ADC 10-K & 10-Q changes, risk factors and insider trading

Changes in global or national economic conditions, such as the global economic and financial market downturn, rising tensions between China and Taiwan and the conflicts in Ukraine and in the Middle East, may cause or continue to cause, among other things, 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. For example, the current and continued macro-economic conditions of high inflation and increased interest rates have increased the costs associated with acquiring new properties and decreased the availability of financing on terms that we find acceptable, which has reduced our ability to acquire properties at our historical rate with attractive terms. Potential consequences of changes in economic and financial conditions include:

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 or our decision not to renew a tenant's lease and the potential resulting vacancy is likely tomay 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.

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. We may be forced to “take back” a property as a result of default or rejection of a lease by a tenant in a bankruptcy proceeding. In addition, a tenant in bankruptcy may attempt to renegotiate their lease or request significant rent concessions, and any payment on a claim we have for unpaid past rent could be substantially less than the amount owed.

Our properties are located in all 50 states throughout the United States and in particular, the state of Texas (where 151169 properties out of 2,3702,674 properties are located, or 6.8%6.9% of our annualized base rent was derived as of December 31, 20242025), Illinois (140166 properties, or 5.5%6.1% of our annualized base rent), Ohio (164 properties, or 5.3% of our annualized base rent), Michigan (142 properties, or 5.5% of our annualized base rent), North Carolina (133149 properties, or 5.2% of our annualized base rent), and FloridaNew York (129103 properties, or 5.2%5.0% 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.

As of December 31, 2024,2025, 9.2%,10.3%, 9.2%9.0% and 8.1%7.7% of our annualized base rents were derived from tenants operating in the grocery store,stores, home improvement, and tireconvenience and auto servicestore sectors, respectively. Similarly, we have concentrations in other sectors such as convenience stores, dollar storestire and auto parts.service, auto parts and dollar stores. 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.

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 delaysdelays, supply chain disruptions, price fluctuations of materials 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.

Our tenants encounter significant macroeconomic, governmental and competitive forces. Beginning in 2022, in an effort to combat inflation and restore price stability, the Federal Reserve significantly raised its benchmark federal funds rate, which led to increases in interest rates in the credit markets. The Federal Reserve may continue to raise the federal funds rate, which will likely lead to higher interest rates in the credit markets and the possibility of slowing economic growth and/or a recession. Additionally, U.S. government policies implemented to address inflation, including actions by the Federal Reserve to increase or maintain current interest rates, could negatively impact consumer spending and adversely impact the broader economy. Adverse changes in consumer spending or consumer preferences for particular goods, services or store-based retailing could severely impact theirour tenants' ability 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.

We primarily invest in properties leased to tenants in sectors where a physical location is critical to the generation of sales and profits. Such tenants operate in sectors including grocery stores, home improvement, convenience stores, tire and automotiveauto servicesservices, auto parts and conveniencedollar stores. We believe many of these businesses have adopted effective omni-channel strategies that leverage their brick and mortarbrick-and-mortar locations as a distinct competitive advantage against online only retailers and other competitors. In addition, theythese businesses generally operate in sectors that are resilient through economic cycles. While we believe this to be the case, technology and business conditions, particularly in the retail industry, are rapidly changing, and our tenants may be adversely affected by technological innovation, changing consumer preferences and competition from non-traditional sources. To the extent our current and prospective tenants face increased competition their businesses could suffer. There can be no assurance that our tenants will be successful in meeting any new competition, and a deterioration in our tenants’ businesses could impair their ability to meet their lease obligations to us and materially and adversely affect us.

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 and/or damage our business relationships and our reputation. Our clients or other third parties with whom we do business may themselves become subject to cyberattacks or security incidents, over which we may have no control, and which could have an indirect adverse impact on them, us or our business relationship. Furthermore, our business is subject to risks from and may be impacted by cybersecurity attacks or cyber intrusion, 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. Further, while we carry cyber liability insurance, such insurance may not be adequate to cover all losses related to such events. In addition, the regulatory framework around data custody, data privacy and breaches varies by jurisdiction and is an evolving area of law with increasingly complex and rigorous standards. Compliance with existing, proposed and recently enacted laws and regulations can be costly; failure to comply could subject us to fines and penalties, or damage to our reputation and credibility with regulators, tenants and investors.

