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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 Commission File Number 1-12928
 AGREE REALTY CORPORATION
  Maryland
    
    38-3148187(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)31850 Northwestern Highway
    
    48334Farmington Hills, Michigan
    
    (Zip code)(Address of principal executive offices)
 (248) 737-4190
 Securities Registered Pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, $.0001 par value
    
    New York Stock Exchange
 Securities Registered Pursuant to Section 12(g) of the Act:
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 Part IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    6Item 1B.
    
    Unresolved Staff Comments
    
    
    9Item 2.
    
    Properties
    
    
    9Item 3.
    
    Legal Proceedings
    
    
    15Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    15Part IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and
Issurer Purchases of Equity Securities
    
    
    16Item 6.
    
    Selected Financial Data
    
    
    17Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    18Item 7A
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    24Item 8
    
    Financial Statements and Supplementary Data
    
    
    25Item 9
    
    Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
    
    
    25Item 9A
    
    Controls and Procedures
    
    
    25Item 9B.
    
    Other Information
    
    
    28Part IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    28Item 11.
    
    Executive Compensation
    
    
    28Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder
Matters
    
    
    29Item 13.
    
    Certain Relationships and Related Transactions, and Director
Independence
    
    
    29Item 14.
    
    Principal Accountant Fees and Services
    
    
    29Part IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    30Signatures
    
    
    32Form of Restricted Stock AgreementSummary of Director CompensationSubsidiariesConsent of Virchow, Krause & Company, LLPConsent of BDO Seidman, LLPCertification pursuant to Section 302, Richard Agree, Chief Executive OfficerCertification pursuant to Section 302, Kenneth R. Howe, Vice President, FinanceCertification pursuant to Section 906, Richard Agree, Chief Executive OfficerCertification pursuant to Section 906, Kenneth R. Howe, Vice President, Finance




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Part I
 FORWARD LOOKING STATEMENTS
  
 Item 1. BUSINESS
 General




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Growth Strategy
   Financing Strategy
   Property Management
   Agree Limited Partnership
  2




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Headquarters
 www.agreerealty.com
 Major Tenants
  Tax Status
   Competition
  Potential Environmental Risks
   3




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Employees
  Financial Information About Industry Segments
  
 ITEM 1A. RISK FACTORS
 General
 We rely significantly on three major tenants.
  We could be adversely affected by a tenants bankruptcy.
 Risks involved in single tenant leases.
 Risks associated with borrowing, including loss of properties in the event of a foreclosure.
 4




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Risks associated with our development and acquisition activities.
 Our portfolio has limited geographic diversification.
 Dependence on key personnel.
 We are not limited by our organization documents as to the amount of debt we may incur.
 We can change our investment and financing policies without stockholder approval.
 Competition
 5




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Risks Associated With Investment in Real Estate
  
    
    The risk that tenants will not perform under their leases, reducing our income from
the leases or requiring us to assume the cost of performing obligations (such as taxes,
insurance and maintenance) that are the tenants responsibility under the lease.
    
    The risk that changes in economic conditions or real estate markets may adversely
affect the value of our properties.
    
    The risk that local conditions (such as oversupply of similar properties) could
adversely affect the value of our properties.
    
    The risk that we may not always be able to lease properties at favorable rental
rates.
    
    The risk that we may not always be able to sell a property when we desire to do so
at a favorable price.
    
    The risk of changes in tax, zoning or other laws could make properties less
attractive or less profitable.
  Uncertainties relating to lease renewals and re-letting of space.
 Some potential losses are not covered by insurance.
 Potential liability for environmental contamination could result in substantial costs.
 6




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
    
    As owner we may have to pay for property damage and for investigation and clean-up
costs incurred in connection with the contamination.
    
    The law may impose clean-up responsibility and liability regardless of whether the
owner or operator knew of or caused the contamination.
    
    Even if more than one person is responsible for the contamination, each person who
 shares legal liability under environmental laws may be held responsible for all of the
clean-up costs.
    
    Governmental entities and third parties may sue the owner or operator of a
contaminated site for damages and costs.
   Real estate investments are relatively illiquid
 Tax Risks
   7




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
    
    We would not be allowed a deduction for dividends paid to stockholders in computing
our taxable income and would be subject to federal income tax at regular corporate
rates.
    
    We could be subject to the federal alternative minimum tax and possibly increased
state and local taxes.
    
    Unless we are entitled to relief under statutory provisions, we could not elect to
be treated as a REIT for four taxable years following the year in which we were
disqualified.
  Excessive non-real estate asset values may jeopardize our REIT status.
  We may have to borrow funds or sell assets to meet our distribution requirements.
 We may be subject to other tax liabilities.
 Changes in tax laws may prevent us from qualifying as a REIT.
 
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  8




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ITEM 2. PROPERTIES
   Development and Acquisition Summary
         9




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Major Tenants
  Annualized Base
    
    
    Percent of TotalNumber
    
    
    Rent as of
    
    
    Annualized Base Rent asof Leases
    
    
    December 31, 2007
    
    
    of December 31, 2007Borders
    
    
    18
    
    
    $
    9,861,727
    
    
    
    31
    %Walgreen
    
    
    20
    
    
    
    7,343,599
    
    
    
    23Kmart
    
    
    12
    
    
    
    3,847,911
    
    
    
    12Total
    
    
    50
    
    
    $
    21,053,237
    
    
    
    66
    %
    www.sec.gov.
 10




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##### Table of Contents



Location of Properties in the Portfolio
 Number
    
    Total Grossof
    
    Leasable Area
    
    Percent of GLA Leased onState
    
    Properties
    
    (Sq. feet)
    
    December 31, 2007California
    
    
    1
    
    
    
    38,015
    
    
    
    100
    %Florida
    
    
    4
    
    
    
    258,793
    
    
    
    100Georgia
    
    
    1
    
    
    
    14,820
    
    
    
    100Illinois
    
    
    1
    
    
    
    20,000
    
    
    
    100Indiana
    
    
    2
    
    
    
    15,844
    
    
    
    100Kansas
    
    
    2
    
    
    
    45,000
    
    
    
    100Kentucky
    
    
    1
    
    
    
    116,212
    
    
    
    100Maryland
    
    
    2
    
    
    
    53,000
    
    
    
    100Michigan
    
    
    36
    
    
    
    2,049,794
    
    
    
    99Nebraska
    
    
    2
    
    
    
    55,000
    
    
    
    100New Jersey
    
    
    1
    
    
    
    10,118
    
    
    
    100New York
    
    
    2
    
    
    
    27,626
    
    
    
    100Ohio
    
    
    1
    
    
    
    21,000
    
    
    
    100Oklahoma
    
    
    4
    
    
    
    99,282
    
    
    
    100Pennsylvania
    
    
    1
    
    
    
    37,004
    
    
    
    100Wisconsin
    
    
    3
    
    
    
    523,036
    
    
    
    99Total/Average
    
    
    64
    
    
    
    3,384,544
    
    
    
    99
    %
 Lease Expirations
  December 31, 2007Gross Leasable Area
    
    Annualized Base RentNumberof Leases
    
    Square
    
    Percent
    
    
    
    
    
    PercentExpiration Year
    
    Expiring
    
    Footage
    
    Of Total
    
    Amount
    
    Of Total2008
    
    
    13
    
    
    
    226,445
    
    
    
    6.7
    %
    
    $
    747,618
    
    
    
    2.4
    %2009
    
    
    20
    
    
    
    193,326
    
    
    
    5.7
    %
    
    
    976,244
    
    
    
    3.1
    %2010
    
    
    21
    
    
    
    304,757
    
    
    
    9.0
    %
    
    
    1,859,626
    
    
    
    5.9
    %2011
    
    
    28
    
    
    
    242,154
    
    
    
    7.2
    %
    
    
    1,726,069
    
    
    
    5.5
    %2012
    
    
    14
    
    
    
    76,560
    
    
    
    2.3
    %
    
    
    614,235
    
    
    
    1.9
    %2013
    
    
    9
    
    
    
    103,718
    
    
    
    3.1
    %
    
    
    954,773
    
    
    
    3.0
    %2014
    
    
    3
    
    
    
    172,958
    
    
    
    5.1
    %
    
    
    824,206
    
    
    
    2.6
    %2015
    
    
    11
    
    
    
    651,242
    
    
    
    19.3
    %
    
    
    4,665,262
    
    
    
    14.7
    %2016
    
    
    5
    
    
    
    80,945
    
    
    
    2.4
    %
    
    
    1,664,513
    
    
    
    5.3
    %2017
    
    
    4
    
    
    
    55,303
    
    
    
    1.6
    %
    
    
    848,440
    
    
    
    2.7
    %Thereafter
    
    
    45
    
    
    
    1,264,483
    
    
    
    37.6
    %
    
    
    16,780,199
    
    
    
    52.9
    %Total
    
    
    173
    
    
    
    3,371,891
    
    
    
    100.0
    %
    
    $
    31,661,185
    
    
    
    100.0
    %
 11




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Annualized Base Rent of our Properties
  Percent ofAnnualized
    
    
    AnnualizedType of Tenant
    
    Base Rent
    
    
    Base RentNational(1)
    
    $
    28,047,948
    
    
    
    88
    %Regional(2)
    
    
    2,444,206
    
    
    
    8Local
    
    
    1,169,031
    
    
    
    4Total
    
    $
    31,661,185
    
    
    
    100
    %
 
 (1)
    
    Includes the following national tenants: Borders, Walgreen, Kmart, Wal-Mart, Eckerd Drugs,
Fashion Bug, Rite Aid, JC Penney, Avco Financial, GNC Group, Radio Shack, Super Value,
Maurices, Payless Shoes, Blockbuster Video, Family Dollar, H&R Block, Sally Beauty, Jo Ann
Fabrics, Staples, Best Buy, Dollar Tree, TGI Fridays, Circuit City and Pier 1 Imports.(2)
    
    Includes the following regional tenants: Roundys Foods, Dunhams Sports, Christopher Banks
and Bealls Department Stores. Freestanding Properties
   Freestanding Properties
 YearCompleted/
    
    
    
    
    
    Lease Expiration(2)Tenant/Location
    
    Expanded
    
    Total GLA
    
    (Option expiration)Borders, Aventura, FL (1)
    
    
    1996
    
    
    
    30,000
    
    
    Jan 31, 2016 (2036)Borders, Columbus, OH
    
    
    1996
    
    
    
    21,000
    
    
    Jan 23, 2016 (2036)Borders, Monroeville, PA
    
    
    1996
    
    
    
    37,004
    
    
    Nov 8, 2016 (2036)Borders, Norman, OK
    
    
    1996
    
    
    
    24,641
    
    
    Sep 20, 2016 (2036)Borders, Omaha, NE
    
    
    1995
    
    
    
    30,000
    
    
    Nov 3, 2015 (2035)Borders, Santa Barbara, CA
    
    
    1995
    
    
    
    38,015
    
    
    Nov 17, 2015 (2035)Borders, Wichita, KS
    
    
    1995
    
    
    
