KeyBanc last night initiated coverage of Agree Realty with an Overweight rating and $68 price target. Sentiment for the net lease real estate investment trusts remains highly dependent on the path of interest rates and the spread REITs can achieve on investments relative to their cost of capital, the analyst tells investors in a research note. The firm says it would likely become more constructive on the triple net lease REITs if borrowing costs decrease and/or investment yields increase. It views Agree Realty to be one of the best positioned net lease REITs in the sector given its “high-quality” retail net lease portfolio, proven track record of external growth, and strong balance sheet. The company’s high investment grade-rated tenant profile has led fundamentals to outpace peers, contends KeyBanc.
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