,753
3,312,794
13,864
3,326,658
4,723,411
166,246
Carrizo Springs, TX
337,070
812,963
5,087
818,050
1,155,120
51,007
Garland, TX
773,385
2,587,011
3,360,396
172,467
Kenedy, TX
325,159
954,774
11,255
966,029
1,291,188
48,231
Laredo, TX
1,117,403
2,152,573
3,269,976
138,925
Lewisville, TX
2,347,993
5,271,935
7,619,928
384,412
1,420,820
1,858,395
3,279,215
135,508
Wichita Falls, TX
585,664
1,952,988
2,538,652
122,062
Wylie, TX
686,154
1,623,684
2,309,838
114,951
Draper, UT
1,344,025
3,321,208
23,553
3,344,761
4,688,786
167,091
Bristol, VA
996,915
1,374,467
2,371,382
80,177
Gloucester, VA
458,785
1,994,093
2,452,878
116,278
3,549,928
6,096,218
6,096,325
9,646,253
342,669
429,613
1,081,015
1,510,628
63,059
744,520
1,249,355
1,993,875
72,879
561,596
1,545,002
2,106,598
90,125
12,618,320
855,793
1,754,228
2,610,021
102,330
Poquoson, VA
330,867
848,105
2,156
850,261
1,181,128
49,567
South Boston, VA
490,590
2,637,385
15,414
2,652,799
3,143,389
143,533
Surry, VA
685,233
994,788
1,680,021
58,029
F-59
Williamsburg, VA
1,574,769
2,001,920
(9,200)
1,565,569
3,567,489
116,779
675,861
1,098,464
1,774,325
64,077
Wytheville, VA
206,660
1,248,178
1,454,838
62,409
Ephrata, WA
368,492
4,821,470
18,383
4,839,853
5,208,345
251,865
Charleston, WV
561,767
Ripley, WV
1,042,204
20,423
1,062,627
Black River Falls, WI
278,472
1,141,572
9,519
1,151,091
1,429,563
59,873
Lake Geneva, WI
7,078,726
Menomonee Falls, WI
3,518,493
12,020,248
12,918
12,033,166
15,551,659
776,210
Sun Prairie, WI
2,864,563
7,215,614
10,080,177
405,679
West Milwaukee, WI
783,260
3,055,907
16,402
3,072,309
3,855,569
159,730
Adger, AL
189,119
1,222,891
1,412,010
48,406
Dothan, AL
792,626
3,017,431
(31,788)
778,553
2,999,716
3,778,269
72,536
Enterprise, AL
728,934
2,504,283
15,377
2,519,660
3,248,594
119,997
Lanett, AL
597,615
2,264,102
128
2,264,230
2,861,845
75,450
Saraland, AL
838,216
2,709,602
1,275
2,710,877
3,549,093
129,629
Sylacauga, AL
2,181,806
9,940,930
9,945,260
12,127,066
393,426
Theodore, AL
743,751
2,667,802
3,411,553
122,186
Altheimer, AR
202,235
1,151,471
1,353,706
47,589
Benton, AR
561,085
2,141,511
249,809
2,391,320
2,952,405
67,140
2,271,157
1,324,716
7,992
1,332,708
3,603,865
33,268
Bismarck, AR
129,139
876,127
1,005,266
30,910
Centerton, AR
502,391
2,152,058
249,808
2,401,866
2,904,257
71,931
Elaine, AR
51,248
802,757
854,005
33,149
477,565
942,703
1,420,268
29,405
136,550
638,605
775,155
26,551
Mayflower, AR
708,465
448,741
66,856
515,597
1,224,062
12,472
Mena, AR
1,459,039
Pine Bluff, AR
195,689
1,102,338
3,250
1,105,588
1,301,277
48,124
279,293
1,290,094
1,569,387
53,461
548,495
5,834,876
6,383,371
206,400
Sparkman, AR
80,956
720,376
801,332
23,953
West Helena, AR
93,907
885,680
979,587
36,515
Coolidge, AZ
252,228
1,164,641
510
1,165,151
1,417,379
43,568
761,177
1,600,925
11,257
1,612,182
2,373,359
43,559
Phoenix, AZ
11,641,459
7,261,072
18,902,531
257,028
3,267,761
6,624,814
94,241
6,719,055
9,986,816
168,488
F-60
Yuma, AZ
840,427
5,489,179
577
5,489,756
6,330,183
205,716
5,052,648
29,919
5,082,567
126,877
Antioch, CA
3,369,667
6,952,571
10,322,238
231,654
Calexico, CA
937,091
22,274
959,365
Hawthorne, CA
7,297,568
5,841,964
1,750
5,843,714
13,141,282
182,451
Napa, CA
5,287,831
13,608,836
650
13,609,486
18,897,317
510,154
Palmdale, CA
2,159,541
6,648,091
6,648,577
8,808,118
290,702
Quincy, CA
315,559
1,597,973
1,913,532
69,662
605,988
4,898,500
5,504,488
193,826
10,668,451
27,033
10,695,484
San Francisco, CA
7,234,677
748,185
19,918
768,103
8,002,780
20,617
Signal Hill, CA
8,490,622
6,714,882
15,205,504
321,755
Stockton, CA
961,910
3,310,275
16,114
3,326,389
4,288,299
83,059
Broomfield, CO
708,881
965,675
7,993
973,668
