SEC Filings

8-K
ACADIA REALTY TRUST filed this Form 8-K on 02/19/2019
Entire Document
 
akr-8k_20181231.htm

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): February 13, 2019

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))

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 February 13, 2019, Acadia Realty Trust (the “Company”) issued a press release announcing its consolidated financial results for the quarter and year ended December 31, 2018. A copy of this 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 ownership, operations and portfolio of the Company as of and for the quarter and year ended December 31, 2018. A copy of this 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

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, 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

February 19, 2019

 

Title:

 

Sr. Vice President and Chief Financial Officer

 

akr-ex991_8.htm

 

Exhibit 99.1

ACADIA REALTY TRUST REPORTS FOURTH QUARTER AND FULL YEAR 2018 OPERATING RESULTS

RYE, NY (February 13, 2019) - Acadia Realty Trust (NYSE:AKR) (“Acadia” or the “Company”) today reported operating results for the quarter and year ended December 31, 2018. 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”), which owns and operates assets in the nation’s most dynamic urban and street-retail 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") and net operating income ("NOI").

Highlights

Earnings: Generated GAAP earnings per share of $0.09 for the fourth quarter; FFO per share was $0.34 for the fourth quarter, and FFO per share of $0.36 for the fourth quarter before deduction of $0.02 per share for retirement related costs.

Core Portfolio Operating Results: Solid Core operating fundamentals and significant progress towards long-term NOI growth goals

 

 

Strong same-property net operating income growth of 4.1% for the fourth quarter (excluding redevelopments) driven by profitable lease up in its street and urban portfolio

 

Achieved substantially all (over 95%) of its 2018 leasing goals

 

Executed key urban leases at its City Center property in San Francisco, California (Whole Foods) and its State Street property in Chicago, Illinois (Uniqlo)

 

Solid rent growth of 16.5% and 9.4% on new leases for the quarter on a GAAP and cash basis, respectively

 

Reported 95.2% leased occupancy as of December 31, 2018

Fund Acquisition Activity: Fund V completed a $44.4 million acquisition during the fourth quarter. Fund acquisition volume for 2018 totaled $149.0 million; included within the Fund V pipeline is over $100.0 million of investments currently under contract

Balance Sheet: The Company closed a $50 million ten-year financing within its Core Portfolio in the fourth quarter. At December 31, 2018, over 95% of Core debt was fixed at an average rate of 3.7% and maturity of 5.8 years. No shares were issued or purchased during the fourth quarter

Guidance: The Company has issued its annual 2019 guidance of net income per share of $0.35 to $0.46 and FFO per share of $1.34 to $1.46. In addition, the Company expects same property net operating income growth of 3.0% to 4.0% for 2019 (excluding redevelopments), which is comprised of 5% to 7% growth within its street/urban portfolio and 0% to 1% within its suburban portfolio

“Our fourth quarter and full-year operating results were in line with our expectations; driven by the strength of our Core Portfolio and a meaningful improvement in retailer demand for high quality spaces,” stated Kenneth F. Bernstein, President and CEO of Acadia Realty Trust. “Following the successful and profitable execution of two important leases in San Francisco and Chicago, our long-term growth plan remains well on track as we add these two exciting retailers to our best-in-class portfolio. We are seeing compelling investment opportunities as we head into 2019. With significant dry powder, both on balance sheet and within our Fund business, we are well-positioned in our highly differentiated dual platform.”

 

1

 


 

FINANCIAL RESULTS

A complete reconciliation, in dollars and per share amounts, of net income attributable to common shareholders to FFO attributable to common shareholders is included in the financial tables of this release.

Net Income

Net income attributable to common shareholders for the quarter ended December 31, 2018 was $7.1 million, or $0.09 per share. Net income attributable to common shareholders for the quarter ended December 31, 2017 was $20.9 million, or $0.25 per share, inclusive of $6.8 million on a pro rata basis, or $0.08 per share, attributable to an aggregate gain on dispositions of Fund properties net of related impairment charges and $5.6 million, or $0.07 per share, attributable to a Core gain on change in control partially offset by $1.0 million, or $0.01 per share, of acquisition costs.

