NEW YORK--(BUSINESS WIRE)--Dec. 18, 2008--Acadia Realty Trust (NYSE:AKR - "Acadia" or the "Company") announced
today that its Board of Trustees has declared a special dividend payable
to holders of its Common Shares of approximately $0.55 per share, or
$18,000,000 in the aggregate. The Company also announced as a result of
its review of its preferred equity and mezzanine investments, that it is
providing an impairment charge of $4.4 million against a mezzanine
investment.
Special Dividend
The special dividend, which is associated with taxable gains for 2008
arising from property dispositions, is payable on January 30, 2009, to
shareholders of record on December 31, 2008, and Acadia's Common Shares
will begin trading "ex-dividend" on December 29, 2008.
Acadia previously announced the declaration and payment of its regular
dividend for the quarter ended, December 31, 2008, of $0.21 per Common
Share payable on January 15, 2009 to holders of record as of December
31, 2008.
The special dividend will be payable in cash, Common Shares or in any
combination of cash and Common Shares. Subject to Acadia's right to pay
the entire dividend in cash, shareholders will have the option to make
an election to receive payment in cash or in Common Shares, however, the
aggregate amount of cash payable to shareholders, other than cash
payable in lieu of fractional shares, will not exceed $1,800,000. For
shareholders who do not make an election, Acadia reserves the right to
pay the dividend in the form of cash, Common Shares or any combination
of cash and Common Shares, in its sole discretion. As noted above,
Acadia reserves the right, in its sole discretion, to pay the entire
dividend in cash.
Acadia expects the special dividend to be a taxable dividend to its
shareholders, without regard to whether a particular shareholder
receives the dividend in the form of cash or shares. It therefore allows
Acadia to avoid corporate-level income and excise taxes for 2008,
preserving cash for other corporate purposes.
The number of shares issued in the special dividend will be calculated
based on the average of the volume weighted trading price per share of
Acadia's Common Shares on the New York Stock Exchange on January 16 and
20, 2009.
A prospectus and election form will be filed with the Securities and
Exchange Commission and will be mailed to shareholders of record
promptly after December 31, 2008. The prospectus will describe in more
detail the terms of the special dividend, including the ability of
shareholders to elect to receive the special dividend in the form of
cash or Acadia's Common Shares, and a limitation on the aggregate amount
of cash to be included in the special dividend as well as Acadia's
option to change the method of payment. The cash or share election must
be exercised and received by Acadia's transfer agent prior to 5:00 p.m.
(EST) on January 16, 2008. Acadia reserves the right, in its sole
discretion, to cancel the share election and pay the entire special
dividend in cash.
Registered shareholders with questions regarding the special dividend
may call American Stock Transfer & Trust Company, LLC, Acadia's transfer
agent, toll-free at 1-800-937-5449. If Common Shares are held through a
bank, broker or nominee, and shareholders have questions regarding the
special dividend; please contact such bank, broker or nominee, who will
also be responsible for communicating to you the election information
and submitting the election form on your behalf.
Impairment Charge
During 2004, Acadia provided a $3.0 million mezzanine loan to help fund
a redevelopment project of the retail complexes associated with seven
public rest stops along the toll roads in and around Chicago, Illinois
(the "Project"). This investment included a right of first offer to
acquire an ownership interest in the Project. As a result of economic
conditions, including the current disruption in the credit markets, the
owner has experienced difficulty in stabilizing and refinancing the
Project. The owner is currently in default under the first mortgage
loan, but has entered into a standstill agreement with the first
mortgage lender, as well as with the Company. While Acadia has been
engaged in discussions with the owner and the first mortgage lender to
restructure the debt and provide a portion of the additional capital
required to stabilize the Project, these discussions have not, to date,
resulted in a successful resolution. Accordingly, the Company is
providing an impairment charge equal to 100% of its original mezzanine
loan and the related accrued interest aggregating $4.4 million, or
approximately $0.13 per share.
As a result of this charge, the Company is revising its projected 2008
annual funds from operations ("FFO") to a range of $1.17 to $1.22 per
share. Excluding this asset impairment, the Company's projected FFO
would have been consistent with its previous FFO guidance of $1.30 to
$1.35 per share. Earnings per share ("EPS") is currently projected to
range from $0.92 to $1.02, compared with the previous forecast of $1.05
to $1.15. Please see Acadia's third quarter earnings press release dated
October 29, 2008 for a reconciliation of GAAP net income to FFO for the
three and nine months ended September 30, 2008.
As of September 30, 2008, Acadia's preferred equity investments, notes
receivable and accrued interest thereon aggregated $133.9 million. Of
this amount, $85.3 million represents investments collateralized by a
senior preferred equity interest in a portfolio of 23 properties located
primarily in Georgetown, Washington D.C. and by an assignment of the
ownership interests in a mixed-use retail and residential development at
72nd Street and Broadway on the Upper West Side of Manhattan.
Of the remaining $44.2 million (net of the $4.4 million reserve), $27.3
million represents first mortgage loans. Based on management's review of
the underlying collateral and security of the preferred equity and
mezzanine portfolio, it has determined that no additional reserves are
currently required.
Acadia Realty Trust, headquartered in White Plains, NY, is a fully
integrated, self-managed and self-administered equity REIT focused
primarily on the ownership, acquisition, redevelopment and management of
retail and mixed-use properties including neighborhood and community
shopping centers located in urban and suburban markets in major
metropolitan areas.
Certain matters in this press release may constitute forward-looking
statements within the meaning of the federal securities laws, including
statements relating to our future financial results, and as such may
involve known and unknown risks, uncertainties and other factors which
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.
Factors that could cause or contribute to such differences include, but
are not limited to, the possibility of additional defaults by borrowers
in connection with the Company's preferred equity and mezzanine loan
portfolio and those discussed under the headings "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and "Risk Factors" in the Company's most recent annual
report on Form 10-K filed with the SEC on February 29, 2008 (the "Form
10-K") and other periodic reports filed with the SEC, including risks
related to: (i) the Company's reliance on revenues derived from major
tenants; (ii) the Company's limited control over joint venture
investments; (iii) the Company's partnership structure; (iv) real estate
and the geographic concentration of our properties; (v) market interest
rates; (vi) leverage; (vii) liability for environmental matters;(viii)
the Company's growth strategy; (ix) the Company's status as a REIT (x)
uninsured losses and (xi) 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.
CONTACT: Acadia Realty Trust
Jon Grisham, 914-288-8100
Source: Acadia Realty Trust