    25,000
    
    
    Nov 10, 2015 (2035)Borders, Lawrence, KS
    
    
    1997
    
    
    
    20,000
    
    
    Oct 16, 2022 (2042)
 12




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##### Table of Contents



YearCompleted/
    
    
    
    
    
    Lease Expiration(2)Tenant/Location
    
    Expanded
    
    Total GLA
    
    (Option expiration)Borders, Tulsa, OK
    
    
    1998
    
    
    
    25,000
    
    
    Sep 30, 2018 (2038)Borders, Oklahoma City, OK
    
    
    2002
    
    
    
    24,641
    
    
    Nov 17, 2017 (2037)Borders, Omaha, NE
    
    
    2002
    
    
    
    25,000
    
    
    Nov 17, 2017 (2037)Borders, Indianapolis, IN
    
    
    2002
    
    
    
    15,844
    
    
    Nov 17, 2017 (2037)Borders, Columbia, MD
    
    
    1999
    
    
    
    28,000
    
    
    Oct 16, 2022 (2042)Borders, Germantown, MD
    
    
    2000
    
    
    
    25,000
    
    
    Oct 16, 2022 (2042)Borders Headquarters, Ann Arbor, MI
    
    
    1996/1998
    
    
    
    458,729
    
    
    Jan 29, 2023 (2043)Borders, Tulsa, OK
    
    
    1996
    
    
    
    25,000
    
    
    Sep 30, 2018 (2038)Borders, Boynton Beach, FL
    
    
    1996
    
    
    
    25,000
    
    
    July 20, 2024 (2044)Borders, Ann Arbor, MI
    
    
    1996
    
    
    
    110,000
    
    
    July 20, 2024 (2044)Circuit City, Boynton Beach, FL
    
    
    1996
    
    
    
    32,459
    
    
    Dec 15, 2016 (2036)Citizens Bank, Flint, MI
    
    
    2003
    
    
    
    4,426
    
    
    Apr 15, 2023Eckerd Drugs, Webster, NY
    
    
    2004
    
    
    
    13,813
    
    
    Feb 24, 2024 (2044)Eckerd Drugs, Albion, NY
    
    
    2004
    
    
    
    13,813
    
    
    Oct 12, 2024 (2044)Fajita Factory, Lansing, MI
    
    
    2004
    
    
    Note (3)
    
    Aug 31,2014 (2032)Lake Lansing RA Associates, LLC, East Lansing, MI
    
    
    2004
    
    
    Note (4)
    
    Dec 31,2028 (2078)Kmart, Grayling, MI
    
    
    1984
    
    
    
    52,320
    
    
    Sep 30, 2009 (2059)Kmart, Oscoda, MI
    
    
    1984/1990
    
    
    
    90,470
    
    
    Sep 30, 2009 (2059)Meijer, Plainfield, IN
    
    
    2007
    
    
    Note (5)
    
    Nov 5, 2027 (2047)Rite Aid, Canton Twp, MI
    
    
    2003
    
    
    
    11,180
    
    
    Oct 31, 2019 (2049)Rite Aid, Roseville, MI
    
    
    2005
    
    
    
    11,060
    
    
    June 30, 2025 (2050)Rite Aid, Mt Pleasant, MI
    
    
    2005
    
    
    
    11,095
    
    
    Nov 30, 2025 (2065)Rite Aid, N Cape May, NJ
    
    
    2005
    
    
    
    10,118
    
    
    Nov 30, 2025 (2065)Rite Aid, Summit Twp, MI
    
    
    2006
    
    
    
    11,060
    
    
    Oct 31, 2019 (2039)Sams Club, Roseville, MI
    
    
    2002
    
    
    Note (6)
    
    Aug 4, 2022 (2082)Walgreen, Waterford, MI
    
    
    1997
    
    
    
    13,905
    
    
    Feb 28, 2018 (2058)Walgreen, Chesterfield, MI
    
    
    1998
    
    
    
    13,686
    
    
    July 31, 2018 (2058)Walgreen, Pontiac, MI
    
    
    1998
    
    
    
    13,905
    
    
    Oct 31, 2018 (2058)Walgreen, Grand Blanc, MI
    
    
    1998
    
    
    
    13,905
    
    
    Feb 28, 2019 (2059)Walgreen, Rochester, MI
    
    
    1998
    
    
    
    13,905
    
    
    June 30, 2019 (2059)Walgreen, Ypsilanti, MI
    
    
    1999
    
    
    
    15,120
    
    
    Dec 31, 2019 (2059)Walgreen, Petoskey, MI (1)
    
    
    2000
    
    
    
    13,905
    
    
    Apr 30, 2020 (2060)Walgreen, Flint, MI
    
    
    2000
    
    
    
    14,490
    
    
    Dec 31, 2020 (2060)Walgreen, Flint, MI
    
    
    2001
    
    
    
    15,120
    
    
    Feb 28, 2021 (2061)Walgreen, N Baltimore, MI
    
    
    2001
    
    
    
    14,490
    
    
    Aug 31, 2021 (2061)Walgreen, Flint, MI
    
    
    2002
    
    
    
    14,490
    
    
    Apr 30, 2027 (2077)Walgreen, Big Rapids, MI
    
    
    2003
    
    
    
    13,560
    
    
    Apr 30, 2028 (2078)Walgreen, Flint, MI
    
    
    2004
    
    
    
    14,560
    
    
    Feb 28, 2029 (2079)Walgreen, Flint, MI
    
    
    2004
    
    
    
    13,650
    
    
    Oct 31, 2029 (2079)Walgreen, Midland, MI
    
    
    2005
    
    
    
    14,820
    
    
    July 31, 2030 (2080)Walgreen, Grand Rapids, MI
    
    
    2005
    
    
    
    14,820
    
    
    Aug 30, 2030 (2080)Walgreen, Delta Township, MI
    
    
    2005
    
    
    
    14,559
    
    
    Nov 30, 2030 (2080)
 13




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##### Table of Contents



YearCompleted/
    
    
    
    
    
    Lease Expiration(2)Tenant/Location
    
    Expanded
    
    Total GLA
    
    (Option expiration)Walgreen, Livonia, MI
    
    
    2007
    
    
    
    14,490
    
    
    June 30, 2032 (2082)Walgreen, Barnesville, GA
    
    
    2007
    
    
    
    14,820
    
    
    Nov 30, 2032 (2082)Total
    
    
    
    
    
    
    1,521,888
 
 (1)
    
    These properties are subject to long-term ground leases where a third party owns the
underlying land and has leased the land to us to construct or operate freestanding properties.
We pay rent for the use of the land and we are generally responsible for all costs and
expenses associated with the building and improvements. At the end of the lease terms, as
extended (Aventura, FL 2036, and Petoskey, MI 2074), the land together with all improvements
revert to the land owner. We have an option to purchase the Petoskey property after August 7,
2019.(2)
    
    At the expiration of tenants initial lease term, each tenant (except Citizens Bank) has an
option, subject to certain requirements, to extend its lease for an additional period of time.(3)
    
    This 2.03 acre property is leased from us by Fajita Factory, LLC pursuant to a ground lease.
The tenant occupies a 5,448 square foot building.(4)
    
    This 11.3 acre property is leased from us by Lake Lansing RA Associates, LLC pursuant to a
ground lease. The land owner expects to construct a 14,564 square foot building.(5)
    
    This 32.5 acre property is leased from us by Meijer pursuant to a ground lease. Meijer
expects to construct an estimated 210,000 square foot super center.(6)
    
    This 12.68 acre property is leased from us by Wal-Mart pursuant to a ground lease. Wal-Mart
has constructed a Sams Club retail building containing approximately 132,332 square feet. Community Shopping Centers
   Gross
    
    
    
    
    
    Average
    
    Percent
    
    PercentYear
    
    Leasable
    
    
    
    
    
    Base
    
    Occupied at
    
    Leased at
    
    Anchor Tenants (LeaseCompleted/
    
    Area
    
    Annualized
    
    Rent per
    
    December 31,
    
    December 31,
    
    expiration/Option periodProperty Location
    
    Expanded
    
    Sq. Ft.
    
    Base Rent (2)
    
    Sq. Ft.(3)
    
    2007
    
    2007 (4)
    
    expiration) (5)Capital Plaza,(1)
    
    
    1978/ 2006
    
    
    
    116,212
    
    
    $
    562,917
    
    
    $
    4.84
    
    
    
    100
    %
    
    
    100
    %
    
    Kmart(2008/2053)Frankfort, KY
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Walgreen (2031/2052)Fashion Bug (2010/2025)Charlevoix Commons
    
    
    1991
    
    
    
    137,375
    
    
    
    686,495
    
    
    
    5.00
    
    
    
    100
    %
    
    
    100
    %
    
    Kmart (2015/2065)Charlevoix, MI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Roundys (2011-2031)Chippewa Commons
    
    
    1991
    
    
    
    168,311
    
    
    
    963,849
    
    
    
    5.73
    
    
    
    100
    %
    
    
    100
    %
    
    Kmart (2014/2064)Chippewa Falls, WI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Roundys (2011/2031)Fashion Bug (2011/2021)Ironwood Commons
    
    
    1991
    
    
    
    185,535
    
    
    
    932,827
    
    
    
    5.03
    
    
    
    100
    %
    
    
    100
    %
    
    Kmart (2015/2065)Ironwood, MI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Super Value (2011/2036)Fashion Bug (2012/2022)
 14




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##### Table of Contents



Gross
    
    
    
    
    
    Average
    
    Percent
    
    PercentYear
    
    Leasable
    
    
    
    
    
    Base
    
    Occupied at
    
    Leased at
    
    Anchor Tenants (LeaseCompleted/
    
    Area
    
    Annualized
    
    Rent per
    
    December 31,
    
    December 31,
    
    expiration/Option periodProperty Location
    
    Expanded
    
    Sq. Ft.
    