Net income attributable to common shareholders for the year ended December 31, 2018 was $31.4 million, or $0.38 per share. Net income attributable to common shareholders for the year ended December 31, 2017 was $61.5 million, or $0.73 per share, inclusive of $11.5 million on a pro rata basis, or $0.14 per share, attributable to an aggregate gain on dispositions of Fund properties net of related impairment charges and $5.6 million, or $0.07 per share, attributable to a Core gain on change in control; partially offset by $1.3 million, or $0.01 per share, of acquisition expenses.

FFO as Defined by NAREIT

FFO for the quarter ended December 31, 2018 was $29.8 million, or $0.34 per share compared to $33.1 million, or $0.37 per share for the quarter ended December 31, 2017. The decrease in FFO for the quarter is due primarily to a decrease $0.05 per share related to a $2.1 million reduction of interest income (following scheduled repayments within the Structured Finance business) and a $2.0 million executive retirement charge, partially offset by an increase of $2.7 million, or $0.03 per share, of below-market lease adjustments.

FFO for the year ended December 31, 2018 was $118.9 million, or $1.35 per share compared to $134.7 million, or $1.51 per share, for the year ended December 31, 2017. The decrease in FFO for the year is due primarily to a decrease of $0.19 per share, related to a $14.8 million reduction of interest income (following scheduled repayments within the Structured Finance business) and a $2.0 million executive retirement charge, partially offset by an increase of $2.7 million, or $0.03 per share, of below-market lease adjustments.

FFO as Adjusted for Special Items

FFO before the pro rata impact of retirement charges of $2.0 million, or $0.02 per share, for the quarter ended December 31, 2018 was $31.8 million, or $0.36 per share. FFO before the pro rata impact of retirement charges, acquisition-related costs and gains/losses on sale or impairment of depreciated and non-operating properties for the quarter ended December 31, 2017 was $31.4 million, or $0.35 per share, which excludes the net $0.02 per share effect of a $5.6 million gain on change in control partially offset by $3.0 million of impairment charges and $1.0 million of acquisition expenses.

FFO before the pro rata impact of retirement charges for the year ended December 31, 2018 was $120.9 million, or $1.38 per share, which excludes an executive retirement charge of $2.0 million, or $0.02 per share. FFO before the pro rata impact of retirement charges, acquisition-related costs and gains/losses on sale or impairment of depreciated and non-operating properties for the year ended December 31, 2017 was $133.4 million, or $1.50 per share, which excludes the net $0.01 per share effect of a $5.6 million gain on change in control partially offset by $3.0 million of impairment charges and $1.3 million of acquisition expenses.

CORE PORTFOLIO

Core Operating Results

The Company experienced strong same-property net operating income growth of 4.1% for the fourth quarter (before redevelopments), driven by the profitable re-leasing of key street and urban properties.  

The Company successfully completed substantially all (over 95%) of its projected 2018 leasing activities.  

In addition to the successful execution of its 2018 leasing goals, the Company signed two key leases that were an integral part of the Company’s Core NOI growth plan:

2

 


 

 

City Center (San Francisco): The Company signed a lease with Whole Foods Market for approximately 56,000 square feet, which is subject to certain approvals. City Center is a Target-anchored property located in one of San Francisco’s busiest and most prominent corridors surrounded by a dense and affluent trade area. As previously announced, the Company has commenced a 40,000 square foot expansion of City Center, which is approximately 90% pre-leased.  

 

State Street (Chicago): The Company signed a lease with Uniqlo for approximately 28,000 square feet for space that is currently occupied by H&M. State Street is a 79,000 square foot property that features Nordstrom Rack and is located within the primary urban retail corridor for Chicago’s Loop.

The Core Portfolio was 94.2% occupied and 95.2% leased as of December 31, 2018, compared to 94.7% occupied and 95.5% leased as of September 30, 2018. The leased rate includes space that is leased but not yet occupied and excludes development and redevelopment properties.

During the fourth quarter, the Company generated a 16.5% and 9.4% increase in rent on a GAAP and cash basis, respectively, on 5 conforming new leases aggregating approximately 39,000 square feet primarily within its street and urban portfolio.

