Agree Realty (ADC) risk factors, FY2025 10-K

Risks Related to Our Business and Operations

1. 01Economic and financial conditions may have a negative effect on our business and operations
2. 02Our business is significantly dependent on single tenant properties
3. 03Bankruptcy laws will limit our remedies if a tenant becomes bankrupt and rejects its leases33% rewritten
4. 04Our portfolio is concentrated in certain states, which makes us more susceptible to adverse events in these areas58% rewritten
5. 05Our tenants are concentrated in certain retail sectors, which makes us susceptible to adverse conditions impacting these sectors47% rewritten
6. 06There are risks associated with our development and acquisition activities
7. 07Loss of revenues from tenants would reduce the Company’s cash flow
8. 08Our 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 adversely affect us23% rewritten
9. 09The availability and timing of cash dividends is uncertain
10. 10We face risks relating to information technology and cybersecurity attacks, loss of confidential information and other business disruptions
11. 11The use of artificial intelligence presents risks and challenges that may adversely impact our business and operating results or that of our tenants52% rewritten
12. 12Our 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

General Real Estate Risks

1. 13Our performance and value are subject to general economic conditions and risks associated with our real estate assets
2. 14We face risks associated with climate change, which could materially and adversely impact usNew
3. 15Compliance with the ADA, fire and safety regulations, and other regulations may require us to make unanticipated expendituresNew
4. 16The fact that real estate investments are relatively illiquid may reduce economic returns to investors
5. 17Our ability to renew leases or re-lease space on favorable terms as leases expire significantly affects our business
6. 18Our leases contain certain limitations on tenants’ real estate tax, insurance and operating cost reimbursement obligations
7. 19Potential liability for environmental contamination could result in substantial costs
8. 20Uninsured losses relating to real property may adversely affect our operating results and cash flows and upon renewal of our insurance policies, our coverage may change and our costs may increase

Risks Related to Our Debt Financings

1. 21Our level of indebtedness could materially and adversely affect our financial position, including reducing funds available for other business purposes and reducing our operational flexibility, and we may have future capital needs for which we may not be able to obtain additional financing on acceptable terms
2. 22Covenants in our credit agreements and note purchase agreements could limit our flexibility and adversely affect our financial condition
3. 23An 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 rates may lead to additional competition for the acquisition of real estate or adversely affect our results of operations
4. 24Our hedging strategies may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on your investment
5. 25Future offerings of debt and equity may not be available to us or may adversely affect the market price of our common stock

Risks Related to Our Corporate Structure

1. 26Our charter, bylaws and Maryland law contain provisions that may delay, defer or prevent a change of control transaction
2. 27In 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
3. 28An officer and director may have interests that conflict with the interests of stockholders

Federal Income Tax Risks

1. 29Complying with REIT requirements may cause us to forego otherwise attractive opportunities
2. 30Failure to qualify as a REIT could adversely affect our operations and our ability to make distributions
3. 31U.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 anticipate38% rewritten
4. 32Changes in tax laws may prevent us from maintaining our qualification as a REIT
5. 33Complying with REIT requirements may force us to liquidate or restructure otherwise attractive investments
6. 34We may have to borrow funds or sell assets to meet our distribution requirements
7. 35Our ownership of and relationship with our TRSs will be limited, and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax
8. 36Liquidation of our assets may jeopardize our REIT qualification
9. 37We may be subject to other tax liabilities even if we qualify as a REIT
10. 38Dividends payable by REITs do not qualify for the reduced tax rates on dividend income from regular corporations42% rewritten
11. 39Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities

General Risks

1. 40Loss of our key personnel could materially impair our ability to operate successfully
2. 41If we fail to maintain an effective system of internal controls, we may not be able to accurately report financial results, which could result in a loss of investor confidence and adversely affect the market price of our common stock
3. 42The market price and trading volume of shares of our common stock may fluctuate or decline
4. 43The extent to which a future pandemic impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence