Agree Realty Corporation

Good morning and welcome to the AGRI Realty first quarter 2026 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist 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 touch-tone phone. To withdraw your question, please press star one again. Please limit yourself to two questions during this call. Note, this event is being recorded. At this time, I would like to turn the conference over to Ruben Treatment, Senior Director of Corporate Finance. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us for AgriRealty's first quarter 2026 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 will make certain statements that may be considered forward-looking under federal securities law, including statements related to our updated 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 a 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 pro forma net debt to recurring EBITDA. Reconciliations of our historical non-GAAP financial measures to the most directly comparable GAAP measures can be found at our earnings release website and SEC filings. I'll now turn the call over to Joey.

Thank you, Ruben, and thank you all for joining us this morning. I am extremely pleased with our performance to start the year, as we have continued to execute on all fronts. During the quarter, we invested nearly $425 million across our three external growth platforms, while further strengthening our market-leading portfolio. The $403 million of acquisitions completed during the period represents our largest quarterly acquisition volume since 2022, as we continue to source superior risk-adjusted opportunities. While the macro backdrop remained highly unpredictable, we have never been better positioned. During the quarter, we raised approximately $660 million of forward equity through our ATM. We now enjoy $2.3 billion of total liquidity and more than $1.6 billion of hedge capital, including a company record $1.4 billion of outstanding forward equity. At quarter end, pro forma net debt to recurring EBITDA was just 3.2 times, giving us meaningful flexibility to execute regardless of capital markets volatility. As a reminder, we have no material debt maturities until 2028. We have married this fortress balance sheet with the highest quality retail portfolio in the country that only continues to improve. In a K-shaped economy, our industry-leading tenants stand poised to leverage their scale and value propositions to drive further share gains. We are consistently seeing leading retailers with the balance sheets and operating discipline winning across cycles and expanding their brick-and-mortar footprints. Our pipeline across all three external growth platforms is robust, yet our approach remained unchanged. We will stay consistent within our established investment parameters without compromising our underwriting standards. While our investment and earning guidance remain unchanged, I would note that we have increased our treasury stock method dilution in anticipation of an elevated stock price, and as well as the additional forward equity raised during the quarter. We'll continue to provide updates as the year progresses. and Peter will provide additional details on our guidance and input shortly. Turning to our external growth activity, we had an active start to the year, leveraging our unique market positioning and deep relationships with retail partners to uncover opportunities across all three platforms. During the first quarter, we invested nearly $425 million in 100 properties across these three platforms. Of note, during the quarter, we executed a sale leaseback with Hobby Lobby on their corporately owned stores. As we've discussed on prior earnings calls, Hobby Lobby is privately owned, has a pristine balance sheet, and stands as a clear market leader in the craft and hobby space. They are a terrific operator and partner. As a reminder, we do not impute investment grade or shadow investment grade ratings in our IG percentage. Additional acquisitions during the quarter included a Home Depot, five Wawa ground leases in Pennsylvania and Maryland, a portfolio of 11 Sherwin-Williams stores, several Aldi's and three Walmarts located in Georgia and South Carolina. The acquired properties had a weighted average cap rate of 7.1% and a weighted average lease term of 11.3 years. Nearly 60% of base rent acquired was derived from investment grade retailers and we continue to add to our ground lease portfolio during the quarter. As previously discussed, we continue to see increased activity across our development and developer funding platforms. During the first quarter, we convinced two new development or DFP projects with total anticipated costs of approximately $18 million. Construction continued on nine projects during the quarter with aggregate and anticipated costs of approximately $71 million. We completed four projects during the quarter representing a total investment of approximately $23 million. Our development and DFP pipelines continue to grow significantly. and we expect development and DFP activity to meaningfully ramp in the second and third quarters, including several additional projects that have commenced subsequent to quarter end. Moving on to dispositions, we sold seven properties during the quarter for total gross proceeds of approximately $11 million at a weighted average cap rate of 6.8%. This activity included both a Jiffy Lube and Dutch Brothers that were included in the grocery portfolio acquisition last year. We sold these assets approximately 300 basis points inside of where we acquired them less than one year ago, highlighting our ability to opportunistically recycle capital and harvest value across our portfolio. Our asset management team continues to do an excellent job proactively addressing upcoming lease maturities. We executed new leases, extensions, or options on over 876,000 square feet of gross leaseable area during the first quarter, with a recapture rate of over 104%. This included a Walmart Supercenter in Whitewater, Wisconsin, and a Home Depot in Orange, Connecticut. We remain well positioned for the remainder of the year with just 29 leases or 90 basis points of annualized base rent maturing, which is down 60 basis points quarter over quarter and 260 basis points year over year. We ended the quarter with pharmacy exposure at 3.5% of annualized base rent, and it now falls outside of our top 10 sectors. a meaningful milestone given that pharmacy once exceeded 40% of our portfolio. Anchored by assets such as our Walgreens on the corner of the Diag on the University of Michigan's campus and our CVS on Greenwich Avenue, we are confident in the real estate and performance of our remaining pharmacy assets. As of quarter end, our best-in-class portfolio comprised 2,756 properties spanning all 50 states. The portfolio included 261 ground leases comprising over 10% of annualized base rent. Our investment grade exposure stood at over 65%, and occupancy is strong at 99.7%, up 50 basis points year over year. Before I hand the call over to Peter, I'd like to thank and compliment the tremendous work he and his team did on the creation of our inaugural supplement. We have taken feedback from a number of constituents, and created a first-class document that provides investors and analysts with a thorough picture of our portfolio and financials. Peter, thank you and take it away.