Agree Realty Corporation (ADC) 2024年年度報告「NYSE」.pdf

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1、ANNUALREPORT2024Agree Realty Corporation(NYSE:ADC)is a fully-integrated,self-administered,and self-managed real estate investment trust(REIT)whose mission is to RETHINK RETAIL through the acquisition and development of properties net leased to industry-leading,omni-channel retail tenants throughout

2、the United States.Building upon the foundation of excellence established throughout the past five decades,Agree Realty continues to be a market leader in the net lease space.As of December 31,2024,our growing portfolio consisted of 2,370 properties located in all 50 states and contained approximatel

3、y 48.8 million square feet of gross leasable area.ANNUAL REPORTfor the year endedDECEMBER 31,2024201920202021202220242023Dear Fellow Shareholders,The past year was marked by macroeconomic volatility and elevated interest rates.Amid these external pressures,we focused inward.In 2024,our Companys them

4、e was DIALED IN.We enhanced processes,improved systems and provided Team Members opportunities to join other departments,driving professional development and more efficient resource allocation.We introduced a new Annual Planning Roadmap to streamline organizational planning and an Operations Alignme

5、nt Meeting to enhance cross-functional collaboration and planning.We maintained our steadfast commitment to discipline and avoided deploying capital at inferior spreads or diluting portfolio quality.These efforts strengthened the Companys foundation and further positioned us for long-term success.Ho

6、wever,this outcome was anything but certain at the beginning of the year,and the path to get here required discipline and grit.Please allow me to review our Companys accomplishments over the past year.I hope you are as proud of our terrific Team as I am.Disciplined Capital AllocationDespite the diff

7、icult backdrop entering this past year,we were determined not to waver from our investment strategy.Following discussion of a potential“do-nothing”scenario on our Q3 2023 earnings call,we decisively raised over$235 million of forward equity during Q4 2023.This enabled us to announce$500 million of l

8、everage-neutral investment capacity in February 2024 and subsequently introduce initial acquisition guidance of$600 million in April 2024.Our Team rolled up their sleeves and got to work identifying the best risk-adjusted opportunities.We intensified our focus on strengthening relationships with our

9、 retail partners,increased the n umber of outbound connections,and identified distressed sellers and developers,enabling us to continue executing on high-quality opportunities while improving efficiency.Our conversion rate of deals approved by Investment Committee to letters of intent signed increas

10、ed to 42%,near the highest level in two years.As the year progressed and the macro-economic environment became more conducive,our efforts began to bear fruit.In the fourth quarter,we acquired over$341 million of high-quality retail net lease assets,nearly triple the investment volume completed durin

11、g the first quarter.For the year,we acquired nearly$867 million of high-quality retail net lease assets,44%above our initial acquisition guidance.Including capital deployed into development and Developer Funding Platform projects,we invested$951 million during a year that started with the contemplat

12、ion of a“do-nothing”scenario.Proactive Balance Sheet ManagementThe acceleration in investment activity during the second half of the year was supported by strategic and proactive capital raises.In May,we completed a$450 million offering of 2034 senior unsecured notes at an all-in interest rate of 5.

13、65%.Subsequently in June,we raised nearly$200 million of forward equity via our at-the-market equity(“ATM”)program.Our capital markets activities during the second quarter were quickly followed by the achievement of an upgraded credit rating of BBB+from S&P Global Ratings,further validating the prud

14、ent and disciplined manner in which we continue to grow the Company.We remained active in the capital markets during the third quarter,expanding our revolving credit facility from$1.0 billion to$1.25 billion,with strong support from our key banking partners.Our prudent activities,combined with a dec

15、line in interest rates,resulted in a significant improvement in our cost of capital.We capitalized on this shift,raising nearly$470 million of forward equity via our ATM program during the third quarter and further bolstering our fortress balance sheet.In addition,we executed on$200 million of forwa

16、rd starting swaps at an effective 10-year US treasury rate of approximately 3.7%,once again demonstrating our ability to opportunistically de-risk future capital raises.Our capital markets activities put the Company in an excellent position to pursue investment opportunities as activity across all t

17、hree external growth platforms began to ramp.Multiple equity levers were pulled during the year totaling$1.1 billion of gross proceeds raised.This positioned our balance sheet for 2025 with over$1.5 billion of investment capacity while staying within our targeted leverage range of 4 to 5 times net d

18、ebt to recurring EBITDA without raising any additional equity capital.Driving Operational EfficiencyContending with a volatile backdrop provided us with an opportunity to continue to develop our Team,while improving processes and systems.We streamlined operations with the creation of an Annual Plann

19、ing Roadmap and Operations Alignment Meeting,commenced a“Migration South”,rotating Team Members from the north end of the building to the south end,providing internal mobility and professional development opportunities.We recruited,hired and onboarded over a dozen new Team Members during the year,re

20、launched ADC University with 30 training courses offered and created a Team Leader Training Program.Systems improvements included two new reporting modules in“arc”,our proprietary database;the implementation of a new data warehouse to further automate and improve key operational reporting capabiliti

21、es;and new information security policies to enhance document and email security.These investments will enable our growth for years to come.In ConclusionThe past year presented many challenges.However,we emerged stronger than before,demonstrating one of our core values Greatness Requires Grit.We conc

22、luded 2024 with over$2.0 billion of liquidity,including approximately$920 million of outstanding forward equity.Our leverage stood at the lowest level in two years at 3.3 times proforma net debt to recurring EBITDA,and we have no material debt maturities until 2028.Over 68%of annualized base rents a

23、re derived from investment grade retailers,and occupancy remains very healthy at 99.6%.The Company has never been better positioned in its over 50 years since inception.As a result of our perseverance,we are positioned to go WHEELS UP in 2025 and beyond.I would like to thank our many loyal sharehold

24、ers,our Board of Directors,our retail partners,and our outstanding Team for their continued support of Agree Realty Corporation.Sincerely,Joey Agree President&Chief Executive Officer UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,DC 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 O

25、R 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2024 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _ to _ Commission File Number 001-12928 AGREE REALTY CORPORATION(Exact name of registrant

26、 as specified in its charter)Maryland 38-3148187(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)32301 Woodward Avenue,Royal Oak,Michigan 48073(Address of principal executive offices)(Zip Code)(248)737-4190(Registrants telephone number,including area c

27、ode)Securities Registered Pursuant to Section 12(b)of the Act:Title of Each Class Trading Symbol(s)Name of Each Exchange on Which Registered Common Stock,$.0001 par value ADC New York Stock Exchange Depositary Shares,each representing one-thousandth of a share of 4.25%Series A Cumulative Redeemable

28、Preferred Stock,$0.0001 par value ADCPrA New York Stock Exchange Securities Registered Pursuant to Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not

29、 required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that th

30、e registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during

31、 the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,smaller reporting company,or an emerging growth company.See the de

32、finitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate

33、 by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its

34、 managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the A

35、ct,indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incenti

36、ve-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No The aggregate market value of the Registrants shares o

37、f common stock held by non-affiliates was$6,119,262,682 as of June 30,2024,based on the closing price of$61.94 on the New York Stock Exchange on that date.At February 10,2025,there were 107,248,705 shares of common stock,$.0001 par value per share,outstanding.DOCUMENTS INCORPORATED BY REFERENCE Port

38、ions of the registrants definitive proxy statement for the annual stockholder meeting to be held in 2025 are incorporated by reference into Part III of this Annual Report on Form 10-K as noted herein.AGREE REALTY CORPORATION Index to Form 10-K Page PART I Item 1:Business 2 Item 1A:Risk Factors 10 It

39、em 1B:Unresolved Staff Comments 24 Item 1C:Cybersecurity 24 Item 2:Properties 26 Item 3:Legal Proceedings 29 Item 4:Mine Safety Disclosures 29 PART II Item 5:Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6:Reserved 30 Item 7:Manage

40、ments Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A:Quantitative and Qualitative Disclosures about Market Risk 43 Item 8:Financial Statements and Supplementary Data 45 Item 9:Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 45

41、 Item 9A:Controls and Procedures 45 Item 9B:Other Information 46 Item 9C:Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 46 PART III Item 10:Directors,Executive Officers and Corporate Governance 47 Item 11:Executive Compensation 47 Item 12:Security Ownership of Certain Beneficial

42、 Owners and Management and Related Stockholder Matters 47 Item 13:Certain Relationships and Related Transactions,and Director Independence 47 Item 14:Principal Accountant Fees and Services 47 PART IV Item 15:Exhibits and Financial Statement Schedules 48 Consolidated Financial Statements and Notes F-

43、1 Item 16:Form 10-K Summary 53 SIGNATURES 1 PART I Cautionary Note Regarding Forward-Looking Statements This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,as amended(the“Securities Act”)and Section 21E of the Securities Exchange Act of 193

44、4,as amended(the“Exchange Act”).The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbo

45、r provisions.Forward-looking statements,which are based on certain assumptions and describe the Companys future plans,strategies and expectations,are generally identifiable by use of the words“anticipate,”“estimate,”“should,”“expect,”“believe,”“intend,”“may,”“will,”“seek,”“could,”“project”or similar

