Agree Realty Corporation

Good morning and welcome to the Agri Realty fourth quarter 2025 conference call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star one a second time. Please limit yourself to two questions during this call. Note, this event is being recorded. I would now like to turn the conference over to Ruben Treatman, Senior Director of Corporate Finance. Please go ahead, Ruben.

Thank you. Good morning, everyone, and thank you for joining us for AgriRealty's fourth quarter 2025 earnings call. Before turning the call over to Joey and Peter to discuss our results for the quarter, let me first run through the cautionary language. Please note that during this call, we'll make certain statements that may be considered forward-looking under federal securities law, including statements related to our 2026 guidance. Our actual results may differ significantly from the matters discussed in any forward-looking statements for a number of reasons. Please see yesterday's earnings release and our SEC filings, including our latest annual report on Form 10-K, for discussion of various risks and uncertainties underlying our forward-looking statements. In addition, we discussed non-GAAP financial measures including core funds from operations or core FFO, adjusted funds from operations or AFFO, and net set to recurring EBITDA. Reconciliations of our historical non-GAAP financial measures to the most directly comparable GAAP measures can be found on our earnings release website and SEC filings. I'll now turn the call over to Joey.

Thanks, Ruben, and thank you all for joining us this morning. 2025 represented yet another year of consistent execution for our growing company. In a dynamic macro environment, we remained disciplined, continued investing in our future, and delivered over 4.5% AFFO per share growth. The $1.55 billion invested across our three investment platforms was the second highest total in company history, representing more than 60% year-over-year growth. As demonstrated by our 2026 guidance, the fundamentals supporting our outlook are very strong. Our portfolio has never been better positioned, The depth and strength of our team is exceptional, and our balance sheet is in tremendous shape. We have commenced numerous IT undertakings, including the construction of the next iteration of ARC, and continue to drive efficiencies through systematic process improvement. These initiatives will support bottom-line growth this year and beyond, driven by ongoing efficiency gains and a material reduction in G&A as a percentage of revenue. During the course of the year, we once again proactively fortified our balance sheet, raising roughly $1.5 billion in capital. We concluded 2025 with over $2 billion of liquidity, including over $715 million of outstanding forward equity. With no material debt maturities until 2028, our balance sheet is in tremendous position to execute on our 2026 investment guidance and provide significant flexibility. At year end, pro forma net debt to recurring EBITDA stood at just 3.8 times, enabling us to execute on the high end of our 2026 investment guidance without incremental equity while staying within our targeted leverage range of four to five times. Our pipeline has expanded significantly over the past month and now represents over a half billion dollars and provides us confidence in increasing our 2026 investment guidance to a range of 1.4 to 1.6 billion dollars. Our updated investment guidance represents approximately a 10% increase from our prior range, and the high end of the range is slightly above our 2025 investment activity. With yesterday's release, we have initiated full-year AFO per share guidance of $4.54 to $4.58. At the midpoint, this represents 5.4% year-over-year growth and two-year stacked growth of 10%. When combined with our current dividend yield, this implies a total operational return of our target of approximately 10%. Combined with a fortress balance sheet, best-in-class portfolio, and historic track record of execution, we believe that ADC offers one of the most compelling value propositions in the REIT sector. Turning to our three external growth platforms, our partnerships across the real estate spectrum have never been stronger nor more productive. Today, AgriRealty is the preferred one-stop shop for the country's largest retailers. These partnerships are translating into actionable opportunities, including one-off acquisitions, sale leasebacks, lend and extend transactions, programmatic development, and high-quality DFP projects. As a result, all three external growth platforms are accelerating and seeing increasing transactional opportunities. Moving on to recap last year, During the fourth quarter, we invested approximately $377 million in 94 high quality retail that lease properties across our three external growth platforms. This included the acquisition of 94 assets for over $347 million. The properties acquired during the quarter leased to leading operators in home improvement, auto parts, grocery store, farm and rural supply, convenience store, and tire and auto service sectors. Fourth quarter investment activity was a very high quality, evidenced by the largest quarterly percentage of ground lease acquisitions since 2021 at over 18%. Notable transactions included three geographically diverse ground leases leased to Lowe's, as well as a Home Depot in Michigan paying under $5 per square foot in rent. The acquired properties had a weighted average cap rate of 7.1% and a weighted average lease term of 9.6 years. Investment-grade retailers accounted for nearly two-thirds of the annualized base rent acquired. For the full year 2025, we invested nearly $1.6 billion in 338 retail net lease properties spanning 41 states. Over $1.4 billion of our investment activities originated from the acquisition platform. The acquisitions were completed at a weighted average cap rate of 7.2% and had a weighted average lease term of 11.5 years. with roughly two-thirds of rents coming from investment-grade retailers. As a reminder, we do not impute credit ratings for non-rated retailers. Our development and DFP platforms had a record year with 34 projects either completed or under construction, representing approximately $225 million of committed capital. We're continuing to see increased activity across both these platforms as we partner with retailers and developers to execute on their store growth plans. During the fourth quarter, we commenced four new development and DFP projects with total anticipated costs of approximately $35 million. The new projects are with leading retailers including Boot Barn, Burlington, Five Below, Ross Dress for Less, Alta, and 7-Eleven. Construction continued during the quarter on nine projects with anticipated costs totaling approximately $59 million. Lastly, we completed construction on three projects during the quarter with total cost of $29 million. On the asset management front, we executed new leases, extensions, or options on over 640,000 square feet of gross leaseable area during the fourth quarter, including a Walmart Supercenter in Rochester, New York, and a Lowe's in Rowland Park, Kansas. For the full year 2025, we executed new leases, extensions, or options on approximately 3 million square feet of GLA, with a recapture rate of 104%. We are very well positioned for 2026 with only 52 leases or 1.5% of annualized base rents maturing. During the past year, we disposed 22 properties for gross proceeds of just over $44 million at a weighted average cap rate of 6.9%. This includes nine properties that were sold for $20 million during the fourth quarter at a weighted average cap rate of 6.4%. Our capital recycling efforts will continue to focus on select non-core assets as well as opportunistic dispositions. At year-end, our best-in-class portfolio is approaching 2,700 properties and spans all 50 states. The portfolio includes 251 ground leases representing over 10% of annualized base rents. Our investment-grade exposure at year-end stood at nearly 67%, an occupancy increase to 99.7%, reflecting a 50 basis point improvement since the first quarter of the year. Lastly, I want to recognize Peter and his team for their exceptional work in 2025. We achieved an A- rating from Fitch and successfully launched our commercial paper program, both milestones that will deliver meaningful savings and long-term benefits to our cost of capital. With that, I'll hand it over to Peter, and then we can open up for questions.