Agree Realty rents stores to retailers and has grown fast, but new shares and debt paid for that growth. The question is whether higher yields on new stores can outrun rising funding costs.
If you shop at Walmart, Hobby Lobby or Five Below, the building may belong to a landlord rather than the retailer. Agree Realty is such a landlord, and it recently bought stores let to all three. It owns retail properties, leases each one to a single retailer for many years and earns its living from the rent. Its portfolio is approaching 2,900 properties, which management says were 100% occupied in the third quarter of 2026.
Retailers pay for the right to trade from a store for many years. Under a net lease, the tenant also reimburses recoverable property costs. While tenants stay solvent and keep trading, the rent keeps arriving. Three things decide what Agree keeps: the rent yield (yearly rent as a share of the price paid) on each store it buys, the depreciation charged on that building, and interest on the money borrowed to buy it. Depreciation is an accounting charge that spreads a building's cost over its life without using cash. So every new store adds rent but also adds depreciation from day one. Bought with debt, it raises the interest bill; bought with new shares, it spreads rent across more owners.
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