RYE, N.Y.--(BUSINESS WIRE)--Jan. 18, 2017--
Acadia Realty Trust (NYSE:AKR) (“Acadia” or the “Company”) today
announced that it completed $1.1 billion of total transactions during
2016, comprised of $627 million of core acquisitions, $261 million of
fund acquisitions, and $212 million of fund dispositions.
During the fourth quarter, the Company completed $395 million of total
transactions, comprised of $141 million of core acquisitions, $196
million of fund acquisitions, and $58 million of fund dispositions.
In addition, looking ahead, the Company’s transaction pipeline currently
includes $35 million of fund acquisitions and $48 million of fund
dispositions. Although no assurance can be given, all of these
transactions are anticipated to close during first quarter 2017.
During 2016, the Company completed $627 million of previously-announced
core acquisitions, of which approximately 70% were street retail and 30%
were urban retail. All were completed within five key gateway markets –
New York, NY; Chicago, IL; San Francisco, CA; Washington, DC; and
Boston, MA – where more than 85% of Acadia’s total core portfolio is now
As anticipated, during the fourth quarter, Acadia closed on the $141
million acquisition of 555 9th St, an urban retail property
located in San Francisco.
Acquisition Matchfunding & Balance Sheet
During 2016, Acadia fueled all of its acquisition activities by issuing
$481 million of equity, net of related costs, via: (i) a
third-quarter block trade ($172 million), (ii) its at-the-market
(“ATM”) facility ($156 million), (iii) a public offering on a
forward basis ($125 million, of which the final $95 million was settled
during the fourth quarter in connection with the acquisition of 555 9th
St), and (iv) issuance of operating-partnership units ($28
million). In the aggregate, this new capital was raised at an average
gross price of $35.25 per unit/share ($34.72 per unit/share net of
Fund Acquisitions – Closed
During 2016, Acadia, on behalf of Fund IV, completed $261 million of
opportunistic and value-add investments. Of this amount, $196 million
was completed during the fourth quarter, as discussed below:
Northeast Grocery Portfolio, Various U.S. In October 2016, Fund
IV acquired a portfolio of seven grocery-anchored shopping centers,
totaling 1.1 million square feet, for $83 million. Additionally, Fund IV
made a short-term, $9 million loan to the seller on an eighth
grocery-anchored center (124,300 square feet), with an opportunity to
purchase the property. The portfolio is located throughout the
Northeast: Maine (five assets), Pennsylvania (two assets), and New York
(one asset). The properties have excellent visibility and access to
major thoroughfares and provide essential products and services to
regional and urban areas. The grocery anchors include Hannaford, Price
Chopper, and Shaw’s. The portfolio’s leased rate is 89%. This investment
is consistent with the Fund platform’s high-yield opportunistic strategy.
717 N Michigan Ave, Gold Coast, Chicago, IL. In December 2016,
Fund IV acquired a 61,600-square foot, four-story street-retail
property, located in Chicago, IL, for $104 million. This flagship
property anchors a prime corner of the Magnificent Mile, one of the
nation’s premier shopping districts. Neighboring retailers include Saks
Fifth Avenue, Zara, Tiffany & Co., Stuart Weitzman, and Brooks Brothers.
The property is 25% leased to The Disney Store, who has operated at the
property since 1999. Acadia intends to redevelop the balance of the
property, which was previously occupied by Saks Fifth Avenue Men’s Store.
Fund Acquisitions – Pipeline
As previously reported, Acadia has entered into a contract to acquire a
high-yielding shopping center, on behalf of Fund IV, for $35 million.
Although no assurance can be given, this transaction is anticipated to
close during first quarter 2017.
As of the third quarter, this pipeline investment, together with the
Northeast Grocery Portfolio and 717 N Michigan Ave, were included in
Acadia’s disclosed $231 million fund acquisition pipeline.
Fund Platform Dry Powder
As previously announced, Acadia has approximately $1.5 billion of buying
power, on a leveraged basis, through its newly-raised Fund V. This fund,
which raised $520 million of total capital commitments during 2016, is
the fifth in a series of institutional funds dedicated to making
opportunistic and value-add investments in retail real estate.
Fund Dispositions – Closed
During 2016, the Company completed $212 million of dispositions on
behalf of Fund III. Of this amount, $58 million was completed during the
fourth quarter, as discussed below:
Cortlandt Town Center, Mohegan Lake, NY. In December 2016, Fund
III successfully completed the sale of its remaining 35% interest in
Cortlandt Town Center, a 641,000-square foot power center located in
Westchester County, NY, for $58 million. This equates to a $165 million
valuation for 100% of the property, compared to Fund III’s all-in cost
basis of $95 million. In January 2009, Fund III acquired the property
for $78 million. At the time, the property was 84% occupied, due to the
bankruptcies of junior-anchors Linens ‘n Things and Levitz Furniture.
During its 7.9-year hold period, Fund III successfully increased the
property’s occupancy to 97%. In January 2016, the fund sold a 65%
interest in this property to the same institutional investor at the same
pricing. Fund III has now realized a 43% IRR and 3.5x multiple on
its total equity investment in this asset.
Fund Dispositions – Pipeline
During fourth quarter 2016, Acadia entered into contracts to sell two
fund investments, one each from Fund III and Fund IV, for an aggregate
$48 million. Although no assurance can be given, both transactions are
anticipated to close during first quarter 2017.
Fund III Promote
During 2016, Fund III generated approximately $10.3 million ($0.13 per
share) of net promote income for the Company; of this amount,
approximately $3.4 million ($0.04 per share) was generated during the
fourth quarter by sale and refinancing activities.
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
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 19, 2016 (“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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170118006326/en/
Source: Acadia Realty Trust
Acadia Realty Trust
Amy L. Racanello, 914-288-8100