akr-8k_20210728.htm
false 0000899629 0000899629 2021-07-28 2021-07-28

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): July 28, 2021

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. 

 

 

 


 

Item 2.02.Results of Operations and Financial Condition.

 

On July 28, 2021, Acadia Realty Trust (the “Company”) issued a press release announcing its consolidated financial results for the quarter and year-to-date period ended June 30, 2021. 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 regarding the financial results, operations and portfolio of the Company as of and for the quarter and year-to-date period ended June 30, 2021. 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” pursuant to 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 dated July 28, 2021

99.2

Supplemental Reporting Information as of and for the quarter and year-to-date period ended June 30, 2021

104  

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.)

 

 


 

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

July 29, 2021

 

Title:

 

Sr. Vice President and Chief Financial Officer

 

 

akr-ex991_291.htm

 

Exhibit 99.1

 

Sunny Holcomb

(914) 288-8100

 

ACADIA REALTY TRUST REPORTS SECOND QUARTER 2021 OPERATING RESULTS

RYE, NY (July 28, 2021) - Acadia Realty Trust (NYSE: AKR) (“Acadia” or the “Company”) today reported operating results for the quarter and year-to-date period ended June 30, 2021. All per share amounts are on a fully-diluted basis, where applicable.

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").

Second Quarter and Recent Highlights

Second Quarter Earnings and Operating Results:

 

o

Exceeded expectations with GAAP earnings per share of $0.04, FFO per share of $0.31 and FFO before Special Items per share of $0.30  

 

o

Raised annual 2021 guidance to $1.05  to $1.14 (from initial guidance of $0.98 to $1.14) to reflect  improved outlook on leasing and credit reserves

 

o

Increased same-property NOI by 13.9%

 

o

Increased collections to 96% of pre-COVID billings (as defined below)

Core Portfolio Leasing:

 

o

Core Portfolio leasing pipeline increased to approximately $14.0 million, with approximately 60% signed to date, including Street leases in Chicago, New York and Washington D.C.

 

o

Core Portfolio is 89.8% occupied and 92.4% leased as of June 30, 2021, compared to 89.5% occupied and 91.0% leased as of March 31, 2021

 

o

GAAP and cash leasing spreads of 7.7% and 1.8%, respectively, on comparable new and renewal leases

Core Structured Financing and Fund Acquisition/Disposition Activity:

 

o

Approximately $170.0 million of Fund V acquisitions under contract and/or agreements in principle

 

o

Funded a $16.0 million Core Structured Financing investment

 

o

Fund IV completed $39.9 million of dispositions and Fund III completed a $10.0 million disposition

Core Balance Sheet and Liquidity:

 

o

Significantly increased liquidity and extended maturities with the closing of a $700.0 million amended and restated credit facility

 

o

Raised gross proceeds of $46.0 million at an average price per share of approximately $22.37 through the at-the-market equity program ("ATM Program")

1


 

 

“We are seeing meaningful improvement in our operations as our key markets continue to re-open,” stated Kenneth F. Bernstein, President and CEO of Acadia Realty Trust. “We are energized by the new and exciting retailers that are expanding their real estate presence in our key street markets, evidenced by our robust leasing pipeline and the successful execution of these leases. Looking further ahead, more potential acquisition opportunities are emerging and we are aggressively pursuing these accretive investment opportunities as they become more actionable in both our Core Portfolio and Fund platform.”  

CORE PORTFOLIO

Core Portfolio Operating Results

The Company had an increase in same-property NOI of 13.9% for the second quarter 2021 as compared to the second quarter 2020, driven by rent commencement on new leases and improved credit reserves.

The Core Portfolio was 89.8% occupied and 92.4% leased as of June 30, 2021 compared to 89.5% occupied and 91.0% leased as of March 31, 2021, which reflects progress in its leasing pipeline as further discussed above. The leased rate includes space that is leased but not yet occupied and excludes development and redevelopment properties.

During the second quarter, the Company generated a 7.7% increase in rent spreads on a GAAP basis and 1.8% increase in rent spreads on a cash basis, on 19 conforming new and renewal leases aggregating approximately 227,000 square feet.

The Company continued to expand its Core Portfolio leasing pipeline, which has increased to approximately $14.0 million to date, with approximately 60% signed to date, including Street leases in Chicago, New York City and Washington D.C.  

Core Portfolio Cash Collections

The Company collected 96% of second quarter pre-COVID billings as of July 23, 2021.

