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 updated 2025 guidance. 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 discuss non-GAAP financial measures, including core funds from operations, or core FFO, adjusted funds from operations, or AFFO, and 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.
Given growing pipelines across our three external growth platforms, we are increasing our full-year 2025 investment guidance to a new range of $1.5-$1.65 billion. At the midpoint, this represents an increase of over 65% above last year's investment volume. We will continue to be disciplined capital allocators while maintaining our stringent real estate quality underwriting standards. With pro forma net debt to recurring EBITDA of just 3.5x and over $1 billion of forward equity available to us, we enjoy significant runway and have pre-funded our growth well into next year.
Given our robust liquidity profile, fortress balance sheet, and strong portfolio performance, we are raising our AFFO per share guidance to a new range of $4.31-$4.33 for the year. Turning to our three external growth platforms, during the third quarter, we invested over $450 million in 110 high-quality retail net lease properties across our three platforms. The properties acquired during the quarter are leased to leading operators in home improvement, auto parts, grocery, off-price, farm and rural supply, convenience stores, and tire and auto service. Investment-grade retailers accounted for 70% of the annualized base rent acquired, the highest mark so far this year.
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| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Three-platform external growth (acquisitions, development, developer funding) | Development had largely dropped off the radar after the acquisition platform launched in 2010; company historically viewed primarily as a spread investor. | All three platforms are 'firing on all cylinders'; development and developer funding are a growing component at a record ~$50 million in Q3, positioning Agree Realty as a real estate company that happens to be in retail net lease rather than a typical spread investor. | — |
| Acquisition cap rates and competition | Cap rates stable through the first half of the year despite market narratives of increased competition. | No material change in cap rates year-to-date; the 10-basis-point sequential uptick to 7.2% reflects deal composition, and management expects no material deviation in Q4 while declining to predict 2026. | — |
| Balance sheet strength and credit rating | Disciplined, conservatively built balance sheet over 15 years and $10 billion invested. | Earned an A-minus issuer rating from Fitch (one of only 13 U.S. listed REITs at that level or better), which immediately improved term loan and commercial paper pricing and is expected to compress spreads in future public unsecured issuance. | — |
| Capital and equity issuance discipline | Following the April equity offering, management committed to a self-imposed hiatus on new equity issuance, telling investors it would not repeatedly flood the market. | With ~3.5x leverage, over $1.9 billion of liquidity, over $1 billion of forward equity, and a new $350 million delayed-draw term loan, the company is pre-funded well into 2026 and does not need to raise capital. | — |
| Tenant health and the 'trade-down' thesis | Focus on necessity and value-oriented retail tenants. | Portfolio benefits from the consumer trade-down effect (Target customers shifting to TJX and Walmark), with positive flow-through across most categories despite tariffs and a softer job market; management is trimming Dollar Store and Pharmacy exposure. | — |
| Ground leases | Ground leases a steady portion of the portfolio. | Ground leases now represent 10% of total ABR (237 ground leases) and are a larger, opportunistic component of the Q4 acquisition pipeline, with recent favorable releasing outcomes and no material near-term ground-lease maturities in 2026. | — |