    Base Rent (2)
    
    Sq. Ft.(3)
    
    2007
    
    2007 (4)
    
    expiration) (5)Marshall Plaza
    
    
    1990
    
    
    
    119,279
    
    
    
    696,189
    
    
    
    5.84
    
    
    
    100
    %
    
    
    100
    %
    
    Kmart (2015/2065)Marshall, MIMt. Pleasant Shopping Center
    
    
    1973/1997
    
    
    
    241,458
    
    
    
    1,107,657
    
    
    
    4.68
    
    
    
    98
    %
    
    
    98
    %
    
    Kmart (2008/2048)Mt. Pleasant, MI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    J.C. Penney Co. (2010/2020)Staples, Inc. (2010/2025)Fashion Bug (2010/2025)North Lakeland Plaza
    
    
    1987
    
    
    
    171,334
    
    
    
    1,318,888
    
    
    
    7.70
    
    
    
    100
    %
    
    
    100
    %
    
    Best Buy (2013/2028)Lakeland, FL
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Bealls (2015/2025)Petoskey Town Center
    
    
    1990
    
    
    
    174,870
    
    
    
    1,093,873
    
    
    
    6.26
    
    
    
    100
    %
    
    
    100
    %
    
    Kmart (2015/2065)Petoskey, MI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Roundys (2010/2030)Fashion Bug (2012/2022)Plymouth Commons
    
    
    1990
    
    
    
    162,031
    
    
    
    880,236
    
    
    
    5.59
    
    
    
    97
    %
    
    
    97
    %
    
    Kmart (2015/2065)Plymouth, WI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Roundys (2010/2030)Fashion Bug (2010/2020)Rapids Associates
    
    
    1990
    
    
    
    173,557
    
    
    
    776,209
    
    
    
    4.58
    
    
    
    98
    %
    
    
    98
    %
    
    Kmart (2015/2065)Big Rapids, MI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MC Sports (2018/2033)Fashion Bug (2011/2021)Shawano Plaza
    
    
    1990
    
    
    
    192,694
    
    
    
    1,031,117
    
    
    
    5.35
    
    
    
    100
    %
    
    
    100
    %
    
    Kmart (2014/2064)Shawano, WI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Roundys (2010/2030)J.C. Penney Co. (2010/2025)Fashion Bug (2009/2021)West Frankfort Plaza
    
    
    1982
    
    
    
    20,000
    
    
    
    146,000
    
    
    
    7.30
    
    
    
    100
    %
    
    
    100
    %
    
    Fashion Bug (2012)West Frankfort, ILTotal/Average
    
    
    
    
    
    
    1,862,656
    
    
    $
    10,196,257
    
    
    $
    5.51
    
    
    
    99
    %
    
    
    99
    %
 
 (1)
    
    All community shopping centers except Capital Plaza (which is subject to a long-term ground
lease expiring in 2053 from a third party) are wholly-owned by us.(2)
    
    Total annualized base rents of the Company as of December 31, 2007.(3)
    
    Calculated as total annualized base rents, divided by gross leaseable area actually leased as
of December 31, 2007.(4)
    
    Roundys has sub-leased the space it leases at Charlevoix Commons (35,896 square feet, rented
at a rate of $5.97 per square foot). The Charlevoix lease expires in 2011 (assuming it is not
extended by Roundys).(5)
    
    The option to extend the lease beyond its initial term is only at the option of the tenant. 
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  15




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##### Table of Contents



Part II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
  Market Information
 Dividends Declared PerQuarter Ended
    
    High
    
    Low
    
    Common ShareMarch 31, 2007
    
    $
    36.00
    
    
    $
    32.30
    
    
    $
    0.49June 30, 2007
    
    $
    35.04
    
    
    $
    30.12
    
    
    $
    0.49September 30, 2007
    
    $
    33.95
    
    
    $
    27.29
    
    
    $
    0.49December 31, 2007
    
    $
    34.00
    
    
    $
    28.32
    
    
    $
    0.50March 31, 2006
    
    $
    32.10
    
    
    $
    29.69
    
    
    $
    0.49June 30, 2006
    
    $
    35.07
    
    
    $
    29.88
    
    
    $
    0.49September 30, 2006
    
    $
    34.05
    
    
    $
    31.24
    
    
    $
    0.49December 31, 2006
    
    $
    36.26
    
    
    $
    32.10
    
    
    $
    0.49
    16




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##### Table of Contents



ITEM 6. SELECTED FINANCIAL DATA
  Selected Financial Data
 Year Ended December 31,2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Operating DataTotal Revenue
    
    $
    34,468
    
    
    $
    32,908
    
    
    $
    31,579
    
    
    $
    28,940
    
    
    $
    26,224ExpensesProperty expense (1)
    
    
    4,310
    
    
    
    4,219
    
    
    
    4,545
    
    
    
    4,220
    
    
    
    4,161General and administrative
    
    
    4,462
    
    
    
    4,019
    
    
    
    4,191
    
    
    
    2,849
    
    
    
    2,275Interest
    
    
    4,896
    
    
    
    4,625
    
    
    
    4,159
    
    
    
    4,507
    
    
    
    5,684Early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    961Depreciation and amortization
    
    
    5,017
    
    
    
    4,851
    
    
    
    4,637
    
    
    
    4,249
    
    
    
    3,836Total Expenses
    
    
    18,685
    
    
    
    17,714
    
    
    
    17,532
    
    
    
    15,825
    
    
    
    16,917Other Income (2)
    
    
    1,044
    
    
    
    
    
    
    
    6
    
    
    
    217
    
    
    
    438Income before Minority Interest and Discontinued
Operations.
    
    
    16,827
    
    
    
    15,194
    
    
    
    14,053
    
    
    
    13,332
    
    
    
    9,745Minority Interest
    
    
    1,345
    
    
    
    1,220
    
    
    
    1,145
    
    
    
    1,257
    
    
    
    1,103Income before Discontinued Operations
    
    
    15,482
    
    
    
    13,974
    
    
    
    12,908
    
    
    
    12,075
    
    
    
    8,642Gain on Sale of Asset From Discontinued
Operations
    
    
    
    
    
    
    
    
    
    
    2,654
    
    
    
    523
    
    
    
    740Income From Discontinued Operations
    
    
    
    
    
    
    
    
    
    
    486
    
    
    
    525
    
    
    
    1,090Net Income
    
    $
    15,482
    
    
    $
    13,974
    
    
    $
    16,048
    
    
    $
    13,123
    
    
    $
    10,472Number of Properties
    
    
    64
    
    
    
    60
    
    
    
    59
    
    
    
    54
    
    
    
    50Number of Square Feet
    
    
    3,385
    
    
    
    3,355
    
    
    
    3,363
    
    
    
    3,463
    
    
    
    3,495Percentage Leased
    
    
    99
    %
    
    
    99
    %
    
    
    99
    %
    
    
    99
    %
    
    
    97
    %Per Share Data  DilutedIncome before discontinued operations
    
    $
    2.01
    
    
    $
    1.83
    
    
    $
    1.72
    
    
    $
    1.87
    
    
    $
    1.64Discontinued operations
    
    
    
    
    
    
    
    
    
    
    .42
    
    
    
    .16
    
    
    
    .35Net income
    
    $
    2.01
    
    
    $
    1.83
    
    
    $
    2.14
    
    
    $
    2.03
    
    
    $
    1.99Weighted average of common shares outstanding
 Diluted
    
    
    7,716
    
    
    
    7,651
    
    
    
    7,491
    
    
    
    6,475
    
    
    
    5,276Cash dividends
    
    $
    1.97
    
    
    $
    1.96
    
    
    $
    1.96
    
    
    $
    1.95
    
    
    $
    1.94Balance Sheet DataReal Estate (before accumulated depreciation)
    
    $
    289,074
    
    
    $
    268,248
    
    
    $
    258,232
    
    
    $
    252,427
    
    
    $
    220,334Total Assets
    
    $
    239,348
    
    
    $
    223,515
    
    
    $
    223,460
    
    
    $
    214,837
    
    
    $
    190,795Total debt, including accrued interest
    
    $
    82,889
    
    
    $
    69,031
    
    
    $
    68,504
    
    
    $
    92,441
    
    
    $
    83,313
 
 (1)
    
    Property expense includes real estate taxes, property maintenance, insurance, utilities and
land lease expense.(2)
    
    Other income is composed of development fee income, gain on land sales, and equity in net
income of unconsolidated entities.(3)
    
    Net income per share has been computed by dividing the net income by the weighted average
number of shares of Common Stock outstanding and the effect of dilutive securities
outstanding. The per share amounts are presented in accordance with SFAS No. 128 Earnings per
share. 
 17




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##### Table of Contents



ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Overview
   Recent Accounting Pronouncements
 Accounting for Uncertainty in Income
Taxesan Interpretation of FASB Statement No. 109 Accounting for Income
Taxes. Accounting for Uncertainty in Income Taxes  an
 Fair Value Measurements
 The Fair Value Option for Financial Assets
and Financial Liabilities
 18




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##### Table of Contents



Noncontrolling Interests in Consolidated
Financial Statements
 Business Combinations.
 Critical Accounting Policies
      19




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##### Table of Contents



Comparison of Year Ended December 31, 2007 to Year Ended December 31, 2006
         20




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Comparison of Year Ended December 31, 2006 to Year Ended December 31, 2005
          21




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Discontinued Operations
   Liquidity and Capital Resources
      22




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Total
    
    
    Yr 1
    
    
    2-3 Yrs
    
    
    4-5 Yrs
    
    
    Over 5 YrsMortgages Payable
    
    $
    45,760
    
    
    $
    2,750
    
    
    $
    6,075
    
    
    $
    6,931
    
    
    $
    30,004Notes Payable
    
    
    36,800
    
    
    
    
    
    
    
    36,800
    
    
    
    
    
    
    
    Land Lease Obligations
    
    
    11,296
    
    
    
    681
    
    
    
    1,412
    
    
    
    1,463
    
    
    
    7,740Other Long-Term Liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Estimated Interest
Payments on Mortgages and
Notes Payable
    
    
    24,714
    
    
    
    5,130
    
    
    
    7,414
    
    
    
    4,482
    
    
    
    7,688Total
    
    $
    118,570
    
    
    $
    8,561
    
    
    
    51,701
    
    
    $
    12,876
    
    
    $
    45,432
   Off-Balance Sheet Arrangements
  Inflation
  Funds from Operations
   23




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##### Table of Contents



Year ended December 31,2007
    
    
    2006
    
    
    2005Net income
    
    $
    15,482,274
    
    
    $
    13,974,168
    
    
    $
    16,047,576Depreciation of real estate assets
    
    
    4,905,361
    
    
    
    4,745,319
    
    
    
    4,683,807Amortization of leasing costs
    
    
    50,868
    
    
    
    44,423
    
    
    
    48,357Minority interest
    
    
    1,344,475
    
    
    
    1,220,113
    
    
    
    1,423,932Gain on sale of assets
    
    
    (1,043,675
    )
    
    
    
    
    
    
    (2,895,532
    )Funds from Operations
    
    $
    20,739,303
    
    
    $
    19,984,023
    
    
    $
    19,308,140Weighted average shares and
OP Units outstandingBasic
    
    
    8,328,418
    
    
    
    8,254,391
    
    
    
    8,134,051Diluted
    
    
    8,389,426
    
    
    
    8,324,973
    
    
    
    8,164,288
 
 ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    Thereafter
    
    TotalFixed rate debt
    
    $
    2,750
    
    
    $
    2,937
    
    
    $
    3,138
    
    
    $
    3,351
    
    
    $
    3,580
    
    
    $
    30,004
    
    
    $
    45,760Average interest rate
    
    
    6.64
    %
    
    
    6.64
    %
    
    
    6.64
    %
    
    
    6.64
    %
    
    
    6.64
    %
    
    
    6.64
    %
    
    
    Variable rate debt
    
    
    
    
    
    
    
    
    
    $
    36,800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    36,800Average interest rate
    
    
    
    
    
    
    
    
    
    
    5.65
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
     24




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##### Table of Contents



ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
   
 ITEM 9A CONTROLS AND PROCEDURES
     Report of Management on Agree Realty Corporations Internal Control Over Financial Reporting
  25




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##### Table of Contents




    
    We lack segregation of duties in the period-end financial reporting process.
Our chief financial officer is the only employee with any significant knowledge of
generally accepted accounting principles. The chief financial officer is also the
sole employee in charge of the general ledger (including the preparation of routine
and non-routine journal entries and journal entries involving accounting
estimates), the preparation of accounting reconciliations, the selection of
accounting principles, and the preparation of interim and annual financial
statements (including report combinations, consolidation entries and footnote
disclosures) in accordance with generally accepted accounting principles.
   Report of Independent Registered Public Accounting Firm
 
   26




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##### Table of Contents




    
    The Company lacks segregation of duties in the period-end financial reporting process.
The Chief Financial Officer (CFO) is the only employee with any significant knowledge of
generally accepted accounting principles. The CFO is also the sole employee in charge of
the general ledger (including the preparation of routine and non-routine journal entries
and journal entries involving accounting estimates), the preparation of accounting
reconciliations, the selection of accounting principles, and the preparation of interim and
annual financial statements (including report combinations, consolidation entries and
footnote disclosures) in accordance with generally accepted accounting principles.
     