The Company had renewals on less than 15,000 square feet, primarily within its suburban portfolio that were effectively flat for the fourth quarter on a cash and GAAP basis.

FUND PLATFORM

Fund Acquisitions

During 2018, the Company completed $149.0 million in acquisitions including $44.4 million completed during fourth quarter 2018 as follows:

Hiram Pavilion, Hiram, GA (Fund V). In October 2018, Fund V acquired a 363,000-square foot shopping center, located in greater Atlanta, GA for $44.4 million. The property is anchored by Kohl’s, Marshalls and Ross Dress for Less.

The Company, on behalf of Fund V, has an acquisition pipeline with over $100.0 million of investments currently under contract.

Fund Dispositions

During 2018, the Company completed $76.6 million of Fund dispositions including $12.1 million completed during the fourth quarter as follows:

210 Bowery, New York, NY (Fund IV). In November and December, Fund IV sold four residential units within its 210 Bowery property located in New York City, NY for $12.1 million.

Acadia does not report return metrics for partial sales of its investments.

BALANCE SHEET

The Company has maintained its solid, low-leveraged balance sheet, with over 95% of its Core Portfolio debt fixed at an average rate of 3.7%. As of December 31, 2018, the Company’s net debt to EBITDA ratio for the Core Portfolio was 5.0x.

During the quarter, the Company closed on a $73.5 million non-recourse mortgage, of which $50 million was drawn at December 31, 2018. The loan matures in November 2028 with interest only at LIBOR plus 1.5%. The proceeds were used to repay outstanding indebtedness.

The Company repurchased $55.1 million of its common shares (2.3 million shares) during the year ended December 31, 2018 at an average cost of approximately $24 per share on a leverage-neutral basis. No shares were issued or purchased during the fourth quarter.


3

 


 

2019 Guidance

The following guidance is based upon our current view of existing market conditions and assumptions for the year ending December 31, 2019. The Company forecasts that its 2019 annual earnings per share will range from $0.35 to $0.46 and 2019 FFO per share will range from $1.34 to $1.46. These forecasts, and the comparable 2018 FFO, both presented below, are before acquisition and gains/losses on sale or impairment of depreciated and non-operating assets:

  

 

 

2019 Guidance

 

2018 Actual

 

 

 

 

 

 

 

 

Net income per share attributable to Common Shareholders

 

$0.35 to $0.46

 

$

0.38

 

Impact of transactional activity and tenant recapture

 

(0.08) to (0.13)

 

 

(0.04

)

Depreciation of real estate and amortization of leasing costs

 

 

 

 

 

 

(net of noncontrolling interests' share)

 

0.96

 

 

0.98

 

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

 

-

 

 

(0.01

)

Noncontrolling interest in Operating Partnership

 

0.02

 

 

0.03

 

Funds from operations, prior to transactional activity, per share

 

$1.25 to $1.31

 

$

1.34

 

 

 

 

 

 

 

 

Fund acquisitions and related fees

 

0.01 to 0.03

 

 

-

 

Net Promote and other transactional income

 

0.01 to 0.05

 

 

0.01

 

Accelerated tenant recapture - GAAP adjustments

 

0.07

 

 

0.03

 

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

 

$1.34 to $1.46

 

$

1.38

 

 

 

 

 

 

 

 

The Company is projecting same property net operating income growth (excluding redevelopment) of 3.0% to 4.0% for 2019. This growth is comprised of 5% to 7% within its street/urban portfolio and 0% to 1% within its suburban portfolio.

Please refer to the Company’s fourth quarter 2018 supplemental information package for additional details.

CONFERENCE CALL

Management will conduct a conference call on Thursday, February 14, 2019 at 12:00 PM ET to review the Company’s earnings and operating results. Dial-in and webcast information is listed below.