1,682,549
24,292
Cortez, CO
177,422
1,594,274
9,852
1,604,126
1,781,548
40,042
La Junta, CO
187,988
823,735
1,011,723
35,789
Pueblo, CO
235,805
1,568,540
1,804,345
58,820
Newington, CT
403,932
1,915,897
2,319,829
87,708
Old Saybrook, CT
443,801
3,497,920
74
3,497,994
3,941,795
109,163
Stafford Springs, CT
1,230,939
7,075,776
8,306,715
221,118
Davenport, FL
721,966
1,435,651
2,157,617
71,783
Deerfield Beach, FL
1,963,542
514,491
2,478,033
18,120
Labelle, FL
489,345
2,754,977
3,244,322
97,472
2,060,445
15,405
2,075,850
Leesburg, FL
708,698
541,993
549,986
1,258,684
13,700
Madison, FL
171,150
619,660
790,810
25,742
4,558,262
7,261,682
11,819,944
302,440
Panama City, FL
830,080
856,243
1,686,323
42,805
379,154
969,254
977,247
1,356,401
24,381
Port St. Lucie, FL
670,030
1,664,571
2,334,601
76,168
Punta Gorda, FL
615,829
1,921,751
2,537,580
92,084
Sebring, FL
1,986,013
15,406
2,001,419
1,301,719
1,233,030
2,534,749
61,651
1,241,406
1,356,081
1,356,101
2,597,507
64,979
311,920
1,278,107
1,590,027
53,191
248,888
1,445,530
1,694,418
60,172
898,015
5,713,749
6,611,764
193,539
F-61
238,633
968,812
1,207,445
40,361
Cairo, GA
237,315
1,040,643
1,277,958
52,032
Dallas, GA
235,642
1,134,202
1,142,195
1,377,837
28,505
533,512
1,709,449
2,242,961
49,859
Flowery Branch, GA
1,253,091
(2,000)
1,251,091
Jesup, GA
155,604
864,415
1,020,019
35,938
Lawrenceville, GA
852,136
1,633,580
2,485,716
78,276
Lithia Springs, GA
3,789,145
7,881,640
11,670,785
295,457
Moultrie, GA
150,752
868,415
1,019,167
36,105
Quitman, GA
407,661
1,125,845
1,533,506
56,292
749,834
1,802,814
2,552,648
63,769
3,502,278
4,132,018
2,179
4,134,197
7,636,475
137,532
George, IA
283,785
942,785
1,226,570
47,139
Graettinger, IA
154,261
933,746
1,088,007
46,687
Alexis, IL
425,656
1,237,404
1,663,060
59,292
2,780,722
2,305,569
5,086,291
71,922
424,932
4,223,123
4,648,055
131,851
596,808
1,415,648
2,012,456
44,118
932,560
2,553,809
7,273
2,561,082
3,493,642
63,974
East Alton, IL
113,457
1,422,573
1,536,030
53,248
Fairfield, IL
198,833
1,180,242
6,975
1,187,217
1,386,050
32,067
Grayslake, IL
478,307
1,131,061
1,609,368
44,645
Homewood, IL
1,224,131
10,005,811
6,230
10,012,041
11,236,172
416,806
Kankakee, IL
107,139
1,185,653
1,292,792
34,501
Manteno, IL
71,681
1,213,963
37,938
1,251,901
1,323,582
31,058
Oswego, IL
373,727
2,715,101
16,092
2,731,193
3,104,920
68,179
Rockton, IL
367,154
1,526,399
1,893,553
38,160
Elkhart, IN
173,631
972,629
980,621
1,154,252
24,465
Franklin, IN
979,332
1,548,523
1,556,516
2,535,848
38,863
251,149
1,550,984
1,802,133
41,989
Noblesville, IN
259,582
1,611,431
1,871,013
77,214
Peru, IN
202,110
1,501,247
1,703,357
56,297
Rockville, IN
436,457
1,601,972
(75,085)
1,526,887
1,963,344
Derby, KS
440,419
2,367,428
2,807,847
78,777
Independence, KS
200,329
1,426,975
1,351,890
1,552,219
34,242
Shwanee, KS
2,594,271
2,766,524
5,360,795
103,646
834,377
2,338,612
3,172,989
87,600
F-62
2,031,526
1,974,595
4,006,121
73,949
1,194,939
2,062,020
3,256,959
77,228
2,171,260
2,235,093
4,406,353
83,816
Louisa, KY
242,391
1,177,975
1,184,950
1,427,341
34,488
Louisville, KY
2,185,678
3,081,512
5,300
3,086,812
5,272,490
154,076
208,346
621,820
830,166
21,963
Amite City, LA
264,208
930,655
7,080
937,735
1,201,943
31,019
377,270
1,225,020
1,602,290
58,522
Denham Springs, LA
398,006
1,484,613
1,882,619
49,462
Dequincy, LA
288,426
969,725
1,258,151
34,344
Gibson, LA
414,855
1,252,765
4,509
1,257,274
1,672,129
49,553
Gonzales, LA
688,032
2,457,035
2,706,843
3,394,875
76,276
Hammond, LA
367,215
2,243,382
2,493,191
2,860,406
60,763
Laplace, LA
1,971,887
8,537,415
10,509,302
355,589
Springhill, LA
438,507
2,335,035
14,125
2,349,160
2,787,667
58,730
Dorchester, MA