46、 expressions.You should not rely on forward-looking statements since they involve known and unknown risks,uncertainties and other factors which are,in some cases,beyond the Companys control and which could materially affect the Companys results of operations,financial condition,cash flows,performanc

47、e or future achievements or events.Currently,one of the most significant factors,however,is the adverse effect of macroeconomic conditions,including inflation and the potential impacts of pandemics,epidemics or other public health emergencies or fear of such events on the financial condition,results

48、 of operations,cash flows and performance of the Company and its tenants,the real estate market and the global economy and financial markets.The extent to which macroeconomic trends may impact the Company and its tenants will depend on future developments,which are highly uncertain and cannot be pre

49、dicted with confidence.Moreover,you should interpret many of the risks identified in this report,as well as the risks set forth below,as being heightened as a result of the ongoing and numerous adverse impacts of macroeconomic conditions.Additional factors which may cause actual results to differ ma

50、terially from current expectations include,but are not limited to:changes in general economic,financial and real estate market conditions;the financial failure of,or other default in payment by,tenants under their leases and the potential resulting vacancies;the Companys concentration with certain t

51、enants and in certain markets,which may make the Company more susceptible to adverse events;changes in the Companys business strategy;risks that the Companys acquisition and development projects will fail to perform as expected;adverse changes and disruption in the retail sector and the financing st

52、ability of the Companys tenants,which could impact tenants ability to pay rent and expense reimbursement;the Companys ability to pay dividends;risks relating to information technology and cybersecurity attacks,loss of confidential information and other related business disruptions;risks related to t

53、he impacts of artificial intelligence;loss of key management personnel;the potential need to fund improvements or other capital expenditures out of operating cash flow;financing risks,such as the inability to obtain debt or equity financing on favorable terms or at all;the level and volatility of in

54、terest rates;the Companys ability to renew or re-lease space as leases expire;limitations in the Companys tenants leases on real estate tax,insurance and operating cost reimbursement obligations;loss or bankruptcy of one or more of the Companys major tenants,and bankruptcy laws that may limit the Co

55、mpanys remedies if a tenant becomes bankrupt and rejects its leases;potential liability for environmental contamination,which could result in substantial costs;the Companys level of indebtedness,which could reduce funds available for other business purposes and reduce the Companys operational flexib

56、ility;covenants in the Companys credit agreements and unsecured notes,which could limit the Companys flexibility and adversely affect its financial condition;credit market developments that may reduce availability under the Companys revolving credit facility;an increase in market interest rates whic

57、h could raise the Companys interest costs on existing and future debt;a decrease in interest rates,which may lead to additional competition for the acquisition of real estate or adversely affect the Companys results of operations;the Companys hedging strategies,which may not be successful in mitigat

58、ing the Companys risks associated with interest rates;legislative or regulatory changes,including changes to laws governing real estate investment trusts(“REITs”);the Companys ability to maintain its qualification as a REIT for federal income tax purposes and the limitations imposed on its business

59、by its status as a REIT;and the Companys failure to qualify as a REIT for federal income tax purposes,which could adversely affect the Companys operations and ability to make distributions.Unless the context otherwise requires,references in this Annual Report on Form 10-K to the terms“registrant,”th

60、e“Company,”“Agree Realty,”“we,”“our”or“us”refer to Agree Realty Corporation and all of its consolidated subsidiaries,including its majority owned operating partnership,Agree Limited Partnership(the“Operating Partnership”).Agree Realty has elected to treat certain subsidiaries as taxable real estate

61、investment trust subsidiaries which are collectively referred to herein as the“TRS.”2 Item 1:Business General The Company is a fully integrated REIT primarily focused on the ownership,acquisition,development and management of retail properties net leased to industry leading tenants.The Company was f

62、ounded in 1971 by its current Executive Chairman,Richard Agree,and its common stock was listed on the New York Stock Exchange(“NYSE”)in 1994.The Companys assets are held by,and all of its operations are conducted through,directly or indirectly,the Operating Partnership of which the Company is the so

63、le general partner and in which it held a 99.7%common interest as of December 31,2024.Under the agreement of limited partnership of the Operating Partnership,the Company,as the sole general partner,has exclusive responsibility and discretion in the management and control of the Operating Partnership

64、.As of December 31,2024,the Companys portfolio consisted of 2,370 properties located in all 50 states and totaling approximately 48.8 million square feet of Gross Leasable Area(“GLA”).The portfolio was approximately 99.6%leased and had a weighted average remaining lease term of approximately 7.9 yea

65、rs.A significant majority of the Companys properties are leased to national tenants and approximately 68.2%of our annualized base rent was derived from tenants,or parent entities thereof,with an investment grade credit rating from S&P Global Ratings,Moodys Investors Service,Fitch Ratings or the Nati

66、onal Association of Insurance Commissioners.Substantially all of our tenants are subject to net lease agreements.A net lease typically requires the tenant to be responsible for minimum monthly rent and property operating expenses including property taxes,insurance and maintenance.As of December 31,2

67、024,the Company had 75 full-time employees,covering accounting,acquisitions,asset management,development and construction,finance,information technology,legal,and people and culture.The Company was incorporated in December 1993 under the laws of the State of Maryland.The Company believes that it has

68、 operated,and it intends to continue to operate,in such a manner to qualify as a REIT under the Internal Revenue Code of 1986,as amended(the“Internal Revenue Code”).In order to maintain qualification as a REIT,the Company must,among other things,distribute at least 90%of its REIT taxable income each

69、 year and meet asset and income tests.Additionally,its charter limits ownership of the Company,directly or constructively,by any single person to 9.8%of the value or number of shares,whichever is more restrictive,of its outstanding common stock and 9.8%of the value of the aggregate of all of its out

70、standing stock,subject to certain exceptions.As a REIT,the Company is not subject to federal income tax with respect to that portion of its income that is distributed currently to its stockholders.The Companys principal executive offices are located at 32301 Woodward Avenue,Royal Oak MI 48073 and it

71、s telephone number is(248)737-4190.The Companys website is .The Companys reports are electronically filed with or furnished to the Securities and Exchange Commission(“SEC”)pursuant to Section 13 or 15(d)of the Exchange Act and can be accessed through this site,free of charge,as soon as reasonably pr

72、acticable after we electronically file or furnish such reports.These filings are also available on the SECs website at www.sec.gov.The Companys website also contains copies of its corporate governance guidelines and code of business conduct and ethics,as well as the charters of its audit,compensatio

73、n and nominating and governance committees.The information on the Companys website is not part of this report.Recent Developments For a discussion of business developments that occurred in 2024,see“Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations”later in t

74、his report.Certain summarized highlights are contained below.Investments and Disposition Activity During 2024,the Company completed approximately$939.2 million of investments in net leased retail real estate.Total investment volume includes the acquisition of 242 properties for an aggregate purchase

75、 price of approximately$866.6 million,and the completed development of 21 properties for an aggregate cost of approximately$72.7 million.These properties are net leased to tenants operating in 27 sectors and are located in 45 states.These assets are leased for a weighted average lease term of approx

76、imately 10.6 years.3 During 2024,the Company sold 26 assets and land parcels for net proceeds of$94.3 million and recorded a net gain of$11.5 million.Leasing During 2024,excluding properties that were sold,the Company executed new leases,extensions or options on approximately 2,041,000 square feet o

77、f GLA throughout its portfolio.The annualized base contractual rent associated with these new leases,extensions or options is approximately$19.8 million.Dividends The Company increased its monthly dividend per common share from$0.247 to$0.25 in April 2024 and further increased the monthly dividend p

78、er common share to$0.253 in October 2024.The December 2024 dividend per share of$0.253 represents an annualized dividend of$3.036 per share and an annualized dividend yield of approximately 4.3%based on the last reported sales price of our common stock listed on the NYSE of$70.45 on December 31,2024

79、.The Company has routinely paid cash dividends to our common shareholders.Common cash dividends were paid quarterly for 107 consecutive quarters between 1994 and 2020 prior to moving to monthly common cash dividends in 2021.We have since paid 48 consecutive monthly dividends.Although we expect to co

80、ntinue our policy of paying regular dividends,we cannot guarantee that we will maintain our current level of common dividends,that we will continue our recent pattern of increasing dividends per share or what our actual dividend yield will be in any future period.In addition to its common dividends,

81、the Company paid monthly cash dividends on its 4.25%Series A Cumulative Redeemable Preferred Stock.Financing Equity The Company enters into at-the-market(“ATM”)programs through which the Company,from time to time,sells shares of common stock and/or enters into forward sale agreements.In October 2024

82、,the Company entered into a$1.25 billion ATM program(the“October 2024 ATM Program”).The previous$1.00 billion ATM program(the“February 2024 ATM Program”)was terminated following the establishment of the October 2024 ATM Program.As a result,no future issuances will occur under the February 2024 ATM P

83、rogram.4 The following table summarizes the ATM programs that were in place during the years ended December 31,2024,2023 and 2022:Program Year Program Size($million)Total Forward Shares Sold Total Forward Shares Settled Total Forward Shares Outstanding as of December 31,2024 Total Net Proceeds Antic

