Agree Realty Corporation Reports Operating Results for the Second Quarter 2008

SECOND Quarter 2008 Highlights:

FARMINGTON HILLS, Mich., July 31 /PRNewswire-FirstCall/ -- Agree Realty
Corporation (NYSE: ADC) today announced results for the quarter ended June 30,
2008. For the second quarter, funds from operations ("FFO") increased 4.9% to
$5,420,000 compared with funds from operations in the second quarter of 2007
of $5,165,000. Diluted funds from operations per share were $0.65 per share
compared with $0.62 per share for the second quarter of 2007. Net income was
$3,766,000, or $0.49 per share on a diluted basis, compared with net income
for the second quarter of 2007 of $3,603,000 or $0.47 per share. Total
revenues increased 4.9% to $8,789,000, compared with total revenues of
$8,378,000 in the second quarter of 2007. A reconciliation of net income to
FFO is included in the financial tables accompanying this press release.
For the six months ended June 30, 2008, FFO was $10,586,000 compared with
FFO for the six months ended June 30, 2007 of $10,304,000. FFO per diluted
share was $1.27 compared with $1.23 for the six months ended June 30, 2007.
Net income was $7,345,000, or $0.96 per diluted share, compared with net
income for the comparable period last year of $7,208,000, or $0.94 per diluted
share. Total revenues increased 4.3% to $17,557,000 compared with total
revenues of $16,841,000 for the comparable period last year.
"We are extremely pleased with the operating results for the quarter, and
expect continued growth as our projects in Silver Springs Shores, Florida,
Shelby Township, Michigan, Brighton, Michigan and Big Rapids, Michigan are
completed," said Richard Agree, President and Chief Executive Officer.
"Despite difficult market conditions, we achieved year-over-year growth of
nearly 5%. We continue to build a pipeline of development projects for
high-quality national tenants and look forward to upcoming announcements
highlighting additional development activity."
Dividend
The Company paid a cash dividend of $0.50 per share on July 15, 2008 to
shareholders of record on June 30, 2008. The dividend is equivalent to an
annualized dividend of $2.00 per share and represents a payout ratio of 76.9%
of FFO for the quarter
Portfolio
At June 30, 2008, the Company's total assets were $247,900,000 and its
portfolio consisted of 67 properties located in 16 states and totaling
3,432,734 square feet. The portfolio was 99.3% leased at the end of the
quarter.
The Company's construction in progress balance totaled approximately
$6,576,000 at June 30, 2008, and we capitalized $148,000 of construction
period interest during the second quarter of 2008.
Lease Expirations
The following table, as of June 30, 2008, sets forth lease expirations for
the next 10 years for the Company's freestanding properties and community
shopping centers, assuming that none of the tenants exercise renewal options
or terminate their leases prior to the contractual expiration date.

Expiring Leases

Number of
Expiration Leases Square Percent of Annualized Percent of
Year Expiring Footage Total Base Rent Total

2008 5 12,300 0.4 % $72,860 0.2 %
2009 19 191,726 5.6 % 963,717 2.9 %
2010 21 304,757 8.9 % 1,859,626 5.6 %
2011 27 236,154 6.9 % 1,695,819 5.1 %
2012 14 76,560 2.2 % 617,385 1.9 %
2013 16 314,313 9.2 % 1,669,637 5.1 %
2014 4 174,558 5.1 % 837,006 2.5 %
2015 11 651,242 19.1 % 4,665,262 14.1 %
2016 5 80,945 2.4 % 1,664,513 5.0 %
2017 4 55,303 1.6 % 848,440 2.6 %
Thereafter 50 1,310,223 38.4 % 18,129,532 54.9 %

Total 176 3,408,081 $33,023,797

Annualized Base Rent of Properties
The following is a breakdown of base rents in effect at June 30, 2008 for
each type of retail tenant:

Credit Analysis

Retail Annualized Percent of Percent of
Tenant Base Rent Total Square Feet Total

National $29,251,716 88.6 % 2,916,636 85.6 %
Regional 2,596,264 7.9 % 375,206 11.0 %
Local 1,175,817 3.5 % 116,439 3.4 %
Total $33,023,797 3,408,281

Major Tenants
The following is a breakdown of base rents in effect at June 30, 2008 for
each of the Company's major tenants:

Tenant Analysis

Retail Annualized Percent of Percent of
Tenant Base Rent Total Square Feet Total

Borders $9,861,727 29.9 % 979,474 28.5 %
Walgreen 8,354,599 25.3 % 330,310 9.6 %
Kmart 3,847,911 11.7 % 999,766 29.1 %
Subtotal $22,064,237 66.9 % 2,309,550 67.2 %