4,815,990
923,841
13,041
936,882
5,752,872
25,242
East Wareham, MA
590,052
1,525,359
8,780
1,534,139
2,124,191
41,390
Pittsfield, MA
4,127,428
5,087,945
Taunton, MA
1,005,673
8,352,646
9,358,319
417,632
Aberdeen, MD
758,616
1,712,723
2,471,339
85,636
3,031,879
36,709
3,068,588
Cockeysville, MD
2,209,572
20,283
2,229,855
Hagerstown, MD
1,009,779
1,285,162
2,294,941
61,581
Owings Mills, MD
2,154,954
3,017,368
3,019,118
5,174,072
94,178
Augusta, ME
1,627,817
Benton Harbor, MI
385,355
1,090,802
1,098,794
1,484,149
27,420
Cedar Springs, MI
346,310
1,907,232
2,253,542
47,681
Grayling, MI
277,355
521,492
925
522,417
799,772
19,427
Hart, MI
1,336,141
1,294,095
2,630,236
56,356
Holland, MI
108,733
1,773,459
1,882,192
88,673
Howell, MI
601,610
1,491,797
300
1,492,097
2,093,707
58,900
Jonesville, MI
1,171,853
8,871,307
10,043,160
369,504
1,315,043
9,131,436
10,446,479
285,132
Omer, MI
165,126
828,778
993,904
39,712
Owosso, MI
299,521
2,240,764
2,540,285
112,038
Taylor, MI
338,092
1,017,043
1,355,135
31,616
F-63
Traverse City, MI
337,556
3,980,018
(48,115)
3,931,903
4,269,459
114,681
Apple Valley, MN
814,086
2,665,167
3,479,253
77,664
Blaine, MN
497,750
2,998,249
3,006,242
3,503,992
75,106
Chanhassen, MN
1,664,359
11,222
1,675,581
Glyndon, MN
131,845
853,575
985,420
42,678
Hill City, MN
66,391
996,428
1,062,819
49,821
Holdingford, MN
276,722
1,078,003
1,354,725
53,900
Ottertail, MN
209,929
897,043
1,106,972
44,852
Arnold, MO
846,894
2,392,044
2,400,037
3,246,931
59,951
Leeton, MO
192,069
1,109,261
1,301,330
43,908
367,591
4,348,251
4,715,842
153,749
Northmoor, MO
551,491
1,723,994
2,275,485
60,968
Platte City, MO
766,613
2,501,154
21,647
2,522,801
3,289,414
62,796
Richmond Heights, MO
3,305,260
2,531,065
5,836,325
94,915
Sheldon, MO
168,799
1,017,992
1,186,791
40,296
Thayer, MO
685,788
1,968,043
2,200
1,970,243
2,656,031
81,892
Union, MO
270,233
1,041,690
1,311,923
36,830
526,657
1,575,241
2,101,898
49,112
1,625,494
6,417,821
7,430
6,425,251
8,050,745
244,251
759,912
2,383,348
3,143,260
74,392
Gore Springs, MS
188,141
951,645
48,115
999,760
1,187,901
40,469
Greenwood, MS
150,855
903,459
1,054,314
37,256
137,312
1,154,001
43,112
Grenada, MS
187,855
947,888
1,135,743
39,107
597,617
2,692,177
2,693,452
3,291,069
128,764
Madison, MS
1,437,048
6,194,546
7,631,594
193,513
Oxford, MS
547,606
993,807
1,001,799
1,549,405
24,995
259,300
864,055
21,364
885,419
1,144,719
27,489
Wiggins, MS
639,466
2,563,263
2,563,391
3,202,857
85,422
Asheville, NC
5,132,913
17,171
5,150,084
Atlantic Beach, NC
261,338
1,156,375
1,417,713
38,453
Beaufort, NC
375,437
1,417,587
1,793,024
47,160
Boone, NC
4,795,569
9,543,185
1,001
9,544,186
14,339,755
457,155
Buxton, NC
209,947
1,186,030
1,395,977
39,442
Cary, NC
253,081
1,018,159
1,271,240
34,211
Chapel Hill, NC
22,437,345
(808,470)
21,628,875
978,304
1,328,283
2,306,587
57,999
F-64
952,393
1,398,319
2,350,712
64,090
Dallas, NC
309,847
1,008,936
1,318,783
37,749
229,232
1,169,836
1,399,068
38,902
Elkin, NC
1,884,674
10,255
1,894,929
2,187,163
47,309
Elm City, NC
447,081
1,401,379
1,848,460
46,620
Emerald Isle, NC
316,187
1,125,842
1,442,029
37,435
4,398,922
10,142,102
14,541,024
485,976
Garner, NC
216,566
1,170,660
1,387,226
38,929
Goldsboro, NC
246,160
1,227,984
1,474,144
40,840
243,355
1,135,304
1,378,659
37,751
272,962
1,126,017
1,398,979
37,441
161,533
1,095,964
1,257,497
36,439
Harkers Island, NC
964,627
2,109,360
3,073,987
70,312
405,135
1,122,908
1,528,043
37,430
3,213,710
10,021,579
13,235,289
313,027
295,296
1,426,015
12,096
1,438,111
1,733,407
35,877
Kinston, NC
358,915
1,016,305
1,375,220
33,877
Knotts Island, NC
129,285
1,232,265
1,361,550
41,076
Morehead City, NC
201,436