84、ipated or Received from Shares Sold($million)February 2021*$500.0 5,453,975 5,453,975 -$379.1 September 2022*$750.0 10,217,973 10,217,973 -$670.3 February 2024*$1,000.0 10,409,017 2,775,498 7,633,519(1)$706.0 October 2024$1,250.0 168,277(3)-168,277(2)$12.9 *Applicable ATM program terminated and no f

85、uture forward sales will occur under the program.(1)The Company is required to settle the outstanding shares of common stock under the February 2024 ATM Program between June 2025 and October 2025.(2)The Company is required to settle the outstanding shares of common stock under the October 2024 ATM P

86、rogram by June 2026.(3)After considering the shares of common stock sold subject to forward sale agreements under the October 2024 ATM Program,the Company had approximately$1.24 billion of availability under the October 2024 ATM Program as of December 31,2024.The following table summarizes the ATM a

87、ctivity completed during the years ended December 31,2024,2023 and 2022:2024 2023 2022 Shares of common stock sold under the ATM programs 10,598,037 5,846,998 7,678,911 Shares of common stock settled under the ATM programs 6,630,112 6,117,768 5,699,566 Net proceeds received(in millions)$403.8$415.4$

88、397.2 Debt In May 2024,the Operating Partnership completed an underwritten public offering of$450.0 million in aggregate principal amount of its 5.625%Notes due 2034(the“2034 Senior Unsecured Public Notes”).The public offering was priced at 98.83%of the principal amount,resulting in net proceeds of$

89、444.7 million.Upon completion of the underwritten public offering,the Company terminated$150.0 million of forward-starting interest rate swap agreements as well as the$150.0 million US Treasury lock that hedged the 2034 Senior Unsecured Public Notes,receiving$4.4 million,net upon termination.The pro

90、ceeds from the underwritten public offering were used for general corporate purposes,including to reduce amounts outstanding under the Revolving Credit Facility(as defined below)and to fund property acquisitions and development activity.In August 2024,the Company entered into the Fourth Amended and

91、Restated Revolving Credit Agreement which provides a$1.25 billion senior unsecured revolving credit facility(the“Revolving Credit Facility”).The Revolving Credit Facilitys interest rate is based on a pricing grid with a range of 72.5 to 140 basis points over SOFR,determined by the Companys credit ra

92、tings and leverage ratio,plus a SOFR adjustment of 10 basis points.The margins for the Revolving Credit Facility are subject to adjustment based on changes in the Companys leverage ratio and credit ratings.As of December 31,2024,the Revolving Credit Facility had a$158.0 million outstanding balance a

93、nd bore interest of 5.29%,which is comprised of SOFR of 4.46%,the pricing grid spread of 72.5 basis points,and the 10 basis point SOFR adjustment.5 Business Strategies Our primary business objectives are to capitalize on distinct market positioning in the retail net lease space,focus on 21st century

94、 industry-leading retailers through our external growth platforms,leverage our real estate acumen and relationships to identify superior risk-adjusted opportunities,maintain a conservative and flexible capital structure that enables growth,and provide consistent,high-quality earnings growth and a we

95、ll-covered growing dividend.The following is a discussion of our investment,financing and asset management strategies.Investment We are primarily focused on the long-term,fee simple ownership of properties net leased to national or large,regional retailers operating in sectors we believe to be more

96、e-commerce and recession resistant than other retail sectors.Our leases are typically long-term net leases that require the tenant to pay all property operating expenses,including real estate taxes,insurance and maintenance.We believe that a diversified portfolio of such properties provides for stab

97、le and predictable cash flow.We seek to expand and enhance our portfolio by identifying the best risk-adjusted investment opportunities across our three external avenues for growth:development,Developer Funding Platform(“DFP”)and acquisitions.Development:We have been developing retail properties sin

98、ce the formation of our predecessor company in 1971 and our development platform seeks to employ our capabilities to direct all aspects of the development process,including site selection,land acquisition,lease negotiation,due diligence,design and construction.Our developments are typically build-to

99、-suit projects that result in fee simple ownership of the property upon completion.Developer Funding Platform:Our DFP collaborates with developers or retailers on their in-process developments.We offer construction expertise and access to capital to facilitate the successful completion of their proj

100、ects.We typically take fee simple ownership of DFP projects upon completion.Acquisitions:Our acquisitions platform expands our investment capabilities by pursuing opportunities that meet both our real estate and return on investment criteria.We believe that development and DFP projects have the pote

101、ntial to generate superior risk-adjusted returns on investment in properties that are substantially similar to those we acquire.We focus on four core principles that underlie our investment criteria:Omni-channel critical(e-commerce resistance),focusing on leading operators that have matured in omni-

102、channel structure or those in e-commerce resistant sectors;Recession resistance,emphasizing a balanced portfolio with exposure to counter-cyclical sectors and retailers with strong credit profiles;Avoidance of private equity sponsorship,emphasizing leading operators with strong balance sheets and mi

103、nimizing exposure to the possibility of such sponsorship overleveraging their acquisitions and reducing retailers abilities to invest in their businesses;and Adherence to strong real estate fundamentals and fungible buildings,protecting against unforeseen changes to our investment philosophies.Each

104、platform leverages the Companys real estate acumen to pursue investments in net lease retail real estate.Factors that we consider when evaluating an investment include but are not limited to:Overall market-specific characteristics,such as demographics,market rents,competition and retail synergy;Asse

105、t-specific characteristics,such as the age,size,location,zoning,use and environmental history,accessibility,physical condition,signage and visibility of the property;Tenant-specific characteristics,including but not limited to the financial profile,operating history,business plan,6 size,market posit

106、ioning,geographic footprint,management team,industry and/or sector-specific trends and other characteristics specific to the tenant and parent thereof;Unit-level operating characteristics,including store sales performance and profitability,if available;Lease-specific terms,including term of the leas

107、e,rent to be paid by the tenant and other tenancy considerations;and Transaction considerations,such as purchase price,seller profile and other non-financial terms.Financing We seek to maintain a capital structure that provides us with the flexibility to manage our business and pursue our growth str

108、ategies,while allowing us to service our debt requirements and generate appropriate risk-adjusted returns for our stockholders.We believe these objectives are best achieved by a capital structure that consists primarily of common equity and prudent amounts of preferred equity and debt financing.Howe

109、ver,we may raise capital in any form and under terms that we deem acceptable and in the best interest of our stockholders.We have previously utilized common and preferred stock equity offerings,secured mortgage borrowings,unsecured bank borrowings,private placements and public offerings of senior un

110、secured notes and the sale of properties to meet our capital requirements.We continually evaluate our financing policies on an on-going basis in light of current economic conditions,access to various capital markets,relative costs of equity and debt securities,the market value of our properties and

111、other factors.Additionally,we sell common stock through forward sale agreements,enabling the Company to set the price of shares upon pricing the offering while delaying the issuance of shares and the receipt of the net proceeds by the Company.As of December 31,2024,the Companys ratio of total debt t

112、o enterprise value,assuming the conversion of common limited partnership interests in the Operating Partnership(“Operating Partnership Common Units”)into shares of common stock,was approximately 26.6%,and its ratio of total debt to total gross assets(before accumulated depreciation)was approximately

113、 31.1%.As of December 31,2024,our total debt outstanding before deferred financing costs and original issue discount was$2.81 billion,including$43.9 million of secured mortgage debt that had a weighted average fixed interest rate of 3.73%and a weighted average maturity of 4.8 years,$2.61 billion of

114、unsecured borrowings,which includes$350.0 million of unsecured term loans and$2.26 billion of unsecured notes,that had a weighted average fixed interest rate of 3.87%(including the effects of interest rate swap agreements)and a weighted average maturity of 6.2 years,and$158.0 million of floating rat

115、e borrowings under our Revolving Credit Facility at an interest rate of approximately 5.29%.Certain financial agreements to which the Company is a party contain covenants that limit its ability to incur debt under certain circumstances;however,our organizational documents do not limit the absolute a

116、mount or percentage of indebtedness that we may incur.As such,we may modify our borrowing policies at any time without stockholder approval.Asset Management We maintain a proactive leasing and capital improvement program that,combined with the quality and locations of our properties,has made our pro

117、perties attractive to tenants.We intend to continue to hold our properties for long-term investment and,accordingly,place a strong emphasis on the quality of construction and an on-going program of regular and preventative maintenance.Our properties are designed and built to require minimal capital

118、improvements other than renovations or alterations,typically paid for by tenants.Personnel from our corporate headquarters conduct regular inspections of each property,maintain regular contact with major tenants and engage in consistent dialogue to understand store performance and tenant sustainabil

119、ity.We have a management information system designed to provide our management with the operating data necessary to make informed business decisions on a timely basis.This system provides us rapid access to lease data,tenants sales history,cash flow budgets and forecasts.Such a system helps us to ma

120、ximize cash flow from operations and closely monitor corporate expenses.7 Competition The U.S.commercial real estate investment market is a highly competitive industry.We actively compete with many entities engaged in the acquisition,development and operation of commercial properties.As such,we comp

121、ete with other investors for a limited supply of properties and financing for these properties.Investors include traded and non-traded public REITs,private equity firms,institutional investment funds,insurance companies and private individuals,many of which have greater financial resources than we d