Live Conference Call:

Date:            Thursday, February 14, 2019

Time:           12:00 PM ET

Dial#:         844-309-6711

Passcode:     “Acadia Realty” or “6289135”

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

Phone Replay:

Dial#:            855-859-2056

Passcode:      “6289135”

Available Through:    Thursday, February 21, 2019

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 urban and street-retail 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 matters in this press release may constitute forward-looking statements within the meaning of federal securities law and as such may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performances or achievements of Acadia to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. These forward-looking statements include statements regarding Acadia’s future financial results and its ability to capitalize on potential investment opportunities. Factors that could cause the Company’s forward-looking statements to differ from its future results include, but are not limited to, those discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent annual report on Form 10-K filed with the SEC on February 27, 2018 (“Form 10-K”) and other periodic reports filed with the SEC, including risks related to: (i) political and economic uncertainty; (ii) the Company’s reliance on revenues derived from major tenants; (iii) the Company’s limited control over joint venture investments; (iv) the Company’s partnership structure; (v) real estate and the geographic concentration of the Company’s properties; (vi) market interest rates; (vii) leverage; (viii) liability for environmental matters; (ix) the Company’s growth strategy; (x) the Company’s status as a REIT; (xi) uninsured losses; (xii) information technology security threats and (xiii) the loss of key executives. Copies of the Form 10-K and the other periodic reports Acadia files with the SEC are available on the Company’s website at www.acadiarealty.com. Any forward-looking statements in this press release speak only as of the date hereof. Acadia 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 Acadia’s expectations with regard thereto or change in events, conditions or circumstances on which any such statement is based.

5

 


 

ACADIA REALTY TRUST AND SUBSIDIARIES

Consolidated Statements of Operations (a)  

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

 

 

 

Three Months Ended December 31,

 

 

Year Ended

December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

55,104

 

 

$

50,181

 

 

$

208,756

 

 

$

198,941

 

Expense reimbursements

 

 

13,284

 

 

 

12,560

 

 

 

48,284

 

 

 

44,907

 

Other

 

 

1,057

 

 

 

3,340

 

 

 

5,173

 

 

 

6,414

 

Total revenues

 

 

69,445

 

 

 

66,081

 

 

 

262,213

 

 

 

250,262

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

30,794

 

 

 

27,689

 

 

 

117,549

 

 

 

104,934

 

General and administrative

 

 

9,984

 

 

 

8,470

 

 

 

34,343

 

 

 

33,756

 

Real estate taxes

 

 

9,184

 

 

 

8,484

 

 

 

36,712

 

 

 

35,946

 

Property operating

 

 

11,688

 

 

 

14,690

 

 

 

45,211

 

 

 

41,668

 

Impairment charge

 

 

 

 

 

10,615

 

 

 

 

 

 

14,455

 

Other operating

 

 

202

 

 

 

1,197

 

 

 

857

 

 

 

2,184

 

Total operating expenses

 

 

61,852

 

 

 

71,145

 

 

 

234,672

 

 

 

232,943

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

7,593

 

 

 

(5,064

)

 

 

27,541

 

 

 

17,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity in earnings of unconsolidated affiliates inclusive of gain on disposition of properties of $0, $589, $0 and $15,360, respectively

 

 

2,223

 

 

 

2,327

 

 

 

9,302

 

 

 

23,371

 

Interest income

 

 

2,692

 

 

 

5,495

 

 

 

13,231

 

 

 

29,143

 

Interest expense

 

 

(19,096

)

 

 

(19,312

)

 

 

(69,978

)

 

 

(58,978

)

Gain on change in control

 

 

 

 

 

5,571

 

 

 

 

 

 

5,571

 

(Loss) income from continuing operations before income taxes

 

 

(6,588

)

 

 

(10,983

)

 

 

(19,904

)

 

 

16,426

 

Income tax (provision) benefit

 

 

(83

)

 

 

13

 

 

 

(934

)

 

 

(1,004

)

(Loss) income from continuing operations before gain on disposition of properties

 

 

(6,671

)

 

 

(10,970

)

 

 

(20,838

)

 

 

15,422

 

Gain on disposition of properties, net of tax

 

 

 

 

 

35,914

 

 

 

5,140

 

 

 

48,886

 

Net (loss) income

 

 

(6,671

)

 

 

24,944

 

 

 

(15,698

)

 

 

64,308

 

Net loss (income) attributable to noncontrolling interests

 

 

13,801

 