All amounts are based upon pre-COVID billings (original contract rents without regard to deferral or abatement agreements) and exclude the impact of any security deposits applied against tenant accounts.

 

Core Structured Financing Activity

 

The Company funded a $16.0 million Structured Financing investment.

 

Core Balance Sheet and Liquidity

As previously announced, the Company closed on a $700.0 million amended and restated unsecured credit facility, which replaced its existing $600.0 million credit facility. The amended and restated unsecured credit facility provides for an increase in the Company’s existing revolving credit facility from $250.0 million to $300.0 million and an increase in the Company’s existing term loan facility from $350.0 million to $400.0 million. The amended and restated unsecured credit facility has an accordion feature expandable to $900.0 million, subject to customary conditions, and, inclusive of extension options, matures on June 29, 2026.

The Company has raised gross proceeds during the second quarter of $46.0 million at an average price per share of approximately $22.37 through the ATM Program.

 

2


 

 

OPERATIONS UPDATE

COVID-19 Pandemic Impact on Operations

Second quarter 2021 credit losses and abatements were de minimis due to a benefit of approximately $2.2 million of cash collections on previously-reserved tenant accounts received during the quarter, which included $1.8 million related to the Core Portfolio and $0.4 million related to the Funds.

The amounts below represent the Company's pro-rata share of credit losses and abatements, inclusive of a benefit of approximately $2.2 million of credit loss (recoveries) mentioned above, and straight-line rent reserves primarily associated with the COVID-19 Pandemic (in millions) for the six months ended June 30, 2021:

 

Year-to-Date Ended June 30, 2021 Credit Losses and Reserves

 

Core Same Store

 

 

Core Other

 

 

Funds

 

 

Total

 

 

Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Loss and Abatements - Billed Rents and Recoveries

 

$

3.1

 

 

$

0.2

 

 

$

0.3

 

 

$

3.6

 

 

$

0.04

 

Straight-Line Rent Reserves

 

N/A

 

 

 

 

 

 

0.1

 

 

 

0.1

 

 

 

 

Total

 

$

3.1

 

 

$

0.2

 

 

$

0.4

 

 

$

3.7

 

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Credit Loss and Abatements – Billed Rents and Recoveries” represent reserves taken against a tenant’s rent and recoveries that were billable pursuant to the terms of a lease agreement. “Straight-Line Rent Reserves” represent reserves against a tenant’s straight-line rent balance. The balance is derived from the cumulative difference, generally from inception of the lease, between a tenant’s billed rents and the amount of rent recognized in earnings on a straight-line basis over the life of the lease.

CONSOLIDATED FINANCIAL RESULTS

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

Net Income

Net income attributable to Acadia for the quarter ended June 30, 2021 was $3.9 million, or $0.04 per share, which included (i) $0.7 million, or $0.01 per share, from the unrealized mark-to-market gain on Albertsons and (ii) $1.5 million, or $0.02 per share, attributable to an aggregate gain on dispositions of Fund investments. Net income attributable to Acadia for the quarter ended June 30, 2020 was $19.4 million, or $0.22 per share, which included $24.9 million, or $0.27 per share from the monetization of and unrealized mark-to-market gain on Albertsons, which was offset by $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.

Net income attributable to Acadia for the six months ended June 30, 2021 was $9.1 million, or $0.10 per share, which included (i) $2.4 million, or $0.03 per share, from the unrealized mark-to-market gain on Albertsons and (ii) $6.6 million, or $0.07 per share, attributable to an aggregate gain on dispositions of Core Portfolio and Fund investments was offset by $3.7 million, or $0.04 per share, related to credit loss, straight-line rent reserves and tenant abatements, primarily due to the COVID-19 Pandemic. Net income attributable to Acadia for the six months ended June 30, 2020 was $11.0 million, or $0.12 per share, which included $24.9 million of Acadia's share, or $0.27 per share from the monetization of and unrealized mark-to-market gain on Albertsons, which was offset by (i) $12.4 million of Acadia's share, or $0.14 per share, attributable to impairment charges within the Funds and (ii) $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.

