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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): August 5, 2020

ACADIA REALTY TRUST

(Exact name of registrant as specified in its charter)

 

Maryland		1-12002		23-2715194
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

411 Theodore Fremd Avenue

Suite 300

Rye, New York 10580

(Address of principal executive offices) (Zip Code)

(914) 288-8100

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading symbol	Name of exchange on which registered
Common shares of beneficial interest, par value $0.001 per share	AKR	The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02.Results of Operations and Financial Condition.

 

On August 5, 2020, Acadia Realty Trust (the “Company”) issued a press release announcing its consolidated financial results for the quarter ended June 30, 2020. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated herein by reference.

 

On the same day, the Company made available supplemental reporting information concerning the financial results, operations and portfolio of the Company as of and for the quarter ended June 30, 2020. A copy of the supplemental reporting information is attached to this Current Report on Form 8-K as Exhibit 99.2 and incorporated herein by reference.

 

The information included in this Item 2.02, including the information included in Exhibits 99.1 and 99.2 attached hereto, is intended to be furnished solely pursuant to this Item 2.02, and is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any filing under the Securities Act of 1933, as amended (“Securities Act”) or the Exchange Act, or otherwise subject to the liabilities of Sections 11 and 12 (a)(2) of the Securities Act.

Item 9.01.Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number	Description
99.1	Press release of the Company dated August 5, 2020 regarding the Company’s consolidated financial results for the quarter ended June 30, 2020
99.2	Supplemental Reporting Information of the Company as of and for the quarter ended June 30, 2020
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Extension Calculation Linkbase
101.LAB	Inline XBRL Extension Labels Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.)

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		ACADIA REALTY TRUST
Dated:		(Registrant)
		By:		/s/ John Gottfried
		Name:		John Gottfried
August 7, 2020		Title:		Sr. Vice President and Chief Financial Officer

 

 

 

 

Exhibit 99.1

 

Sunny Holcomb

(914) 288-8100

 

ACADIA REALTY TRUST REPORTS SECOND QUARTER 2020 OPERATING RESULTS

RYE, NY (August 5, 2020) - Acadia Realty Trust (NYSE: AKR) (“Acadia” or the “Company”) today reported operating results for the quarter ended June 30, 2020. All per share amounts are on a fully-diluted basis.

Acadia operates dual platforms, comprised of a high-quality core real estate portfolio (“Core Portfolio”), through which the Company owns and operates retail assets in the nation’s most dynamic corridors, and a series of discretionary, institutional funds (“Funds”) that target opportunistic and value-add investments.

Please refer to the tables and notes accompanying this press release for further details on operating results and additional disclosures related to net income, funds from operations ("FFO") as per NAREIT and before Special Items (discussed below), and net property operating income ("NOI") which were impacted due to the COVID-19 Pandemic.

Highlights

Core Portfolio

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Fund Portfolio

“While we are carefully monitoring the ongoing evolution of the COVID-19 health crisis, we feel encouraged by seeing our retail stores re-opening and consumers returning to our locations. With a strong balance sheet and solid collection rates, Acadia remains well positioned to withstand the temporary disruption caused by COVID-19,” stated Kenneth F. Bernstein, President and CEO of Acadia Realty Trust. “We are confident that our unique and diversified portfolio will enable us and our tenants to survive and, ultimately, thrive during these unprecedented times. Furthermore, we are well situated to pursue new investment opportunities as they arise.”

 

OPERATIONS UPDATE

COVID-19 Impact on Operations

Second quarter per share GAAP income, NAREIT FFO and FFO before Special Items were adversely impacted by approximately $0.10 representing Acadia’s share of credit loss, straight-line rent reserves and tenant abatements associated with the COVID-19 Pandemic, as follows (in millions):

 

Core Cash Collections

As of June 30, 2020, the Company has collected 71% of its billed Core rents and recoveries. In addition to the 71% collected, at June 30, 2020, the Company has reached deferral agreements, the majority of which are national credit-worthy tenants, on approximately 12% of its second quarter billed Core rents and recoveries for an aggregate of 83% of its billed Core rents and recoveries.

The Company’s Street and Urban portfolio is located in key gateway markets and comprises approximately 60% of its Core ABR. As of June 30, 2020, the Company has collected approximately 70% of its Street and Urban portfolio’s billed rents and recoveries. The Company’s Suburban portfolio represents approximately 40% of its Core ABR, of which the Company has collected 72% of its Suburban billed rents and recoveries as of June 30, 2020.

Additionally, as of July 31, 2020, the Company has collected approximately 74% of its July billed Core rents and recoveries.

All amounts above are based upon pre-COVID billings and exclude the impact of any security deposits applied against tenant accounts.