934,453
1,135,889
31,148
Randleman, NC
1,368,987
8,954,905
10,323,892
429,089
1,834,106
19,174
1,853,280
Rocky Mount, NC
305,766
1,114,117
1,419,883
37,137
206,675
960,873
1,167,548
32,029
990,303
1,019,025
1,027,018
2,017,321
25,625
Salter Path, NC
245,172
1,012,413
1,257,585
33,747
Smithfield, NC
270,560
1,201,146
1,471,706
40,038
1,776,968
12,026,284
6,026
12,032,310
13,809,278
526,000
Waves, NC
320,928
1,092,703
1,413,631
36,423
Waxhaw, NC
679,943
2,377,641
3,057,584
69,277
Winston Salem, NC
232,299
1,069,191
1,301,490
35,640
Winston-Salem, NC
282,142
1,316,279
12,095
1,328,374
1,610,516
33,134
Winterville, NC
312,123
1,271,222
1,583,345
42,374
Stanley, ND
346,030
3,299,205
8,430
3,307,635
3,653,665
144,332
Lebanon, NH
694,609
3,892,685
61,494
3,954,179
4,648,788
162,594
Budd Lake, NJ
2,771,964
20,750
2,792,714
Fairfield, NJ
2,358,323
24,454
2,382,777
Paterson, NJ
F-65
Clovis, NM
74,256
943,641
11,851
955,492
1,029,748
25,758
Albany, NY
539,308
1,123,766
1,663,074
37,350
Bemus Point, NY
49,293
980,218
(53,367)
926,851
976,144
36,380
Candor, NY
271,132
1,012,522
959,155
1,230,287
37,624
Conklin, NY
247,429
939,529
886,162
1,133,591
34,887
Greene, NY
449,997
1,173,666
1,623,663
44,001
526,596
561,841
4,891
566,732
1,093,328
14,138
Masonville, NY
222,228
1,059,364
1,281,592
39,714
Medford, NY
1,211,908
3,751,279
3,751,353
4,963,261
117,081
Mount Upton, NY
152,379
918,162
1,070,541
34,431
Olean, NY
1,224,360
12,197,768
181,275
12,379,043
13,603,403
533,363
Pompey, NY
774,544
1,437,312
2,211,856
53,899
Ripley, NY
110,279
756,748
867,027
28,378
2,391,104
13,146,442
15,537,546
410,627
1,432,858
6,115,247
7,548,105
267,328
Wainscott, NY
4,544,060
4,084,794
8,628,854
178,577
Watertown, NY
523,013
1,323,771
7,380
1,331,151
1,854,164
41,384
Boardman, OH
483,754
1,817,047
2,300,801
64,294
Carrollton, OH
251,046
1,593,367
1,844,413
69,465
Chillicothe, OH
760,959
10,507,546
11,268,505
459,534
Cincinnati, OH
381,550
1,651,643
2,033,193
58,436
1,689,259
6,937,214
8,626,473
250,267
Defiance, OH
127,517
1,407,734
1,332,649
1,460,166
33,761
Dunkirk, OH
230,958
1,069,772
4,508
1,074,280
1,305,238
42,356
Hudson, OH
548,279
763,934
768,825
1,317,104
19,190
Mason, OH
4,470,714
11,479,943
7,630
11,487,573
15,958,287
382,640
Massillon, OH
118,153
1,177,205
1,185,197
1,303,350
29,580
Mayfield Heights, OH
696,965
987,268
992,159
1,689,124
24,773
Oregon, OH
4,915,676
11,980,299
16,895,975
349,284
Parma, OH
1,292,437
9,410
(1)
1,301,846
8,645,091
30,638
8,675,729
4,950,900
8,979,618
13,930,518
261,843
Westerville, OH
946,988
1,786,197
1,791,088
2,738,076
44,747
690,653
1,402,190
801,642
2,203,832
2,894,485
49,461
Checotah, OK
151,906
862,730
1,014,636
37,717
507,204
3,969,937
4,477,141
148,741
Moore, OK
1,649,938
1,480,239
1,488,232
3,138,170
37,156
F-66
356,795
1,349,469
1,706,264
47,734
Eugene, OR
4,253,602
7,543,456
11,797,058
235,639
Seaside, OR
376,612
5,093,532
1,875
5,095,407
5,472,019
190,903
Bristol, PA
1,201,361
9,382
1,210,743
Lawrence Township, PA
225,955
1,552,979
16,800
1,569,779
1,795,734
61,472
Nescopeck, PA
428,452
1,362,404
1,790,856
48,252
New Milford, PA
206,824
1,139,407
1,143,916
1,350,740
45,112
Orangeville, PA
201,441
1,065,583
1,267,024
33,299
Port Trevorton, PA
143,540
955,027
959,535
1,103,075
37,814
Tobyhanna, PA
181,003
1,066,380
1,070,889
1,251,892
42,222
Wellsboro, PA
165,062
1,091,790
1,256,852
27,295
Whitehall, PA
1,139,318
2,964,839
526,241
3,491,080
4,630,398
156,123
Chapin, SC
237,432
1,540,336
1,777,768
54,423
Clemson, SC
501,288
1,898,545
6,845
1,905,390
2,406,678
79,128
1,233,052
5,532,637
6,765,689
241,813
354,953
1,670,857
2,025,810
52,141
Greer, SC
426,062
1,800,058