3


 

FFO as Defined by NAREIT

FFO for the quarter ended June 30, 2021 was $28.3 million, or $0.31 per share, and included $0.7 million, or $0.01 per share, from the unrealized mark-to-market gain on Albertsons. FFO for the quarter ended June 30, 2020 was $44.9 million, or $0.49 per share, which included $24.9 million, or $0.27 per share, from the monetization of and unrealized mark-to-market gain on Albertsons that was offset by $9.4 million, or $0.10 per share, related to credit loss and straight-line rent reserves, primarily due to the COVID-19 Pandemic.

 

FFO for the six months ended June 30, 2021 was $52.7 million, or $0.57 per share, and included $2.4 million, or $0.03 per share, from the unrealized mark-to-market gain on Albertsons and was offset by $3.7 million, or $0.04 per share, related to credit loss, straight-line reserves and tenant abatements, primarily due to the COVID-19 Pandemic. FFO for the six months ended June 30, 2020 was $72.7 million, or $0.79 per share, inclusive of $24.9 million, or $0.27 per share, from the monetization and unrealized mark-to-market gain of Albertsons, which was offset by $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.

 

FFO before Special Items

FFO before Special Items for the quarter ended June 30, 2021 was $27.6 million, or $0.30 per share, which excluded $0.7 million, or $0.01 per share, from the unrealized mark-to-market gain on Albertsons. For the quarter ended June 30, 2020, FFO before Special Items was $26.6 million, or $0.29 per share, which excluded $18.4 million, or $0.20 per share, of unrealized mark-to-market gain on Albertsons.  

FFO before Special Items for the six months ended June 30, 2021 was $50.2 million, or $0.54 per share, which excluded $2.4 million, or $0.03 per share, from the unrealized mark-to-market gain on Albertsons. For the six months ended June 30, 2020, FFO before Special Items was $54.3 million, or $0.59 per share, which excluded $18.4 million, or $0.20 per share, of unrealized mark-to-market gain on Albertsons.

 

FUND PLATFORM

Fund Acquisitions

Fund V has approximately $170.0 million of new investments under contract and/or agreements in principle. No assurance can be given that the Company will successfully close on such acquisitions under contract, which are subject to customary conditions and market uncertainty.

Fund Dispositions

Northeast Grocer Portfolio (Fund IV). Fund IV completed the disposition of four properties (aggregate 560,000 square-foot) located in Maine within its Northeast Grocer Portfolio for $39.9 million and repaid the properties' $23.5 million mortgages. Two properties remain within the grocery portfolio, both located in Pennsylvania.

654 Broadway (Fund III). Fund III completed the disposition of a 16,000 square-foot property located in New York City for $10.0 million.

4


 

 

2021 GUIDANCE

The Company again raised its annual 2021 guidance to reflect improved outlook on leasing and credit reserves. Presented below is the revised 2021 guidance.

 

 

 

2021 Guidance

 

 

Initial

 

Q1 Revision

 

Q2 Revision

 

 

 

 

 

 

 

Net (loss) earnings per share attributable to Common Shareholders

 

$(0.12) to $0.04

 

$(0.08) to $0.06 

 

$(0.02) to $0.07

Depreciation of real estate and amortization of leasing costs  (net of noncontrolling interests' share)

 

1.22 to 1.26 

 

1.22 to 1.26

 

1.22 to 1.26 

Gain on disposition of properties (net of noncontrolling interests' share)

 

(0.05) to (0.07)

 

(0.05) to (0.07)

 

(0.05) to (0.07)

Noncontrolling interest in Operating Partnership

 

(0.07) to (0.09)

 

(0.07) to (0.09)

 

(0.07) to (0.09)

Funds from operations per share attributable to Common Shareholders and Common OP Unit holders

 

$0.98 to $1.14 

 

$1.02 to $1.16

 

$1.08 to $1.17

 

 

 

 

 

 

 

Adjustments for Special Items:

 

 

 

 

 

 

Less: Albertsons unrealized holding gain (net of noncontrolling interest share)

 

 

(0.02)

 

(0.03)

Funds from operations before Special Items per share attributable to Common Shareholders and Common OP Unit holders

 

$0.98 to $1.14  

 

$1.00 to $1.14

 

$1.05  to $1.14

 

 

 

 

 

 

 

 

Please refer to the second quarter 2021 supplemental information package for additional details on certain other assumptions related to revised 2021 guidance.

