Detroit, Michigan – Agree Realty, a retail net lease REIT based in Detroit, Michigan, has been gaining attention in the investment community recently. While its operations may seem similar to other retail net lease REITs like Realty Income Corporation and Essential Properties Realty Trust, there are unique characteristics that make Agree Realty stand out.

One key factor driving interest in Agree Realty as an attractive investment option is the rise in interest rates that has impacted the entire REIT industry. This shift has led investors to focus on back-end loaded debt maturity profiles, strong capital structures, and a high margin of safety embedded in REIT vehicles.

Investor discussions have been comparing Agree Realty to Realty Income, with some favoring Agree Realty due to its perceived better risk/reward profile. This has led some investors to consider shifting their investments from Realty Income to Agree Realty.

When comparing multiples and dividend yields, Realty Income may appear more attractive than Agree Realty on the surface. However, Agree Realty has shown resilience in price returns, recovering quickly after the initial impact of COVID-19. This performance may be attributed to the market’s increased focus on defense and high-quality investments.

From a balance sheet perspective, Agree Realty has a stronger position compared to Realty Income. Agree Realty’s debt maturity profile is back-end loaded, reducing refinancing risk and providing greater cash flow predictability. Additionally, Agree Realty has a higher concentration of investment-grade tenants, further de-risking its cash flows compared to Realty Income.

Ultimately, some investors believe that Agree Realty is a better choice than Realty Income due to its stronger balance sheet and tenant roster. However, it’s essential to consider both options and evaluate the potential returns based on individual investment goals and risk tolerance.

In conclusion, while Agree Realty may offer attractive dividend streams and lower risk compared to Realty Income, investors should carefully consider their investment strategies. Realty Income may still present opportunities for outsized returns, especially in a scenario of decreasing interest rates. By diversifying investments and understanding the unique characteristics of each REIT, investors can build a well-rounded portfolio that aligns with their financial objectives.