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 andfor which we may not be able to obtain additional financing on acceptable terms.

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. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code.

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 ability to meet some of these covenants, including covenants related to the condition of the property or payment of real estate taxes, may be dependent on the performance by our tenants under their leases. 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.

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 and commercial paper 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.

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. AEffective July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law and is a complex revision to the U.S. federal income tax laws with potentially far-reaching consequences. The OBBBA will require subsequent rulemaking in a number of changesareas. thatThe affectlong-term non-corporateimpact taxpayers will expire atof the endOBBBA ofalong 2025with unlessH.R. Congress1 actson tous, extendour them.investors, Theseour tenants and the real estate industry cannot be reliably predicted and 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 to these laws 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 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.

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) was reduced 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.this 1’s20% reduction in the maximum individual federal income tax rate from(which 39.6%is tootherwise 37%,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). TheThis 20% deduction in the applicable tax rate for ordinary REIT dividends was originally enacted for the period from January 1, 2018 through December 31, 2025, but the reduction was made permanent by the passage of OBBBA on July 4, 2025. Nevertheless, the more favorable tax rates generally applicable to regular corporate distributions (from non-REIT corporations) 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.

An epidemic or pandemic (such as the outbreak and worldwide spread of COVID-19),pandemic, and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, may precipitate or materially exacerbate one or more of the other risks, and may significantly disrupt our tenants’ ability to operate their businesses and/or pay rent to us or prevent us from operating our business in the ordinary course for an extended period.

The Company’s real estate investment portfolio grew from approximately $6.74 billion in net investment amount representing 2,135 properties with 44.2 million square feet of GLA as of December 31, 2023 to approximately $7.42 billion in net investment amount representing 2,370 properties with 48.8 million square feet of GLA as of December 31, 2024 to approximately $8.57 billion in net investment amount representing 2,674 properties with 55.5 million square feet of GLA at December 31, 2024.2025. The Company’s real estate investments were made throughout and between 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 20242025 on acquisitionsacquisitions, development and DFP projects that were madecompleted during 2023.2024. Similarly, the full rental income impact of acquisitions made during 20242025 will not be seen until 2025.2026.

Comparison of Year Ended December 31, 20242025 to Year Ended December 31, 20232024 (dollars in thousands)

General and administrative expenses increased $2.4$6.9 million, or 7%,18%, to $44.1 million for the year ended December 31, 2025, compared to $37.2 million for the year ended December 31, 2024, compared to $34.8 million for the year ended December 31, 2023.2024. The increase was primarily the result of growth in compensation costs due to inflationary increases and higher stock basedstock-based compensation expense as a result of changing the vesting period for awards granted beginning in 2023 and 2024.2023. General and administrative expenses as a percentage of total revenue decreasedincreased to 6.1% for the year ended December 31, 2025 from 6.0% for the year ended December 31, 2024 from 6.5% for the year ended December 31, 2023.2024.

Interest expenseexpense, net increased $27.8$25.7 million, or 34%,24%, to $134.6 million for the year ended December 31, 2025, compared to $108.9 million for the year ended December 31, 2024, compared to $81.1 million for the year ended December 31, 2023.2024. The increase in interest expenseexpense, net was primarily a result of higher levels of borrowings during the year ended December 31, 20242025 compared to the year ended December 31, 20232024 in order to finance the acquisition and development of additional properties. BorrowingsInterest expense, net increased dueapproximately $21.5 million related to the $400.0 million 2035 Senior Unsecured Public Notes that were issued in May 2025 and the $450.0 million 2034 Senior Unsecured Public Notes that were issued in May 20242024, andpartially offset by a decrease in interest due to the $350.0repayment of the $50.0 million 2029 Unsecured Term Loan (defined below) that closed in July 2023. The 20342025 Senior Unsecured Public Notes and 2029 Unsecured Term Loan resulted in increasesMay in2025. In addition, interest expense on the Revolving Credit Facility and relatedCommercial amortizationPaper Notes increased approximately $4.8 million due to higher levels of theborrowings, originalpartially issuanceoffset discountby andlower deferredaverage financingborrowing costsrates, during the year ended December 31, 20242025 ofcompared $17.0to millionthe andyear $9.8ended million,December respectively.31, 2024.