 

 

CONFERENCE CALL

Management will conduct a conference call on Thursday, July 29, 2021 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, July 29, 2021

Time:           11:00 AM ET

Dial#:         844-309-6711

Passcode:     “Acadia Realty” or “9089155”

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

Phone Replay:

Dial#:            855-859-2056

Passcode:      “9089155”

Available Through:   Thursday, August 5, 2021

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

 

5


 

 

The Company uses, and intends to use, the Investors page of its website, which can be found at www.acadiarealty.com, as a means of disclosing material nonpublic information and of complying with its disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the Investors page, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, the website is not incorporated by reference into, and is not a part of, this document.

 

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 Portfolio 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 the use of the words, such as “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 businesses, including the Company’s tenants, that have suffered significant declines in revenues as a result of governmental restrictions to contain or mitigate the COVID-19 Pandemic, as well as to adversely impacted individuals, (b) the rate and efficacy of COVID-19 vaccines, (c) 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, (d) temporary or permanent migration out of major cities by customers, including cities where the Company’s properties are located, which may have a negative impact on the Company’s tenants’ businesses, (e) 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, (f) 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, and (g) the potential adverse impact on returns from development and redevelopment projects; (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

6


 

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, 2020 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.

7


 

ACADIA REALTY TRUST AND SUBSIDIARIES

Consolidated Statements of Income (a)  

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

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

73,666

 

 

$

62,639

 

 

$

140,871

 

 

$

133,096

 

Other

 

 

994

 

 

 

1,134

 

 

 

3,183

 

 

 

2,097

 

Total revenues

 

 

74,660

 

 

 

63,773

 

 

 

144,054

 

 

 

135,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

31,345

 

 

 

33,793

 

 

 

62,735

 

 

 

67,170

 

General and administrative

 

 

10,671

 

 

 

8,720

 

 

 

19,667

 

 

 

17,790

 

Real estate taxes

 

 

12,504

 

 

 

10,697

 

 

 

23,966

 

 

 

21,144

 

Property operating

 

 

12,890

 

 

 

16,806

 

 

 

26,367

 

 

 

30,126

 

Impairment charges

 

 

 

 

 

 

 

 

 

 

 

51,549

 

Total operating expenses

 

 

67,410

 

 

 

70,016

 

 

 

132,735

 

 

 

187,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposition of properties

 

 

5,909

 

 

 

485

 

 

 

10,521

 

 

 

485

 

Operating income (loss)

 

 

13,159

 

 

 

(5,758

)

 

 

21,840

 

 

 

(52,101

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity in earnings (losses) of unconsolidated affiliates

 

 

1,106

 

 

 

(786

)

 

 

3,369

 

 

 

469

 

Interest and other income

 

 

2,054

 

 

 

2,095

 

 

 

3,754

 

 

 

5,024

 

Realized and unrealized holding gains on investments and other

 

 

2,711

 

 

 

87,811

 

 

 

9,218

 

 

 

87,281

 

Interest expense

 

 

(17,605

)

 

 

(18,319

)

 

 

(34,746

)

 

 

(36,621

)

Income from continuing operations before income taxes

 

 

1,425

 

 

 

65,043

 

 

 

3,435

 

 

 

4,052

 

Income tax (provision) benefit

 

 

(194

)

 

 

(137

)

 

 

(344

)

 

 

815

 

Net income

 

 

1,231

 

 

 

64,906

 

 

 

3,091

 

 

 

4,867

 

Net loss (income) attributable to noncontrolling interests

 

 

2,687

 

 

 

(45,496

)

 

 

5,989

 

 

 

6,129

 

Net income attributable to Acadia

 

$

3,918

 

 

$

19,410

 

 

$

9,080

 

 

$

10,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: net income attributable to participating securities

 

 

(156

)

 

 

(244

)

 

 

(312

)

 

 

(233

)

Net income attributable to Common Shareholders -
   basic and diluted earnings per share

 

$

3,762

 

 

$

19,166

 

 

$

8,768

 

 

$

10,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares for basic and diluted earnings per share

 

 

86,824

 

 

 

86,180

 

 

 

86,575

 

 

 

86,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per share - basic and diluted (b)

 

$

0.04

 

 

$

0.22

 

 

$

0.10

 

 

$

0.12

 

 

8


 

 

ACADIA REALTY TRUST AND SUBSIDIARIES

Reconciliation of Consolidated Net Income to Funds From Operations (a, c)  

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

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Acadia

 

$

3,918

 

 

$

19,410

 

 

$

9,080

 

 

$

10,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation of real estate and amortization of leasing costs (net of
   noncontrolling interests' share)

