Agree Realty Corp. is a self-administered self-managed real estateinvestment trust which develops acquires owns and operates properties which are primarily leased to major national and regional retail companies under net leases. Agree Realty Corp. has a market cap of $126.9 million; its shares were traded at around $16 with a P/E ratio of 6 and P/S ratio of 3.5. The dividend yield of Agree Realty Corp. stocks is 12.5%. Highlight of Business Operations:Minimum rental income increased $532,000, or 7%, to $8,511,000 in 2009, compared to $7,979,000 in 2008. The increase was the result of the development of a Walgreens drug store and a bank land lease in Macomb Township, Michigan in March 2008, the development of a Walgreens drug store in Ypsilanti, Michigan in May 2008, the development of a Walgreens drug store in Ocala, Florida in June 2008, the development of a Walgreens drug store in Shelby Township, Michigan in July 2008, the development of a Walgreens drug store in Silver Springs Shores, Florida in January 2009 and the development of a Walgreens drug store in Brighton, Michigan in February 2009. Our revenue increase from these developments amounted to $484,000. In addition, rental income from our Big Rapids, Michigan shopping center increased by $74,000 as a result of redevelopment activities.
Property operating expenses (shopping center maintenance, snow removal, insurance and utilities) decreased $135,000, or 23%, to $459,000 in 2009 compared to $594,000 in 2008. The net decrease was the result of: a decrease in shopping center maintenance costs of ($23,000); a decrease in snow removal costs of ($105,000); an increase in utility costs of $5,000; and a decrease in insurance costs of ($12,000) in 2009 versus 2008.
General and administrative expenses increased by $155,000, or 14%, to $1,251,000 in 2009, compared to $1,096,000 in 2008. The increase was the result of increased dead deal costs related to property searches in Michigan and Florida. General and administrative expenses as a percentage of total rental income (minimum and percentage rents) increased from 13.7% for 2008 to 14.7% for 2009.
Depreciation and amortization increased $99,000, or 8%, to $1,394,000 in 2009, compared to $1,295,000 in 2008. The increase was the result of the development of four properties in 2008 and two properties in 2009.
Our cash flows from operations increased $738,000 to $5,456,000 for the three months ended March 31, 2009, compared to $4,718,000 for the three months ended March 31, 2008. Cash used in investing activities decreased $1,712,000 to $1,242,000 in 2009, compared to $2,954,000 in 2008. Cash used in financing activities increased $2,491,000 to $4,621,000 in 2009, compared to $2,130,000 in 2008.
As of March 31, 2009, we had total mortgage indebtedness of $66,795,430. Of this total mortgage indebtedness, $42,294,150 is fixed rate, self-amortizing debt with a weighted average interest rate of 6.64% and the remaining mortgage debt of $24,501,280 has a maturity date of July 14, 2013, can be extended at our option for two additional years and bears interest a 150 basis points over LIBOR (or 2.06% as of March 31, 2009). In January 2009, the Company entered into an interest rate swap agreement that will fix the interest rate during the initial term of the mortgage at 3.744%.
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