There can be no assurance that all payment deferral plans will be consummated on the agreed-upon terms and/or if consummated, repaid by terms of the agreement.

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Core Opening Status

At June 30, 2020 and continuing through July 31, 2020, Core store openings continued to increase based on pro-rata ABR and GLA as follows:

Dividend

The Board of Trustees temporarily suspended distributions on its common shares and common units for the third quarter of 2020. The Board will continue to evaluate its dividend policy each quarter and intends to maintain compliance with its REIT taxable income requirements.

CONSOLIDATED FINANCIAL RESULTS

A complete reconciliation, in dollars and per share amounts, of (i) net income attributable to Acadia to FFO (NAREIT and before Special Items) attributable to common shareholders and common OP Unit holders and (ii) operating income to NOI is included in the financial tables of this release.

Net Income

Net income attributable to Acadia for the quarter ended June 30, 2020 was $19.4 million, or $0.22 per share. This included $9.4 million, or $0.10 per share, related to credit loss, straight-line rent reserves and tenant abatements, primarily due to the COVID-19 Pandemic that was offset by $24.9 million of Acadia’s share, or $0.27 per share from the monetization and unrealized gain of Albertsons. Net income attributable to Acadia for the quarter ended June 30, 2019 was $9.1 million, or $0.11 per share.

Net income attributable to Acadia for the six months ended June 30, 2020 was $11.0 million, or $0.12 per share. This included (i) $13.6 million, or $0.15 per share, related to credit loss, straight-line rent reserves and tenant abatements, primarily due to the COVID-19 Pandemic and (ii) $12.4 million of Acadia’s share, or $0.14 per share attributable to impairment charges within the Funds. These charges were offset by $24.9 million of Acadia’s share, or $0.27 per share from the monetization and unrealized gain of Albertsons. Net income attributable to Acadia for the six months ended June 30, 2019 was $21.3 million, $0.26 per share, inclusive of $5.8 million, or $0.07 per share, related to a previously-announced accelerated tenant recapture.

FFO as Defined by NAREIT

FFO for the quarter ended June 30, 2020 was $44.9 million, or $0.49 per share. This included $9.4 million, or $0.10 per share, related to credit loss, straight-line rent reserves and tenant abatements, primarily due to the COVID-19 Pandemic that was offset by $24.9 million of Acadia’s share, or $0.27 per share, from the monetization and unrealized gain of Albertsons. FFO was $31.8 million, or $0.36 per share, for the quarter ended June 30, 2019.

FFO for the six months ended June 30, 2020 was $72.7 million, or $0.79 per share. This included $13.6 million, or $0.15 per share, related to credit loss, straight-line reserves and tenant abatements, primarily due to the COVID-19 Pandemic that was offset by $24.9 million of Acadia’s share, or $0.27 per share, from the monetization and unrealized gain of Albertsons. FFO was $66.6 million, or $0.75 per share, including $5.8 million, or $0.07 per share related to a previously-announced accelerated tenant recapture for the six months ended June 30, 2019.

FFO Before Special Items

FFO before Special Items for the quarter ended June 30, 2020, excludes Acadia’s share of $18.4 million, or $0.20 per share, of unrealized gain on Albertsons. Accordingly, FFO before Special Items was $26.6 million, or $0.29 per share,

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which includes $6.5 million, or $0.07 per share, from the realized gain of Albertsons for the quarter ended June 30, 2020. There were no Special Items for the quarter ended June 30, 2019.

FFO before Special Items for the six months ended June 30, 2020, excludes Acadia’s share of $18.4 million, or $0.20 per share, of unrealized gain on Albertsons. Accordingly, FFO before Special Items was $54.3 million, or $0.59 per share, which includes $6.5 million, or $0.07 per share, from the realized gain of Albertsons for the six months ended June 30, 2020. There were no Special Items for the six months ended June 30, 2019.

CORE AND FUND PORTFOLIOS

Core Operating Results

The Company had a decrease in same-property NOI of -18.7% for the three months ended June 30, 2020 predominantly due to credit reserves and abatements on billed Core rents and recoveries along with the short-term delays of rent commencement on executed new leases.

The Core Portfolio was 92.6% occupied and 93.3% leased as of June 30, 2020 compared to 93.1% occupied and 93.9% leased as of March 31, 2020. The leased rate includes space that is leased but not yet occupied and excludes development and redevelopment properties.

The Company did not have any conforming new leases for the second quarter. During the second quarter, the Company generated a 3.3% increase in rent on a GAAP basis and -2.4% decrease in rent on a cash basis, on 10 conforming renewal leases aggregating approximately 189,000 square feet.

The Company has a strong new lease pipeline (at lease or under LOI) of approximately $6.5 million of its Core pro-rata annualized base rents, at rents that were largely in line with pre-COVID expectations. The leases in the pipeline include several key street and urban locations in New York City, Chicago and San Francisco.  