 

 

23,077

 

 

 

24,390

 

 

 

46,884

 

 

 

48,478

 

Impairment charges (net of noncontrolling interests' share)

 

 

 

 

 

 

 

 

 

 

 

12,400

 

Loss (gain) on disposition of properties (net of noncontrolling interests' share)

 

 

933

 

 

 

(111

)

 

 

(4,163

)

 

 

(111

)

Income attributable to Common OP Unit holders

 

 

275

 

 

 

1,136

 

 

 

622

 

 

 

674

 

Distributions - Preferred OP Units

 

 

123

 

 

 

123

 

 

 

246

 

 

 

249

 

Funds from operations attributable to Common Shareholders and Common OP Unit holders

 

$

28,326

 

 

$

44,948

 

 

$

52,669

 

 

$

72,686

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments for Special Items:

 

 

 

 

 

 

 

 

 

 

 

 

Less: Albertsons unrealized holding gain (net of noncontrolling interest share)

 

 

(688

)

 

 

(18,397

)

 

 

(2,426

)

 

 

(18,397

)

Funds from operations before Special Items attributable to Common Shareholders and Common OP Unit holders

 

$

27,638

 

 

$

26,551

 

 

$

50,243

 

 

$

54,289

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations per Share - Diluted

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted-average shares outstanding, GAAP earnings

 

 

86,824

 

 

 

86,180

 

 

 

86,575

 

 

 

86,576

 

Weighted-average OP Units outstanding

 

 

5,135

 

 

 

5,003

 

 

 

5,127

 

 

 

5,096

 

Assumed conversion of Preferred OP Units to common shares

 

 

465

 

 

 

465

 

 

 

465

 

 

 

465

 

Assumed conversion of LTIP units and restricted share units to
   common shares

 

 

203

 

 

 

 

 

 

87

 

 

 

 

Weighted average number of Common Shares and Common OP Units

 

 

92,627

 

 

 

91,648

 

 

 

92,254

 

 

 

92,137

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Funds from operations, per Common Share and Common OP Unit

 

$

0.31

 

 

$

0.49

 

 

$

0.57

 

 

$

0.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted Funds from operations before Special Items, per Common Share and Common OP Unit

 

$

0.30

 

 

$

0.29

 

 

$

0.54

 

 

$

0.59

 

 

9


 

 

ACADIA REALTY TRUST AND SUBSIDIARIES

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

(dollars in thousands)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated operating income (loss)

 

$

13,159

 

 

$

(5,758

)

 

$

21,840

 

 

$

(52,101

)

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

10,671

 

 

 

8,720

 

 

 

19,667

 

 

 

17,790

 

Depreciation and amortization

 

 

31,345

 

 

 

33,793

 

 

 

62,735

 

 

 

67,170

 

Impairment charges

 

 

 

 

 

 

 

 

 

 

 

51,549

 

Straight-line rent (recoveries) reserves

 

 

(232

)

 

 

3,562

 

 

 

585

 

 

 

6,529

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Above/below market rent, straight-line rent and other adjustments

 

 

(4,249

)

 

 

1,751

 

 

 

(9,533

)

 

 

(2,585

)

Gain on disposition of properties

 

 

(5,909

)

 

 

(485

)

 

 

(10,521

)

 

 

(485

)

Consolidated NOI

 

 

44,785

 

 

 

41,583

 

 

 

84,773

 

 

 

87,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interest in consolidated NOI

 

 

(12,373

)

 

 

(11,694

)

 

 

(23,234

)

 

 

(25,992

)

Less: Operating Partnership's interest in Fund NOI included above

 

 

(3,131

)

 

 

(2,826

)

 

 

(5,749

)

 

 

(6,421

)

Add: Operating Partnership's share of unconsolidated
   joint ventures NOI (d)

 

 

3,764

 

 

 

2,874

 

 

 

7,064

 

 

 

9,220

 

NOI - Core Portfolio

 

$

33,045

 

 

$

29,937

 

 

$

62,854

 

 

$

64,674

 

 

10


 

 

ACADIA REALTY TRUST AND SUBSIDIARIES

Consolidated Balance Sheets (a)  

(dollars in thousands)

 

 

As of

 

 

 

June 30,
2021

 

 

December 31,
2020

 

ASSETS

 

 

 

 

 

 

Investments in real estate, at cost

 

 

 

 

 

 

