With the real estate market still volatile thanks to high interest rates, it might seem like the wrong time to invest. But things are not always as simple as they appear, especially when it comes to large real estate investment trusts (REITs). Agree Realty has faced some tough times recently, with its stock currently down about 20% from its 2022 high, but it could represent a tremendous opportunity. Here is what you need to know.
Who Is Agree Realty?
Agree Realty specializes in simple one-tenant retail properties that are largely cookie-cutter in nature. This makes them incredibly easy to buy and sell, as well to re-rent as tenants come and go. Any single property is high risk, since it relies on a single tenant, but Agree spreads that risk through some 2,100 properties across the United States. Importantly, the company also structures its leases in such a way that tenants are responsible for the majority of operating costs for their buildings. This gives Agree a largely predictable income stream.
What the Analysts Are Saying
Agree Realty’s biggest strength for investors is its dividend yield, which is currently sitting at 4.9%. But there’s more to the story than that. Despite the difficult market, Agree purchased 31 properties and completed two development projects in the first quarter of this year. It’s still an up-and-coming company with plenty of room to grow. Once interest rates settle and the property market as a whole improves, Agree is on track for stellar growth. In fact, the biggest company in the REIT space owns more than seven times as many properties as Agree, which proves that there is a long way to go. In the meantime, Agree Realty’s massive dividend yield and consistent dividend growth are strong reasons for long-term investors to consider this one a buy.
Neither Lisa Fritscher nor Stocks.News have positions in the companies mentioned in this article.
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Contributing Writer
Lisa Fritscher has been a contributing writer for App.Stock.News since 2024. Lisa has been interested in investing since winning The Stock Market Game in high school. In more than a decade as a professional writer, she has written consumer-facing financial information and advice articles for a wide variety of publications. She has a Bachelor of Arts in Psychology from the University of South Flori...