SOURCE: Compson Holding Corp.

May 03, 2006 09:39 ET

Letter to the Board of Agree Realty Corp. Urging Maximization of Stockholder Value

BOCA RATON, FL -- (MARKET WIRE) -- May 3, 2006 --


The following letter was sent yesterday to the Board of Agree Realty Corporation by Michael Comparato, President of Compson Holding Corporation.

Dear Members of the Board of Directors of Agree Realty Corporation:

As you are aware, over the past month, a group that includes Compson Holding Corporation ("Compson"), the principals of which hold approximately 3.1% of the outstanding shares of Agree Realty Corporation ("Agree"), has submitted two proposals to acquire either (i) the entire company or (ii) Agree's fifty-nine property portfolio of existing properties permitting Agree to remain a viable, operating development REIT. Both proposals were all cash offers with no financing contingencies, originally for $34.50 per share and thereafter increased to $36.00 per share. Both were summarily rejected by the board of directors without any clear explanation other than "it is not in the best interest of our stockholders."

As a commercial real estate company with sixty years experience, and expertise in the single tenant marketplace, we feel Agree's share price does not reflect the underlying value of its properties. As of yesterday's stock market close, Agree had a market capitalization of $242 million. Based on our analysis of Agree's current holdings, we estimate that the liquidation value of the current fifty-nine property portfolio is approximately $411 to $416 million. Adjusting this for the repayment of all Agree debt, prepayment penalties, minority interest conversion and typical transaction costs, we estimate the net value of a liquidation of the current portfolio to equal approximately $309 to $314 million, or $40.10 to $40.75 per share. Again, this value represents only a liquidation of the current portfolio and does not include any value for the development pipeline Agree currently maintains and would retain under our proposal, which clearly has additional value of some amount.

We are not content with the status quo and the other stockholders should not be either. The Board must take action to maximize stockholder value as we are currently witnessing some of the highest prices ever achieved for commercial real estate assets, especially single tenant assets, when properly marketed by commercial real estate professionals. In a rising interest rate market these historically high valuations may not exist much longer, which is why the time to act is now.

Accordingly, please allow this letter to serve as a formal request to the Board to initiate an orderly process to either sell Agree or liquidate its properties and distribute the proceeds to Agree's owners based on a price established in the open marketplace. We will also urge all other stockholders to make their views on this matter known to the Board.

Thank you for your attention to this matter.

Sincerely,

Michael Comparato

About Compson Holding Corporation

Compson is a family owned real estate company that was founded in Rochester, NY in 1946. Compson, headquartered in Boca Raton, FL, currently maintains additional offices in Rochester, NY, and McLean, VA. During the 1st quarter of 2006, the principals of Compson completed approximately $200 million in transactions involving single tenant properties. Compson has completed millions of square feet of transactions over its existence and is receiving most acknowledgment for its current development of the seven-million square foot, mixed used property known as Renaissance Commons located in Boynton Beach, FL. In addition to their strong real estate history, the principals of Compson were also the founding directors of 1st United Bank, a $1 billion asset bank that was traded on the Nasdaq under the symbol FUBC prior to its being acquired by Wachovia Bank.

Questions regarding this press release should be directed to Michael Comparato at mcomparato@compson.com.

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