2,226,120
86,253
Irmo, SC
274,327
729,177
1,003,504
22,787
858,941
1,377,893
2,236,834
66,024
389,784
915,150
923,143
1,312,927
23,028
Pageland, SC
305,018
2,185,114
24,897
2,210,011
2,515,029
59,498
Vermillion, SD
182,981
1,352,667
186,311
1,538,978
1,721,959
53,760
Yankton, SD
197,328
985,756
993,749
1,191,077
24,794
Cleveland, TN
1,060,966
1,508,917
2,569,883
72,302
Henderson, TN
109,252
705,187
814,439
21,983
Kimball, TN
1,509,366
11,782,512
13,291,878
441,631
4,110,394
12,554,772
16,665,166
470,659
210,544
1,396,261
1,606,805
43,515
Lakeland, TN
237,682
795,446
1,033,128
24,804
Nashville, TN
556,406
980,902
1,537,308
44,867
355,577
1,331,745
1,687,322
47,106
Seymour, TN
187,929
1,302,250
1,490,179
46,042
Tullahoma, TN
1,206,870
9,840,853
12,758
9,853,611
11,060,481
266,747
Belton, TX
587,479
2,228,889
2,816,368
64,936
Comanche, TX
93,935
1,213,190
1,307,125
60,660
Conroe, TX
1,227,703
4,880
1,232,583
Converse, TX
1,425,000
471,349
1,896,349
16,523
F-67
200,802
1,642,854
8,674
1,651,528
1,852,330
44,508
Cuero, TX
361,553
2,937,261
3,298,814
91,734
Dayton, TX
167,367
1,222,272
9,162
1,231,434
1,398,801
30,729
Devine, TX
307,379
1,194,057
1,501,436
37,314
El Paso, TX
5,085,368
9,188,052
17,206
9,205,258
14,290,626
382,800
Euless, TX
802,881
1,599,698
2,402,579
59,989
Gonzales, TX
382,828
2,667,952
3,050,780
83,313
Harker Heights, TX
659,665
863,417
1,523,082
26,982
1,564,673
806,551
12,204
818,755
2,383,428
20,384
231,002
2,423,937
196,346
2,620,283
2,851,285
79,078
Houston, TX
5,229,809
6,223,821
22,179
6,246,000
11,475,809
212,020
812,409
2,365,951
3,178,360
73,872
835,464
5,596
17,094
858,154
595,712
2,044,118
2,639,830
80,813
La Feria, TX
44,473
1,170,246
1,177,221
1,221,694
34,263
Lake Jackson, TX
898,275
1,791,093
1,799,085
2,697,360
44,927
1,033,074
1,746,113
2,779,187
65,480
332,773
933,072
937,963
1,270,736
23,419
1,884,836
5,897,417
38,387
5,935,804
7,820,640
148,108
Mansfield, TX
1,116,200
1,554,255
1,562,247
2,678,447
39,006
Mckinney, TX
2,304,155
1,862,729
1,870,722
4,174,877
46,718
Rhome, TX
477,504
2,267,040
21,819
2,288,859
2,766,363
57,061
Saginaw, TX
318,799
734,538
1,053,337
22,901
San Antonio, TX
947,884
884,952
892,945
1,840,829
Terrell, TX
1,065,186
3,244,273
4,309,459
162,215
789,415
1,258,695
1,266,687
2,056,102
31,617
Weslaco, TX
921,078
2,179,132
(581)
2,178,551
3,099,629
55,153
1,386,391
1,793,944
1,801,937
3,188,328
44,998
Chester, VA
389,357
37,083
426,440
Galax, VA
160,074
1,185,312
14,576
1,199,888
1,359,962
32,359
Henrico, VA
439,174
1,681,279
36,356
1,717,635
2,156,809
43,065
Lynchburg, VA
241,396
890,833
902,929
1,144,325
22,498
Burlington, WI
1,121,515
3,220,272
3,228,265
4,349,780
80,657
Germantown, WI
617,945
1,199,846
1,207,839
1,825,784
30,146
Minocqua, WI
2,866,258
680
2,866,938
3,093,836
83,482
1,705,035
14,386,315
16,091,350
449,427
Portage, WI
800,764
3,052,566
3,853,330
101,715
F-68
Vienna, WV
141,299
1,283,342
1,424,641
64,168
Cheyenne, WY
884,988
2,104,537
2,112,530
2,997,518
52,763
Gadsden, AL
1,516,549
Jasper, AL
733,824
5,508,628
6,242,452
34,359
Pelham, AL
919,330
2,327,831
3,247,161
53,346
121,550
1,211,283
1,332,833
2,278,930
1,199,562
3,478,492
22,477
345,738
1,279,134
1,624,872
2,050,887
1,527,796
3,578,683
18,958
Springdale, AR
1,331,671
1,696,714
3,028,385
14,123
Avondale, AZ
399,574
2,237,087
2,636,661
Winslow, AZ
375,135
999,436
1,374,571
12,395
Colton, CA
2,917,244
6,274,140
9,191,384
143,746
904,398
Elk Grove, CA
1,692,244
3,387,901
5,080,145
77,639
Pleasant Hill, CA
17,618,136
Sacramento, CA
2,962,751
14,367,331
17,330,082
29,858
Van Nuys, CA
10,821,454
6,196,785
17,018,239
Silverthorne, CO
4,368,862
6,781,801
11,150,663
Colchester, CT