 

 

(4,032

)

 

 

47,137

 

 

 

(2,838

)

Net income attributable to Acadia

 

$

7,130

 

 

$

20,912

 

 

$

31,439

 

 

$

61,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: net income attributable to participating securities

 

 

(78

)

 

 

(219

)

 

 

(267

)

 

 

(642

)

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

 

$

7,052

 

 

$

20,693

 

 

$

31,172

 

 

$

60,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares for diluted earnings per share

 

 

81,591

 

 

 

83,733

 

 

 

82,080

 

 

 

83,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Earnings per share - basic and diluted (b)

 

$

0.09

 

 

$

0.25

 

 

$

0.38

 

 

$

0.73

 

 

6

 


 

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 December 31,

 

 

Year Ended

December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Acadia

 

$

7,130

 

 

$

20,912

 

 

$

31,439

 

 

$

61,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation of real estate and amortization of leasing costs (net of

   noncontrolling interests' share)

 

 

22,040

 

 

 

20,580

 

 

 

85,852

 

 

 

83,515

 

Impairment charge (net of noncontrolling interests' share)

 

 

 

 

 

 

 

 

 

 

 

1,088

 

Gain on sale (net of noncontrolling interests’ share)

 

 

 

 

 

(9,776

)

 

 

(994

)

 

 

(15,565

)

Income attributable to Common OP Unit holders

 

 

462

 

 

 

1,209

 

 

 

2,033

 

 

 

3,609

 

Distributions - Preferred OP Units

 

 

135

 

 

 

135

 

 

 

540

 

 

 

550

 

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

 

$

29,767

 

 

$

33,060

 

 

$

118,870

 

 

$

134,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations per Share - Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of Common Shares and Common OP Units (d)

 

 

87,212

 

 

 

88,990

 

 

 

87,728

 

 

 

88,998

 

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

 

$

0.34

 

 

$

0.37

 

 

$

1.35

 

 

$

1.51

 

 

7

 


 

ACADIA REALTY TRUST AND SUBSIDIARIES

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

(dollars in thousands)

 

 

 

Three Months Ended December 31,

 

 

Year Ended

December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated operating income (loss)

 

$

7,593

 

 

$

(5,064

)

 

$

27,541

 

 

$

17,319

 

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

9,984

 

 

 

8,470

 

 

 

34,343

 

 

 

33,756

 

Depreciation and amortization

 

 

30,794

 

 

 

27,689

 

 

 

117,549

 

 

 

104,934

 

Impairment charge

 

 

 

 

 

10,615

 

 

 

 

 

 

14,455

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(8,030

)

 

 

(6,439

)

 

 

(23,521

)

 

 

(21,110

)

Consolidated NOI

 

 

40,341

 

 

 

35,271

 

 

 

155,912

 

 

 

149,354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncontrolling interest in consolidated NOI

 

 

(10,583

)

 

 

(5,917

)

 

 

(37,496

)

 

 

(28,379

)

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

 

 

(2,852

)

 

 

(1,382

)

 

 

(9,790

)

 

 

(7,927

)

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

 

 

6,563

 

 

 

5,124

 

 

 

24,919

 

 

 

19,539

 

NOI - Core Portfolio

 

$

33,469

 

 

$

33,096

 

 

$

133,545

 

 

$

132,587

 

 

8

 


 

ACADIA REALTY TRUST AND SUBSIDIARIES

Consolidated Balance Sheets (a)  

(dollars in thousands)

 

 

 

As of

 

 

 

December 31,

2018

 

 

December 31,

2017

 

ASSETS

 

 

 

 

 

 

 

 

Investments in real estate, at cost

 

 

 

 

 

 

 

 

Land

 

$

710,469

 

 

$

658,835

 

Buildings and improvements

 

 

2,745,982

 

 

 

2,538,338

 

Construction in progress

 

 

44,092

 

 

 

18,642

 

Properties under capital lease

 

 

76,965

 

 

 

76,965

 

 

 

 

3,577,508

 

 

 

3,292,780

 

Less: Accumulated depreciation

 

 

(416,657

)

 

 

(339,862

)