Land

 

$

761,029

 

 

$

776,275

 

Buildings and improvements

 

 

2,825,549

 

 

 

2,848,781

 

Tenant improvements

 

 

204,542

 

 

 

191,046

 

Construction in progress

 

 

9,427

 

 

 

5,751

 

Right-of-use assets - finance leases

 

 

25,086

 

 

 

25,086

 

 

 

 

3,825,633

 

 

 

3,846,939

 

Less: Accumulated depreciation and amortization

 

 

(624,461

)

 

 

(586,800

)

Operating real estate, net

 

 

3,201,172

 

 

 

3,260,139

 

Real estate under development

 

 

217,620

 

 

 

247,349

 

Net investments in real estate

 

 

3,418,792

 

 

 

3,507,488

 

Notes receivable, net

 

 

117,280

 

 

 

101,450

 

Investments in and advances to unconsolidated affiliates

 

 

258,063

 

 

 

249,807

 

Other assets, net

 

 

159,592

 

 

 

173,809

 

Right-of-use assets - operating leases, net

 

 

42,398

 

 

 

76,268

 

Cash and cash equivalents

 

 

34,645

 

 

 

19,232

 

Restricted cash

 

 

15,094

 

 

 

14,692

 

Rents receivable, net

 

 

43,748

 

 

 

44,136

 

Total assets

 

$

4,089,612

 

 

$

4,186,882

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Mortgage and other notes payable, net

 

$

1,162,617

 

 

$

1,204,581

 

Unsecured notes payable, net

 

 

440,088

 

 

 

420,858

 

Unsecured line of credit

 

 

61,405

 

 

 

138,400

 

Accounts payable and other liabilities

 

 

239,056

 

 

 

269,911

 

Lease liability - operating leases, net

 

 

40,861

 

 

 

88,816

 

Dividends and distributions payable

 

 

14,339

 

 

 

147

 

Distributions in excess of income from, and investments in, unconsolidated affiliates

 

 

14,896

 

 

 

15,616

 

Total liabilities

 

 

1,973,262

 

 

 

2,138,329

 

Commitments and contingencies

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

Acadia Shareholders' Equity

 

 

 

 

 

 

Common shares, $0.001 par value, authorized 200,000,000 shares, issued and outstanding 88,419,303 and 86,268,303 shares, respectively

 

 

88

 

 

 

86

 

Additional paid-in capital

 

 

1,730,686

 

 

 

1,683,165

 

Accumulated other comprehensive loss

 

 

(47,909

)

 

 

(74,891

)

Distributions in excess of accumulated earnings

 

 

(184,174

)

 

 

(167,046

)

Total Acadia shareholders’ equity

 

 

1,498,691

 

 

 

1,441,314

 

Noncontrolling interests

 

 

617,659

 

 

 

607,239

 

Total equity

 

 

2,116,350

 

 

 

2,048,553

 

Total liabilities and equity

 

$

4,089,612

 

 

$

4,186,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11


 

 

ACADIA REALTY TRUST AND SUBSIDIARIES

Notes to Financial Highlights:

 

(a)

For additional information and analysis concerning the Company’s balance sheet and results of operations, reference is made to the Company’s quarterly supplemental disclosures for the relevant periods furnished on the Company's Current Report on Form 8-K and made available on the Company’s website at www.acadiarealty.com.

 

(b)

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common shares of the Company were exercised or converted into common shares. The effect of the conversion of units of limited partnership interest (“OP Units”) in Acadia Realty Limited Partnership, the “Operating Partnership” of the Company, is not reflected in the above table; OP Units are exchangeable into common shares on a one-for-one basis. The income allocable to such OP units is allocated on the same basis and reflected as noncontrolling interests in the consolidated financial statements. As such, the assumed conversion of these OP Units would have no net impact on the determination of diluted earnings per share.