 27




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  
 ITEM 9B OTHER INFORMATION
    
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  
 ITEM 11. EXECUTIVE COMPENSATION
  28




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##### Table of Contents



ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  Number ofsecurities to beissued upon
    
    Weighted averageexercise of
    
    exercise price ofoutstanding
    
    outstanding
    
    Number of securitiesoptions, warrants
    
    options, warrants
    
    remaining availablePlan category
    
    and rights
    
    and rights
    
    for future issuanceEquity
compensation plans approved by
security holders
    
    
    
    
    
    
    
    
    
    
    915,100Equity
compensation plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    915,100
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  29




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    The following documents are filed as part of this Report:
   3.1
    
    Articles of Incorporation and Articles of Amendment of the Company (incorporated by
reference to Exhibit 3.1 to the Companys Registration Statement on Form S-11 (Registration
Statement No. 33-73858, as amended)3.2
    
    Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Companys Form
10-K for the year ended December 31, 2006)4.1
    
    Rights Agreement by and between Agree Realty Corporation and BankBoston, N.A. as Rights
Agent dated as of December 7, 1998 (incorporated by reference to Exhibit 4.1 to the
Companys Form 8-K filed on December 7, 1998)4.2
    
    Amended and Restated Registration Rights Agreement, dated July 8, 1994 by and among the
Company, Richard Agree, Edward Rosenberg and Joel Weiner (incorporated by reference to
Exhibit 10.2 to the Companys Form 10-K for the year ended December 31, 1994)4.3
    
    Amended and Restated $50 million Line of Credit agreement dated November 5, 2003, among
Agree Realty Corporation, Standard Federal Bank and Bank One. (incorporated by reference
to Exhibit 10.1 to the Companys Form 10-Q for the quarter ended Sep 30, 2003)4.4
    
    Third Amended and Restated Line of Credit Agreement by and between the Company, and
LaSalle Bank Midwest National Association Individually and as Agent for the Lenders and
together with Fifth Third Bank (incorporated by reference to Exhibit 10.28 to the Companys
Form 10-K for the year ended December 31, 2006)10.1
    
    First Amended and Restated Agreement of Limited Partnership of Agree Limited
Partnership, dated as of April 22, 1994, by and among the Company, Richard Agree, Edward
Rosenberg and Joel Weiner (incorporated by reference to Exhibit 10.6 to the Companys Form
10-K for the year ended December 31, 1996)10.2
    
    Contribution Agreement, dated as of April 21, 1994, by and among the Company, Richard
Agree, Edward Rosenberg and the co-partnerships named therein (incorporated by reference to
Exhibit 10.10 to the Companys Form 10-K for the year ended December 31, 1996)10.3+
    
    Agree Realty Corporation Profit Sharing Plan (incorporated by reference to Exhibit
10.13 to the Companys Form 10-K for the year ended December 31, 1996)10.4+
    
    Employment Agreement, dated July 1, 2004, by and between the Company and Richard Agree
(incorporated by reference to Exhibit 10.1 to the Companys Form 10-Q for the quarter ended
June 30, 2004)10.5+
    
    Employment Agreement, dated July 1, 2004, by and between the Company, and Kenneth R.
Howe (incorporated by reference to Exhibit 10.2 to the Companys Form 10-Q for the quarter
ended June 30, 2004)
 30




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##### Table of Contents



10.6+
    
    Employment Agreement, dated January 10, 2000, by and between the Company, and David J.
Prueter (incorporated by reference to Exhibit 10.1 to the Companys Form 10-Q for the
quarter ended March 31, 2000)10.7+
    
    Employment Agreement, dated September 1, 2005, by and between the Company, and Vicky
Umphryes (incorporated by reference to Exhibit 10.2 to the Companys Form 10-Q for the
quarter ended September 30, 2005)10.8+
    
    The Companys 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10.25
to the Companys Form 10-K for the year ended December 31, 2004)10.9*+
    
    Form of Restricted Stock Agreement10.10*+
    
    Summary of Director Compensation21.1*
    
    Subsidiaries of Agree Realty Corporation23.1*
    
    Consent of Virchow, Krause & Company, LLP23.2*
    
    Consent of BDO Seidman, LLP31.1 *
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Richard
Agree, President and Chairman of the Board of Directors31.2 *
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, Kenneth R.
Howe, Vice President, Finance32.1 *
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Richard
Agree, President and Chairman of the Board of Directors32.2 *
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Kenneth R.
Howe, Vice President, Finance
 
 *
    
    Filed herewith+
    
    Management contract or compensatory plan or arrangement  15
    
    (b)
    
    The Exhibit listed in Item 15(a)(3) that are noted filed herewith are hereby filed with this Report.15
    
    (c)
    
    The financial statement schedule listed at Item 15(a)(2) is hereby filed with this Report.
 31




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##### Table of Contents



SIGNATURES
  AGREE REALTY CORPORATIONBy:
    /s/ Richard AgreeName:
    
    Richard AgreePresident and Chairman of the
Board of Directors
Date:  March 13, 2008  By:
    
    /s/ Richard Agree
    
    By:
    
    /s/ Farris G. KalilRichard Agree
    
    
    
    Farris G. KalilPresident and Chairman of the
    
    
    
    DirectorBoard of Directors(Principal Executive Officer)
    
    By:
    
    /s/ Michael RotchfordMichael RotchfordDirectorBy:
    
    /s/ Kenneth R. Howe
    
    By:
    
    /s/William S. RubenfaerKenneth R. Howe
    
    
    
    William S. RubenfaerVice President, Finance and
Secretary
    
    
    
    Director(Principal Financial and
Accounting Officer)By:
    
    /s/ Gene SilvermanGene SilvermanDirectorBy:
    
    /s/ Leon M. SchurginLeon M. Schurgin 
Director
 32




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Agree Realty Corporation
 Index
 Page
 
 Reports of Independent Registered Public Accounting Firms
    
    
    F-2Financial StatementsConsolidated Balance Sheets
    
    
    F-4Consolidated Statements of Income
    
    
    F-6Consolidated Statements of Stockholders Equity
    
    
    F-7Consolidated Statements of Cash Flows
    
    
    F-8Notes to Consolidated Financial Statements
    
    
    F-10Schedule III  Real Estate and Accumulated Depreciation
    
    
    F-30
 F - 1




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Report of Independent Registered Public Accounting Firm
 
       
 F - 2




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Report of Independent Registered Public Accounting Firm
 
      
 F - 3




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Agree Realty Corporation
 
 Consolidated Balance Sheets
 December 31,
    
    2007
    
    
    2006AssetsReal Estate Investments(Notes 3 and 4)Land
    
    $
    87,233,715
    
    
    $
    77,536,458Buildings
    
    
    197,033,867
    
    
    
    189,117,421Property under development
    
    
    4,806,114
    
    
    
    1,593,828289,073,696
    
    
    
    268,247,707Less accumulated depreciation
    
    
    (53,250,564
    )
    
    
    (48,352,753
    )Net Real Estate Investments
    
    
    235,823,132
    
    
    
    219,894,954Cash and Cash Equivalents
    
    
    544,639
    
    
    
    463,730Accounts
Receivable  Tenants,net of allowance of $20,000 for possible losses at both December 31, 2007 and 2006
    
    
    770,365
    
    
    
    732,141Unamortized Deferred ExpensesFinancing costs, net of accumulated amortization of $4,665,144
and $4,482,272 at December 31, 2007 and 2006, respectively
    
    
    837,033
    
    
    
    1,019,905Leasing costs, net of accumulated amortization of $716,679
and $665,811 at December 31, 2007 and 2006, respectively
    
    
    424,002
    
    
    
    421,229Other Assets
    
    
    948,335
    
    
    
    982,640$
    239,347,506
    
    
    $
    223,514,599
 See accompanying notes to consolidated financial statements.
 F - 4




---



##### Table of Contents



Agree Realty Corporation
 Consolidated Balance Sheets
 December 31,
    
    2007
    
    
    2006Liabilities and Stockholders EquityMortgages Payable(Note 3)
    
    $
    45,760,168
    
    
    $
    48,291,247Notes Payable(Note 4)
    
    
    36,800,000
    
    
    
    20,500,000Dividends and Distributions Payable(Note 5)
    
    
    4,211,827
    
    
    
    4,111,807Deferred Revenue(Note 14)
    
    
    11,414,404
    
    
    
    12,103,954Accrued Interest Payable
    
    
    329,171
    
    
    
    239,318Accounts PayableCapital expenditures
    
    
    1,069,734
    
    
    
    766,378Operating
    
    
    1,483,127
    
    
    
    1,140,617Deferred Income Taxes(Note 6)
    
    
    705,000
    
    
    
    Tenant Deposits
    
    
    64,085
    
    
    
    64,085Total Liabilities
    
    
    101,837,516
    
    
    
    87,217,406Minority Interest(Note 7)
    
    
    5,896,180
    
    
    
    5,878,593Stockholders Equity(Note 5)Common stock, $.0001 par value; 20,000,000
shares authorized; 7,754,246 and 7,750,496
shares issued and outstanding
    
    
    775
    
    
    
    775Additional paid-in capital
    
    
    142,260,659
    
    
    
    141,276,763Deficit
    
    
    (10,647,624
    )
    
    
    (10,858,938
    )Total Stockholders Equity
    
    
    131,613,810
    
    
    
    130,418,600$
    239,347,506
    
    
    $
    223,514,599
 See accompanying notes to consolidated financial statements.
 F - 5




