RYE, N.Y.--(BUSINESS WIRE)--Jul. 25, 2017-- Acadia Realty Trust (NYSE:AKR) (“Acadia” or the “Company”) today reported operating results for the quarter ended June 30, 2017. 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 meaningful concentrations of 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 FFO and net income.

Highlights

• Earnings: Generated earnings per share of $0.14 for the second quarter; funds from operations (“FFO”) per share of $0.37 for the second quarter, and FFO of $0.38 per share before acquisition costs
• Core Portfolio Operating Results: Generated same-property net operating income growth of 1.8% for the second quarter; reported a leased rate of 95.2% as of quarter end
• Fund Acquisitions: Fund V acquired its first investment during the second quarter for $35 million; Fund V also has $44 million of acquisitions under contract
• Fund Dispositions: Completed a $6 million Fund IV disposition during the second quarter, resulting in a 29% IRR and 2.2x multiple; additionally, Fund III sold a $22 million property in July 2017, resulting in a 14% IRR and 1.6x multiple; Fund II also has $96 million under contract for sale
• Balance Sheet: Maintained conservative leverage levels during 2017, as indicated by a net debt to EBITDA ratio of 4.5x and a fixed-charge coverage ratio of 4.5x, both for the Core Portfolio; Acadia did not issue any equity during the second quarter

“Our company continues to successfully execute its dual-platform strategy, as reflected in our solid second-quarter results,” stated Kenneth F. Bernstein, President and CEO of Acadia Realty Trust. “Over the past several years, we have built a high-quality core portfolio, with a concentration of live-work-play, urban and street-retail locations in our nation’s key gateway cities. Not only is there significant growth to harvest within our existing core and fund investments, but also, we have dry powder, in both platforms, that enables us to opportunistically respond to overreactions to today’s cyclical headwinds and secular shifts. All in all, we remain well positioned and active.”

FINANCIAL RESULTS

Net income attributable to common shareholders for the quarter ended June 30, 2017 was $12 million, or $0.14 per share. Net income attributable to common shareholders for the quarter ended June 30, 2016 was $18 million, or $0.24 per share, which included $4 million, or $0.06 per share, of gain from a Fund property disposition. Net income attributable to common shareholders for the six months ended June 30, 2017 was $27 million, or $0.33 per share. Net income attributable to common shareholders for the six months ended June 30, 2016 was $46 million, or $0.64 per share, which included $19 million, or $0.27 per share, of gain from two Fund property dispositions.

FFO for the quarter ended June 30, 2017 was $33 million, or $0.37 per share, which was net of $0.2 million of acquisition costs. This compares to FFO for the quarter ended June 30, 2016 of $29 million, or $0.37 per share, which was net of $0.7 million of acquisition costs. FFO for the six months ended June 30, 2017 was $69 million, or $0.77 per share, which was net of $0.3 million of acquisition costs. This compares to FFO for the six months ended June 30, 2016 of $60 million, or $0.78 per share, which was net of $0.9 million of acquisition costs.

CORE PORTFOLIO

Core Operating Results

Same-property NOI in the Core Portfolio increased 1.8% for the quarter ended June 30, 2017, compared to 2016, excluding redevelopment activities. The Company reaffirms its previously-announced guidance for full-year same-property NOI growth of 0.0% to 2.0%.

The Core Portfolio was 95.0% occupied and 95.2% leased as of June 30, 2017, compared to 95.6% occupied and 95.7% leased as of March 31, 2017. The leased rate includes space that is leased but not yet occupied.

During the quarter, the Company generated a 14.6% increase in average rents on a GAAP basis, and a 9.5% increase on a cash basis, on 20 new and renewal leases aggregating approximately 173,000 square feet.

FUND PLATFORM

Fund Acquisitions

Through June 30, 2017, the Company has completed $71 million of Fund acquisitions, including $35 million completed during second quarter 2017 as follows:

Plaza Santa Fe, Santa Fe, NM (Fund V). In June 2017, Acadia acquired a 230,000 square-foot suburban shopping center in Santa Fe, NM for $35 million. The property is 99% leased and key tenants include TJ Maxx, Ross Dress for Less, PetSmart and Ulta. Staples, recently, did not exercise its option, and the suite was immediately filled by Total Wine at a higher rent. This investment is consistent with the Fund platform’s high-yield opportunistic strategy.

Shaw's Plaza - Windham, Windham, ME (Fund IV). In June 2017, Acadia opportunistically acquired a 124,000 square-foot grocery-anchored property in Windham, ME. As previously reported, Fund IV made a $9 million loan on the property as part of its acquisition of the Northeast Grocery Portfolio in October 2016. As such, this acquisition is excluded from the above volume metrics.

Fund V also has $44 million of acquisitions under contract (the “Pending Acquisition Amount”). As the Pending Acquisition Amount is subject to customary closing conditions, no assurance can be given that the Company will successfully close on the Pending Acquisition Amount.

Fund Dispositions

Through June 30, 2017, the Company has completed $53 million of Fund dispositions, including $6 million completed during second quarter 2017 as follows:

1701 Belmont Ave, Baltimore, MD (Fund IV). In June 2017, Fund IV, in partnership with MCB Real Estate, completed the sale of 1701 Belmont Ave, a 59,000-square foot property in Baltimore, MD, for $6 million. In December 2012, the fund opportunistically acquired this high-yield property, which was fully leased to Best Buy, for $5 million. Best Buy’s lease expired in January 2017, and the next use is expected to be self-storage. This sale generated a 29% IRR and 2.2x multiple on the fund’s equity investment. During the 4.6-year hold period, the property’s net operating income returned 79% of the original purchase price.

In July 2017, the Company completed $22 million of Fund dispositions as follows:

New Hyde Park Shopping Center, New Hyde Park, NY (Fund III). In July 2017, Fund III completed the sale of New Hyde Park Shopping Center, a 32,000-square foot retail strip center in New Hyde Park, NY, for $22 million. This compares to an all-in cost basis of $18 million. During its 5.5-year hold period, the fund recaptured and re-tenanted a 16,000-square foot, below-market Annie Sez with PetSmart and Chop’t, completed a façade renovation, and executed new small-shop leases with Smashburger, European Wax Center, and Club Pilates. This sale generated a 14% IRR and 1.6x multiple on the fund’s equity investment.

Fund II also has $96 million under contract for sale (the “Pending Disposition Amount”). As the Pending Disposition Amount is subject to customary closing conditions, no assurance can be given that the Company will successfully close on the Pending Disposition Amount.

Fund Promote

During the six months ended June 30, 2017, the Company generated $0.6 million (less than $0.01 per share) of net promote income from Fund III. No promote was earned during the second quarter of 2017.

BALANCE SHEET

The Company did not issue any equity during 2017.

Additionally, the Company maintained its solid, low-leveraged balance sheet. As of June 30, 2017, the Company’s net debt to EBITDA ratio for the Core Portfolio was 4.5x. Including its pro-rata share of Fund debt, the Company’s net debt to EBITDA ratio was 5.6x over the same period.

GUIDANCE

The Company is confirming its full-year 2017 guidance for FFO per share of $1.44 to $1.54 and for earnings per share of $0.58 to $0.63. The guidance is before any acquisition-related costs, and gains/losses on sale or impairment of depreciated and non-operating properties.

CONFERENCE CALL

Management will conduct a conference call on Wednesday, July 26, 2017 at 12:00 PM ET to review the Company’s earnings and operating results. Dial-in and webcast information is listed below.

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 24, 2017 (“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/20170725006502/en/

Source: Acadia Realty Trust

Acadia Realty Trust
Amy L. Racanello, 914-288-8100