WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Dec. 4, 2014--
Acadia Realty Trust (NYSE:AKR) today announced the core-portfolio
acquisition of an 88.4% interest in 840 N Michigan Ave, an 87,000 square
foot, four-story street-retail property located in Chicago, Illinois,
for $144.3 million.
“Our core portfolio growth strategy centers on the selection of
high-quality, retail real estate locations, primarily in our nation’s
top urban markets, where we are able to achieve strong rental growth,
today, and where we believe we are better positioned to create outsized
shareholder value over the next 5, 10, and 15 years,” stated Kenneth F.
Bernstein, President and CEO of Acadia Realty Trust. “Since 2010, we
have more than doubled the size of our core portfolio, in a manner
consistent with this strategy, equating to a compounded annual growth
rate in excess of 20%. Including this transaction, our 2014 core
acquisition volume now totals $450.4 million, consistent with our
upwardly-revised guidance. Given retailing’s continued evolution,
urban/street retail’s more robust growth profile, and the relative
pricing of alternative investments, we remain active acquirers of these
types of high-barrier-to-entry, irreplaceable assets. In fact, we are
very pleased with our 2015 pipeline, which has already begun to take
shape.”
The Magnificent Mile is the stretch of Michigan Ave that runs from the
Chicago River north to Oak St within Chicago’s Gold Coast. Known for its
luxury and mainstream retailers and world-class hotels, restaurants, and
residential condominiums, the Magnificent Mile is the premier tourist
and shopping destination in Chicago.
840 N Michigan Ave anchors a prime corner of the Magnificent Mile and is
located directly across the street from Water Tower Place. The property
is 100% occupied by H&M and Verizon. H&M has operated at the property
since 2003 and recently committed to a new 10-year term that expands its
selling space by approximately 10,000 square feet into the below-grade
concourse level. Its flagship store now totals 59,500 square feet.
Verizon selected this location to create its newest two-level
Destination Store, which – at approximately 10,000 square feet of
selling space – is reportedly its largest store in the country and one
of only two such experience stores.
“Flagship locations, such as 840 N Michigan Ave, located in
live-work-play-visit cities, enable our retailers to pair highly-visible
branding with access to thousands of shoppers daily. In our experience,
retailers have been highly motivated to invest their own dollars to
uniquely merchandise these flagship stores,” stated Joel Braun,
Executive Vice President and Chief Investment Officer of Acadia Realty
Trust. “We are excited to be partnering on this transaction with four of
the property’s original developers and existing owners – Nancy Pacher,
Camille Julmy, and Bob Wislow of CBRE|U.S. Equities Realty, along with
Doris Holleb. We share their enthusiasm for the Magnificent Mile and are
committed to together maintaining this property’s top-tier status, as
they certainly have during their 35 years of ownership.”
“In 1979, U.S. Equities Realty partnered with Marshall Holleb and Robert
Gerstein to purchase the former Bonwit Teller building, which, at the
time, housed Crate & Barrel’s flagship store. Then, in 1990, that same
partnership completely demolished, reimagined, and modernized the
property to create flagship space for the trio of Escada, FAO Schwarz,
and Waterstones Booksellers,” stated Camille Julmy, Vice Chairman of
CBRE, Inc. “More recently, we worked with H&M to increase their selling
space at this productive store and also brought in Verizon, whose
engaging Destination Store concept also suits this landmark location.
Following the successful completion of this most recent re-tenanting, we
felt that the time was right to recapitalize. Given its complementary,
high-street portfolio and extensive footprint in Chicago’s Gold Coast
and Lincoln Park neighborhoods, Acadia was a natural choice as our
majority partner. We look forward to a long relationship with them.”
Acadia acquired this asset in a private negotiation and funded its
investment using a combination of cash, operating partnership units (“OP
units”), and the assumption of $48.6 million of pro-rata debt secured by
the property. 840 N Michigan Ave is the third street-retail property
that Acadia has acquired using OP units over the past 12 months.
Acadia and CBRE|U.S. Equities Realty will jointly provide property
management services. CBRE|U.S. Equities Realty, along with Doris Holleb
and Robert Gerstein, represented the sellers in this transaction.
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
and making profitable opportunistic and value-add investments through
its series of discretionary, institutional funds. For further
information, please visit www.acadiarealty.com.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company
headquartered in Los Angeles, is the world’s largest commercial real
estate services and investment firm (in terms of 2013 revenue). The
Company has approximately 44,000 employees (excluding affiliates), and
serves real estate owners, investors and occupiers through approximately
350 offices (excluding affiliates) worldwide. CBRE offers strategic
advice and execution for property sales and leasing; corporate services;
property, facilities and project management; mortgage banking; appraisal
and valuation; development services; investment management; and research
and consulting. Please visit our website at www.cbre.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
opportunities arising from continued economic uncertainty. 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 26,
2014 (“Form 10-K”) and other periodic reports filed with the SEC,
including risks related to: (i) the current global financial environment
and its effect on retail tenants; (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 and (xii) 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.
Source: Acadia Realty Trust
Acadia Realty Trust
Jon Grisham, 914-288-8100