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##### Table of Contents



Agree Realty Corporation
 
 Consolidated Statements of Income
 Year Ended December 31,
    
    2007
    
    
    2006
    
    
    2005RevenuesMinimum rents
    
    $
    31,636,497
    
    
    $
    29,963,363
    
    
    $
    28,386,580Percentage rents
    
    
    37,111
    
    
    
    53,550
    
    
    
    68,071Operating cost reimbursement
    
    
    2,759,365
    
    
    
    2,846,775
    
    
    
    3,082,831Other income
    
    
    34,979
    
    
    
    43,938
    
    
    
    41,415Total Revenues
    
    
    34,467,952
    
    
    
    32,907,626
    
    
    
    31,578,897Operating ExpensesReal estate taxes
    
    
    1,848,949
    
    
    
    1,821,372
    
    
    
    1,749,005Property operating expenses
    
    
    1,785,323
    
    
    
    1,637,192
    
    
    
    2,,011,688Land lease payments
    
    
    675,700
    
    
    
    759,831
    
    
    
    784,027General and administrative
    
    
    4,462,423
    
    
    
    4,018,836
    
    
    
    4,191,279Depreciation and amortization
    
    
    5,016,718
    
    
    
    4,851,343
    
    
    
    4,637,325Total Operating Expenses
    
    
    13,789,113
    
    
    
    13,088,574
    
    
    
    13,373,324Income From Continuing Operations
    
    
    20,678,839
    
    
    
    19,819,052
    
    
    
    18,205,573Other Income (Expense)Interest expense, net
    
    
    (4,895,765
    )
    
    
    (4,624,771
    )
    
    
    (4,158,887
    )Gain on sale of asset, net of tax of $705,000
    
    
    1,043,675
    
    
    
    
    
    
    
    6,397Total Other Expense
    
    
    (3,852,090
    )
    
    
    (4,624,771
    )
    
    
    (4,152,490
    )Income Before Minority Interest and Discontinued Operations
    
    
    16,826,749
    
    
    
    15,194,281
    
    
    
    14,053,083Minority Interest
    
    
    1,344,475
    
    
    
    1,220,113
    
    
    
    1,145,330Income Before Discontinued Operations
    
    
    15,482,274
    
    
    
    13,974,168
    
    
    
    12,907,753Gain on Sale of Asset From Discontinued Operations,
net of minority interest of $235,465
    
    
    
    
    
    
    
    
    
    
    2,653,670Income From Discontinued Operations,net of minority
interest of $43,137
    
    
    
    
    
    
    
    
    
    
    486,153Net Income
    
    $
    15,482,274
    
    
    $
    13,974,168
    
    
    $
    16,047,576Basic Earnings Per Share(Note 2)Income before discontinued operations
    
    $
    2.02
    
    
    $
    1.84
    
    
    $
    1.73Discontinued operations
    
    
    
    
    
    
    
    
    
    
    .42Basic Earnings Per Share
    
    $
    2.02
    
    
    $
    1.84
    
    
    $
    2.15Dilutive Earnings Per Share(Note 2)Income before discontinued operations
    
    $
    2.01
    
    
    $
    1.83
    
    
    $
    1.72Discontinued operations
    
    
    
    
    
    
    
    
    
    
    .42Dilutive Earnings Per Share
    
    $
    2.01
    
    
    $
    1.83
    
    
    $
    2.14Dividend Declared Per Common Share
    
    $
    1.97
    
    
    $
    1.96
    
    
    $
    1.96
 See accompanying notes to consolidated financial statements.
 F - 6




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##### Table of Contents



Agree Realty Corporation
 
 Consolidated Statements of Stockholders Equity
 Additional
    
    
    
    
    
    UnearnedCommon Stock
    
    Paid-In
    
    
    
    
    
    Compensation -Shares
    
    Amount
    
    Capital
    
    Deficit
    
    Restricted StockBalance,January 1, 2005
    
    
    6,487,846
    
    
    $
    649
    
    
    $
    109,599,965
    
    
    $
    (10,726,663
    )
    
    $
    (1,241,964
    )Issuance of common stock, net of
issuance costs
    
    
    1,150,000
    
    
    
    115
    
    
    
    31,456,414
    
    
    
    
    
    
    
    Issuance of shares under the Equity
Incentive Plan
    
    
    73,000
    
    
    
    8
    
    
    
    2,208,878
    
    
    
    
    
    
    
    (2,208,886
    )Shares redeemed under the Equity
Incentive Plan
    
    
    (4,000
    )
    
    
    
    
    
    
    (126,760
    )
    
    
    
    
    
    
    Vesting of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    656,112Dividends declared, $1.96 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,038,384
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,047,576
    
    
    
    Balance,December 31, 2005
    
    
    7,706,846
    
    
    
    772
    
    
    
    143,138,497
    
    
    
    (9,717,471
    )
    
    
    (2,794,738
    )Reclassify unearned compensation
    
    
    
    
    
    
    
    
    
    
    (2,794,738
    )
    
    
    
    
    
    
    2,794,738Issuance of shares under the Equity
Incentive Plan
    
    
    43,650
    
    
    
    3
    
    
    
    95,547
    
    
    
    
    
    
    
    Vesting of restricted stock
    
    
    
    
    
    
    
    
    
    
    837,457
    
    
    
    
    
    
    
    Dividends declared, $1.96 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,115,635
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,974,168
    
    
    
    Balance,December 31, 2006
    
    
    7,750,496
    
    
    
    775
    
    
    
    141,276,763
    
    
    
    (10,858,938
    )
    
    
    Issuance of shares under the Equity
Incentive Plan
    
    
    3,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vesting of restricted stock
    
    
    
    
    
    
    
    
    
    
    983,896
    
    
    
    
    
    
    
    Dividends declared, $1.97 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,270,960
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,482,274
    
    
    
    Balance,December 31, 2007
    
    
    7,754,246
    
    
    $
    775
    
    
    $
    142,260,659
    
    
    $
    (10,647,624
    )
    
    $
    
 See accompanying notes to consolidated financial statements.
 F-7




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##### Table of Contents



Agree Realty Corporation
 
 Consolidated Statements of Cash Flows
 Year Ended December 31,
    
    2007
    
    
    2006
    
    
    2005Cash Flows From Operating ActivitiesNet income
    
    $
    15,482,274
    
    
    $
    13,974,168
    
    
    $
    16,047,576Adjustments to reconcile net income to net
cash provided by operating activitiesDepreciation
    
    
    4,958,300
    
    
    
    4,799,370
    
    
    
    4,738,405Amortization
    
    
    241,290
    
    
    
    190,001
    
    
    
    207,040Stock-based compensation
    
    
    983,896
    
    
    
    837,457
    
    
    
    656,112Gain on sale of assets
    
    
    (1,043,675
    )
    
    
    
    
    
    
    (2,895,532
    )Minority interests
    
    
    1,344,475
    
    
    
    1,220,113
    
    
    
    1,423,932(Increase) in accounts receivable
    
    
    (38,224
    )
    
    
    (1,535
    )
    
    
    (103,308
    )Decrease (increase) in other assets
    
    
    (33,734
    )
    
    
    160,596
    
    
    
    420,581Increase (decrease) in accounts payable
    
    
    342,510
    
    
    
    (159,799
    )
    
    
    (141,459
    )Decrease in deferred revenue
    
    
    (689,550
    )
    
    
    (689,550
    )
    
    
    (689,550
    )Increase (decrease) in accrued interest
    
    
    89,853
    
    
    
    (42,762
    )
    
    
    (16,035
    )Increase (decrease) in tenant deposits
    
    
    
    
    
    
    10,023
    
    
    
    (6,927
    )Net Cash Provided By Operating Activities
    
    
    21,637,415
    
    
    
    20,298,082
    
    
    
    19,640,835Cash Flows From Investing ActivitiesAcquisition of real estate investments (including
capitalized interest of $556,000 in 2007,
$198,000 in 2006 and $437,000 in 2005)
    
    
    (19,756,255
    )
    
    
    (9,305,661
    )
    
    
    (15,121,825
    )Net proceeds from sale of assets, less
amounts held in escrow
    
    
    1,748,675
    
    
    
    
    
    
    
    9,576,974Net Cash Used In Investing Activities
    
    
    (18,007,580
    )
    
    
    (9,305,661
    )
    
    
    (5,544,851
    )
 See accompanying notes to consolidated financial statements.
 F-8




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##### Table of Contents



Agree Realty Corporation
 Consolidated Statements of Cash Flows
 Year Ended December 31,
    
    2007
    
    
    2006
    
    
    2005Cash Flows From Financing ActivitiesLine-of-credit net borrowings (payments)
    
    
    16,300,000
    
    
    
    3,000,000
    
    
    
    (21,700,000
    )Dividends and limited partners distributions paid
    
    
    (16,497,828
    )
    
    
    (16,413,226
    )
    
    
    (15,778,376
    )Payments of mortgages payable
    
    
    (2,531,079
    )
    
    
    (2,430,673
    )
    
    
    (2,247,255
    )Payments of payables for capital expenditures
    
    
    (766,378
    )
    
    
    (112,687
    )
    
    
    (393,711
    )Redemption of restricted stock
    
    
    
    
    
    
    
    
    
    
    (126,760
    )Payments for financing costs
    
    
    
    
    
    
    (305,897
    )
    
    
    Payments of leasing costs
    
    
    (53,641
    )
    
    
    (76,298
    )
    
    
    (179,395
    )Exercise of stock options
    
    
    
    
    
    
    95,550
    
    
    
    Net proceeds from the issuance of common stock
    
    
    
    
    
    
    
    
    
    
    31,456,529Net Cash Used In Financing Activities
    
    
    (3,548,926
    )
    
    
    (16,243,231
    )
    
    
    (8,968,968
    )Net Increase (Decrease) In Cash and Cash Equivalents
    
    
    80,909
    
    
    
    (5,250,810
    )
    
    
    5,127,016Cash and Cash Equivalents,beginning of year
    
    
    463,730
    
    
    
    5,714,540
    
    
    
    587,524Cash and Cash Equivalents,end of year
    
    $
    544,639
    
    
    $
    463,730
    
    
    $
    5,714,540Supplemental Disclosure of Cash Flow InformationCash paid for interest (net of amounts capitalized)
    
    $
    4,629,948
    
    
    $
    4,530,740
    
    
    $
    3,894,010Supplemental Disclosure of Non-Cash TransactionsDividends and limited partners distributions
Declared and unpaid
    
    $
    4,211,827
    
    
    $
    4,111,807
    
    
    $
    4,089,243Shares issued under Stock Incentive Plan
    
    $
    116,688
    
    
    $
    1,310,766
    
    
    $
    2,208,886Real estate investments financed with accounts
payable
    
    $
    1,069,734
    
    
    $
    766,378
    
    
    $
    112,687
 See accompanying notes to consolidated financial statements.
 F-9




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##### Table of Contents



Agree Realty Corporation





Notes to Consolidated Financial Statements


1. The Company




2. Summary of Significant
Accounting Policies


Principles of Consolidation




Use of Estimates




Fair Values of Financial Instruments




F-10



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##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 Investments in Real Estate  Carrying Value of Assets
    Depreciation and Amortization
  Investment in Real Estate  Impairment evaluation
  F-11




