Acadia Realty Trust Reports First Quarter 2017 Operating Results
News Release
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Acadia Realty Trust Reports First Quarter 2017 Operating Results
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
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Earnings: Generated earnings per share of
$0.18 for the first quarter; funds from operations (“FFO”) per share of$0.40 for the first quarter - Core Portfolio Operating Results: Generated same-property net operating income growth of 0.4% for the first quarter; reported a leased rate of 95.7% as of quarter end
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Fund Acquisitions: Fund IV acquired a
$35 million opportunistic investment during the first quarter -
Fund Dispositions: Completed
$48 million of fund dispositions during the first quarter -
Fund Promote: During 2017, generated approximately
$0.6 million (approximately$0.01 per share) of net promote income for the Company from a Fund III asset sale - Balance Sheet: Maintained conservative leverage levels during 2017, as indicated by a net debt to EBITDA ratio of 4.4x and a fixed-charge coverage ratio of 4.8x, both for the Core Portfolio; Acadia did not issue any equity during the first quarter
“Despite the cyclical challenges and long-term secular shifts impacting
the retailing industry, our company remains well positioned, as
indicated by our solid first quarter results,” stated Kenneth F.
Bernstein, President and CEO of
FINANCIAL RESULTS
Net income attributable to common shareholders for the quarter ended
March 31, 2017 was
FFO for the quarter ended March 31, 2017 was
Included in net income attributable to common shareholders and FFO for
the quarter ended
CORE PORTFOLIO
Core Operating Results
Same-property NOI in the Core Portfolio increased 0.4% for the quarter ended March 31, 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 95.6% occupied and 95.7% leased as of March 31,
2017, compared to 96.2% occupied and 96.3% leased as of
During the quarter, the Company generated a 21.0% increase in average rents on a GAAP basis, and a 6.7% increase on a cash basis, on 19 new and renewal leases aggregating approximately 164,000 square feet.
Core Acquisition
FUND PLATFORM
Fund Acquisition
Fund Dispositions
During the three months ended March 31, 2017, the Company, through its
Fund platform, completed
Fund Promote
During the three months ended March 31, 2017, the Company generated
BALANCE SHEET
The Company did not issue any equity during the first quarter of 2017.
Additionally, the Company maintained its solid, low-leveraged balance sheet. As of March 31, 2017, the Company’s net debt to EBITDA ratio for the Core Portfolio was 4.4x. Including its pro-rata share of Fund debt, the Company’s net debt to EBITDA ratio was 5.4x over the same period.
GUIDANCE
The Company is confirming its full-year 2017 guidance for FFO per share
of
CONFERENCE CALL
Management will conduct a conference call on
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Live Conference Call: |
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| Date: | Tuesday, April 25, 2017 | |
| Time: | 12:00 PM ET | |
| Dial#: | 844-309-6711 | |
| Passcode: |
“Acadia Realty” or “93055296” |
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| Webcast (Listen-only): |
www.acadiarealty.com under Investors, Presentations & Events |
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Phone Replay: |
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| Dial#: | 855-859-2056 | |
| Passcode: |
“93055296” |
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| Available Through: |
Tuesday, May 2, 2017 |
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Webcast Replay: |
www.acadiarealty.com under Investors, Presentations & Events |
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About
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
| ACADIA REALTY TRUST AND SUBSIDIARIES | ||||||||||
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Consolidated Statements of Operations (a) |
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(dollars and Common Shares in thousands, except per share data) |
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| For the Quarters ended | ||||||||||
| March 31, | ||||||||||
| 2017 | 2016 | |||||||||