Operating real estate, net

 

 

3,160,851

 

 

 

2,952,918

 

Real estate under development

 

 

120,297

 

 

 

173,702

 

Net investments in real estate

 

 

3,281,148

 

 

 

3,126,620

 

Notes receivable, net

 

 

109,613

 

 

 

153,829

 

Investments in and advances to unconsolidated affiliates

 

 

262,410

 

 

 

302,070

 

Other assets, net

 

 

208,570

 

 

 

214,959

 

Cash and cash equivalents

 

 

21,268

 

 

 

74,823

 

Rents receivable, net

 

 

62,191

 

 

 

51,738

 

Restricted cash

 

 

13,580

 

 

 

10,846

 

Assets of properties held for sale

 

 

 

 

 

25,362

 

Total assets

 

$

3,958,780

 

 

$

3,960,247

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Mortgage and other notes payable, net

 

$

1,017,288

 

 

$

909,174

 

Unsecured notes payable, net

 

 

533,257

 

 

 

473,735

 

Unsecured line of credit

 

 

 

 

 

41,500

 

Accounts payable and other liabilities

 

 

214,961

 

 

 

210,052

 

Capital lease obligation

 

 

71,111

 

 

 

70,611

 

Dividends and distributions payable

 

 

24,593

 

 

 

24,244

 

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

 

 

15,623

 

 

 

15,292

 

Total liabilities

 

 

1,876,833

 

 

 

1,744,608

 

Commitments and contingencies

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

 

Acadia Shareholders' Equity

 

 

 

 

 

 

 

 

Common shares, $0.001 par value, authorized 200,000,000 shares, issued and outstanding 81,557,472 and 83,708,140 shares, respectively

 

 

82

 

 

 

84

 

Additional paid-in capital

 

 

1,548,603

 

 

 

1,596,514

 

Accumulated other comprehensive income

 

 

516

 

 

 

2,614

 

Distributions in excess of accumulated earnings

 

 

(89,696

)

 

 

(32,013

)

Total Acadia shareholders’ equity

 

 

1,459,505

 

 

 

1,567,199

 

Noncontrolling interests

 

 

622,442

 

 

 

648,440

 

Total equity

 

 

2,081,947

 

 

 

2,215,639

 

Total liabilities and equity

 

$

3,958,780

 

 

$

3,960,247

 

 

9

 


 

ACADIA REALTY TRUST AND SUBSIDIARIES

Notes to Financial Highlights:

 

 

(a)

For additional information and analysis concerning the Company’s results of operations, reference is made to the Company’s Quarterly Supplemental Disclosure furnished on Form 8-K to the SEC and included 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 were exercised or converted into Common Shares. The effect of the conversion of Common OP Units is not reflected in the above table as they are exchangeable for Common Shares on a one-for-one basis. The income allocable to such units is allocated on the same basis and reflected as noncontrolling interests in the consolidated financial statements. As such, the assumed conversion of these 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. FFO 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 depreciated property, depreciation and amortization, and impairment of depreciable real estate. In addition, NOI excludes interest expense. 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. FFO does not represent cash generated from operations as defined by generally accepted accounting principles (“GAAP”) and is not indicative of cash available to fund all cash needs, including distributions. It 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. Consistent with the NAREIT definition, the Company defines FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of depreciated property, plus depreciation and amortization, impairment of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures.

 

(d)

In addition to the weighted-average Common Shares outstanding, basic and diluted FFO also assume full conversion of a weighted-average 4,906 thousand and 4,717 thousand OP Units into Common Shares for the quarters ended December 31, 2018 and 2017 and 4,942 thousand and 4,741 thousand OP Units into Common Shares for the year ended December 31, 2018 and 2017, respectively. Diluted FFO also includes: (i) the assumed conversion of Preferred OP Units into 499 thousand and 499 thousand Common Shares for the quarters ended December 31, 2018 and 2017 and 499 thousand and 505 thousand Common Shares for the year ended December 31, 2018 and 2017, respectively; and (ii) the effect of 215 thousand and 40 thousand restricted share units and LTIP units for the quarters ended December 31, 2018 and 2017 and 207 thousand and 69 thousand for the year ended December 31, 2018 and 2017, respectively.

