SEC Filings

10-Q
ACADIA REALTY TRUST filed this Form 10-Q on 04/25/2019
Entire Document
 

ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

 

For valuation of the 2019 Performance Shares, a Monte Carlo simulation was used to estimate the fair values based on probability of satisfying the market conditions and the projected share prices at the time of payments, discounted to the valuation dates over the three-year performance periods. The assumptions include volatility (19.60%) and risk-free interest rates (2.5%).

The total value of the above Restricted Share Units and LTIP Units as of the grant date was $ 11.1 million. Total long-term incentive compensation expense, including the expense related to the Share Incentive Plan, was $1.9 million and $2.2 million for the three months ended March 31, 2019 and 2018, respectively and is recorded in General and Administrative on the Consolidated Statements of Income.

In addition, members of the Board of Trustees (the “Board”) have been issued shares and units under the Share Incentive Plan. During 2018, the Company issued 17,427 LTIP Units and 17,050 Restricted Shares to Trustees of the Company in connection with Trustee fees. Vesting with respect to 8,949 of the LTIP Units and 5,181 of the Restricted Shares will be on the first anniversary of the date of issuance and 8,478 of the LTIP Units and 11,869 of the Restricted Shares vest over three years with 33% vesting on each of the next three anniversaries of the issuance date. The Restricted Shares do not carry voting rights or other rights of Common Shares until vesting and may not be transferred, assigned or pledged until the recipients have a vested non-forfeitable right to such shares. Dividends are not paid currently on unvested Restricted Shares, but are paid cumulatively from the issuance date through the applicable vesting date of such Restricted Shares. Total trustee fee expense, including the expense related to the Share Incentive Plan, was $0.3 million for each of the three months ended March 31, 2019 and 2018.

In 2009, the Company adopted the Long-Term Investment Alignment Program (the “Program”) pursuant to which the Company may grant awards to employees, entitling them to receive up to 25% of any potential future payments of Promote to the Operating Partnership from Funds III, IV and V. The Company has granted such awards to employees representing 25% of the potential Promote payments from Fund III to the Operating Partnership, 22.8% of the potential Promote payments from Fund IV to the Operating Partnership and 2.2% of the potential Promote payments from Fund V to the Operating Partnership. Payments to senior executives under the Program require further Board approval at the time any potential payments are due pursuant to these grants. Compensation relating to these awards will be recognized in each reporting period in which Board approval is granted.

As payments to other employees are not subject to further Board approval, compensation relating to these awards will be recorded based on the estimated fair value at each reporting period in accordance with ASC Topic 718, Compensation– Stock Compensation. The awards in connection with Fund IV and Fund V were determined to have no intrinsic value as of March 31, 2019.

No compensation expense was recognized for the three months ended March 31, 2019 and 2018, respectively, related to the Program in connection with Fund III, Fund IV or Fund V.

A summary of the status of the Company’s unvested Restricted Shares and LTIP Units is presented below:

 

Unvested Restricted Shares and LTIP Units

 

Common

Restricted

Shares

 

 

Weighted

Grant-Date

Fair Value

 

 

LTIP Units

 

 

Weighted

Grant-Date

Fair Value

 

Unvested at January 1, 2018

 

 

41,327

 

 

$

26.92

 

 

 

910,099

 

 

$

28.28

 

Granted

 

 

22,817

 

 

 

23.65

 

 

 

425,880

 

 

 

26.80

 

Vested

 

 

(25,261

)

 

 

30.79

 

 

 

(431,827

)

 

 

29.72

 

Forfeited

 

 

(428

)

 

 

27.25

 

 

 

(12,266

)

 

 

28.57

 

Unvested at December 31, 2018

 

 

38,455

 

 

 

22.44

 

 

 

891,886

 

 

 

26.87

 

Granted

 

 

8,041

 

 

 

30.83

 

 

 

330,718

 

 

 

33.09

 

Vested

 

 

(7,288

)

 

 

29.87

 

 

 

(275,447

)

 

 

30.52

 

Forfeited

 

 

 

 

 

 

 

 

(3,588

)

 

 

27.55

 

Unvested at March 31, 2019

 

 

39,208

 

 

$

22.78

 

 

 

943,569

 

 

$

27.98

 

 

The weighted-average grant date fair value for Restricted Shares and LTIP Units granted for the three months ended March 31, 2019 and the year ended December 31, 2018 were $33.04 and $26.64, respectively. As of March 31, 2019, there was $21.5 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Share Incentive Plan. That cost is expected to be recognized over a weighted-average period of 1.9 years. The total fair value of Restricted Shares that vested for the three months ended March 31, 2019 and the year ended December 31, 2018, was $0.2 million and $0.8 million, respectively. The total fair value of LTIP Units that vested during the three months ended March 31, 2019 and the year ended December 31, 2018, was $8.4 million and $12.8 million, respectively.


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