503,706
5,280,982
5,784,688
88,016
2,155,182
2,723,325
4,878,507
28,051
Stratford, CT
993,610
6,285,488
7,279,098
39,233
Wallingford, CT
4,598,776
19,587,021
24,185,797
203,887
13,491,385
4,628,672
18,120,057
11,403
Bridgeville, DE
2,496,605
Daytona Beach, FL
3,248,529
2,949,873
7,123,762
10,073,635
29,533
691,891
1,034,268
1,726,159
17,154
Hialeah, FL
4,971,380
804,622
3,907,841
4,712,463
57,000
545,581
1,461,745
2,007,326
36,329
1,072,558
756,285
1,828,843
14,058
422,211
2,372,216
2,794,427
14,767
1,453,431
1,190,857
8,035,701
10,505,521
18,541,222
65,181
1,039,722
F-69
Pembroke Pines, FL
2,285,774
1,178,923
922,936
2,101,859
7,675
439,430
1,046,780
Yulee, FL
2,262,371
7,246,236
9,508,607
90,005
Athens, GA
68,943
6,048,020
6,116,963
87,778
933,105
1,460,129
2,393,234
17,631
347,441
2,622,249
2,969,690
Dublin, GA
217,337
605,199
822,536
3,783
Gray, GA
148,268
1,074,924
1,223,192
17,888
Jefferson, GA
527,074
931,010
1,458,084
Jonesboro, GA
344,270
1,576,064
1,920,334
3,232
Kingsland, GA
185,047
2,599,400
2,784,447
21,588
1,177,865
1,833,593
3,011,458
42,020
Rome, GA
1,380,532
Stockbridge, GA
278,080
1,479,158
1,757,238
Thomson, GA
257,455
1,291,280
1,548,735
Centerville, IA
182,203
2,115,086
2,297,289
30,671
902,749
Mason City, IA
869,564
3,270,795
4,140,359
45,487
229,425
1,558,507
1,787,932
16,214
Bloomingdale, IL
5,377,240
9,661,090
15,038,330
180,902
239,089
1,826,238
2,065,327
19,003
Bourbonnais, IL
1,593,823
1,525,782
3,119,605
3,143
Carbondale, IL
496,342
1,025,021
1,521,363
8,526
Champaign, IL
3,112,523
4,504,390
7,616,913
27,901
Charleston, IL
2,650,341
698,854
1,412,178
2,111,032
32,224
Coal City, IL
453,744
1,080,622
1,534,366
20,089
East Dundee, IL
1,567,806
East Peoria, IL
2,404,155
Hampshire, IL
3,866,229
Huntley, IL
2,089,500
Joliet, IL
536,897
3,011,274
3,548,171
62,365
Lakemoor, IL
987,967
Lombard, IL
5,480,904
Mount Prospect, IL
885,540
F-70
Naperville, IL
3,973,788
12,799,047
16,772,835
79,617
563,262
1,471,698
2,034,960
27,362
Romeoville, IL
4,835,683
Schiller Park, IL
2,585,445
Sheffield, IL
217,455
998,824
1,216,279
2,060
South Chicago Heights, IL
205,849
1,452,724
1,658,573
15,113
South Elgin, IL
648,899
3,916,025
4,564,924
8,077
985,408
2,746,744
3,732,152
17,074
Streator, IL
203,924
1,040,180
1,244,104
2,146
Westchester, IL
296,452
1,252,538
1,548,990
10,438
Westmont, IL
2,284,013
8,912,960
11,196,973
185,326
Bedford, IN
239,065
956,272
1,195,337
1,972
Brownburg, IN
329,868
3,033,286
3,363,154
69,513
329,123
1,521,763
1,850,886
3,144
Granger, IN
406,211
1,459,388
1,865,599
362,907
2,710,927
3,073,834
28,219
298,258
1,193,243
1,491,501
2,480
Kiowa, KS
20,642
1,469,150
1,489,792
6,066
Liberal, KS
418,695
6,919,579
7,338,274
72,059
Manhattan, KS
1,419,099
Merriam, KS
1,688,893
6,844,926
8,533,819
128,195
1,716,439
10,797,925
12,514,364
695,883
1,918,101
2,613,984
39,679
1,041,287
1,521,346
2,562,633
9,393
Clinton, LA
164,982
1,057,099
1,222,081
24,225
Independence, LA
273,598
1,022,901
1,296,499
976,288
2,744,759
3,721,047
57,017
Pineville, LA
136,853
1,307,116
1,443,969
29,879
Walker, LA
90,393
1,383,507
17,214
Abingdon, MA
8,465,529
Fall River, MA
721,506
5,380,883
6,102,389
89,435
1,514,648
16,947,554
18,462,202
141,214
4,451,982
1,393,361
2,819,672
4,213,033
5,864
Baltimore (Gwynn Oak), MD
1,225,061
Bel Air, MD
499,309
Dundalk, MD
746,235
1,564,948
2,311,183
38,909
F-71
Battle Creek, MI
101,794
1,083,512
1,185,306
13,315
271,928
1,143,856
1,415,784
2,362
925,205
5,848,684
6,773,889
84,791
7,204,001
4,285,184
Okemos, MI
4,607,749
5,825,877
10,433,626
84,827
285,004
896,731
1,181,735
1,859,019
855,000
1,267,920
2,122,920
Sterling Heights, MI
484,463
2,991,098
