Agree Realty Corporation Reports Operating Results for the Second Quarter 2008

SECOND Quarter 2008 Highlights:
- 2nd quarter FFO increases 4.9% year-over-year
- $0.50 per share quarterly dividend paid July 15, 2008

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

Real Estate Central

Agree Realty Corporation Reports Operating Results for the Second Quarter 2008

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