 

(e)

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

 

10

 

akr-ex992_9.htm

 

 

 

Exhibit 99.2

ACADIA—REALTY TRUST—Q2 2018 SUPPLEMENTAL REPORTING INFORMATIO

 

 

 


 

 

 

 

Table of Contents

 

 

Supplemental Report – December 31, 2018

 

 

 

 

 

 

Section I - Fourth Quarter 2018 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

 

 

 

 

EBITDA

13

 

 

 

 

Same Property Net Operating Income

14

 

 

 

 

Fee Income

15

 

Section IV - Fund Information

 

 

Structured Financing

16

 

 

 

 

Other Information

 

 

Fund Overview

 

34

Transactional Activity

17

 

Fund Properties

 

35

2019 Guidance

18

 

Fund Lease Expirations

 

38

Net Asset Valuation Information

19

 

Development and Redevelopment Activity

 

39

Selected Financial Ratios

20

 

 

 

 

Debt Analysis

 

 

 

 

 

Summary

22

 

 

 

 

Detail

23

 

 

 

 

Maturities

25

 

Important Notes

 

41

 

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

 

 

 

 

 


 

 

 

 

Supplemental Report – December 31, 2018

 

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

 

Amy Racanello

 

Symbol AKR

 

 

Suite 300

 

Senior Vice President,

 

 

 

 

Rye, NY 10580

 

Capital Markets & Investments

 

 

 

 

 

 

(914) 288-3345

 

 

 

 

 

 

aracanello@acadiarealty.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analyst Coverage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank of America / Merrill Lynch

 

BTIG

 

KeyBanc Capital Markets, Inc.

 

 

Craig Schmidt - (646) 855-3640

 

Michael Gorman - (212) 738-6138

 

Todd Thomas - (917) 368-2286

 

 

craig.schmidt@baml.com

 

mgorman@btig.com

 

tthomas@key.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Green Street Advisors

 

Citigroup - Global Markets

 

J.P. Morgan Securities, Inc.

 

 

Daniel Busch - (949) 640-8780

 

Christy McElroy - (212) 816-6981

 

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

 

 

dbusch@greenstreetadvisors.com

 

christy.mcelroy@citi.com

 

michael.w.mueller@jpmorgan.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 


 

 

Market Capitalization

Supplemental Report – December 31, 2018

(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

 

 

81,557

 

 

 

 

 

 

 

 

 

 

Balance at 12/31/2017

 

 

83,708

 

 

 

4,716

 

 

 

88,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Operating Partnership ("OP") Units

 

 

5,030

 

 

 

 

 

 

 

 

 

 

Other

 

 

11

 

 

 

289

 

 

 

300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined Common Shares and OP Units

 

 

86,587

 

 

 

 

 

 

 

 

 

 

Share repurchases

 

 

(1,304

)

 

 

 

 

 

(1,304

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OP Conversions

 

 

36

 

 

 

(36

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share Price at December 31, 2018

 

$

23.76

 

 

 

 

 

 

 

 

 

 

Balance at 3/31/2018

 

 

82,451

 

 

 

4,969

 

 

 

87,420

 

 

 

83,438

 

 

 

83,438

 

 

 

89,067

 

 

 

89,067

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

13

 

 

 

18

 

 

 

31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Capitalization - Common Shares and OP Units

 

$

2,057,307

 

 

 

 

 

 

 

 

 

 

Share repurchases

 

 

(990

)

 

 

 

 

 

(990

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred OP Units

 

 

11,864

 

2

 

 

 

 

 

 

 

 

OP Conversions

 

 

29

 

 

 

(29

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity Capitalization

 

 

2,069,171

 

 

68%

 

 

69%

 

 

Balance at 6/30/2018

 

 

81,503

 

 

 

4,958

 

 

 

86,461

 

 

 

81,756

 

 

 

82,592

 

 

 

87,485

 

 

 

88,272

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

1

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt Capitalization

 

 

 

 

 

 

 

 

 

 

 

 

 

OP Conversions

 

 

46

 

 

 

(46

)