The Company recognized $7.2 million provisionProvision for impairment duringincreased both$4.7 yearsmillion to $11.9 million for the year ended December 31, 20242025, andcompared 2023.to $7.2 million for the year ended December 31, 2024. Provisions for impairment are recorded when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable through operations plus estimated disposition proceeds and are not necessarily comparable period-to-period.

A net gain of $11.5$5.4 million was recognized on the sale of 2622 assets and land parcels during the year ended December 31, 2024,2025, compared to a net gain of $1.8$11.5 million recognized on the sale of six26 assets during the year ended December 31, 2023.2024. The increasedecrease was primarily due to the growth inlower disposition volume duringand 2024lower average disposition proceeds per property in 2025 as compared to 2023.2024. Gains and losses on sale of assets are dependent on levels of disposition activity and the carrying value of the assets relative to their sales prices. As a result, such gains on sales are not necessarily comparable period-to-period.

The Company’s principal demands for funds include payment of operating expenses, payment of principal and interest on ourits 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 and cash equivalents held as of December 31, 2024,2025, cash provided from operations, settlement of outstanding forward equity and borrowings under its Revolving Credit Facility.Facility and Commercial Paper Program. As of December 31, 2024,2025, wethe Company had overapproximately $2.00$2.02 billion of liquidity, which consistedconsists of cash and cash equivalentsequivalents, including cash held in escrow of $6.4$20.6 million, unsettled forward equity of $919.9$716.1 million, $350.0 million of undrawn capacity under the 2031 Term Loan and $1.09$929.5 billionmillion of availability under our Revolving Credit Facility, adjusted to reflect the outstanding Commercial Paper Notes, subject to compliance with covenants.

The Company anticipates funding its long-term capital needs through cash provided from operations, borrowings under its Revolving Credit Facility, and the issuance of debt and the issuance or settlement of common or preferred equity or other instruments convertible into or exchangeable for common or preferred equity.

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,needs is uncertain and cannot be predicted and could be affected by various risks and uncertainties, including, but not limited to the risks detailed in Part I, Item 1A,1A titled “Risk Factors.Factors”

As of December 31, 2024,2025, the Company’s total enterprise value was approximately $10.56$12.15 billion. Total enterprise value consisted of $7.58$8.67 billion of common equity (based on the December 31, 20242025 closing price of Company common stock on the NYSE of $70.45$72.03 per share and assuming the conversion of Operating Partnership Common Units), $175.0 million of preferred equity (stated at liquidation value), and $2.81$3.32 billion of total debt including (i) $158.0$320.5 million of borrowings under its Revolving Credit Facility and Commercial Paper Program; (ii) $2.26$2.61 billion of senior unsecured notes; (iii) $350.0 million of unsecured term loans (iv) $43.9$42.9 million of mortgage notes payable; less $6.4$20.6 million cash, cash equivalents and cash held in escrow. The Company’s total debt to total enterprise value was 26.6%27.4% at December 31, 2024.2025.

In October 2024, the Company completed a follow-on public offering of 5,060,000 shares of common stock, including the full exercise of the underwriters’ option to purchase an additional 660,000 shares in connection with the forward sale agreements. As of December 31, 2024, the Company hashad not settled any of these shares. Upon settlement,During the offeringyear isended anticipatedDecember to31, raise2025, the Company settled all of the October 2024 forward sales agreements, realizing net proceeds to the Company of approximately $368.0$366.6 millionmillion, after deducting fees and expenses and making certain adjustmentsother as provided in the forward sale agreements.adjustments.

The following table summarizes the ATM programs that were in place during the2025, years2024 ended December 31, 2024,and 2023 and(dollars 2022in millions):

*(1)Applicable ATM program terminated and no future forward sales will occur under the program.

(32) After considering the shares of common stock sold subject to forward sale agreements under the October 2024 ATM Program,program, the Company had approximately $1.24$914.5 billion of availability under the October 2024 ATM Program as of December 31, 2024.2025.

The following table summarizes the ATM activity completed duringfor the yearsperiods ended December 31, 2024, 2023 and 2022presented:

The table below table summarizes the Company’s outstanding debt as of Decemberthe 31,dates 2024 and 2023presented (presenteddollars in thousands):

(23) The interest rate of the 2029 Unsecured Term Loan reflects the credit spread of 8580 basis points, plus a 10 basis point SOFR adjustmentpoints and the impact of the interest rate swaps which convert $350.0$350 million of SOFR based interest to a fixed interest rate of 3.57%.