3,475,561
51,546
403,176
1,862,968
2,266,144
23,190
Brooklyn Park, MN
2,386,951
2,002,599
4,389,550
41,721
Burnsville, MN
588,062
1,977,978
2,566,040
Fridley, MN
4,775,640
1,566,580
2,730,817
4,297,397
56,811
Oakdale, MN
4,800,338
12,814,387
17,614,725
240,018
Savage, MN
1,470,298
1,283,392
2,753,690
26,656
California, MO
62,996
1,479,867
1,542,863
24,596
Marshfield, MO
795,252
4,724,969
5,520,221
78,534
Pevely, MO
724,554
1,130,540
1,855,094
23,505
Sugar Creek, MO
488,219
1,038,408
1,526,627
17,238
Byhalia, MS
150,179
1,417,039
1,567,218
2,912
Byram, MS
5,279,846
10,832,879
16,112,725
157,846
Vicksburg, MS
705,202
825,075
1,530,277
5,061
Sidney, MT
190,517
3,935,720
4,126,237
24,529
1,972,755
810,927
1,344,585
Denver, NC
199,637
1,323,072
1,522,709
19,271
188,155
702,254
890,409
10,217
545,483
2,714,833
3,260,316
62,215
261,641
1,033,980
1,295,621
25,850
Hickory, NC
417,127
1,548,699
1,965,826
6,402
367,561
1,427,032
1,794,593
35,676
Holly Springs, NC
1,298,760
996,275
1,200,518
F-72
1,024,340
1,405,020
1,611,871
Mt. Airy, NC
188,167
1,318,013
1,506,180
2,691
1,073,746
6,186,151
7,259,897
154,654
742,521
1,547,361
2,289,882
9,671
1,387,879
Bottineau, ND
680,781
2,851,784
3,532,565
5,934
Blair, NE
65,927
1,171,950
1,237,877
Crete, NE
283,765
4,583,875
4,867,640
19,004
Valentine, NE
30,526
1,276,252
1,306,778
2,628
Wayne, NE
24,660
1,211,103
1,235,763
9,990
Hooksett, NH
2,474,821
3,660,471
Bellmawr, NJ
3,517,630
Berlin, NJ
4,487,319
East Hanover, NJ
2,424,060
6,185,969
6,748,014
12,933,983
140,061
Eatontown, NJ
4,073,886
Elizabeth, NJ
1,389,441
Hammonton, NJ
4,231,954
Lawrenceville, NJ
19,909
12,118
1,111,855
22,969
North Plainfield, NJ
1,189,310
1,655,062
2,844,372
30,944
Parsippany, NJ
4,683,017
896,104
1,977,903
2,874,007
24,724
20,901,499
Pennsauken, NJ
3,731,685
Randolph, NJ
3,550,608
Upper Deerfield, NJ
194,607
1,729,659
1,924,266
14,396
Whippany, NJ
3,557,958
Woodbine, NJ
354,591
1,545,735
1,900,326
38,429
Woodbridge, NJ
737,212
2,644,765
3,381,977
49,460
Albuquerque, NM
2,812,052
F-73
433,221
1,163,623
1,596,844
14,410
698,506
3,183,377
3,881,883
6,631
Espanola, NM
5,630,895
Kingston, NY
515,184
3,795,511
4,310,695
23,472
New Rochelle, NY
14,519,339
21,244,741
35,764,080
309,914
353,653
6,062,345
6,415,998
113,483
North Babylon, NY
2,090,724
Plattsburgh, NY
161,089
2,240,530
2,401,619
14,003
1,097,316
7,362,973
8,460,289
137,698
Scarsdale, NY
886,492
1,108,577
1,995,069
6,848
Wappingers Falls, NY
595,962
3,792,944
4,388,906
63,216
Bedford, OH
222,469
1,643,801
1,866,270
13,519
289,416
1,625,007
1,914,423
3,345
Chesepeake, OH
314,084
2,102,730
2,416,814
48,085
1,009,008
Dayton, OH
168,736
1,738,910
1,907,646
10,752
1,445,514
5,043,700
6,489,214
10,477
Gallipolis, OH
818,390
2,159,967
2,978,357
49,397
Geneva, OH
193,381
1,317,460
1,510,841
10,853
Groveport, OH
386,687
1,166,510
1,553,197
19,297
1,030,560
Hilliard, OH
1,152,478
1,041,080
707,910
1,428,428
Mentor, OH
484,808
2,222,441
2,707,249
Milford Center, OH
193,215
924,186
1,117,401
NW Lexington, OH
670,811
2,171,553
2,842,364
49,662
Octa, OH
3,303,590
Pataskala, OH
626,985
1,071,479
1,698,464
8,837
1,986,486
Rocky River, OH
4,045,087
2,151,951
1,372,577
Sidney, OH
45,594
1,562,442
1,608,036
12,929
Streetsboro, OH
199,026
975,438
1,174,464
4,839,262
6,842,158
11,681,420
99,648
F-74
Urbana, OH
4,690,277
6,963,348
11,653,625
101,415
Winchester, OH
259,544
1,236,805
1,496,349
2,536
Atoka, OK
335,303
3,504,781
3,840,084
21,835
Stillwater, OK
501,114
3,252,177
3,753,291
20,242
Tillamook, OR
1,491,707
5,261,299
6,753,006
Cranberry, PA
1,677,064
Dunmore, PA
2,386,896
1,545,236
20,023,873
21,569,109
83,199
Greenville, PA
1,117,096
10,381,185
