Net Takeaways with Feller & Harf

CEO Joey Agree - Net Takeaways Interview

Episode Summary

In this episode of Net Takeaways with Feller & Harf, special guest Joey Agree, CEO of Agree Realty, dives into the evolution and future of the net lease industry. The conversation begins with some light banter about personal experiences, including Joey’s weekend and Detroit sports, before transitioning into the history of Agree Realty. Joey shares how the company transformed from a Kmart developer to a nearly $8 billion market cap leader in net lease real estate, highlighting pivotal moments, such as their focus on acquiring top-tier retailers and navigating the e-commerce revolution. Joey emphasizes the importance of maintaining a strong balance sheet and being at the forefront of industry trends, citing their leadership in forward equity offerings and diversification away from struggling retailers like Kmart and Borders. He discusses the rise of e-commerce, the future of omnichannel retailing, and the evolving dynamics of the real estate market. Key highlights include: - Agree Realty’s strategic approach to acquisitions, focusing on the top 30 retailers, with Walmart being their largest tenant. Insights into the challenges and opportunities posed by e-commerce, emphasizing the necessity for retailers to adapt to new consumer behaviors. - Agree Realty’s focus on maintaining discipline in acquisitions, navigating the rising cap rates, and positioning the company for future growth. - The conversation also touches on the future of retail, including the implications of omnichannel fulfillment and the importance of strong retailer relationships. Joey concludes by outlining Agree Realty’s vision to become a $20 billion enterprise within the next few years, driven by its commitment to shareholder value and disciplined growth strategy. The episode ends with a motivational anecdote, referencing Kobe Bryant’s work ethic, and how it aligns with the company’s philosophy of staying focused and seizing opportunities. This engaging episode provides listeners with a deep dive into the net lease industry and the strategic thinking behind Agree Realty's success.

Episode Notes

Episode Title: Net Lease Evolution with Joey Agree, CEO of Agree Realty

Podcast: Net Takeaways with Feller & Harf

Hosts: BJ Feller & Isaiah Harf

Special Guest: Joey Agree, CEO of Agree Realty

Episode Overview: In this insightful episode, BJ and Isaiah sit down with Joey Agree, the CEO of Agree Realty, to discuss the evolution of the net lease real estate sector and the strategic moves that have driven Agree Realty’s success. Joey shares how the company evolved from its roots as a Kmart developer to become one of the largest players in the net lease space, with nearly $8 billion in market cap. They also explore the rise of e-commerce, the impact of omnichannel retailing, and what the future holds for retail real estate.

Key Discussion Points:

History of Agree Realty: From Kmart developer to an industry leader with Walmart as its largest tenant.
E-commerce Disruption: Joey’s early recognition of the e-commerce revolution and its impact on retail real estate.
Omnichannel Retailing: The future of retail lies in a blend of online and in-store strategies, with significant implications for real estate.
Strategic Acquisitions: A focus on top-tier retailers and disciplined investment, with an emphasis on long-term value and stability.
Balance Sheet Strength: Agree Realty’s pioneering role in forward equity offerings and maintaining a low-leverage approach.
Cap Rate Trends: Insights into the current state of the market, cap rates, and where the industry is heading.
Agree Realty's Future Vision: Joey's outlook for expanding the company's portfolio and achieving a $20 billion enterprise within the next few years.

Key Quotes:

“We are focused on the top 30 retailers because they have the balance sheets and liquidity to weather the e-commerce disruption.”
“The power of mobile e-commerce has transformed consumer behavior – we're in the sixth inning of this evolution.”
“At Agree Realty, it’s not about doing something fun – we focus on essentials like auto parts and grocery, where there’s consistent demand.”

Additional Insights:

The episode touches on the generational trade from high-intensity downtown assets to more passive, suburban net lease investments.
Joey discusses the impact of changing consumer behavior and how retailers are adapting to an omnichannel approach to serve modern shopping preferences.
The conversation concludes with Joey’s reflections on leadership and staying disciplined in an ever-changing market, with inspiration from Kobe Bryant's legendary work ethic.