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##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 Cash and Cash Equivalents
  Accounts Receivable  Tenants
  Unamortized Deferred Expenses
  Other Assets
  Accounts Payable  Capital Expenditures
  F-12




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##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 Minority Interest
  Revenue Recognition
  Taxes Collected and Remitted to Governmental Authorities
  Operating Cost Reimbursement
  F-13




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##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 Income Taxes
   F-14




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 Dividends
  December 31,
    
    2007
    
    
    2006
    
    
    2005Ordinary income
    
    $
    1.93
    
    
    $
    1.80
    
    
    $
    1.76Return of capital
    
    
    .04
    
    
    
    .16
    
    
    
    .20Total
    
    $
    1.97
    
    
    $
    1.96
    
    
    $
    1.96
  Discontinued Operations
   F-15




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##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 Earnings Per Share
   Year Ended December 31,
    
    2007
    
    
    2006
    
    
    2005Weighted
Average number of common shares outstanding
    
    
    7,751,321
    
    
    
    7,711,964
    
    
    
    7,460,504Unvested restricted stock
    
    
    96,450
    
    
    
    131,120
    
    
    
    Weighted
average number of common shares outstanding used in basic earnings
per share
    
    
    7,654,871
    
    
    
    7,580,844
    
    
    
    7,460,504Weighted average number of common shares
outstanding used in basic earnings per
share
    
    
    7,654,871
    
    
    
    7,580,844
    
    
    
    7,460,504Effect of dilutive securitiesRestricted stock
    
    
    61,160
    
    
    
    70,582
    
    
    
    29,842Common stock options
    
    
    
    
    
    
    
    
    
    
    395Weighted average number of common shares
outstanding used in diluted earnings per
share
    
    
    7,716,031
    
    
    
    7,651,426
    
    
    
    7,490,741
 F-16




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##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 Stock Based Compensation
  Recent Accounting Pronouncements
 Accounting
for Uncertainty in Income Taxes  an Interpretation of FASB
Statement No. 109 Accounting for Income Taxes.
 Fair Value Measurements
 F-17




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##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
  The Fair Value Option for Financial
Assets and Financial Liabilities
 F-18




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
  Business Combinations.
 F-19




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
  3. Mortgages Payable
  December 31,
    
    2007
    
    2006Note payable in monthly
installments of $153,838 including
interest at 6.90% per annum, with
the final monthly payment due
January 2020; collateralized by
related real estate and tenants
leases
    
    $
    15,104,016
    
    
    $
    15,878,633Note payable in monthly
installments of $128,205 including
interest at 6.20% per annum, with
a final monthly payment due
November 2018; collateralized by
related real estate and tenants
leases
    
    
    12,180,878
    
    
    
    12,877,086Note payable in monthly
installments of $99,598 including
interest at 6.63% per annum, with
the final monthly payment due
February 2017; collateralized by
related real estate and tenants
leases
    
    
    8,193,427
    
    
    
    8,822,558




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##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 December 31,
    
    2007
    
    2006Note payable in
monthly
installments of
$57,403 including
interest at 6.50%
per annum, with the
final monthly
payment due
February 2023;
collateralized by
related real estate
and tenant lease
    
    
    6,632,703
    
    
    
    6,881,562
 December 31,
    
    2007
    
    2006Note payable in monthly
installments of $25,631
including interest at
7.50% per annum, with the
final monthly payment due
May 2022; collateralized
by related real estate and
tenant lease
    
    
    2,705,377
    
    
    
    2,805,919Note payable in monthly
installments of $12,453
including interest at
6.95% per annum, with the
final monthly payment due
December 2017;
collateralized by related
real estate and tenant
lease
    
    
    943,767
    
    
    
    1,025,489Total
    
    $
    45,760,168
    
    
    $
    48,291,247




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 4. Notes Payable
   5. Dividends and Distributions
Payable




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 6. Income Taxes
 Accounting for Income
Taxes.




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 7. Minority Interest
  Minority Interest at January 1, 2005
    
    $
    5,874,855Minority interests share of income for the year
    
    
    1,423,932Distributions for the year
    
    
    (1,320,152
    )Minority Interest at December 31, 2005
    
    
    5,978,635Minority interests share of income for the year
    
    
    1,220,113Distributions for the year
    
    
    (1,320,155
    )Minority Interest at December 31, 2006
    
    
    5,878,593Minority interests share of income for the year
    
    
    1,344,475Distributions for the year
    
    
    (1,326,888
    )Minority Interest at December 31, 2007
    
    $
    5,896,180
 8. Stock Incentive Plan
  9. Stock Based Compensation




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
   WeightedAverageShares
    
    
    Grant DateOutstanding
    
    
    Fair ValueNon-vested
restricted shares at December 31, 2005
    
    
    129,440
    
    
    $
    21.59Restricted shares granted
    
    
    38,750
    
    
    $
    33.83Restricted shares vested
    
    
    (37,070
    )
    
    $
    22.59Restricted shares forfeited
    
    
    
    
    
    
    Non-vested
restricted shares at December 31, 2006
    
    
    131,120
    
    
    $
    24.92Restricted shares granted
    
    
    3,750
    
    
    $
    31.12Restricted shares vested
    
    
    (38,420
    )
    
    $
    25.61Restricted shares forfeited
    
    
    
    
    
    
    Non-vested
restricted shares at December 31, 2007
    
    
    96,450
    
    
    $
    24.89




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 10. Profit-Sharing
Plan
  11. Rental Income
   2008
    
    $
    31,5662009
    
    
    31,0752010
    
    
    29,9842011
    
    
    27,8882012
    
    
    26,512Thereafter
    
    
    199,395Total
    
    $
    346,420




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
  12. Lease
Commitments
  For the Year ending December 31,2008
    
    $
    680,8672009
    
    
    684,2002010
    
    
    727,3752011
    
    
    731,3002012
    
    
    731,300Thereafter
    
    
    7,740,522Total
    
    $
    11,295,564




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 13. Interim Results (Unaudited)
  Three Months Ended2007
    
    March 31,
    
    June 30,
    
    September 30,
    
    December 31,Revenues
    
    $
    8,463
    
    
    $
    8,378
    
    
    $
    8,450
    
    
    $
    9,177Net Income
    
    $
    3,605
    
    
    $
    3,603
    
    
    $
    3,613
    
    
    $
    4,661Earnings Per Share  Diluted
    
    $
    .47
    
    
    $
    .47
    
    
    $
    .47
    
    
    $
    .60
 Three Months Ended2006
    
    March 31,
    
    June 30,
    
    September 30,
    
    December 31,Revenues
    
    $
    8,272
    
    
    $
    7,994
    
    
    $
    8,114
    
    
    $
    8,528Income before discontinued operations
    
    $
    3,387
    
    
    $
    3,519
    
    
    $
    3,406
    
    
    $
    3,662Earnings Per Share  Diluted
    
    $
    .44
    
    
    $
    .46
    
    
    $
    .44
    
    
    $
    .49
 F - 28




---



##### Table of Contents



Agree Realty Corporation
 Notes to Consolidated Financial Statements
 14. Deferred Revenue
  15. Subsequent Event
  F - 29




---



##### Table of Contents



Agree Realty Corporation
 
 Schedule III  Real Estate and Accumulated Depreciation
December 31, 2007
 Column A
    
    Column B
    
    
    Column C
    
    
    Column D
    
    
    Column E
    
    
    Column F
    
    
    Column G
    
    
    Column HLife on WhichCosts
    
    
    Gross Amount at Which Carried
    
    
    
    
    
    
    
    
    
    
    Depreciation inInitial Cost
    
    
    Capitalized
    
    
    At Close of Period
    
    
    
    
    
    
    
    
    
    
    Latest IncomeBuildings and
    
    
    Subsequent to
    
    
    
    
    
    
    Buildings and
    
    
    
    
    
    
    Accumulated
    
    
    Date of
    
    
    StatementDescription
    
    Encumbrance
    
    
    Land
    
    
    Improvements
    
    
    Acquisition
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Depreciation
    
    
    Construction
    
    
    is ComputedCompleted Retail FacilitiesSams Club, MI
    
    $
    1,114,422
    
    
    $
    550,000
    
    
    $
    562,404
    
    
    $
    1,087,596
    
    
    $
    550,000
    
    
    $
    1,650,000
    
    
    $
    2,200,000
    
    
    $
    1,329,276
    
    
    
    1977
    
    
    40 YearsCapital Plaza, KY
    
    
    
    
    
    
    7,379
    
    
    
    2,240,607
    
    
    
    3,336,764
    
    
    
    7,379
    
    
    
    5,577,371
    
    
    
    5,584,750
    
    
    
    1,899,228
    
    
    
    1978
    
    
    40 YearsCharlevoix Common, MI
    
    
    
    
    
    
    305,000
    
    
    
    5,152,992
    
    
    
    106,718
    
    
    
    305,000
    
    
    
    5,259,710
    
    
    
    5,564,710
    
    
    
    2,241,268
    
    
    
    1991
    
    
    40 YearsChippewa Commons, WI
    
    
    
    
    
    
    1,197,150
    
    
    
    6,367,560
    
    
    
    439,818
    
    
    
    1,197,150
    
    
    
    6,807,378
    
    
    
    8,004,528
    
    
    
    2,885,233
    
    
    
    1990
    
    
    40 YearsGrayling Plaza, MI
    
    
    
    
    
    
    200,000
    
    
    
    1,778,657
    
    
    
    
    
    
    
    200,000
    
    
    
    1,778,657
    
    
    
    1,978,657
    
    
    
    1,060,690
    
    
    
    1984
    
    
    40 YearsIronwood Commons, MI
    
    
    
    
    
    
    167,500
    
    
    
    8,181,306
    
    
    
    332,545
    
    
    
    167,500
    
    
    
    8,513,851
    
    
    
    8,681,351
    
    
    
    3,475,185
    
    
    
    1991
    
    
    40 YearsMarshall Plaza Two, MI
    
    
    
    
    
    
    
    
    
    
    4,662,230
    
    
    
    115,294
    
    
    
    
    
    
    
    4,777,524
    
    
    
    4,777,524
    
    
    
    1,983,505
    
    
    
    1990
    
    
    40 YearsNorth Lakeland Plaza, FL
    
    
    4,953,301
    
    
    
    1,641,879
    
    
    
    6,364,379
    
    
    
    1,772,138
    
    
    
    1,641,879
    
    
    
    8,136,517
    
    
    
    9,778,396
    
    
    
    3,635,770
    
    
    
    1987
    
    
    40 YearsOscoda Plaza, MI
    
    
    
    
    
    
    183,295
    
    
    
    1,872,854
    
    
    
    
    
    
    
    183,295
    
    
    
    1,872,854
    
    
    
    2,056,149
    
    
    
    1,112,635
    
    
    