(35) All-in interest rate for Senior Unsecured Notes reflects the straight-line amortization of the terminated swap agreements and original issuance discounts, as applicable.

(46) The principal amounts outstanding are presented excluding their original issue discounts.

InOn August 8, 2024, the Company entered into the Fourth Amended and Restated Revolving Credit Agreement which provides for a $1.25 billion senior unsecured revolving credit facility.facility The Revolving Credit Facility's interest rate is based on a pricing grid with a range of 72.5 to 140 basis points over SOFR, determined by (the Company's credit ratings and leverage ratio, plus a SOFR adjustment of 10 basis points. The margins for the “Revolving Credit Facility are subject to adjustment based on changes in the Company's leverage ratio and credit ratings.”).

As of December 31, 20242025 the Revolving Credit Facility had a $158.0 millionno outstanding balance and bore interest of 5.29%,4.50%, which is comprised of SOFR of 4.46%,3.77%, the pricing grid spread of 72.5 basis points, andwith the 10 basis pointno SOFR adjustment.

The Revolving Credit Facility serves as a liquidity backstop for the Company’s Commercial Paper Notes and includes an accordion option that allows the Company to request additional lender commitments up to a total of $2.00 billion. The Revolving Credit Facility will mature in August 2028 with Company options to extend the maturity date to August 2029.

The Company and Richard Agree, the Executive Chairman of the Company, wereare parties to a Reimbursement Agreement dated NovemberOctober 18,3, 20142023 (the “Reimbursement Agreement”). Pursuant to the Reimbursement Agreement, Mr. Agree had 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. The parties terminated the Reimbursement Agreement and entered into a new reimbursement agreement dated October 3, 2023 (the “New Reimbursement Agreement”). Pursuant to the New Reimbursement Agreement, Mr. Agree has agreed to reimburse the Company for his proportionate share of loss incurred under the Revolving Credit Facility and/or certain other indebtedness in an amount to be determined by facts and circumstances at the time of loss.

InOn July 31, 2023, the Company closed on the 2029 Unsecured Term Loan, an unsecured $350.0 million 5.5-year term loan (the “2029 Unsecured Term Loan”) which includes an accordion option that allows the Company to request additional lender commitments up to a total of $500.0 million and matures in January 2029. BorrowingsAt underthe time of the 2029 Unsecured Term LoanLoan’s areclosing, borrowings were priced at SOFR plus a spread of 80 to 160 basis points over SOFR, depending on the Company’s credit ratings, plus a SOFR adjustment of 10 basis points. Based on the Company’s credit ratings at the time of closing, pricing on the 2029 Unsecured Term Loan was 95 basis points over SOFR. Due to the Company’s improved credit rating, the credit spread on the 2029 Unsecured Term Loan decreased by five basis points in August 2025. The Company used the existing $350.0 million of forward starting interest rate swaps to hedge the variable SOFR priced interest to a weighted average fixed rate of 3.57% until January 2029.

On August 8, 2024, the Company entered into the First Amendment to Term Loan Agreement (the “First Amendment”) with PNC Bank, National Association, as Administrative Agent, and a syndicate of lenders named therein, and with certain indirect subsidiaries of the Operating Partnership as guarantors. The First Amendment amends the 2029 Unsecured Term Loan implementingimplements various covenant and technical amendments to make the 2029 Unsecured Term Loan’s provisions consistent with corresponding provisions in the Revolving Credit Facility (see “Senior Unsecured Revolving Credit Facility” above). The First Amendment does not change the maturity or the pricing terms of the 2029 Unsecured Term Loan.

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 99.7% common interest as of MarchJune 31,30, 2026. Refer to Note 1- Organization in the Notesnotes to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q 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 MarchJune 31,30, 2026, the Company’s portfolio consisted of 2,7562,825 properties located in all 50 states and totalingthe District of Columbia, comprised of approximately 57.559.6 million square feet of gross leasable area (“GLA”). The portfolio was approximately 99.7%99.8% leased and had a weighted average remaining lease term of approximately 7.87.7 years. A significant majority of the Company’s properties are leased to national tenants and approximately 65.4%65.8% of our 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 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.