122、o and the ability to accept more risk than we believe we can prudently manage.There can be no assurance that we will be able to compete successfully with such entities in our acquisition,development and leasing activities in the future.Significant Tenants No tenant accounted for more than 10.0%of ou

123、r annualized base rent as of December 31,2024.See“Item 2 Properties”for additional information on our top tenants and the composition of our tenant base.Regulation Environmental Investments in real property create the potential for environmental liability on the part of the owner or operator of such

124、 real property.If hazardous substances are discovered on or emanating from a property,the owner or operator of the property may under certain statutory schemes be held strictly liable for all costs and liabilities relating to such hazardous substances.We have obtained a Phase I environmental study(w

125、hich involves inspection without soil sampling or ground water analysis)conducted by independent environmental consultants on each of our properties and,in certain instances,have conducted additional investigation,including Phase II environmental assessments.We have no knowledge of any hazardous sub

126、stances existing on our properties in violation of any applicable laws;however,no assurance can be given that such substances are not currently located on any of our properties.We believe that we are in compliance,in all material respects,with all federal,state and local ordinances and regulations r

127、egarding hazardous or toxic substances.Furthermore,we have not received notice from any governmental authority of any noncompliance,liability or other claim in connection with any of our properties.Americans with Disabilities Act of 1990 Our properties,as commercial facilities,are required to comply

128、 with Title III of the Americans with Disabilities Act of 1990 and similar state and local laws and regulations(collectively,the“ADA”).Investigation of a property may reveal non-compliance with the ADA.Our tenants will typically have primary responsibility for complying with the ADA,but we may incur

129、 costs if the tenant does not comply.As of December 31,2024,we have not received notice from any governmental authority,nor are we otherwise aware,of any non-compliance with the ADA that we believe would have a material adverse effect on our business,financial position or results of operations.Human

130、 Capital Team Members and Values As of December 31,2024,the Company had 75 full-time team members covering acquisitions,development,legal,asset management,accounting,finance,administrative,and executive functions as compared to 72 full-time team members as of December 31,2023.Our core values are the

131、 foundation of our Company culture and include:We All Do the Dishes-We are a team.We all roll up our sleeves and dig in,no matter the task.Brick by Brick-We achieve results by making consistent,disciplined decisions.Greatness Requires Grit-We have a resilient mindset to achieve and exceed our goals.

132、8 Punch Your Ticket-We push ourselves to be the best we can at our position and embrace the opportunities that new challenges present.We work to attract the best talent externally to meet the current and future demands of our business.We utilize social media,professional recruiters and other organiz

133、ations to find motivated and talented team members and employ competency-based behavioral interviewing techniques.Talent Management Professional development is a cornerstone of our talent management system,and we diligently work to develop talent from within.We emphasize professional development thr

134、ough both technical and soft-skill development and training.To empower team members to reach their potential,the Company provides a range of on-the-job training and mentoring,knowledge sharing,continuing education and“lunch-and-learn”programs.Our talent management practices include the utilization o

135、f our core competency frameworks,professional development plans,career pathing and succession planning and carefully designed promotion and internal mobility opportunities.Our team members goal setting and performance feedback processes include formal quarterly and annual reviews and self and team l

136、eader reviews,as well as ongoing one-on-one meetings with team leaders.Professional development plans based on critical core competencies are created and monitored to ensure progress is made along established timelines.Financial and Health Wellness As part of our compensation philosophy,we offer and

137、 maintain market competitive total rewards programs for team members in order to attract and retain superior talent.These programs not only include wages and incentives,but also health,welfare,and retirement benefits.Our compensation philosophies include:Total compensation that is both fair and comp

138、etitive.The Company seeks fairness in total compensation with reference to external and internal comparisons.Attract,retain and motivate team members.Compensation is used to achieve business objectives by attracting,retaining and motivating top talent.Reward superior individual and Company performan

139、ce on both a short-term and long-term basis.Performance-based pay aligns the interests of management with the interests of our stockholders and motivates and rewards individual efforts and company success.Align executives and team members long-term interests with those of our stockholders.The Compan

140、y seeks to align these interests by providing a significant portion of executive officer compensation in the form of restricted common stock and performance units.In addition,all team members are eligible to receive a portion of compensation in the form of restricted common stock.The structure of ou

141、r compensation programs balance incentive earnings for both short-term and long-term performance.Specifically,the programs include a base salary,incentive compensation through annual cash bonuses and equity participation,and a retirement plan with Company match.The“Agree Wellness Program”affords tea

142、m members paid time off and holidays,fully equipped on-site fitness amenities,and leaves of absence for specified events.Insurance coverages are provided for all team members and their dependents,including medical,dental,vision,disability,and life insurance.The Company pays 100%of short-term,long-te

143、rm,and life insurance premiums for team members and their families.The Company pays 100%of medical premiums for team members and their families for two plan options.Environmental,Social and Governance(“ESG”)As part of the Companys commitment to continuously improving our understanding of and perform

144、ance across material ESG topics,the Company engaged a third-party consultant since 2022 to help identify opportunities for improvement 9 across our programs,policies,and disclosures to meet the expectations of our stakeholders.The Company executed an ongoing sustainability and ESG strategy to enhanc

145、e our oversight structure,risk management,policies,data collection,reporting,and stakeholder engagement.Additionally,the Company received Gold Level recognition from Green Lease Leaders for two consecutive years.Environmental Sustainability We understand that environmental sustainability is an ongoi

146、ng endeavor and embrace the responsibility to be a steward of the environment,use natural resources carefully,and work with our retail partners on shared sustainability initiatives.We remain committed to using our time,talents,resources,and relationships to grow in a manner that makes the world and

147、the environment better for future generations.Our focus on industry-leading,national and super-regional retailers provides for long-term relationships with many environmentally conscientious retailers.This is particularly meaningful because the Companys portfolio is primarily comprised of properties

148、 that are leased to tenants under long-term net leases where the tenant is generally responsible for maintaining the property and implementing environmentally responsible practices.We engaged with our retail partners on shared sustainability initiatives at our properties,and executed green leases wi

149、th various tenants,as well as systematically monitored ESG policies for current and prospective tenants.We continue working with our tenants and consultant to update our greenhouse gas emissions inventory.Social,Company Culture and Team Members The“Agree Wellness Program”focuses on physical and fina

150、ncial wellness to enhance team members well-being.The Company believes that team members who are healthy,fit,financially secure and motivated are team members who achieve personal and professional success.Ongoing professional development is offered to help all team members advance their careers.The

151、Company regularly sponsors local charities and has received numerous local awards recognizing its outstanding corporate culture and wellness initiatives.The Company supports healthy living through enhanced health insurance,an on-site gym,training and education,various complementary meal programs and

152、 many other benefits.We support team members with cash compensation plans,equity ownership programs,retirement plans and ongoing access to financial planning resources.Team members are compensated for their performance and rewarded for their outstanding work.Alignment of individual,team,corporate an

153、d stockholder objectives provides for continuity,teamwork and increased collaboration.Our team members are paid commensurate with their qualifications,responsibilities,productivity,quality of work and adherence to our core values.The Agree Culture Committee is composed of team members from departmen

154、ts throughout the organization.The Companys Culture Committee hosts a variety of events that are focused on team building and camaraderie as well as contributing to the communities in which we live.Governance,Fiduciary Duties and Ethics We believe that nothing is more important than a companys reput

155、ation for integrity and serving as a responsible fiduciary for its stockholders.We are committed to managing the Company for the benefit of our stockholders and are focused on maintaining good corporate governance.Our board of directors has 10 directors,eight of whom are independent.Six new independ

156、ent directors have been added since 2018.Independent directors meet regularly,without the presence of officers or team members.A Lead Independent Director was appointed in 2019.The board of directors has adopted an insider trading policy that applies to all directors,officers and team members.The Co

157、mpany does not have a stockholder rights plan(“poison pill”)and maintains stock ownership guidelines for directors and certain executive officers requiring specified levels of stock ownership.Time-vested stock grants to officers and team members vest over a three-year period to provide long-term ali

158、gnment,while performance-based stock grants to named 10 executive officers utilize total shareholder return,with the amount of the grants intended to increase as total returns to stockholders increase,further enhancing alignment.Our board of directors has established a succession plan for the Chief

159、Executive Officer to cover emergencies and other occurrences.Finally,the Company annually submits“say-on-pay”advisory votes to its stockholders.Available Information We make available free of charge through our website at all reports we electronically file with,or furnish to,the SEC,including our An

160、nual Report on Form 10-K,Quarterly Reports on Form 10-Q and current reports on Form 8-K,as well as any amendments to those reports,as soon as reasonably practicable after those documents are filed with,or furnished to,the SEC.These filings are also accessible on the SECs website at www.sec.gov.Item

161、1A:Risk Factors The following factors and other factors discussed in this Annual Report on Form 10-K could cause the Companys actual results to differ materially from those contained in forward-looking statements made in this report or presented elsewhere in future SEC reports.You should carefully c

162、onsider each of the risks,assumptions,uncertainties and other factors described below and elsewhere in this report,as well as any reports,amendments or updates reflected in subsequent filings or furnishings with the SEC.We believe these risks,assumptions,uncertainties and other factors,individually