    1984
    
    
    40 YearsPetoskey Town Center, MI
    
    
    
    
    
    
    875,000
    
    
    
    8,895,289
    
    
    
    296,488
    
    
    
    875,000
    
    
    
    9,191,777
    
    
    
    10,066,777
    
    
    
    3,812,927
    
    
    
    1990
    
    
    40 YearsPlymouth Commons, WI
    
    
    
    
    
    
    535,460
    
    
    
    5,667,504
    
    
    
    282,915
    
    
    
    535,460
    
    
    
    5,950,419
    
    
    
    6,485,879
    
    
    
    2,525,864
    
    
    
    1990
    
    
    40 YearsRapids Associates, MI
    
    
    
    
    
    
    705,000
    
    
    
    6,854,790
    
    
    
    58,507
    
    
    
    705,000
    
    
    
    6,913,297
    
    
    
    7,618,297
    
    
    
    2,959,840
    
    
    
    1990
    
    
    40 YearsShawano Plaza, WI
    
    
    
    
    
    
    190,000
    
    
    
    9,133,934
    
    
    
    248,763
    
    
    
    190,000
    
    
    
    9,382,697
    
    
    
    9,572,697
    
    
    
    4,052,020
    
    
    
    1990
    
    
    40 YearsWest Frankfort Plaza, IL
    
    
    
    
    
    
    8,002
    
    
    
    784,077
    
    
    
    143,258
    
    
    
    8,002
    
    
    
    927,335
    
    
    
    935,337
    
    
    
    534,665
    
    
    
    1982
    
    
    40 YearsOmaha, NE
    
    
    1,905,351
    
    
    
    1,705,619
    
    
    
    2,053,615
    
    
    
    2,152
    
    
    
    1,705,619
    
    
    
    2,055,767
    
    
    
    3,761,386
    
    
    
    623,146
    
    
    
    1995
    
    
    40 YearsWichita, KS
    
    
    1,395,310
    
    
    
    1,039,195
    
    
    
    1,690,644
    
    
    
    24,666
    
    
    
    1,039,195
    
    
    
    1,715,310
    
    
    
    2,754,505
    
    
    
    519,879
    
    
    
    1995
    
    
    40 YearsSanta Barbara, CA
    
    
    2,836,017
    
    
    
    2,355,423
    
    
    
    3,240,557
    
    
    
    2,650
    
    
    
    2,355,423
    
    
    
    3,243,207
    
    
    
    5,598,630
    
    
    
    983,087
    
    
    
    1995
    
    
    40 YearsMonroeville, PA
    
    
    
    
    
    
    6,332,158
    
    
    
    2,249,724
    
    
    
    
    
    
    
    6,332,158
    
    
    
    2,249,724
    
    
    
    8,581,882
    
    
    
    625,451
    
    
    
    1996
    
    
    40 YearsNorman, OK
    
    
    
    
    
    
    879,562
    
    
    
    1,626,501
    
    
    
    
    
    
    
    879,562
    
    
    
    1,626,501
    
    
    
    2,506,063
    
    
    
    457,264
    
    
    
    1996
    
    
    40 YearsColumbus, OH
    
    
    
    
    
    
    826,000
    
    
    
    2,336,791
    
    
    
    
    
    
    
    826,000
    
    
    
    2,336,791
    
    
    
    3,162,791
    
    
    
    696,167
    
    
    
    1996
    
    
    40 YearsAventura, FL
    
    
    
    
    
    
    
    
    
    
    3,173,121
    
    
    
    
    
    
    
    
    
    
    
    3,173,121
    
    
    
    3,173,121
    
    
    
    928,799
    
    
    
    1996
    
    
    40 YearsBoyton Beach, FL
    
    
    1,812,488
    
    
    
    1,534,942
    
    
    
    2,043,122
    
    
    
    
    
    
    
    1,534,942
    
    
    
    2,043,122
    
    
    
    3,578,064
    
    
    
    565,927
    
    
    
    1996
    
    
    40 YearsLawrence, KS
    
    
    2,705,377
    
    
    
    981,331
    
    
    
    3,000,000
    
    
    
    349,127
    
    
    
    981,331
    
    
    
    3,349,127
    
    
    
    4,330,458
    
    
    
    822,360
    
    
    
    1997
    
    
    40 YearsWaterford, MI
    
    
    1,972,977
    
    
    
    971,009
    
    
    
    1,562,869
    
    
    
    135,390
    
    
    
    971,009
    
    
    
    1,698,259
    
    
    
    2,669,268
    
    
    
    423,530
    
    
    
    1997
    
    
    40 YearsChesterfield Township, MI
    
    
    2,166,342
    
    
    
    1,350,590
    
    
    
    1,757,830
    
    
    
    (46,164
    )
    
    
    1,350,590
    
    
    
    1,711,666
    
    
    
    3,062,256
    
    
    
    407,101
    
    
    
    1998
    
    
    40 YearsGrand Blanc, MI
    
    
    2,069,660
    
    
    
    1,104,285
    
    
    
    1,998,919
    
    
    
    13,968
    
    
    
    1,104,285
    
    
    
    2,012,887
    
    
    
    3,117,172
    
    
    
    453,245
    
    
    
    1998
    
    
    40 YearsPontiac, MI
    
    
    1,984,448
    
    
    
    1,144,190
    
    
    
    1,808,955
    
    
    
    (113,506
    )
    
    
    1,144,190
    
    
    
    1,695,449
    
    
    
    2,839,639
    
    
    
    393,780
    
    
    
    1998
    
    
    40 YearsMt. Pleasant Shopping
Center, MI
    
    
    
    
    
    
    907,600
    
    
    
    8,081,968
    
    
    
    579,287
    
    
    
    907,600
    
    
    
    8,661,255
    
    
    
    9,568,855
    
    
    
    2,595,280
    
    
    
    1973
    
    
    40 YearsTulsa, OK
    
    
    
    
    
    
    1,100,000
    
    
    
    2,394,512
    
    
    
    
    
    
    
    1,100,000
    
    
    
    2,394,512
    
    
    
    3,494,512
    
    
    
    575,614
    
    
    
    1998
    
    
    40 YearsColumbia, MD
    
    
    2,858,852
    
    
    
    1,545,509
    
    
    
    2,093,700
    
    
    
    286,589
    
    
    
    1,545,509
    
    
    
    2,380,289
    
    
    
    3,925,798
    
    
    
    500,981
    
    
    
    1999
    
    
    40 YearsRochester, MI
    
    
    3,026,845
    
    
    
    2,438,740
    
    
    
    2,188,050
    
    
    
    1,949
    
    
    
    2,438,740
    
    
    
    2,189,999
    
    
    
    4,628,739
    
    
    
    465,351
    
    
    
    1999
    
    
    40 Years
 F - 30




---



##### Table of Contents



Agree Realty Corporation
 Schedule III  Real Estate and Accumulated Depreciation
December 31, 2007
 Column A
    
    Column B
    
    
    Column C
    
    
    Column D
    
    
    Column E
    
    
    Column F
    
    
    Column G
    
    
    Column HLife on WhichCosts
    
    
    Gross Amount at Which Carried
    
    
    
    
    
    
    
    
    
    
    Depreciation inInitial Cost
    
    
    Capitalized
    
    
    at Close of Period
    
    
    
    
    
    
    
    
    
    
    Latest IncomeBuildings and
    
    
    Subsequent to
    
    
    
    
    
    
    Buildings and
    
    
    
    
    
    
    Accumulated
    
    
    Date of
    
    
    StatementDescription
    
    Encumbrance
    
    
    Land
    
    
    Improvements
    
    
    Acquisition
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Depreciation
    
    
    Construction
    
    
    is ComputedYpsilanti, MI
    
    
    2,733,827
    
    
    
    2,050,000
    
    
    
    2,222,097
    
    
    
    29,624
    
    
    
    2,050,000
    
    
    
    2,251,721
    
    
    
    4,301,721
    
    
    
    450,388
    
    
    
    1999
    
    
    40 YearsGermantown, MD
    
    
    2,688,320
    
    
    
    1,400,000
    
    
    
    2,288,890
    
    
    
    45,000
    
    
    
    1,400,000
    
    
    
    2,333,890
    
    
    
    3,733,890
    
    
    
    471,329
    
    
    
    2000
    
    
    40 YearsPetoskey, MI
    
    
    1,901,596
    
    
    
    
    
    
    
    2,332,473
    
    
    
    (1,721
    )
    
    
    
    
    
    
    2,330,752
    
    
    
    2,330,752
    
    
    
    447,527
    
    
    
    2000
    
    
    40 YearsFlint, MI
    
    
    2,868,253
    
    
    
    2,026,625
    
    
    
    1,879,700
    
    
    
    (1,201
    )
    
    
    2,026,625
    
    
    
    1,878,499
    
    
    
    3,905,124
    
    
    
    328,741
    
    
    
    2000
    
    
    40 YearsFlint, MI
    
    
    2,467,996
    
    
    
    1,477,680
    
    
    
    2,241,293
    
    
    
    
    
    
    
    1,477,680
    
    
    
    2,241,293
    
    
    
    3,718,973
    
    
    
    385,220
    
    
    
    2001
    
    
    40 YearsNew Baltimore, MI
    
    
    2,105,500
    
    
    
    1,250,000
    
    
    
    2,285,781
    
    
    
    (16,502
    )
    
    
    1,250,000
    
    
    
    2,269,279
    
    
    
    3,519,279
    
    
    
    361,841
    
    
    
    2001
    
    
    40 YearsFlint, MI
    
    
    1,787,433
    
    
    
    1,729,851
    
    
    
    1,798,091
    
    
    
    660
    
    
    
    1,729,851
    
    
    
    1,798,751
    
    
    
    3,528,602
    
    
    
    256,659
    
    
    
    2002
    
    
    40 YearsOklahoma City, OK
    
    
    3,459,369
    
    
    
    1,914,859
    
    
    
    2,057,034
    
    
    
    
    
    
    
    1,914,859
    
    
    
    2,057,034
    
    
    
    3,971,893
    
    
    
    270,913
    
    
    
    2002
    
    
    40 YearsOmaha, NE
    
    
    3,174,337
    
    
    
    1,530,000
    
    
    
    2,237,702
    
    
    
    
    
    
    
    1,530,000
    
    
    
    2,237,702
    
    
    
    3,767,702
    
    
    
    294,686
    
    
    
    2002
    
    
    40 YearsIndianapolis, IN
    
    
    943,767
    
    
    
    180,000
    
    
    
    1,117,617
    
    
    
    
    
    
    
    180,000
    
    
    
    1,117,617
    
    
    
    1,297,617
    
    
    
    147,238
    
    
    
    2002
    
    
    40 YearsBig Rapids, MI
    
    
    1,627,959
    
    
    
    1,201,675
    
    
    
    2,014,107
    
    
    
    (2,000
    )
    
    
    1,201,675
    
    
    
    2,012,107
    
    
    
    3,213,782
    
    
    