 

(c)

The Company considers funds from operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and net property operating income (“NOI”) to be appropriate supplemental disclosures of operating performance for an equity REIT due to their widespread acceptance and use within the REIT and analyst communities. In addition, the Company believes that given the atypical nature of certain unusual items (as further described below), “FFO before Special Items” is also an appropriate supplemental disclosure of operating performance. FFO, FFO before Special Items and NOI are presented to assist investors in analyzing the performance of the Company. They are helpful as they exclude various items included in net income  that are not indicative of the operating performance, such as gains (losses) from sales of real estate property, depreciation and amortization, and impairment of real estate property. In addition, NOI excludes interest expense and FFO before Special Items excludes certain unusual items (as further described below). The Company’s method of calculating FFO and NOI may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. Neither FFO nor FFO before Special Items represent cash generated from operations as defined by generally accepted accounting principles (“GAAP”), or are  indicative of cash available to fund all cash needs, including distributions. Such measures should not be considered as an alternative to net income (loss) for the purpose of evaluating the Company’s performance or to cash flows as a measure of liquidity. Consistent with the NAREIT definition, the Company defines FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of real estate property, plus depreciation and amortization, impairment of real estate property, 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. FFO before Special Items begins with the NAREIT definition of FFO and further adjusts FFO to take into account FFO without regard to 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.

 

(d)

The pro-rata share of NOI is based upon the Operating Partnership’s stated ownership percentages in each venture or Fund’s operating agreement. Does not include the Operating Partnership's share of NOI from unconsolidated joint ventures within the Funds.

 

 

 

12

akr-ex992_7.htm

 

 

Exhibit 99.2

 

EALTY TRUST—Q220SUPPLEMENTAL REPFORMATIO

 

 

 


 

 

 

 

Table of Contents

 

 

Supplemental Report – June 30, 2021

 

 

 

 

 

 

Section I – Second Quarter 2021 Earnings Press Release

 

 

 

 

 

Section II – Financial Information

 

 

Section III – Core Portfolio Information

 

 

 

 

 

 

 

 

Company Information

3

 

Core Properties

 

26

Market Capitalization

4

 

Core Top Tenants

 

30

Operating Statements

 

 

Core Lease Expirations

 

31

Consolidated Income Statements

5

 

Core New and Renewal Rent Spreads

 

32

Income Statement - Pro-rata Adjustments

7

 

Core Capital Expenditures

 

33

Consolidated Balance Sheet

8

 

 

 

 

Balance Sheet - Pro-rata Adjustments

9

 

 

 

 

Funds from Operations (“FFO”), Adjusted FFO (“AFFO”)

11

 

Section IV – Fund Information

 

 

EBITDA

12

 

 

 

 

Same Property Net Operating Income

13

 

Fund Overview

 

34

Fee Income

14

 

Fund Properties

 

35

Structured Financing

15

 

Fund Lease Expirations

 

38

Other Information

 

 

Development and Redevelopment Activity

 

39

Transactional Activity

16

 

 

 

 

2021 Guidance

17

 

 

 

 

Net Asset Valuation Information

18

 

 

 

 

Selected Financial Ratios

19

 

Section V – Other Information

 

 

Debt Analysis

 

 

 

 

 

Summary

21

 

Portfolio Composition

 

41

Detail

22

 

 

 

 

Maturities

24

 

Important Notes

 

42

 

 

 

 

 

 

 

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

 

 

 

 

 


 

 

 

 

 

Supplemental Report – June 30, 2021

 

Company Information

 

 

 

 

 

 

 

 

Acadia Realty Trust is a fully-integrated equity real estate investment trust, focused on the ownership, acquisition, redevelopment and management of high-quality retail properties located in key street and urban retail corridors as well as suburban locations within high-barrier-to-entry, densely-populated metropolitan areas. Acadia owns, or has an ownership interest in, these properties through its Core Portfolio and through a series of opportunistic/value-add investment funds. Additional information may be found on the Company’s website at www.acadiarealty.com.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contact Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Headquarters

 

Investor Relations

 

New York Stock Exchange

 

 

411 Theodore Fremd Avenue

 

Sunny Holcomb

 

Symbol AKR

 

 

Suite 300

 

Vice President, Financial Reporting

 

 

 

 

Rye, NY 10580

 

(914) 288-8100

 

 

 

 

 

 

investorrelations@acadiarealty.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analyst Coverage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank of America / Merrill Lynch

 

Citigroup - Global Markets

 

  KeyBanc Capital Markets, Inc.

 

 

Craig Schmidt - (646) 855-3640

 

Katy McConnell - (212) 816-4471

 

  Todd Thomas - (917) 368-2286

 

 

craig.schmidt@baml.com

 

katy.mcconnell@citi.com

 

  tthomas@key.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Green Street Advisors

 

Compass Point Research & Trading

 

  J.P. Morgan Securities, Inc.