| Revenues | ||||||||||
| Rental income | $ | 48,585 | $ | 38,590 | ||||||
| Expense reimbursements | 12,316 | 7,959 | ||||||||
| Other | 1,098 | 1,496 | ||||||||
| Total revenues | 61,999 | 48,045 | ||||||||
| Operating expenses | ||||||||||
| Depreciation and amortization | 24,536 | 16,849 | ||||||||
| General and administrative | 8,469 | 9,352 | ||||||||
| Real estate taxes | 10,606 | 6,165 | ||||||||
| Property operating | 8,197 | 5,537 | ||||||||
| Other operating | 294 | 291 | ||||||||
| Total operating expenses | 52,102 | 38,194 | ||||||||
| Operating income | 9,897 | 9,851 | ||||||||
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Equity in earnings and gains of unconsolidated affiliates inclusive
of gains on disposition of properties of $11,486 and $ - , respectively |
12,703 | 1,954 | ||||||||
| Interest income | 8,984 | 4,638 | ||||||||
| Interest expense | (11,488 | ) | (8,038 | ) | ||||||
| Income from continuing operations before income taxes | 20,096 | 8,405 | ||||||||
| Income tax (provision) benefit | (125 | ) | 77 | |||||||
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Income from continuing operations before gain on disposition of properties |
19,971 | 8,482 | ||||||||
| Gain on disposition of properties, net of tax | — | 65,393 | ||||||||
| Net income | 19,971 | 73,875 | ||||||||
| Net income attributable to noncontrolling interests | (4,340 | ) | (44,950 | ) | ||||||
| Net income attributable to Acadia | $ | 15,631 | $ | 28,925 | ||||||
| Less: Net income attributable to participating securities | (162 | ) | (365 | ) | ||||||
| Net income attributable to Common Shareholders - basic | $ | 15,469 | $ | 28,560 | ||||||
| Weighted average shares for diluted earnings per share | 83,646 | 71,200 | ||||||||
| Net Earnings per share - basic and diluted (b) | $ | 0.18 | $ | 0.40 | ||||||
| ACADIA REALTY TRUST AND SUBSIDIARIES | ||||||||||
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Reconciliation of Consolidated Net Income to Funds From Operations (a, c) |
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(dollars and Common Shares and Units in thousands, except per share data) |
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| For the Quarters ended | ||||||||||
| March 31, | ||||||||||
| 2017 | 2016 | |||||||||
| Net income attributable to Acadia | $ | 15,631 | $ | 28,925 | ||||||
| Depreciation of real estate and amortization of leasing costs (net of noncontrolling interests' share) | 21,533 | 15,328 | ||||||||
| Gain on sale (net of noncontrolling interests’ share) | (2,742 | ) | (15,140 | ) | ||||||
| Income attributable to Common OP Unit holders | 923 | 1,855 | ||||||||
| Distributions - Preferred OP Units | 139 | 139 | ||||||||
| Funds from operations attributable to Common Shareholders and Common OP Unit holders | $ | 35,484 | $ | 31,107 | ||||||
| Funds From Operations per Share - Diluted | ||||||||||
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Weighted average number of Common Shares and Common OP Units (d) |
89,024 | 75,845 | ||||||||
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Diluted Funds from operations, per Common Share and Common OP Unit |
$ | 0.40 | $ | 0.41 | ||||||
| ACADIA REALTY TRUST AND SUBSIDIARIES | ||||||||||
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Reconciliation of Consolidated Operating Income to Net Property Operating Income (“NOI”) (a) |
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(dollars in thousands) |
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| For the Quarters ended | ||||||||||
| March 31, | ||||||||||
| 2017 | 2016 | |||||||||
| Operating income | $ | 9,897 | $ | 9,851 | ||||||
| Add back: | ||||||||||
| General and administrative | 8,469 | 9,352 | ||||||||
| Depreciation and amortization | 24,536 | 16,849 | ||||||||
| Less: | ||||||||||
| Above/below market rent, straight-line rent and other adjustments | (5,987 | ) | (3,513 | ) | ||||||
| Consolidated NOI | 36,915 | 32,539 | ||||||||
| Noncontrolling interest in consolidated NOI | (6,539 | ) | (7,052 | ) | ||||||
| Pro-rata share of NOI (e) | 30,376 | 25,487 | ||||||||
| Less: Operating Partnership’s interest in Fund NOI included above | (1,947 | ) | (1,289 | ) | ||||||
| Add: Operating Partnership’s share of unconsolidated joint venture NOI * | 4,707 | 3,269 | ||||||||