The Company’s real estate investment portfolio grew from approximately $7.70$7.96 billion in net investment amount representing 2,4222,513 properties with 50.352.0 million square feet of GLA as of MarchJune 31,30, 2025, to approximately $8.89$9.24 billion in net investment amount representing 2,7562,825 properties with 57.559.6 million square feet of GLA at MarchJune 31,30, 2026. The Company’s real estate investments were made throughout and between 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 2026 on acquisitions, development and Developer Funding Platform (“DFP”) projects that were completed during 2025. Similarly, the full rental income impact of acquisitions made during 2026 will not be realized until 2027.

The following table summarizes the acquisitions completed by the Company during the periods presented (dollars in thousands):

The following table summarizes the Company’s development and Developer Funding Platform (“DFP”) activity during the periods presented:

The following table summarizes the Company’s disposition activity during the periods presented (dollars in thousands):

Comparison of three months ended MarchJune 31,30, 2026 to the three months ended MarchJune 31,30, 2025 (dollars in thousands)

The variances in rental income, real estate tax expense,taxes, property operating expenseexpenses and depreciation and amortization expense shown above were due to the acquisition and the ownership of an increased number of properties during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, as further described under Results of Operations - Overall above.

General and administrative expenses increased $0.7 million, or 7%,6%, to $11.5$12.0 million for the three months ended MarchJune 31,30, 2026, compared to $10.8$11.3 million for the three months ended MarchJune 31,30, 2025. The increase was primarily the result of growth in compensation costs due to inflationary increases and higher stock-based compensation expense as a result of changing the vesting period for awards granted beginning in 2023. General and administrative expenses as a percentage of total revenue decreased to 5.7%5.8% for the three months ended MarchJune 31,30, 2026, compared to 6.4%6.5% for the three months ended MarchJune 31,30, 2025.

Interest expense, net increased $5.2$8.0 million, or 17%,25%, to $36.0$40.3 million for the three months ended MarchJune 31,30, 2026, compared to $30.8$32.3 million for the three months ended MarchJune 31,30, 2025. The increase in interest expense, net was primarily a result of higher levels of borrowings during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, in order to finance the acquisition and development of additional properties. Interest expense, net increased approximately $4.9$2.8 million related to the $400.0 million 2035 Senior Unsecured Public Notes that were issued in May 2025, and approximately $2.6 million related to the $350.0 million 2031 Unsecured Term Loan that closed in November 2025, partially offset by a decrease in interest due to the repayment of the $50.0 million 2025 Senior Unsecured Notes in May 2025. In addition, interest expense on the Revolving Credit Facility and Commercial Paper Notes increased approximately $0.3$2.8 million due to higher levels of borrowings, partially offset by lower average borrowing rates, during the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025.

The Company recognized a $1.4$5.9 million provision for impairment during the three months ended MarchJune 31,30, 2026, while $4.3$3.0 million was recognized during the three months ended MarchJune 31,30, 2025. Provisions for impairment are recorded when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through operations plus estimated disposition proceeds and are not necessarily comparable period-to-period.

A net gain on the sale of assets of $1.7$2.0 million was recognized on the disposition of sevenfourteen assets during the three months ended MarchJune 31,30, 2026 as compared to a net gain on the sale of assets of $0.8$1.5 million on the disposition of onefour assetassets during the three months ended MarchJune 31,30, 2025. Gains and losses on sale of assets are dependent on levels of disposition activity and the carrying value of the assets relative to their sales prices. As a result, such gains on sales are not necessarily comparable period-to-period.

Net income increased $15.1$5.4 million, or 32%,11%, to $62.2$54.8 million for the three months ended MarchJune 31,30, 2026, compared to $47.1$49.4 million for the three months ended MarchJune 31,30, 2025. The change was the result of the growth in the portfolio offset by the items discussed above. After allocation of income to non-controlling interest and preferred stockholders, net income attributable to common stockholders increased $15.1$5.5 million, or 33%,12%, to $60.2$52.8 million for the three months ended MarchJune 31,30, 2026, compared to $45.1$47.3 million for the three months ended MarchJune 31,30, 2025.