 

 

Paulina Rojas Schmidt - (949) 640-8780

 

Floris van Dijkum - (646) 757-2621

 

  Michael W. Mueller, CFA - (212) 622-6689

 

 

projasschmidt@greenstreet.com

 

fvandijkum@compasspointllc.com

 

  michael.w.mueller@jpmorgan.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jefferies

 

Truist

 

 

Linda Tsai - (212) 778-8011

 

Ki Bin Kim, CFA – (212) 303-4124

 

 

 

 

ltsai@jefferies.com

 

kibin.kim@truist.com

 

 

 

 

 

 

 

 

 

 

3

 

 

 


 

 

 

 

 

 

 

Market Capitalization

Supplemental Report – June 30, 2021

(Including pro-rata share of Fund debt, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in Total Outstanding Common

 

 

Weighted Average

 

 

 

Total Market

 

 

 

 

 

 

Capitalization

 

 

Shares and OP Units (in thousands)

 

 

Diluted EPS

 

 

FFO

 

 

 

Capitalization

($)

 

 

%

 

 

Based on Net

Debt 1

 

 

 

 

Common

Shares

 

 

Common OP Units

 

 

Total

 

 

Quarter

 

 

YTD

 

 

Quarter

 

 

YTD

 

Equity Capitalization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares

 

 

88,419

 

 

 

 

 

 

 

 

 

 

Balance at 12/31/2020

 

 

86,269

 

 

 

4,891

 

 

 

91,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Operating Partnership ("OP") Units

 

 

5,148

 

 

 

 

 

 

 

 

 

 

Other

 

 

6

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined Common Shares and OP Units

 

 

93,567

 

 

 

 

 

 

 

 

 

 

Vesting RS and LTIPs

 

 

8

 

 

 

251

 

 

 

259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OP Conversions

 

 

19

 

 

 

(19

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share Price at June 30, 2021

 

$

21.96

 

 

 

 

 

 

 

 

 

 

Balance at 3/31/2021

 

 

86,302

 

 

 

5,123

 

 

 

91,425

 

 

 

86,346

 

 

 

86,346

 

 

 

91,931

 

 

 

91,931

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

3

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Capitalization - Common Shares and OP Units

 

$

2,054,731

 

 

 

 

 

 

 

 

 

 

Issuance - ATM

 

 

2,072

 

 

 

 

 

 

2,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred OP Units

 

 

10,203

 

2

 

 

 

 

 

 

 

 

Vesting RS and LTIPs

 

 

35

 

 

 

32

 

 

 

67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity Capitalization

 

 

2,064,934

 

 

66%

 

 

66%

 

 

OP Conversions

 

 

7

 

 

 

(7

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 6/30/2021

 

 

88,419

 

 

 

5,148

 

 

 

93,567

 

 

 

86,824

 

 

 

86,575

 

 

 

92,627

 

 

 

92,254

 

Debt Capitalization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated debt

 

 

1,672,957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment to reflect pro-rata share of debt

 

 

(593,022

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt Capitalization

 

 

1,079,935

 

 

34%

 

 

34%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Market Capitalization

 

$

3,144,869

 

3

100%

 

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

__________

 

1.

Reflects debt net of Core Portfolio cash of $10,050 and pro-rata share of Funds cash of $7,757 for total cash netted against debt of $17,807.

 

 

 

2.

Represents 188 Series A and 126,593 Series C Preferred OP Units convertible into 25,067 and 439,556 Common OP Units, respectively, multiplied by the Common Share price at quarter end.

 

 

 

3.

Market capitalization comprises (fixed-rate debt includes notional principal fixed through interest rate swap transactions):

 

 

4

 

 

 


 

 

 

 

 

 

Consolidated Income Statement

Supplemental Report – June 30, 2021

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2021 1

 

CONSOLIDATED INCOME STATEMENT

 

Quarter

 

 

Year to Date

 

Revenues

 

 

 

 

 

 

 

 

Rental income

 

$

73,666

 

 

$

140,871

 

Other

 

 

994

 

 

 

3,183

 

Total revenues

 

 

74,660

 

 

 

144,054

 

Operating expenses

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

31,345

 

 

 

62,735

 

General and administrative

 

 

10,671

 

 

 

19,667

 

Real estate taxes

 

 

12,504

 

 

 

23,966

 

Property operating

 

 

12,890

 

 

 

26,367

 

Total operating expenses

 

 

67,410

 

 

 

132,735