Fund Activity

Albertsons (Fund II). During the second quarter, as previously announced, the RCP Venture (on behalf of Fund II) monetized approximately $23.2 million of its interest in Albertsons (approximately $6.5 million on a pro-rata basis). The RCP Venture has a remaining ownership interest of approximately 4.1 million shares of Albertsons (of which Acadia’s share is 1.1 million shares) at June 30, 2020.

Colonie Plaza (Fund IV). As previously announced, Fund IV completed the disposition of Colonie Plaza in Albany, New York, a property within the Northeast Grocery Portfolio for $15.3 million and repaid the property’s $11.6 million mortgage during the second quarter. The Company does not report return metrics for partial sales of portfolio transactions.

FINANCING AND LIQUIDITY

Core Portfolio

Based on improving cash collections, the Company generated and retained cash flow from operations.

Subsequent to June 30, 2020, the Company closed on a new $30.0 million one-year unsecured term loan, with an accordion to increase up to $90.0 million.

Fund Portfolio

Fund V has $208.0 million of acquisition capital remaining to reinvest (approximately $600.0 million on a leveraged basis) as opportunities arise. Fund V continues to make cash distributions. There were no new investments during the second quarter.

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CONFERENCE CALL

Management will conduct a conference call on Thursday, August 6, 2020 at 11:00 AM ET to review the Company’s earnings and operating results. Dial-in and webcast information is listed below.

Live Conference Call:

Date:            Thursday, August 6, 2020

Time:           11:00 AM ET

Dial#:         844-309-6711

Passcode:     “Acadia Realty” or “2299383”

Webcast (Listen-only):  www.acadiarealty.com under Investors, Presentations & Events

Phone Replay:

Dial#:            855-859-2056

Passcode:      “2299383”

Available Through:     Thursday, August 13, 2020

Webcast Replay:      www.acadiarealty.com under Investors, Presentations & Events

 

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About Acadia Realty Trust

Acadia Realty Trust is an equity real estate investment trust focused on delivering long-term, profitable growth via its dual - Core and Fund - operating platforms and its disciplined, location-driven investment strategy. Acadia Realty Trust is accomplishing this goal by building a best-in-class core real estate portfolio with meaningful concentrations of assets in the nation’s most dynamic corridors; making profitable opportunistic and value-add investments through its series of discretionary, institutional funds; and maintaining a strong balance sheet. For further information, please visit www.acadiarealty.com.

Safe Harbor Statement

Certain statements in this press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project,” or the negative thereof, or other variations thereon or comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results and financial performance to be materially different from future results and financial performance expressed or implied by such forward-looking statements, including, but not limited to: (i) economic, political and social uncertainty surrounding the COVID-19 Pandemic, including (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance to large and small businesses, including the Company’s tenants, that have suffered significant declines in revenues as a result of mandatory business shut-downs, “shelter-in-place” or “stay-at-home” orders and social distancing practices, as well as individuals adversely impacted by the COVID-19 Pandemic, (b) the duration of any such orders or other formal recommendations for social distancing and the speed and extent to which revenues of the Company’s retail tenants recover following the lifting of any such orders or recommendations, (c) the potential impact of any such events on the obligations of the Company’s tenants to make rent and other payments or honor other commitments under existing leases, (d) to the extent we were seeking to sell properties in the near term, significantly greater uncertainty regarding our ability to do so at attractive prices, (e) the potential adverse impact on returns from development and redevelopment projects, and (f) the broader impact of the severe economic contraction and increase in unemployment that has occurred in the short term and negative consequences that will occur if these trends are not quickly reversed; (ii) the ability and willingness of the Company’s tenants (in particular its major tenants) and other third parties to satisfy their obligations under their respective contractual arrangements with the Company; (iii) macroeconomic conditions, such as a disruption of or lack of access to the capital markets; (iv) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (v) changes in general economic conditions or economic conditions in the markets in which the Company may, from time to time, compete, and their effect on the Company’s revenues, earnings and funding sources; (vi) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of the London Interbank Offered Rate after 2021; (vii) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (viii) the Company’s investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners’ financial condition; (ix) the Company’s ability to obtain the financial results expected from its development and redevelopment projects; (x) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration, the Company’s ability to re-lease its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant, and obligations the Company may incur in connection with the replacement of an existing tenant; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) uninsured losses; (xiv) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xv) information technology security breaches, including increased cybersecurity risks relating to the use of remote technology during the COVID-19 Pandemic; and (xvi) the loss of key executives. The risks described above are not exhaustive and additional factors could adversely affect the Company’s business and financial performance, including the risk factors discussed under the section captioned “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and other periodic or current reports the Company files with the SEC. Any forward-looking statements in this press release speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or change in the events, conditions or circumstances on which such forward-looking statements are based.