    238,977
    
    
    
    2003
    
    
    40 YearsFlint, MI
    
    
    
    
    
    
    
    
    
    
    471,272
    
    
    
    (201,809
    )
    
    
    
    
    
    
    269,463
    
    
    
    269,463
    
    
    
    31,437
    
    
    
    2003
    
    
    20 YearsAnn Arbor, MI
    
    
    6,632,703
    
    
    
    1,727,590
    
    
    
    6,009,488
    
    
    
    
    
    
    
    1,727,590
    
    
    
    6,009,488
    
    
    
    7,737,078
    
    
    
    764,225
    
    
    
    2003
    
    
    40 YearsTulsa, OK
    
    
    
    
    
    
    2,000,000
    
    
    
    2,740,507
    
    
    
    
    
    
    
    2,000,000
    
    
    
    2,740,507
    
    
    
    4,740,507
    
    
    
    301,594
    
    
    
    2003
    
    
    40 YearsCanton Twp., MI
    
    
    1,876,847
    
    
    
    1,550,000
    
    
    
    2,132,096
    
    
    
    23,020
    
    
    
    1,550,000
    
    
    
    2,155,116
    
    
    
    3,705,116
    
    
    
    219,952
    
    
    
    2003
    
    
    40 YearsFlint, MI
    
    
    1,772,475
    
    
    
    1,537,400
    
    
    
    1,961,674
    
    
    
    
    
    
    
    1,537,400
    
    
    
    1,961,674
    
    
    
    3,499,074
    
    
    
    188,077
    
    
    
    2004
    
    
    40 YearsWebster, NY
    
    
    2,045,867
    
    
    
    1,600,000
    
    
    
    2,438,781
    
    
    
    
    
    
    
    1,600,000
    
    
    
    2,438,781
    
    
    
    4,038,781
    
    
    
    231,178
    
    
    
    2004
    
    
    40 YearsAlbion, NY
    
    
    2,501,302
    
    
    
    1,900,000
    
    
    
    3,037,864
    
    
    
    
    
    
    
    1,900,000
    
    
    
    3,037,864
    
    
    
    4,937,864
    
    
    
    237,334
    
    
    
    2004
    
    
    40 YearsFlint, MI
    
    
    1,614,796
    
    
    
    1,029,000
    
    
    
    2,165,463
    
    
    
    (6,666
    )
    
    
    1,029,000
    
    
    
    2,158,797
    
    
    
    3,187,797
    
    
    
    168,615
    
    
    
    2004
    
    
    40 YearsLansing, MI
    
    
    
    
    
    
    785,000
    
    
    
    348,501
    
    
    
    3,045
    
    
    
    785,000
    
    
    
    351,546
    
    
    
    1,136,546
    
    
    
    30,723
    
    
    
    2004
    
    
    40 YearsBoynton Beach, FL
    
    
    2,047,080
    
    
    
    1,569,000
    
    
    
    2,363,524
    
    
    
    108,651
    
    
    
    1,569,000
    
    
    
    2,472,175
    
    
    
    4,041,175
    
    
    
    209,622
    
    
    
    2004
    
    
    40 YearsAnn Arbor, MI
    
    
    5,146,025
    
    
    
    1,700,000
    
    
    
    8,308,854
    
    
    
    150,000
    
    
    
    1,700,000
    
    
    
    8,458,854
    
    
    
    10,158,854
    
    
    
    860,618
    
    
    
    2004
    
    
    40 YearsMidland, MI
    
    
    2,363,326
    
    
    
    2,350,000
    
    
    
    2,313,413
    
    
    
    2,070
    
    
    
    2,350,000
    
    
    
    2,315,483
    
    
    
    4,665,483
    
    
    
    142,230
    
    
    
    2005
    
    
    40 YearsGrand Rapids, MI
    
    
    
    
    
    
    1,450,000
    
    
    
    2,646,591
    
    
    
    
    
    
    
    1,450,000
    
    
    
    2,646,591
    
    
    
    4,096,591
    
    
    
    154,385
    
    
    
    2005
    
    
    40 YearsDelta Twp., MI
    
    
    
    
    
    
    2,075,000
    
    
    
    2,535,971
    
    
    
    7,015
    
    
    
    2,075,000
    
    
    
    2,542,986
    
    
    
    4,617,986
    
    
    
    137,800
    
    
    
    2005
    
    
    40 YearsRoseville., MI
    
    
    
    
    
    
    1,771,000
    
    
    
    2,327,052
    
    
    
    
    
    
    
    1,771,000
    
    
    
    2,327,052
    
    
    
    4,098,052
    
    
    
    123,624
    
    
    
    2005
    
    
    40 YearsMt Pleasant., MI
    
    
    
    
    
    
    1,075,000
    
    
    
    1,432,390
    
    
    
    4,787
    
    
    
    1,075,000
    
    
    
    1,437,177
    
    
    
    2,512,177
    
    
    
    74,842
    
    
    
    2005
    
    
    40 YearsN Cape May, NJ.,
    
    
    
    
    
    
    1,075,000
    
    
    
    1,430,092
    
    
    
    495
    
    
    
    1,075,000
    
    
    
    1,430,587
    
    
    
    2,505,587
    
    
    
    74,505
    
    
    
    2005
    
    
    40 YearsSummit Twp, MI
    
    
    
    
    
    
    998,460
    
    
    
    1,336,357
    
    
    
    
    
    
    
    998,460
    
    
    
    1,336,357
    
    
    
    2,334,817
    
    
    
    43,130
    
    
    
    2006
    
    
    40 YearsLivonia, MI
    
    
    
    
    
    
    1,200,000
    
    
    
    3,441,694
    
    
    
    602,951
    
    
    
    1,200,000
    
    
    
    4,044,645
    
    
    
    5,244,645
    
    
    
    43,021
    
    
    
    2007
    
    
    40 YearsBarnesville, GA
    
    
    
    
    
    
    932,500
    
    
    
    2,091,514
    
    
    
    
    
    
    
    932,500
    
    
    
    2,091,514
    
    
    
    3,024,014
    
    
    
    10,893
    
    
    
    2007
    
    
    40 YearsEast Lansing, MI
    
    
    
    
    
    
    1,450,000
    
    
    
    1,002,192
    
    
    
    
    
    
    
    1,450,000
    
    
    
    1,002,192
    
    
    
    2,452,192
    
    
    
    4,172
    
    
    
    2007
    
    
    40 YearsPlainfield, IN
    
    
    
    
    
    
    4,549,757
    
    
    
    
    
    
    
    
    
    
    
    4,549,757
    
    
    
    
    
    
    
    4,549,757
    
    
    
    
    
    
    
    2007
    
    
    
    SubTotal
    
    
    82,560,168
    
    
    
    81,867,215
    
    
    
    186,829,536
    
    
    
    10,204,331
    
    
    
    81,867,215
    
    
    
    197,033,867
    
    
    
    278,901,082
    
    
    
    53,250,564
 F - 31




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##### Table of Contents



Agree Realty Corporation
 Schedule III  Real Estate and Accumulated Depreciation
December 31, 2007
 Column A
    
    Column B
    
    
    Column C
    
    
    Column D
    
    
    Column E
    
    
    Column F
    
    
    Column G
    
    
    Column HLife on WhichCosts
    
    
    Gross Amount at Which Carried
    
    
    
    
    
    
    
    
    
    
    Depreciation inInitial Cost,
    
    
    Capitalized
    
    
    at Close of Period
    
    
    
    
    
    
    
    
    
    
    Latest IncomeBuildings and
    
    
    Subsequent to
    
    
    
    
    
    
    Buildings and
    
    
    
    
    
    
    Accumulated
    
    
    Date of
    
    
    StatementDescription
    
    Encumbrance
    
    
    Land
    
    
    Improvements
    
    
    Acquisition
    
    
    Land
    
    
    Improvements
    
    
    Total
    
    
    Depreciation
    
    
    Construction
    
    
    is ComputedRetail FacilitiesUnder DevelopmentMacomb Twp, MI
    
    
    
    
    
    
    2,621,500
    
    
    
    2,687,082
    
    
    
    
    
    
    
    2,621,500
    
    
    
    2,687,082
    
    
    
    5,308,582
    
    
    
    
    
    
    
    N/A
    
    
    
    N/AYpsilanti, MI
    
    
    
    
    
    
    1,850,000
    
    
    
    1,172,293
    
    
    
    
    
    
    
    1,850,000
    
    
    
    1,172,293
    
    
    
    3,022,293
    
    
    
    
    
    
    
    N/A
    
    
    
    N/AMarion Oaks, FL
    
    
    
    
    
    
    815,000
    
    
    
    430,288
    
    
    
    
    
    
    
    815,000
    
    
    
    430,288
    
    
    
    1,245,288
    
    
    
    
    
    
    
    N/A
    
    
    
    N/AShelby Twp, MI
    
    
    
    
    
    
    
    
    
    
    202,462
    
    
    
    
    
    
    
    
    
    
    
    202,462
    
    
    
    202,462
    
    
    
    
    
    
    
    N/A
    
    
    
    N/AOther
    
    
    
    
    
    
    80,000
    
    
    
    313,989
    
    
    
    
    
    
    
    80,000
    
    
    
    313,989
    
    
    
    393,989
    
    
    
    
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    5,366,500
    
    
    
    4,806,114
    
    
    
    
    
    
    
    5,366,500
    
    
    
    4,806,114
    
    
    
    10,172,614
    
    
    
    Total
    
    $
    82,560,168
    
    
    $
    87,233,715
    
    
    $
    191,635,650
    
    
    $
    10,204,331
    
    
    $
    87,233,715
    
    
    $
    201,839,981
    
    
    $
    289,073,696
    
    
    $
    53,250,564
 F - 32




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##### Table of Contents



Agree Realty Corporation
 Notes to Schedule III
December 31, 2007
 Reconciliation of Real Estate Properties
  2007
    
    
    2006
    
    
    2005Balance at January 1
    
    $
    268,247,707
    
    
    $
    258,332,265
    
    
    $
    252,426,862Construction and acquisition costs
    
    
    20,825,989
    
    
    
    9,915,442
    
    
    
    15,260,671Sale of real estate asset
    
    
    
    
    
    
    
    
    
    
    (9,355,268
    )Balance at December 31
    
    $
    289,073,696
    
    
    $
    268,247,707
    
    
    $
    258,332,265
 Reconciliation of Accumulated Depreciation
  2007
    
    
    2006
    
    
    2005Balance at January 1
    
    $
    48,352,753
    
    
    $
    43,771,581
    
    
    $
    41,727,987Current year depreciation expense
    
    
    4,897,811
    
    
    
    4,581,172
    
    
    
    4,676,257Sale of real estate asset
    
    
    
    
    
    
    
    
    
    
    (2,632,663
    )Balance at December 31
    
    $
    53,250,564
    
    
    $
    48,352,753
    
    
    $
    43,771,581
 Tax Basis of Buildings and Improvements
  F - 33