The Company expects to meet its short-term liquidity requirements through cash and cash equivalents held as of MarchJune 31,30, 2026, cash provided from operations, settlement of outstanding forward equity and borrowings under its Revolving Credit Facility or Commercial Paper Program. As of MarchJune 31,30, 2026, the Company had over $2.28$1.86 billion of liquidity, which consists of cash and cash equivalents, including cash held in escrow,escrow of $31.2$21.2 million, unsettled forward equity of $1.37$1.08 billion, $100.0 million of undrawn capacity under the 2031 Term Loanbillion and $780.4$753.0 million of availability under our Revolving Credit Facility, adjusted to reflect the outstanding Commercial Paper Notes, subject to compliance with covenants.

As of MarchJune 31,30, 2026, the Company’s total enterprise value was approximately $12.95$13.45 billion. Total enterprise value consisted of $9.08$9.45 billion of common equity (based on the MarchJune 31,30, 2026 closing price of the Company’s common stock on the NYSE of $75.38$75.74 per share and assuming the conversion of Operating Partnership Common Units), $175.0 million of preferred equity (stated at liquidation value) and $3.72$3.85 billion of total debt principal including (i) $469.7$497.0 million of borrowings under its Revolving Credit Facility and Commercial Paper Program; (ii) $2.61 billion of senior unsecured notes; (iii) $600.0$700.0 million under its unsecured term loans; (iv) $42.6$42.3 million of mortgage notes payable; less $31.2$21.2 million cash, cash equivalents and cash held in escrow. The Company’s net debt principal to total enterprise value was 28.5% as of MarchJune 31,30, 2026.

At MarchJune 31,30, 2026, the non-controlling interest in the Operating Partnership consisted of a 0.3% 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 120,451,074124,728,833 shares of common stock outstanding as of MarchJune 31,30, 2026.

TheOn April 24, 2026, the Company has filed with the SEC an automatic shelf registration statement on Form S-3ASR,S-3ASR with the Securities and Exchange Commission ("SEC") registering an unspecified amount of common stock, preferred stock, depositary shares, warrants of the Company 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.price (the “Form S-3ASR”). The Form S-3ASR replaced the Company’s automatic shelf registration statement on Form S-3ASR that was filed with the SEC on May 5, 2023. 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.

In April 2025, the Company completed a follow-on public offering of 5,175,000 shares of common stock, including the full exercise of the underwriters’ option to purchase an additional 675,000 shares in connection with the forward sale agreements. As of MarchJune 31,30, 2026, the Company has not settled any1,500,000 shares of thesecommon shares.stock under such forward sale agreements, realizing net proceeds of $111.5 million. The offering is anticipated to raise total net proceeds of approximately $384.5$383.5 million after deducting fees and expenses and making certain adjustments as provided in the forward sale agreements.

As of MarchJune 31,30, 2026, the Company had 7,000,000 depositary shares (the “Depositary Shares”) outstanding, each representing 1/1,000th of a share of Series A Preferred Stock.

(32)The Company is required to settle the outstanding forward shares of common stock under the program by dates between JuneOctober 2026 and MarchApril 2028.

(1)At MarchJune 31,30, 2026, the Revolving Credit Facility would have incurred interest of 4.36%,4.35%, which is comprised of SOFR of 3.63%3.62% and the pricing grid spread of 72.5 basis points.

(2)As of MarchJune 31,30, 2026, the weighted-average maturity of the Commercial Paper Notes outstanding was less than one month.

(3)TheAt June 30, 2026, the interest rate of the 2029 Unsecured Term Loan reflects the credit spread of 80 basis points and the impact of the interest rate swaps which convert $350$350.0 million of SOFR based interest to a fixed interest rate of 3.57%.

(4)On March 31, 2026, the Company drew $250.0 million under the 2031 Unsecured Term Loan. The all-in interest rate of the 2031 Unsecured Term Loan reflects the credit spread of 80 basis points and the impact of the forward starting interest rate swapsswaps, which convert $350.0 million of SOFR based interest to a fixed interest rate of 3.22%. TheOf forward-startingthese swaps, $100.0 million became effective on July 1, 2026. Accordingly, interest rateon swapsthe are$100.0 effectivemillion Aprildrawn 1,on June 30, 2026 and, accordingly, interest accrued prior to April 1, 2026, is not hedged by the swaps and accrues at the applicable variable rate of SOFR plus 80 basis points.points until July 1, 2026.

(78)VariableFloating rate debt includes the revolving credit facility and commercial paper notes. All other debt is included within fixed rate debt, including the 2029 and 2031 Unsecured Term Loans as the variable portion of the interest rate has been fixed through the use of interest rate swaps.