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ACADIA REALTY TRUST AND SUBSIDIARIES

Consolidated Statements of Operations ^(a)  

(dollars and Common Shares in thousands, except per share data)

 

 

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ACADIA REALTY TRUST AND SUBSIDIARIES

Reconciliation of Consolidated Net (Loss) Income to Funds From Operations ^{(a, c)}  

(dollars and Common Shares and Units in thousands, except per share data)

 

 

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ACADIA REALTY TRUST AND SUBSIDIARIES

Reconciliation of Consolidated Operating (Loss) Income to Net Property Operating Income (“NOI”) ^(a)  

(dollars in thousands)

 

 

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ACADIA REALTY TRUST AND SUBSIDIARIES

Consolidated Balance Sheets ^(a)  

(dollars in thousands)

 

 

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ACADIA REALTY TRUST AND SUBSIDIARIES

Notes to Financial Highlights:

 

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Exhibit 99.2AC

 

 

ADIA—R

 

EALTY TRUST—Q2 2018 SUPPLEMENTAL REPORTING INFORMATIO

 

 

 

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Visit www.acadiarealty.com for additional investor and portfolio information

 

 

 

 

 

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Notes to income statements, balance sheet and pro rata adjustments:

 

 

 

 

 

 

 

 

 

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Refer to “ Net Asset Valuation Information ” for pro-rata costs incurred

 

 

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this supplemental disclosure may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 and as such may involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative thereof or other variations thereon or comparable terminology. Factors which could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to those set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K. These risks and uncertainties should be considered in evaluating any forward-looking statements contained or incorporated by reference herein.

USE OF FUNDS FROM OPERATIONS AS NON-GAAP FINANCIAL MEASURE

The Company considers funds from operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) to be an appropriate supplemental disclosure of operating performance for an equity REIT due to its widespread acceptance and use within the REIT and analyst communities. FFO is presented to assist investors in analyzing the performance of the Company. It is helpful as it excludes various items included in net income that are not indicative of the operating performance, such as gains (or losses) from sales of property and depreciation and amortization. Consistent with the NAREIT definition, the Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Also consistent with NAREIT’s definition of FFO, the Company has elected to include gains and losses incidental to its main business (including those related to its RCP investments such as Albertsons) in FFO.

The Company also provides another supplemental disclosure of operating performance, adjusted funds from operations (“AFFO”). The Company defines AFFO as FFO adjusted for straight line rent, non-real estate depreciation, stock-based compensation, amortization of finance costs and costs of management contracts, tenant improvements, leasing commissions and capital expenditures.

The Company may also provide from time to time another supplemental disclosure of operating performance, FFO Before Special Items. The Company defines FFO Before Special Items as FFO adjusted for certain unusual items including charges, income and gains that management believes are not comparable and indicative of the results of the Company’s operating real estate portfolio.

It should be noted that the Company’s methods of calculating FFO, AFFO or FFO Before Special Items may be different from methods used by other REITs and, accordingly, may not be comparable to such metrics used by other REITs. FFO, AFFO and FFO Before Special Items do not represent cash generated from operations as defined by generally accepted accounting principles (“GAAP”) and are not indicative of cash available to fund all cash needs, including distributions. None of these measures should be considered as an alternative to net income for the purpose of evaluating the Company’s performance or to cash flows as a measure of liquidity.

USE OF NON-GAAP FINANCIAL MEASURES

Non-GAAP financial measures such as EBITDA, NOI, Same-Property NOI and lease spreads are widely used financial measures in many industries, including the REIT industry, and are presented to assist investors and analysts in analyzing the performance of the Company. They are helpful as they exclude various items included in net income that are not indicative of operating performance, such as gains (or losses) from sales of property and depreciation and amortization and is used in computing various financial ratios as a measure of operational performance. The Company computes EBITDA as the sum of net income before extraordinary items plus interest expense, depreciation, income taxes and amortization, less any gains (losses including impairment charges) on the sale of income producing properties. The Company computes NOI by taking the difference between Property Revenues and Property Expenses as detailed in this reporting supplement. Same-Property NOI includes properties in our Core Portfolio that we owned for both the current and prior periods presented, but excludes those properties which we acquired, sold or expected to sell, and redeveloped during these periods. The Company’s method of calculating EBITDA, NOI and Same-Property NOI may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. EBITDA, NOI and Same-Property NOI do not represent cash generated from operations as defined by GAAP and are not indicative of cash available to fund all cash needs, including distributions. They should not be considered as an alternative to net income for the purpose of evaluating the Company’s performance or to cash flows as a measure of liquidity.