11,498,281
1,276,788
547,237
1,503,662
2,050,899
28,116
Quakertown, PA
1,763,324
West Mifflin, PA
1,275,400
1,327,346
5,564,166
6,891,512
34,510
Bluffton, SC
473,900
3,740,291
4,214,191
23,267
307,888
2,411,359
2,719,247
15,000
1,675,276
5,987,483
7,662,759
24,948
Lancaster, SC
187,595
991,659
1,179,254
6,132
Olanta, SC
81,182
820,443
901,625
305,903
571,538
877,441
3,506
Pierre, SD
181,579
2,071,921
2,253,500
25,818
Watertown, SD
561,618
1,596,716
2,158,334
Antioch, TN
935,614
Clarksville, TN
238,147
1,331,623
1,569,770
30,516
Crossville, TN
691,538
2,633,769
3,325,307
Hendersonville, TN
1,724,979
Hermitage, TN
722,734
1,730,483
3,100,154
4,830,637
19,188
1,762,166
3,753,566
5,515,732
46,896
Lakesite, TN
834,052
999,412
1,833,464
18,666
Madison, TN
797,234
Murfreesboro, TN
1,191,176
669,035
Smyrna, TN
2,059,771
Amarillo, TX
1,479,874
3,920,015
5,399,889
16,278
Baytown, TX
5,245,019
13,452,319
18,697,338
196,046
1,899,691
1,955,961
3,855,652
32,572
F-75
Cypress, TX
621,351
1,290,305
4,701,339
5,991,644
97,758
4,640,263
Kerrville, TX
629,024
2,862,560
3,491,584
35,782
3,506,179
1,938,388
5,444,567
24,206
Monahans, TX
783,242
2,930,495
3,713,737
2,378,043
1,905,793
4,283,836
23,798
2,256,629
1,689,906
3,946,535
21,100
2,365,571
1,566,637
3,932,208
19,559
Richmond, TX
478,530
2,624,852
3,103,382
27,322
Shenandoah, TX
2,293,709
Spring, TX
1,886,748
1,930,279
3,817,027
16,086
1,312,692
2,124,343
3,437,035
39,060
White Oak, TX
120,160
1,224,831
1,344,991
15,059
Orem, UT
764,062
2,054,014
2,818,076
47,071
Charlottesville, VA
1,364,219
646,751
4,938,519
5,585,270
92,515
2,102,839
6,892,262
8,995,101
129,194
3,659,187
3,746,418
7,405,605
62,440
287,461
2,086,888
2,374,349
450,045
Lakewood, WA
788,705
2,937,767
3,726,472
36,246
476,652
5,940,135
6,416,787
67,120
Puyallup, WA
1,626,445
2,757,598
4,384,043
34,345
Roy, WA
327,278
1,862,388
2,189,666
23,229
Antigo, WI
150,406
907,287
1,057,693
3,680
Brown Deer, WI
413,053
2,893,299
3,306,352
Eau Claire, WI
2,897,122
6,600,361
9,497,483
122,900
Milwaukee, WI
63,728
1,834,352
1,898,080
19,051
373,040
3,470,250
3,843,290
14,395
Athens, WV
416,517
1,472,494
1,889,011
33,642
Beckley, WV
663,138
2,263,526
2,926,664
51,537
Buckhannon, WV
469,129
1,853,528
2,322,657
Elkins, WV
397,225
1,832,516
2,229,741
41,893
Huntington, WV
447,207
1,851,268
2,298,475
42,139
572,162
1,386,007
1,958,169
30,647
778,229
2,357,830
3,136,059
53,931
F-76
233,205
1,245,497
1,478,702
12,954
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
Sub Total
2,988,109,073
3,041,538,588
4,605,458,035
1. Reconciliation of Real Estate Properties
The following table reconciles the Real Estate Properties from January 1, 2019 to December 31, 2021.
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
2. Reconciliation of Accumulated Depreciation
172,698,378
128,581,697
100,311,974
Current year depreciation expense
66,032,885
49,119,345
34,398,782
(4,869,471)
(5,002,664)
(6,129,059)
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
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.
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.
/s/ Richard Agree
Richard Agree
Executive Chairman of the Board of Directors
President, Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Peter Coughenour
Peter Coughenour
Chief Financial Officer and Secretary
(Principal Financial Officer)
/s/ David Wolff
David Wolff
Chief Accounting Officer
(Principal Accounting Officer)
/s/ Karen Dearing
Karen Dearing
Director
/s/ Merrie S. Frankel
Merrie S. Frankel
/s/ Mike Hollman
Mike Hollman
/s/ Michael Judlowe
Michael Judlowe
/s/ Greg Lehmkuhl
Greg Lehmkuhl
/s/ John Rakolta
John Rakolta
/s/ Jerome Rossi
Jerome Rossi