163、or in the aggregate,could cause our actual results to differ materially from expected and historical results and could materially and adversely affect our business operations,results of operations,financial condition and liquidity.Risks Related to Our Business and Operations Economic and financial c

164、onditions may have a negative effect on our business and operations.Changes in global or national economic conditions,such as the global economic and financial market downturn,rising tensions between China and Taiwan and the conflicts in Ukraine and in the Middle East,may cause or continue to cause,

165、among other things,tightening in the credit markets,lower levels of liquidity,increases in the rate of default and bankruptcy and lower consumer spending and business spending,which could adversely affect our business and operations.For example,the current and continued macro-economic conditions of

166、high inflation and increased interest rates have increased the costs associated with acquiring new properties and decreased the availability of financing on terms that we find acceptable,which has reduced our ability to acquire properties at our historical rate with attractive terms.Potential conseq

167、uences of changes in economic and financial conditions include:Changes in the performance of our tenants,which may result in lower rent and lower recoverable expenses that the tenant can afford to pay and tenant defaults under the leases;Current or potential tenants may delay or postpone entering in

168、to long-term net leases with us;The ability to borrow on terms and conditions that we find acceptable may be limited or unavailable,which could reduce our ability to pursue acquisition and development opportunities and refinance existing debt,reduce our returns from acquisition and development activ

169、ities,reduce our ability to make cash distributions to our stockholders and increase our future interest expense;Our ability to access the capital markets may be restricted at a time when we would like,or need,to access those markets,which could have an impact on our flexibility to react to changing

170、 economic and business conditions;The recognition of impairment charges on or reduced values of our properties,which may adversely affect our results of operations or limit our ability to dispose of assets at attractive prices and may reduce the availability of buyer financing;and One or more lender

171、s under our revolving credit facility could fail and we may not be able to replace the financing commitment of any such lenders on favorable terms,or at all.We are also limited in our ability to reduce costs to offset the results of a prolonged or severe economic downturn given certain fixed costs a

172、nd commitments associated with our operations,which could materially impact our results of operations and/or financial condition.11 Our business is significantly dependent on single tenant properties.We focus our development and investment activities on ownership of real properties that are primaril

173、y net leased to a single tenant.Therefore,the financial failure of,or other default in payment by,a single tenant under its lease and the potential resulting vacancy is likely to cause a significant reduction in our operating cash flows from that property and a significant reduction in the value of

174、the property and could cause a significant impairment loss.In addition,we would be responsible for all of the operating costs of a property following a vacancy at a single tenant building.Because our properties have generally been built to suit a particular tenants specific needs and desires,we may

175、also incur significant losses to make the leased premises ready for another tenant and experience difficulty or a significant delay in releasing such property.Bankruptcy laws will limit our remedies if a tenant becomes bankrupt and rejects its leases.If a tenant becomes bankrupt or insolvent,that co

176、uld diminish the income we receive from that tenants leases.We may not be able to evict a tenant solely because of its bankruptcy.On the other hand,a bankruptcy court might authorize the tenant to terminate its leasehold with us.If that happens,our claim against the bankrupt tenant for unpaid future

177、 rent would be an unsecured claim subject to statutory limitations,and therefore any amounts received in bankruptcy are likely to be substantially less valuable than the remaining rent we otherwise were owed under the leases.In addition,any payment on a claim we have for unpaid past rent could be su

178、bstantially less than the amount owed.Our portfolio is concentrated in certain states,which makes us more susceptible to adverse events in these areas.Our properties are located in all 50 states throughout the United States and in particular,the state of Texas(where 151 properties out of 2,370 prope

179、rties are located,or 6.8%of our annualized base rent was derived as of December 31,2024),Illinois(140 properties,or 5.5%of our annualized base rent),Michigan(142 properties,or 5.5%of our annualized base rent),North Carolina(133 properties,or 5.2%of our annualized base rent),and Florida(129 propertie

180、s,or 5.2%of our annualized rent).An economic downturn or other adverse events or conditions such as natural disasters in any of these areas,or any other area where we may have significant concentration in the future,could result in a material reduction of our cash flows or material losses to our com

181、pany.Our tenants are concentrated in certain retail sectors,which makes us susceptible to adverse conditions impacting these sectors.As of December 31,2024,9.2%,9.2%and 8.1%of our annualized base rents were derived from tenants operating in the grocery store,home improvement,and tire and auto servic

182、e sectors,respectively.Similarly,we have concentrations in other sectors such as convenience stores,dollar stores and auto parts.Any decrease in consumer demand for the products and services offered by our tenants operating in any industries for which we have concentrations could have an adverse eff

183、ect on our tenants revenues,costs and results of operations,thereby adversely affecting their ability to meet their lease obligations to us.As we continue to invest in properties,our portfolio may become more or less concentrated by industry sector.There are risks associated with our development and

184、 acquisition activities.We intend to continue the development of new properties and to consider possible acquisitions of existing properties.We anticipate that our new developments will be financed under the revolving credit facility or other forms of financing that will result in a risk that perman

185、ent fixed rate financing on newly developed projects might not be available or would be available only on disadvantageous terms.In addition,new project development is subject to a number of risks,including risks of construction delays or cost overruns that may increase anticipated project costs.Furt

186、hermore,new project commencement risks also include receipt of zoning,occupancy,other required governmental permits and authorizations and the incurrence of development costs in connection with projects that are not pursued to completion.If permanent debt or equity financing is not available on acce

187、ptable terms to finance new development or acquisitions undertaken without permanent financing,further development activities or acquisitions might be curtailed,or cash available for distribution might be adversely affected.Acquisitions entail risks that investments will fail to perform in accordanc

188、e with expectations,as well as general investment risks associated with any new real estate investment.12 Loss of revenues from tenants would reduce the Companys cash flow.Our tenants encounter significant macroeconomic,governmental and competitive forces.Beginning in 2022,in an effort to combat inf

189、lation and restore price stability,the Federal Reserve significantly raised its benchmark federal funds rate,which led to increases in interest rates in the credit markets.The Federal Reserve may continue to raise the federal funds rate,which will likely lead to higher interest rates in the credit m

190、arkets and the possibility of slowing economic growth and/or a recession.Additionally,U.S.government policies implemented to address inflation,including actions by the Federal Reserve to increase interest rates,could negatively impact consumer spending and adversely impact the broader economy.Advers

191、e changes in consumer spending or consumer preferences for particular goods,services or store-based retailing could severely impact their ability to pay rent.Shifts from in-store to online shopping could increase due to changing consumer shopping patterns as well as the increase in consumer adoption

192、 and use of mobile electronic devices.This expansion of e-commerce could have an adverse impact on our tenants ongoing viability.The default,financial distress,bankruptcy or liquidation of one or more of our tenants could cause substantial vacancies in our property portfolio or impact our tenants ab

193、ility to pay rent.Vacancies reduce our revenues,increase property expenses and could decrease the value of each vacant property.Upon the expiration of a lease,the tenant may choose not to renew the lease,renegotiate the economics of any option period(s)as a condition of exercising one or more of the

194、m,and/or we may not be able to release the vacant property at a comparable lease rate or without incurring additional expenditures in connection with such renewal or re-leasing.These risks could be exacerbated by a deterioration in the financial condition of any major tenant with leases in multiple

195、locations.Our assessment that certain businesses are more insulated from e-commerce pressure than others may prove to be incorrect,and changes in macroeconomic trends may adversely affect our tenants,either of which could impair our tenants ability to make rental payments to us and materially and ad

196、versely affect us.We primarily invest in properties leased to tenants in sectors where a physical location is critical to the generation of sales and profits.Such tenants operate in sectors including grocery stores,home improvement,tire and automotive services and convenience stores.We believe many

197、of these businesses have adopted effective omni-channel strategies that leverage their brick and mortar locations as a distinct competitive advantage against online only retailers and other competitors.In addition,they generally operate in sectors that are resilient through economic cycles.While we

198、believe this to be the case,technology and business conditions,particularly in the retail industry,are rapidly changing,and our tenants may be adversely affected by technological innovation,changing consumer preferences and competition from non-traditional sources.To the extent our tenants face incr

199、eased competition their businesses could suffer.There can be no assurance that our tenants will be successful in meeting any new competition,and a deterioration in our tenants businesses could impair their ability to meet their lease obligations to us and materially and adversely affect us.The avail

200、ability and timing of cash dividends is uncertain.We expect to continue to pay regular dividends to our stockholders.However,we bear all expenses incurred by our operations,and our funds generated by operations,after deducting these expenses,may not be sufficient to cover desired levels of dividends

201、 to our stockholders.We cannot assure our stockholders that sufficient funds will be available to pay dividends.The decision to declare and pay dividends on our common stock in the future,as well as the timing,amount and composition of any such future dividends,will be at the sole discretion of our

202、board of directors and will depend on our earnings,funds from operations,liquidity,financial condition,capital requirements,contractual prohibitions,or other limitations under our indebtedness,annual dividend requirements or the REIT provisions of the Internal Revenue Code,state law and such other f

