|ACADIA REALTY TRUST filed this Form 8-K on 04/25/2019|
|ACADIA REALTY TRUST filed this Form 8-K on 04/25/2019|
RYE, NY (April 24, 2019) - Acadia Realty Trust (NYSE:AKR) (“Acadia” or the “Company”) today reported operating results for the quarter ended March 31, 2019. 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”), through which the Company 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").
“I am pleased to report that 2019 is off to a strong start. This quarter our Core Portfolio has again delivered strong growth,” stated Kenneth F. Bernstein, President and CEO of Acadia Realty Trust. “Importantly, we are selectively adding high-quality street retail properties to our Core Portfolio. We are also seeing an increase in compelling investment opportunities in our fund business. Thus, by maintaining a healthy balance sheet, with plenty of dry powder, along with strong internal growth over the next several years, we are well positioned to create meaningful value for the benefit of all of our stakeholders.”
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 attributable to common shareholders for the quarter ended March 31, 2019 was $12.2 million, or $0.15 per share, including $5.8 million, or $0.07 per share, related to a previously-announced accelerated tenant recapture. Net income attributable to common shareholders for the quarter ended March 31, 2018 was $7.4 million, or $0.09 per share.
FFO for the quarter ended March 31, 2019 was $34.7 million, or $0.39 per share, including $5.8 million, or $0.07 per share related to a previously-announced accelerated tenant recapture. FFO for the quarter ended March 31, 2018 was $29.1 million, or $0.33 per share.
Core Operating Results
Driven by its street and urban portfolio, the Company had strong same-property net operating income growth of 4.6% for the first quarter (before redevelopments). This was driven by the profitable re-leasing of key street and urban properties, contractual growth and better than expected credit loss.
To date, the Company has executed several key leases including Parachute Homes and Lively at Lincoln Park (Chicago) and Monica Vinader at Madison Avenue (New York).
Driven primarily by the previously discussed expiration of H&M’s lease and successful re-tenanting to Uniqlo this quarter at State Street (Chicago), the Core Portfolio was 93.3% occupied and 94.6% leased as of March 31, 2019. The leased rate includes space that is leased but not yet occupied and excludes development and redevelopment properties.
During the first quarter, the Company generated a 26.9% and 8.3% increase in rent on a GAAP and cash basis, respectively, on two conforming new leases aggregating approximately 4,000 square feet within its street and urban portfolio.
During the first quarter, the Company acquired, or entered into contracts to acquire, a portfolio of six New York City street retail assets for $96 million (“Soho Portfolio”), of which $32 million was completed as of March 31, 2019. The Soho Portfolio consists of six properties on Mercer and Greene Streets: two of the most dominant and in-demand streets in the Soho submarket of Manhattan. These accretive acquisitions are expected to provide strong contractual growth and lease-up opportunities. During the quarter, the Company acquired 51 and 53 Greene Street. The properties are leased to Frame Denim and A.L.C.
The Company expects to complete the remaining portion of the Soho Portfolio in phases through early 2020. No assurance can be given that the Company will successfully close on the remaining acquisitions under contract, which are subject to customary closing conditions.
Acquisitions completed to date were match-funded with equity raised under the Company’s ATM program at an average price per share of approximately $29. The Company has sufficient liquidity through a combination of anticipated proceeds from its structured finance portfolio, capital recycling from its fund business and available capacity on its lending facilities to fund the remaining acquisition.
The Company completed the following acquisition during the first quarter 2019:
Family Center at Riverdale, Riverdale, UT (Fund V). In March 2019, Fund V and its venture partner, CCA Acquisition Company, acquired a 428,000-square foot shopping center, located in Riverdale, UT for $48.5 million. This Target-anchored property is 97% leased.
Fund V has an acquisition pipeline with approximately $130.0 million of investments subject to contracts and agreements in principle.
The Company completed the following disposition during the first quarter 2019:
3104 M Street, Washington, DC (Fund III). In January, Fund III’s 80%-owned venture sold its 3104 M Street property located in Washington, DC for $10.5 million ($8.4 million at the Fund’s share).
By match-funding its core acquisition activity, the Company has further strengthened its already-solid, low-leveraged balance sheet. As of March 31, 2019, the Company’s net debt to EBITDA ratio for the Core Portfolio was 5.2x, with approximately 96% of its Core Portfolio debt fixed at an average rate of 3.8% with a weighted-average maturity of 5.6 years.
The Company reaffirms 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 reaffirms 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.
Please refer to the Company’s fourth quarter 2018 supplemental information package for additional details regarding its previously-announced 2019 guidance.
Management will conduct a conference call on Thursday, April 25, 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, April 25, 2019
Time: 12:00 PM ET
Passcode: “Acadia Realty” or “6454798”
Webcast (Listen-only): www.acadiarealty.com under Investors, Presentations & Events
Available Through: Thursday, May 2, 2019
Webcast Replay: www.acadiarealty.com under Investors, Presentations & Events
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 19, 2019 (“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.
Consolidated Statements of Operations (a)
(dollars and Common Shares in thousands, except per share data)
Reconciliation of Consolidated Net Income to Funds From Operations (a, d)
(dollars and Common Shares and Units in thousands, except per share data)
Reconciliation of Consolidated Operating Income to Net Property Operating Income (“NOI”) (a)
(dollars in thousands)
Consolidated Balance Sheets (a)
(dollars in thousands)
Notes to Financial Highlights: