Former Art Van to be converted to fast-growing Agree's headquarters - Sachse Construction
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Former Art Van to be converted to fast-growing Agree’s headquarters

Royal Oak is getting a new publicly traded company headquarters in the old Art Van.

Bloomfield Hills-based retail real estate investment trust Agree Realty Corp. (NYSE: ADC) has purchased the former Art Van Furniture Inc. store on Woodward Avenue, north of Normandy Road, for an undisclosed price with plans to move its employees into the second floor.

The company currently employs 65, said President and CEO Joey Agree. Construction is expected to begin this quarter and finish by the second quarter next year. By that time, the firm could expand to more than 80 people, he said.

It’s the latest headquarters expansion for Agree Realty, which less than three years ago started construction on an addition to its existing home base on East Long Lake Road east of Woodward Avenue. In that time, it has more than doubled its portfolio size.

“Since the start of the pandemic, we’ve invested nearly $3 billion across our three investment platforms. Given the strength of our balance sheet, our growth trajectory accelerated tremendously due to the numerous opportunities we saw during the pandemic,” Agree said. “We’ve added approximately 600 properties to the portfolio over the past two years. While investing in systems such as our ARC Database, we have also scaled every department in the organization and need additional capacity to continue to grow.”

Detroit-based Sachse Construction is the contractor on the former Art Van Furniture building project, while Birmingham-based Biddison Architecture + Design is the architect.

Agree declined to disclose how much is being spent on the build-out, but described it as a “significant renovation that will convert a former retail furniture store into a 21st century modern workspace” adding things like training and development areas, a gym and locker rooms and other amenities for employees.

The building gives Agree Realty “significant capacity to grow on a single floorplate in one building,” Agree said, also noting the property’s centralized location in the region.

“We had a preference to stay within a five-mile radius of our existing headquarters,” Agree said. “The opportunity here is extremely unique, to find a 50,000-square-foot floorplate on Woodward Avenue with covered parking in a tremendous location was compelling.”

As of the end of 2021, Agree Realty had a portfolio of just over 1,400 properties with about 29 million square feet of space. It has an enterprise value of approximately $6.7 billion.

Less than two years ago, it had more than 860 properties and some 16.3 million square feet. And when it began construction on its addition to its current headquarters less than three years ago, it had 660 properties with about 11.5 million square feet, Crain’s reported at the time.

In 2021, Agree Realty bought 290 properties for a total volume of approximately $1.39 billion, the company said earlier this month, and sold 18 properties for a total of $58 million. The company currently anticipates $1.1 billion to $1.3 billion in acquisitions this year and between $25 million and $75 million in dispositions, although those figures could be adjusted as the year progresses.

The company will announce its fourth quarter and full-year 2021 financials Feb. 22

Its core funds from operations for the third quarter were $64 million, up 44 percent from $44.5 million in the third quarter 2020, the company said in November. For the first three quarters of 2021, core FFO was $175.9 million, up 43.2 percent from $122.9 million from the same period in 2020.

As of the end of the third quarter, its portfolio was 99.6 percent leased with nearly 67 percent of its annualized base rents coming from investment-grade retail tenants.

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