203、actors as our board of directors deems relevant.Further,we may issue new shares of common stock as compensation to our team members or in connection with public offerings or acquisitions.Any future issuances may substantially increase the cash required to pay dividends at current or higher levels.An

204、y preferred shares we may offer may have a fixed dividend rate that would not increase with any increases in the dividend rate of our common stock.Conversely,payment of dividends on our common stock is subject to payment in full of the dividends on any preferred shares and payment of interest on any

205、 debt securities we may offer.13 If we do not maintain or increase the dividend on our common stock,it could have an adverse effect on the market price of our shares.We face risks relating to information technology and cybersecurity attacks,loss of confidential information and other business disrupt

206、ions.We rely on information technology networks and systems,including the Internet,to process,transmit and store electronic information and to manage or support a variety of our business processes and we rely on commercially available systems,software,tools and monitoring to provide infrastructure a

207、nd security for processing,transmitting and storing information.Any failure,inadequacy or interruption could materially harm our business and/or damage our business relationships and our reputation.Our clients or other third parties with whom we do business may themselves become subject to cyberatta

208、cks or security incidents,over which we may have no control,and which could have an indirect adverse impact on them,us or our business relationship.Furthermore,our business is subject to risks from and may be impacted by cybersecurity attacks or cyber intrusion,including attempts to gain unauthorize

209、d access to our confidential data and other electronic security breaches.Such cyber-attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats.While we employ a number of measures to prevent,detect and mitigate

210、these threats,there is no guarantee such efforts will be successful in preventing a cyber-attack.Cybersecurity incidents could cause operational interruption,damage to our business relationships,private data exposure(including personally identifiable information,or proprietary and confidential infor

211、mation,of ours and our team members,as well as third parties)and affect the efficiency of our business operations.Any such incidents could result in legal claims or proceedings,liability or regulatory penalties under laws protecting the privacy of personal information and reduce the benefits of our

212、technologies.Further,while we carry cyber liability insurance,such insurance may not be adequate to cover all losses related to such events.The use of artificial intelligence presents risks and challenges that may adversely impact our business and operating results or that of our tenants.We may adop

213、t and integrate generative artificial intelligence and machine learning(collectively,“AI”)tools into our operations to enhance efficiencies and streamline existing systems.However,the deployment and maintenance of AI tools may entail substantial risks.While these tools hold promise in optimizing pro

214、cesses and driving efficiencies,as with many technological innovations,they also pose inherent risks.These include,but are not limited to,the potential for inaccuracy,bias,intellectual property infringement,or misappropriation,as well as concerns regarding data privacy and cybersecurity.Potential ri

215、sk of use of AI by cybercriminals As AI technologies become more advanced,cybercriminals may develop more sophisticated attack methods.Such methods may include the use of AI to automate and enhance phishing schemes,advance malware,and carry out more effective cyberattacks.The AI-driven cyber threats

216、 could be harder to detect and counteract,which may pose significant risks to our data security and the integrity of our systems.If such AI-enhanced cyberattacks are successful,they could lead to substantial data breaches,loss of sensitive information,and significant financial and reputational damag

217、e.Our environmental,social and governance commitments could result in additional costs,and our inability to achieve them could have an adverse impact on our reputation and performance.From time to time,we communicate our strategies,commitments and targets related to sustainability and other environm

218、ental,social and governance matters.These strategies,commitments and targets reflect our current plans and aspirations,and we may be unable to achieve them.We may from time to time incur additional expense to meet such targets.Any failure to meet these sustainability targets could adversely impact o

219、ur business,financial condition and results of operations.In addition,standards and processes for measuring and reporting carbon emissions and other sustainability metrics may change over time,and may result in inconsistent data,or could result in significant revisions to our strategies,commitments

220、and targets,or our ability to achieve them.Any scrutiny of our sustainability disclosures or our failure to achieve related strategies,commitments and targets could negatively impact our reputation or performance.14 General Real Estate Risks Our performance and value are subject to general economic

221、conditions and risks associated with our real estate assets.There are risks associated with owning and leasing real estate.Although many of our leases contain terms that obligate the tenants to bear substantially all of the costs of operating our properties,investing in real estate involves a number

222、 of risks.Income from and the value of our properties may be adversely affected by:Changes in general or local economic conditions;The attractiveness of our properties to potential tenants;Changes in supply of or demand for similar or competing properties in an area;Bankruptcies,financial difficulti

223、es or lease defaults by our tenants;Changes in operating costs and expense and our ability to control rents;Our ability to lease properties at favorable rental rates;Our ability to sell a property when we desire to do so at a favorable price;Property damage or casualty loss;Impacts of climate change

224、;The potential risk of functional obsolescence of properties over time;Changes in interest rates and the availability of financing;Changes in or increased costs of compliance with governmental rules,regulations and fiscal policies,including changes in the ADA and similar regulations and tax,real est

225、ate,environmental and zoning laws,and our potential liability thereunder.Economic and financial market conditions have and may continue to exacerbate many of the foregoing risks.If a tenant fails to perform on its lease covenants,that would not excuse us from meeting any mortgage debt obligation sec

226、ured by the property and could require us to fund reserves in favor of our mortgage lenders,thereby reducing funds available for payment of cash dividends on our shares of common stock.The fact that real estate investments are relatively illiquid may reduce economic returns to investors.We may desir

227、e to sell a property in the future because of changes in market conditions or poor tenant performance or to avail ourselves of other opportunities.We may also be required to sell a property in the future to meet secured debt obligations or to avoid a secured debt loan default.Real estate properties

228、cannot generally be sold quickly,and we cannot assure you that we could always obtain a favorable price.We may be required to invest in the restoration or modification of a property before we can sell it,or we may need to obtain landlord consent to sell certain assets in which we have a leasehold in

229、terest in the land underlying the buildings.This lack of liquidity may limit our ability to vary our portfolio promptly in response to changes in economic or other conditions and,as a result,could adversely affect our financial condition,results of operations,cash flows and our ability to pay divide

230、nds on our common stock.Our ability to renew leases or re-lease space on favorable terms as leases expire significantly affects our business.We are subject to the risks that,upon expiration of leases for space located in our properties,the premises may not be re-let or the terms of re-letting(includ

231、ing the cost of concessions to tenants)may be less favorable than current lease terms.If a tenant does not renew its lease or if a tenant defaults on its lease obligations,there is no assurance we could obtain a substitute tenant on acceptable terms.If we cannot obtain another tenant with comparable

232、 building structural space and configuration needs,we may be required to modify the property for a different use,which may involve a significant capital expenditure and a delay in re-leasing the property.Further,if we are unable to re-let promptly all or a substantial portion of our retail space or

233、if the rental rates upon such re-letting were significantly lower than expected rates,our net income and ability to make expected distributions to stockholders would be adversely affected.There can be no assurance that we will be able to retain tenants in any of our properties upon the expiration of

234、 their leases.15 Our leases contain certain limitations on tenants real estate tax,insurance and operating cost reimbursement obligations.Our tenants under net leases generally are responsible for paying the real estate taxes,insurance costs and operating costs associated with the leased property.Ho

235、wever,certain leases contain limitations on the tenants cost reimbursement obligations and,therefore,there are costs which may be incurred and which will not be reimbursed in full by tenants.This could reduce our operating cash flows from those properties and could reduce the value of those properti

236、es.Potential liability for environmental contamination could result in substantial costs.Under federal,state and local environmental laws,we may be required to investigate and clean up any release of hazardous or toxic substances or petroleum products at our properties,regardless of our knowledge or

237、 actual responsibility,simply because of our current or past ownership or operation of the real estate.If unidentified environmental problems arise,we may have to make substantial payments,which could adversely affect our cash flow and our ability to make distributions to our stockholders.This poten

238、tial liability results from the following:As owner,we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination;The law may impose clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the

239、contamination;Even if more than one person is responsible for the contamination,each person who shares legal liability under environmental laws may be held responsible for all of the clean-up costs;and Governmental entities and third parties may sue the owner or operator of a contaminated site for d

240、amages and costs.These costs could be substantial and in extreme cases could exceed the value of the contaminated property.The presence of hazardous substances or petroleum products or the failure to properly remediate contamination may adversely affect our ability to borrow against,sell or lease an

241、 affected property.In addition,some environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination.We own and may in the future acquire properties that will be operated as convenience stores with gas station facilit

242、ies.The operation of convenience stores with gas station facilities at our properties will create additional environmental concerns.Similarly,we may lease properties to users or producers of other hazardous materials.We require that the tenants who operate these facilities do so in material complian

243、ce with current laws and regulations.A majority of our leases require our tenants to comply with environmental laws and to indemnify us against environmental liability arising from the operation of the properties.However,we could be subject to strict liability under environmental laws because we own

244、 the properties.There are certain losses,including losses from environmental liabilities,that are not generally insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so.There is also a risk that tenants may not satisfy their e

245、nvironmental compliance and indemnification obligations under the leases.Any of these events could substantially increase our cost of operations,require us to fund environmental indemnities in favor of our secured lenders and reduce our ability to service our secured debt and pay dividends to stockh