As of MarchJune 31,30, 2026, the Revolving Credit Facility had no outstanding balance and bore interest of 4.36%,4.35%, which is comprised of SOFR of 3.63%3.62% plus a pricing grid spread of 72.5 basis points.

During 2025, the Company closed on an unsecured $350.0 million 5.5-year delayed draw 2031 Unsecured Term Loan. As of December 31, 2025, the Company had not drawn any amounts under the 2031 Unsecured Term Loan. On March 31, 2026, the Company drew $250.0 million under the 2031 Unsecured Term Loan. TheOn June 30, 2026, the Company drew the remaining $100.0 million isunder availablethe as2031 aUnsecured delayedTerm draw term loan commitment until November 17, 2026.Loan.

As of MarchJune 31,30, 2026, the Company had total gross mortgage indebtedness of $42.6$42.3 million, which was collateralized by related real estate and tenants’ leases with an aggregate net book value of $72.5$71.8 million. The weighted average interest rate on the Company’s mortgage notes payable was 3.65%3.64% as of MarchJune 31,30, 2026.

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 MarchJune 31,30, 2026, 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 MarchJune 31,30, 2026.

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 threesix months ended MarchJune 31,30, 2026, increased by $18.5$29.8 million over the same period in 2025, primarily due to the increase in the size of the Company’s real estate investment portfolio.

Investing - Net cash used in investing activities was $49.3$187.2 million greater during the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025 primarily due to:

•$5.5$35.3 million increase in cash used for development of real estate investments and other assets due to changes in the scope of development and DFP projects in progress as well as the timing of payments for these projects and other capital additions.additions; and

Financing - Net cash provided by financing activities increased by $36.6$155.4 million during the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025 primarily due to:

•$250.0$350.0 million increase in proceeds from the drawdraws under the 2031 Unsecured Term Loan;

•$183.1$88.7 million decreaseincrease in net proceeds from the issuance of common stock as no common stock was settled during the three months ended March 31, 2026;

•$14.8$87.5 million decreaseincrease of net borrowings on the Revolving Credit Facility and Commercial Paper Program. Net borrowings on the Revolving Credit Facility and Commercial Paper Program were $149.2$176.5 million during the threesix months ended MarchJune 31,30, 2026, while $164.0$89.0 million of net borrowings were completed over the same period in 2025; and

•$13.1$24.5 million increase in total dividends and distributions paid. The Company’s annualized common stock dividend declared during the threesix months ended MarchJune 31,30, 2026 of $3.144$3.204 per common share represents a 3.6%4.3% increase over the annualized dividend amount of $3.036$3.072 per common share declared in the same period in 2025.

Details on these obligations as of MarchJune 31,30, 2026, including expected settlement periods, is presented below (in thousands):

(1)The Revolving Credit Facility matures in August 2028, with options to extend the maturity date by six months up to two times, for a maximum maturity of August 2029. The weighted-average maturity of the Commercial Paper Notes outstanding at MarchJune 31,30, 2026 was less than one month.

ForDuring the threesix months ended MarchJune 31,30, 2026, the Company had 1520 development or DFP projects completed or under construction, with anticipated total costs of approximately $112.0$199.9 million. These construction commitments will be funded using cash provided from operations, current capital resources on hand, or other sources of funding available to the Company.

During the quarter ended MarchJune 31,30, 2026, the Company declared monthly dividends of $0.262$0.267 per common share. Holders of the Operating Partnership Common Units are entitled to an equal distribution per Operating Partnership Common Unit held. The dividends and distributions payable for JanuaryApril and FebruaryMay were paid during the three months ended MarchJune 31,30, 2026, while MarchJune dividends and distributions were recorded as a liability on the condensed consolidated balance sheets at MarchJune 31,30, 2026 and were paid on AprilJuly 15, 2026.

During the quarter ended MarchJune 31,30, 2026, the Company declared monthly dividends on the Series A Preferred Shares in the amount of $0.08854,$0.08854 per Depositary Share. The dividends payable for JanuaryApril and FebruaryMay were paid during the quarter. The MarchJune dividends were recorded as a liability on the condensed consolidated balance sheets at MarchJune 31,30, 2026, and were paid on AprilJuly 1, 2026.