WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Jan. 30, 2014--
Acadia Realty Trust (NYSE:AKR) today announced that, during the year
ended December 31, 2013, it acquired, or entered into agreements to buy
and subsequently closed on, $220.9 million of complementary
street-retail assets for its Core Portfolio. Additionally, the Company
announced that it has another $92.1 million of Core properties currently
under contract to purchase.
The Core Portfolio does not include those assets in which the Company
has co-invested through its opportunity funds (the “Funds”). Discussion
of the Company’s 2013 Fund acquisition activity and Core Portfolio
operating progress will be included in the Company’s release of fourth
quarter and full year 2013 operating results scheduled for February 12,
2014.
Core Portfolio Acquisition of Street Retail Properties
The $220.9 million of portfolio additions during 2013 are located in
certain Chicago, New York, and Washington DC sub-markets in which Acadia
already had an established presence and add to the Company’s existing
position in these dominant retail corridors.
The following is a discussion of the Company’s 2013 Core investments. A
pictorial tour of these acquisitions may be found in the Core
Acquisition Update on the Company’s website under Investor
Relations, Presentations.
Chicago
During the year ended December 31, 2013, Acadia acquired, or entered
into agreements to buy and subsequently closed on, $153.1 million of
high-street retail in Chicago’s Gold Coast neighborhood, a premier
shopping destination with luxury retail, world-class hotels, museums and
noted art galleries. The Gold Coast boasts the Chicago flagship stores
of global fashion houses such as Prada, Barneys New York, Brioni and
Hermès and is a major draw for the city’s over 46 million annual
tourists.
11 East Walton Street
During the fourth quarter of 2013, Acadia entered into a contract to
acquire approximately 6,700 square feet of luxury retail space at the
base of the Waldorf Astoria Chicago, formerly the Elysian Hotel, for
$44.0 million. The property is located at the corner of Rush and Walton
Streets, proximate to several prior Acadia acquisitions, and is 100%
occupied by Marc Jacobs, Saint Laurent Paris, and Perchance Boutique.
The Company closed on this acquisition during January 2014.
8-12 East Walton Street
As previously announced, during the second quarter of 2013, the Company
purchased 8-12 East Walton Street for $22.5 million. This
newly-constructed, 8,200 square foot retail property, which is also
located within the Rush/Walton corridor, is tenanted by high-end
retailers Brioni and BHLDN, an Urban Outfitters brand. Together with 11
East Walton Street and several other previous acquisitions, the Company
now controls a significant stretch of the Walton Street corridor at its
key intersection with Rush Street, with tenants including Lululemon
Athletica, Barbour, Burton, and Sprinkles.
664 North Michigan Avenue
As previously announced, during the first quarter of 2013, the Company
acquired this property for $86.6 million. Located on Michigan Avenue
between Erie and Huron Streets, the building is centrally located in the
Magnificent Mile, the premier retail corridor in Chicago with eight
blocks of high-street retail. The 18,100 square foot retail condominium
forms the base of the 40-story Ritz-Carlton Residences Chicago. Tenants
at the property include Tommy Bahama and Ann Taylor Loft.
New York
During the year ended December 31, 2013, Acadia acquired $56.0 million
of street retail in the Manhattan submarkets of Tribeca, Midtown-South,
and the Bowery.
120 West Broadway
During the fourth quarter of 2013, Acadia purchased the master lease for
the retail portion of this cooperative located in the Manhattan
neighborhood of Tribeca for $37.0 million. The Tribeca submarket
represents one of the wealthiest demographics in Manhattan, with median
household incomes above $190,000. It has become one of Manhattan’s most
desirable neighborhoods and continues to evolve with the addition of
high-end luxury residential developments. The property is highly
visible, located one block north of the primary subway stop in Tribeca.
The trapezoidal building has 14,000 square feet of retail space and
includes four corners with frontage on West Broadway, Duane Street,
Reade Street and Hudson Street. The property is anchored by high quality
tenants including HSBC and Citibank. In addition, expiring leases in the
short term should provide upside from rents currently below market
rates. The Company acquired the asset off-market as part of a private
negotiation and funded its investment primarily with Operating
Partnership Units.
868 Broadway
During the fourth quarter of 2013, the Company also acquired this retail
condominium unit for $13.5 million. The asset is located in the
heavily-trafficked Broadway retail corridor just north of Union Square
in Manhattan’s prime Midtown-South submarket and draws strong foot
traffic from both Union Square and the Flatiron District. The Union
Square subway hub hosts approximately 35 million riders annually, making
it the fourth-busiest subway station in New York City on weekdays and
the second-busiest on weekends. Retail vacancy stands at under 3% and
sales volumes along Broadway are in excess of $1,500 per square foot.