246、olders and any debt security interest payments.Environmental problems at any properties could also put us in default under loans secured by those properties,as well as loans secured by unaffected properties.As of December 31,2024,we have not been notified by any governmental authority of any non-com

247、pliance,liability or other claim,and are not aware of any other environmental condition that we believe will have a material adverse effect on our business,financial condition,results of operations or liquidity.Uninsured losses relating to real property may adversely affect our operating results and

248、 cash flows and upon renewal of our insurance policies,our coverage may change and our costs may increase.Our leases generally require tenants to carry comprehensive liability and extended coverage insurance on our properties.However,there are certain losses,including losses from environmental liabi

249、lities,terrorist acts or catastrophic acts of nature,that are not generally insured against or that are not generally fully insured against because it is not deemed 16 economically feasible or prudent to do so.If there is an uninsured loss or a loss in excess of insurance limits,we could lose both t

250、he revenues generated by the affected property and the capital we have invested in the property.Inflation,changes in building codes and ordinances,environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate an affected property after it has

251、been damaged or destroyed.Under those circumstances,the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property.In the event of a substantial unreimbursed loss,we would remain obligated to repay any mortgage indebtedness or other obliga

252、tions related to the property.It has generally become more difficult and expensive to obtain property insurance,including coverage for terrorism.When our current insurance policies expire,we may encounter difficulty in obtaining or renewing property insurance on our properties at the same levels of

253、coverage and under similar terms.Such insurance may be more limited and for some catastrophic risks(for example,earthquake,flood and terrorism)may not be generally available at current levels.Even if we are able to renew our policies or to obtain new policies at levels and with limitations consisten

254、t with our current policies,we cannot be sure that we will be able to obtain such insurance at premium rates that are commercially reasonable.If we were unable to obtain adequate insurance on our properties for certain risks,it could cause us to be in default under specific covenants on certain of o

255、ur indebtedness or other contractual commitments that require us to maintain adequate insurance to protect against the risk of loss.If this were to occur,or if we were unable to obtain adequate insurance and our properties experience damage which would otherwise have been covered by insurance,it cou

256、ld materially and adversely affect our financial condition and the operations of our properties.Risks Related to Our Debt Financings Our level of indebtedness could materially and adversely affect our financial position,including reducing funds available for other business purposes and reducing our

257、operational flexibility,and we may have future capital needs and may not be able to obtain additional financing on acceptable terms.At December 31,2024,our ratio of total debt to enterprise value(assuming conversion of Operating Partnership Common Units into shares of common stock)was approximately

258、26.6%.Incurring substantial debt may adversely affect our business and operating results by:Requiring us to use a substantial portion of our cash flow to pay interest and principal,which reduces the amount available for distributions,acquisitions and capital expenditures;Making us more vulnerable to

259、 economic and industry downturns and reducing our flexibility to respond to changing business and economic conditions;Requiring us to agree to less favorable terms,including higher interest rates,in order to incur additional debt,and otherwise limiting our ability to borrow for operations,working ca

260、pital or to finance acquisitions in the future;or Limiting our flexibility in conducting our business,including our ability to finance or refinance our assets,contribute assets to joint ventures or sell assets as needed,which may place us at a disadvantage compared to competitors with less debt or d

261、ebt with less restrictive terms.In addition,the use of leverage presents an additional element of risk in the event that(1)the cash flow from lease payments on our properties is insufficient to meet debt obligations,(2)we are unable to refinance our debt obligations as necessary or on as favorable t

262、erms,(3)there is an increase in interest rates,(4)we default on our financial obligations or(5)debt service requirements increase.If a property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments,the property could be foreclosed upon with a consequential loss o

263、f income and asset value to us.We generally intend to maintain a ratio of total indebtedness(including construction or acquisition financing)to total market capitalization of 65%or less.Nevertheless,we may operate with debt levels which are in excess of 65%of total market capitalization for extended

264、 periods of time.If our debt capitalization policy were changed,we could become more highly leveraged,resulting in an increase in debt service that could adversely affect our operating cash flow and our ability to make expected distributions to stockholders,and could result in an increased risk of d

265、efault on our obligations.17 Covenants in our credit agreements and note purchase agreements could limit our flexibility and adversely affect our financial condition.The terms of the financing agreements and other indebtedness require us to comply with a number of customary financial and other coven

266、ants.These covenants may limit our flexibility in our operations,and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness even if we have satisfied our payment obligations.Our financing agreements contain certain cross-default provisions wh

267、ich could be triggered in the event that we default on our other indebtedness.These cross-default provisions may require us to repay or restructure the revolving credit facility in addition to any mortgage or other debt that is in default.If our properties were foreclosed upon,or if we are unable to

268、 refinance our indebtedness at maturity or meet our payment obligations,the amount of our distributable cash flows and our financial condition would be adversely affected.Our unsecured revolving credit facility,certain term loan agreements and certain note purchase agreements contain various restric

269、tive corporate covenants,including a maximum total leverage ratio,a maximum secured leverage ratio and a minimum fixed charge coverage ratio.In addition,our unsecured revolving credit facility,certain term loan agreements and certain note purchase agreements have unencumbered pool covenants,which in

270、clude a maximum unencumbered leverage ratio and a minimum unencumbered interest coverage ratio.These covenants may restrict our ability to pursue certain business initiatives or certain transactions that might otherwise be advantageous.Furthermore,failure to meet certain of these financial covenants

271、 could cause an event of default under and/or accelerate some or all of such indebtedness which could have a material adverse effect on us.An increase in market interest rates could raise our interest costs on existing and future debt or adversely affect our stock price,and a decrease in interest ra

272、tes may lead to additional competition for the acquisition of real estate or adversely affect our results of operations.Our interest costs for any new debt and our current debt obligations may rise if interest rates increase.This increased cost could make the financing of any new acquisition more ex

273、pensive as well as lower our current period earnings.For example,the increase in interest rates has led to an increase in our cost of capital,resulting in requiring acquisition opportunities to have higher investment yields to achieve our investment goals and objectives.Rising interest rates could l

274、imit our ability to refinance existing debt when it matures or cause us to pay higher interest rates upon refinancing.In addition,an increase in interest rates could decrease the access third parties have to credit,thereby decreasing the amount they are willing to pay to lease our assets and limit o

275、ur ability to reposition our portfolio promptly in response to changes in economic or other conditions.An increase in market interest rates may lead prospective purchasers of our common stock to expect a higher dividend yield,which could adversely affect the market price of our common stock.Decrease

276、s in interest rates may lead to additional competition for the acquisition of real estate due to a reduction in desirable alternative income-producing investments.Increased competition for the acquisition of real estate may lead to a decrease in the yields on real estate targeted for acquisition.In

277、such circumstances,if we are not able to offset the decrease in yields by obtaining lower interest costs on our borrowings,our results of operations may be adversely affected.Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the over

278、all returns on your investment.We use various derivative financial instruments to provide a level of protection against interest rate risks,but no hedging strategy can protect us completely.These instruments involve risks,such as the risk that the counterparties may fail to honor their obligations u

279、nder these arrangements,that these arrangements may not be effective in reducing our exposure to interest rate changes,that a court could rule that such agreements are not legally enforceable,and that we may have to post collateral to enter into hedging transactions,which we may lose if we are unabl

280、e to honor our obligations.These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the REIT income tests.In addition,the nature and timing of hedging transactions may influence the effectiveness of our hedging strategies.Poorly designed strategies

281、 or improperly executed transactions could actually increase our risk and losses.Moreover,hedging strategies involve transaction and other costs.We cannot assure you that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedg

282、ing transactions will not result in losses that may reduce the overall return on your investment.18 Future offerings of debt and equity may not be available to us or may adversely affect the market price of our common stock.We expect to continue to increase our capital resources by making additional

283、 offerings of equity and debt securities in the future,which could include classes or series of preferred stock,common stock and senior or subordinated notes.Our ability to raise additional capital may be restricted at a time when we would like or need,including as a result of market conditions.Futu

284、re market dislocations could cause us to seek sources of potentially less attractive capital and impact our flexibility to react to changing economic and business conditions.All debt securities and other borrowings,as well as all classes or series of preferred stock,will be senior to our common stoc

285、k in a liquidation of our company.Additional equity offerings could dilute our stockholders equity and reduce the market price of shares of our common stock.In addition,depending on the terms and pricing of an additional offering of our common stock and the value of our properties,our stockholders m

286、ay experience dilution in both the book value and fair value of their shares.The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market after an offering or the perception that such sales could occur,and this could materially

287、 and adversely affect our ability to raise capital through future offerings of equity or equity-related securities.In addition,we may issue preferred stock or other securities convertible into equity securities with a distribution preference or a liquidation preference that may limit our ability to

288、make distributions on our common stock.Our ability to estimate the amount,timing or nature of additional offerings is limited as these factors will depend upon market conditions and other factors.Risks Related to Our Corporate Structure Our charter,bylaws and Maryland law contain provisions that may

289、 delay,defer or prevent a change of control transaction.Our charter contains 9.8%ownership limits.Our charter,subject to certain exceptions,authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT and contains provisions that limit any pers

