SEC Filings

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

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

As of March 31, 2019, we own or have an ownership interest in 174 properties held through our Core Portfolio and Funds. Our Core Portfolio consists of those properties either 100% owned, or partially owned through joint venture interests, by the Operating Partnership or its subsidiaries, not including those properties owned through our Funds. These properties primarily consist of street and urban retail, and dense suburban shopping centers. Our Funds are investment vehicles through which our Operating Partnership and outside institutional investors invest in primarily opportunistic and value-add retail real estate. Currently, we have active investments in four Funds. A summary of our wholly-owned and partially-owned retail properties and their physical occupancies at March 31, 2019 is as follows:

 

 

 

Number of Properties

 

 

Operating Properties

 

 

 

Development or

Redevelopment

 

 

Operating

 

 

GLA

 

 

Occupancy

 

Core Portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chicago Metro

 

 

2

 

 

 

33

 

 

 

696,069

 

 

 

86.7

%

New York Metro

 

 

 

 

 

22

 

 

 

327,394

 

 

 

91.0

%

San Francisco Metro

 

 

1

 

 

 

1

 

 

 

148,832

 

 

 

100.0

%

Washington DC Metro

 

 

 

 

 

28

 

 

 

323,580

 

 

 

96.0

%

Boston Metro

 

 

 

 

 

3

 

 

 

55,276

 

 

 

100.0

%

Suburban

 

 

2

 

 

 

29

 

 

 

4,258,221

 

 

 

93.7

%

Total Core Portfolio

 

 

5

 

 

 

116

 

 

 

5,809,372

 

 

 

93.1

%

Acadia Share of Total Core Portfolio

 

 

5

 

 

 

116

 

 

 

5,188,320

 

 

 

93.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fund Portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fund II

 

 

 

 

 

1

 

 

 

475,000

 

 

 

64.2

%

Fund III

 

 

1

 

 

 

4

 

 

 

173,551

 

 

 

75.6

%

Fund IV

 

 

1

 

 

 

38

 

 

 

2,664,552

 

 

 

85.0

%

Fund V

 

 

 

 

 

8

 

 

 

2,526,092

 

 

 

96.6

%

Total Fund Portfolio

 

 

2

 

 

 

51

 

 

 

5,839,195

 

 

 

88.0

%

Acadia Share of Total Fund Portfolio

 

 

2

 

 

 

51

 

 

 

1,268,340

 

 

 

87.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Core and Funds

 

 

7

 

 

 

167

 

 

 

11,648,567

 

 

 

90.5

%

Acadia Share of Total Core and Funds

 

 

7

 

 

 

167

 

 

 

6,456,660

 

 

 

92.2

%

 

The majority of our operating income is derived from rental revenues from operating properties, including expense recoveries from tenants, offset by operating and overhead expenses.

Our primary business objective is to acquire and manage commercial retail properties that will provide cash for distributions to shareholders while also creating the potential for capital appreciation to enhance investor returns. We focus on the following fundamentals to achieve this objective:

 

Own and operate a Core Portfolio of high-quality retail properties located primarily in high-barrier-to-entry, densely-populated metropolitan areas and create value through accretive development and re-tenanting activities coupled with the acquisition of high-quality assets that have the long-term potential to outperform the asset class as part of our Core asset recycling and acquisition initiative.

 

Generate additional external growth through an opportunistic yet disciplined acquisition program within our Funds. We target transactions with high inherent opportunity for the creation of additional value through:

 

value-add investments in street retail properties, located in established and “next generation” submarkets, with re-tenanting or repositioning opportunities,

 

opportunistic acquisitions of well-located real-estate anchored by distressed retailers, and

 

other opportunistic acquisitions which may include high-yield acquisitions and purchases of distressed debt.

Some of these investments historically have also included, and may in the future include, joint ventures with private equity investors for the purpose of making investments in operating retailers with significant embedded value in their real estate assets.

 

Maintain a strong and flexible balance sheet through conservative financial practices while ensuring access to sufficient capital to fund future growth.

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