The 2,000 square foot retail area is 100% leased to Dr. Martens, a 50
year old British footwear and apparel brand. Located in the block
between East 17th and 18th Streets, this is
Acadia’s second investment in this Manhattan submarket and is located in
close proximity to its property at 5-7 East 17th Street.
313-315 Bowery
Additionally, during the fourth quarter of 2013, Acadia purchased a
leasehold interest in this 7,900 square foot street retail property for
$5.5 million. The property is currently occupied by John Varvatos and
Patagonia and is located in the heart of the Bowery corridor. The Bowery
submarket has considerable momentum, with high-fashion retailers APC and
Phillip Lim set to open new stores alongside those of Billy Reid,
Intermix, Bettie Page, and Blue and Cream, all within the immediate
vicinity of 313-315 Bowery. Additionally, the property is located within
close proximity to Whole Foods and a variety of high-end restaurants,
nightclubs and boutique hotels.
Georgetown, Washington D.C.
As previously announced, during the second quarter of 2013, Acadia
closed on the acquisition of 3200-3204 M Street for a purchase price of
$11.8 million. Located in Georgetown, a premier shopping and dining
district in the Washington D.C. metropolitan area, this 7,000 square
foot property is tenanted by Banana Republic and is located at the
corner of M Street and Wisconsin Avenue. This 2013 purchase added to
Acadia’s existing six-property portfolio in Georgetown, also located
primarily on M Street, with tenants including Coach, Juicy Couture and
Lacoste.
Additional Acquisition Pipeline
In addition to the above acquisitions, Acadia currently has three
additional Core properties under contract for an aggregate purchase
price of $92.1 million. Although the Company anticipates completing
these closings during the first quarter of 2014, these transactions are
subject to customary closing conditions, including lender approval for
the assumption of existing mortgage debt, and, as such, no assurance can
be given that the Company will successfully complete these.
Acquisition Funding and Balance Sheet
The incremental net operating income (“NOI”) for the $220.9 million of
completed acquisitions initially aggregates $10.8 million, which
represents approximately 20% of the Company’s Core Portfolio NOI as
reported for the previous year ended December 31, 2012.
These completed acquisitions were funded using approximately two thirds
equity, which is consistent with Acadia’s conservative balance sheet
management practices. The equity requirement was funded primarily by a
combination of (i) the issuance of both Common Shares under the
Company’s at-the-market (“ATM”) stock offering program and Operating
Partnership Units during 2013 aggregating $114.3 million at an average
net price of $26.92, and (ii) $46.9 million of recycled capital from
fourth quarter Core Portfolio and Fund asset sales.
After taking into account all of the Company’s 2013 core acquisition
activities, Acadia’s Net Debt to EBITDA ratio was under 5.0x at December
31, 2013, which keeps the Company among the lowest leveraged of its
peers. Net Debt includes the Company’s pro rata share of Fund debt and
deducts both cash on hand and restricted cash related to financings.
This provides Acadia additional flexibility in using the most efficient
source of capital based on pricing and availability to fund its Core and
Fund acquisition activities during 2014.
“During 2013, we continued to execute on our core portfolio acquisition
goals, enabling us to accretively increase our total core portfolio
value in excess of 20%,” stated Kenneth F. Bernstein, President and CEO
of Acadia Realty Trust. “Consistent with plan, our multi-year
acquisition activities have led to a significant elevation in the
quality of our already-solid portfolio. Today, our portfolio is well
balanced, with approximately half of its value concentrated in prime
street-retail corridors primarily in Manhattan, Chicago, and Washington
DC, up from approximately 16% three years ago. By aggregating assets
within these densely-populated, vibrant cities, we believe that we are
strengthening our core earnings base and positioning our portfolio to
benefit from short and long-term rental growth. Furthermore, by
continuing to expand our local-market expertise and deepen our existing
relationships, we believe that we are well-equipped to mine future core,
opportunistic, and value-add investments.”
About Acadia Realty Trust
Acadia Realty Trust, a fully-integrated equity real estate investment
trust, is focused on the acquisition, ownership, management and
redevelopment of high-quality retail properties and urban/infill
mixed-use properties with a strong retail component located primarily in
high-barrier-to-entry, densely-populated metropolitan areas along the
East Coast and in Chicago. Acadia owns, or has an ownership interest in,
these properties through its core portfolio and its
opportunistic/value-add investment funds. Additional information may be
found on the Company’s website at www.acadiarealty.com.
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 27,
2013 (“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