290、on to actual or constructive ownership of no more than 9.8%(in value or in number of shares,whichever is more restrictive)of the outstanding shares of our common stock and no more than 9.8%(in value)of the aggregate of the outstanding shares of all classes and series of our stock.Our board of direct

291、ors,in its sole discretion,may exempt,subject to the satisfaction of certain conditions,any person from the ownership limits.These restrictions on transferability and ownership will not apply if our board of directors determines that it is no longer in our best interests to attempt to qualify,or to

292、continue to qualify,as a REIT.The ownership limits may delay or impede,and we may use the ownership limits deliberately to delay or impede,a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders.We have a s

293、taggered board.Our directors are divided into three classes serving three-year staggered terms.The staggering of our board of directors may discourage offers for the Company or make an acquisition more difficult,even when an acquisition may be viewed to be in the best interest of our stockholders.We

294、 could issue stock without stockholder approval.Our board of directors could,without stockholder approval,issue authorized but unissued shares of our common stock or preferred stock.In addition,our board of directors could,without stockholder approval,classify or reclassify any unissued shares of ou

295、r common stock or preferred stock and set the preferences,rights and other terms of such classified or reclassified shares.Our board of directors could establish a series of stock that could,depending on the terms of such series,delay,defer or prevent a transaction or change of control that might in

296、volve a premium price for our common stock or otherwise be viewed to be in the best interest of our stockholders.Provisions of Maryland law may limit the ability of a third party to acquire control of our company.Certain provisions of Maryland law may have the effect of inhibiting a third party from

297、 making a proposal to acquire us or of impeding a change of control under certain circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then prevailing market price of such shares,including:“Business combination”provis

298、ions that,subject to limitations,prohibit certain business combinations between us and an“interested stockholder”(defined generally as any person who beneficially owns 10%or more of the voting power of our shares or an affiliate thereof)for five years after the most recent date on which the stockhol

299、der 19 becomes an interested stockholder and thereafter would require the recommendation of our board of directors and impose special appraisal rights and special stockholder voting requirements on these combinations;and “Control share”provisions that provide that“control shares”of our company(defin

300、ed as shares which,when aggregated with other shares controlled by the stockholder,entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors)acquired in a“control share acquisition”(defined as the direct or indirect acquisition of ownership or control o

301、f“control shares”)have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter,excluding all interested shares.The business combination statute permits various exemptions from its provisions,

302、including business combinations that are approved or exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder.Our board of directors has exempted from the business combination provisions of the Maryland General Corporation Law,or MGCL,any b

303、usiness combination with Mr.Richard Agree or any other person acting in concert or as a group with Mr.Richard Agree.In addition,our bylaws contain a provision exempting any and all acquisitions by any person of shares of our stock from the control share acquisition statute.Additionally,Title 3,Subti

304、tle 8 of the MGCL,permits our board of directors,without stockholder approval and regardless of what is currently provided in our charter or our bylaws,to implement certain takeover defenses.These provisions may have the effect of inhibiting a third party from making an acquisition proposal for our

305、company or of delaying,deferring or preventing a change in control of our company under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-current market price.Our charter,our bylaws,the limited partnership agreement of

306、the Operating Partnership and Maryland law also contain other provisions that may delay,defer or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be viewed to be in the best interest of our stockholders.An officer and director may have

307、 interests that conflict with the interests of stockholders.An officer and member of our board of directors owns Operating Partnership Common Units.This individual may have personal interests that conflict with the interests of our stockholders with respect to business decisions affecting us and the

308、 Operating Partnership,such as interests in the timing and pricing of property sales or refinancing in order to obtain favorable tax treatment.Federal Income Tax Risks Complying with REIT requirements may cause us to forego otherwise attractive opportunities.To qualify as a REIT for federal income t

309、ax purposes we must continually satisfy numerous income,asset and other tests,thus having to forego investments we might otherwise make and hindering our investment performance.Failure to qualify as a REIT could adversely affect our operations and our ability to make distributions.We will be subject

310、 to increased taxation if we fail to qualify as a REIT for federal income tax purposes.Although we believe that we are organized and operate in such a manner so as to qualify as a REIT under the Internal Revenue Code,no assurance can be given that we will remain so qualified.Qualification as a REIT

311、involves the application of highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations.The complexity of these provisions and applicable treasury regulations is also increased in the context of a REIT that holds its assets in partnership

312、form.The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT.Additionally,our charter provides our board of directors with the power,under certain circumstances,to revoke or otherwise terminate our REIT election and c

313、ause us to be taxed as a regular corporation,without the approval of our stockholders.A REIT that annually distributes at least 90%of its taxable income to its 20 stockholders generally is not taxed at the corporate level on such distributed income.We have not requested and do not plan to request a

314、ruling from the Internal Revenue Service(the“IRS”)that we qualify as a REIT.If we fail to qualify as a REIT,we will face tax consequences that will substantially reduce the funds available for payment of cash dividends:We would not be allowed a deduction for dividends paid to stockholders in computi

315、ng our taxable income and would be subject to federal income tax at regular corporate rates.We may be subject to increased state and local taxes.Unless we are entitled to relief under statutory provisions,we could not elect to be treated as a REIT for four taxable years following the year in which w

316、e failed to qualify.In addition,if we fail to qualify as a REIT,we will no longer be required to pay dividends(other than any mandatory dividends on any preferred shares we may offer).As a result of these factors,our failure to qualify as a REIT could adversely affect the market price for our common

317、 stock.U.S.federal tax reform legislation could affect REITs generally,the geographic markets in which we operate,our stock and our results of operations,both positively and negatively in ways that are difficult to anticipate.Changes to the federal income tax laws are proposed regularly.Additionally

318、,the REIT rules are constantly under review by persons involved in the legislative process and by the IRS and the U.S.Department of the Treasury,which may result in revisions to regulations and interpretations in addition to statutory changes.If enacted,certain such changes could have an adverse imp

319、act on our business and financial results.In particular,H.R.1,which took effect for taxable years that began on or after January 1,2018(subject to certain exceptions),as amended by the Coronavirus Aid,Relief,and Economic Security Act made many significant changes to the federal income tax laws that

320、profoundly impacted the taxation of individuals,corporations(both regular C corporations as well as corporations that have elected to be taxed as REITs),and the taxation of taxpayers with overseas assets and operations.A number of changes that affect non-corporate taxpayers will expire at the end of

321、 2025 unless Congress acts to extend them.These changes impact us and our stockholders in various ways,some of which are adverse or potentially adverse compared to prior law.While the IRS has issued some guidance with respect to certain of the new provisions,there are numerous interpretive issues th

322、at will require further guidance,and technical corrections legislation may be needed to clarify certain aspects of the new law and give proper effect to Congressional intent.There can be no assurance,however,that technical clarifications or further changes needed to prevent unintended or unforeseen

323、tax consequences will be enacted by Congress.In addition,while certain elements of tax reform legislation do not impact us directly as a REIT,they could impact the geographic markets in which we operate,the tenants that populate our properties and the customers who frequent our properties in ways,bo

324、th positive and negative,that are difficult to anticipate.Other legislative proposals could be enacted in the future that could affect REITs and their stockholders.Prospective investors are urged to consult their tax advisors regarding the effect of these tax law changes and any other potential tax

325、law changes on an investment in our common stock.Changes in tax laws may prevent us from maintaining our qualification as a REIT.As we have previously described,we intend to maintain our qualification as a REIT for federal income tax purposes.However,this intended qualification is based on the tax l

326、aws that are currently in effect.We are unable to predict any future changes in the tax laws that would adversely affect our status as a REIT.If there is a change in the tax law that prevents us from qualifying as a REIT or that requires REITs generally to pay corporate level income taxes,we may not

327、 be able to make the same level of distributions to our stockholders.Complying with REIT requirements may force us to liquidate or restructure otherwise attractive investments.In order to qualify as a REIT,at least 75%of the value of our assets must consist of cash,cash items,government securities a

328、nd qualified real estate assets.The remainder of our investments in securities(other than government securities,securities of TRSs and qualified real estate assets)cannot include more than 10%of the voting securities or 10%of the value of all securities,of any one issuer.In addition,in general,no mo

329、re than 5%of the total value of our assets(other than government securities,securities of TRSs and qualified real estate assets)can consist of securities of any one issuer,and no more than 21 20%of the total value of our assets can be represented by one or more TRSs.If we fail to comply with these r

330、equirements at the end of any calendar quarter,we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.As a result,we may be required to liquidate

331、 otherwise attractive investments.We may have to borrow funds or sell assets to meet our distribution requirements.Subject to some adjustments that are unique to REITs,a REIT generally must distribute 90%of its taxable income.For the purpose of determining taxable income,we may be required to accrue

332、 interest,rent and other items treated as earned for tax purposes but that we have not yet received.In addition,we may be required not to accrue as expenses for tax purposes some expenses that actually have been paid,including,for example,payments of principal on our debt,or some of our deductions m

333、ight be disallowed by the IRS.As a result,we could have taxable income in excess of cash available for distribution.If this occurs,we may have to borrow funds or liquidate some of our assets in order to meet the distribution requirement applicable to a REIT.Our ownership of and relationship with our TRSs will be limited,and a failure to comply with the limits would jeopardize our REIT status and m