Outstanding Shares and Operating Partnership Units
For the three months and six months ended June 30, 2008, the Company's
fully diluted weighted average shares outstanding were 7,683,039 and
7,682,947, respectively. The basic weighted average shares outstanding for
the three months and six months ended June 30, 2008 were 7,676,258 and
7,672,500, respectively.
The Company's assets are held by, and all of its operations are conducted
through, Agree Limited Partnership, of which the Company is the sole general
partner. As of June 30, 2008, there were 673,547 operating partnership units
outstanding and the Company held a 92.05% interest.
Agree Realty Corporation owns, manages and develops properties which are
primarily single tenant properties leased to major retail tenants and
neighborhood community shopping centers. The Company currently owns and
operates a portfolio of 67 properties, which are located in 16 states and
contain 3.4 million square feet of gross leasable space.
The Company considers portions of the information contained in this
release to be forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, each as amended. These forward-looking statements represent the
Company's expectations, plans and beliefs concerning future events. Although
these forward-looking statements are based on good faith beliefs, reasonable
assumptions and the Company's best judgment reflecting current information,
certain factors could cause actual results to differ materially from such
forward-looking statements. Such factors are detailed from time to time in
reports filed or furnished by the Company with the Securities and Exchange
Commission, including the Company's Form 10-K for the year ended December 31,
2006. Except as required by law, the Company assumes no obligation to update
these forward-looking statements, even if new information becomes available in
the future.
For additional information, visit the Company's home page on the Internet
at http://www.agreerealty.com

Agree Realty Corporation
Operating Results (in thousands, except per share amounts)
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007

Revenues:
Minimum rents $8,133 $7,643 $16,112 $15,330
Percentage rent - 2 5 16
Operating cost reimbursements 654 726 1,437 1,482
Other income 2 7 3 13
Total Revenues 8,789 8,378 17,557 16,841
Expenses:
Real estate taxes 451 467 916 925
Property operating expenses 359 436 954 947
Land lease payments 171 169 339 339
General and administration 1,130 975 2,226 1,971
Depreciation and amortization 1,348 1,263 2,643 2,496
Interest expense 1,239 1,152 2,499 2,328
Total Expenses 4,698 4,462 9,577 9,006
Income before minority interest 4,091 3,916 7,980 7,835
Minority interest 325 313 635 627
Net Income $3,766 $3,603 $7,345 $7,208
Net Income Per Share - Dilutive $0.49 $0.47 $0.96 $0.94
Reconciliation of Funds from
Operations to Net Income: (1)
Net income $3,766 $3,603 $7,345 $7,208
Depreciation of real estate
assets 1,314 1,236 2,577 2,444
Amortization of leasing costs 15 13 30 25
Minority interest 325 313 634 627
Funds from Operations $5,420 $5,165 $10,586 $10,304
Funds from Operations
Per Share - Dilutive $0.65 $0.62 $1.27 $1.23
Weighted average number of shares
and OP units
outstanding - dilutive 8,357 8,365 8,356 8,366

(1) FFO is defined by the National Association of Real Estate Investment
Trusts, Inc. (NAREIT) to mean net income computed in accordance with generally
accepted accounting principles (GAAP), excluding gains (or losses) from sales
of property, plus real estate related depreciation and amortization and after
adjustments for unconsolidated partnerships and joint ventures. Management
uses FFO as a supplemental measure to conduct and evaluate the Company's
business because there are certain limitations associated with using GAAP net
income by itself as the primary measure of the Company's operating
performance. Historical cost accounting for real estate assets in accordance
with GAAP implicitly assumes that the value of real estate assets diminishes
predictably over time. Since real estate values instead have historically
risen or fallen with market conditions, management believes that the
presentation of operating results for real estate companies that use
historical cost accounting is insufficient by itself.
FFO should not be considered as an alternative to net income as the
primary indicator of the Company's operating performance or as an alternative
to cash flow as a measure of liquidity. Further, while the Company adheres to
the NAREIT definition of FFO, its presentation of FFO is not necessarily
comparable to similarly titled measures of other REITs due to the fact that
not all REITs use the same definition.

Agree Realty Corporation
Consolidated Balance Sheets (in thousands)
(Unaudited)

June 30, December 31
2008 2007
Assets
Land $87,234 $87,234
Buildings 206,895 197,034
Accumulated depreciation (55,824) (53,251)
Property under development 6,576 4,806
Cash and cash equivalents 181 545
Rents receivable 657 770
Deferred costs, net of amortization 1,293 1,261
Other assets 888 949
Total Assets $247,900 $239,348

Liabilities
Mortgages payable $44,408 $45,760
Notes payable 47,750 36,800
Deferred revenue 11,070 11,414
Dividends and distributions payable 4,235 4,212
Other liabilities 2,837 3,652
Total Liabilities 110,300 101,838
Total minority interest 5,857 5,896
Stockholders' Equity
Common stock 1 1
Additional paid-in capital 142,842 141,261
Accumulated deficit (11,100) (10,648)
Total Stockholders' Equity 131,743 131,614
$247,900 $239,348

SOURCE Agree Realty Corporation

Kenneth R. Howe, Chief Financial Officer, Agree Realty Corporation,
+1-248-737-4190