| NOI - Core Portfolio | $ | 33,136 | $ | 27,467 | ||||||
| Note: |
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* Does not include the Operating Partnership's share of NOI from unconsolidated joint ventures within the Funds |
| ACADIA REALTY TRUST AND SUBSIDIARIES | ||||||||||
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Consolidated Balance Sheets (a) |
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(dollars in thousands) |
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| As of | ||||||||||
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March 31, |
December 31, |
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| ASSETS | ||||||||||
| Investments in real estate, at cost | ||||||||||
| Land | $ | 649,533 | $ | 693,252 | ||||||
| Buildings and improvements | 2,178,468 | 2,048,508 | ||||||||
| Construction in progress | 21,644 | 19,789 | ||||||||
| Properties under capital lease | 76,965 | 76,965 | ||||||||
| 2,926,610 | 2,838,514 | |||||||||
| Less: accumulated depreciation | 305,074 | 287,066 | ||||||||
| Operating real estate, net | 2,621,536 | 2,551,448 | ||||||||
| Real estate under development, at cost | 510,548 | 543,486 | ||||||||
| Net investments in real estate | 3,132,084 | 3,094,934 | ||||||||
| Notes receivable, net | 276,507 | 276,163 | ||||||||
| Investments in and advances to unconsolidated affiliates | 260,497 | 272,028 | ||||||||
| Other assets, net | 201,822 | 192,786 | ||||||||
| Cash and cash equivalents | 47,707 | 71,805 | ||||||||
| Rents receivable, net | 50,766 | 43,842 | ||||||||
| Restricted cash | 24,021 | 22,904 | ||||||||
| Assets of properties held for sale | 21,498 | 21,498 | ||||||||
| Total assets | $ | 4,014,902 | $ | 3,995,960 | ||||||
| LIABILITIES | ||||||||||
| Mortgage and other notes payable, net | $ | 1,143,049 | $ | 1,055,728 | ||||||
| Unsecured notes payable, net | 358,847 | 432,990 | ||||||||
| Accounts payable and other liabilities | 207,679 | 208,672 | ||||||||
| Capital lease obligations | 70,247 | 70,129 | ||||||||
| Dividends and distributions payable | 23,366 | 36,625 | ||||||||
| Distributions in excess of income from, and investments in, unconsolidated affiliates | 15,221 | 13,691 | ||||||||
| Total liabilities | 1,818,409 | 1,817,835 | ||||||||
| EQUITY | ||||||||||
| Acadia shareholders' Equity | ||||||||||
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Common shares, $0.001 par value, authorized 100,000,000 shares,
issued and outstanding 83,630,051 and 83,597,741 shares, respectively |
84 | 84 | ||||||||
| Additional paid-in capital | 1,589,765 | 1,594,926 | ||||||||
| Accumulated other comprehensive income (loss) | 438 | (798 | ) | |||||||
| Distributions in excess of accumulated earnings | (11,753 | ) | (5,635 | ) | ||||||
| Total Acadia shareholders’ equity | 1,578,534 | 1,588,577 | ||||||||
| Noncontrolling interests | 617,959 | 589,548 | ||||||||
| Total equity | 2,196,493 | 2,178,125 | ||||||||
| Total liabilities and equity | $ | 4,014,902 | $ | 3,995,960 | ||||||
ACADIA REALTY TRUST AND SUBSIDIARIES
Notes to Financial Highlights:
| (a) |
For additional information and analysis concerning the Company’s results of operations, reference is made to the Company’s Quarterly Supplemental Disclosure furnished on Form 8-K to the SEC and included on the Company’s website at www.acadiarealty.com. |
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| (b) | Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue Common Shares were exercised or converted into Common Shares. The effect of the conversion of Common OP Units is not reflected in the above table as they are exchangeable for Common Shares on a one-for-one basis. The income allocable to such units is allocated on the same basis and reflected as noncontrolling interests in the consolidated financial statements. As such, the assumed conversion of these units would have no net impact on the determination of diluted earnings per share. | |||||
| (c) | The Company considers funds from operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and net property operating income (“NOI”) to be appropriate supplemental disclosures of operating performance for an equity REIT due to their widespread acceptance and use within the REIT and analyst communities. FFO and NOI are presented to assist investors in analyzing the performance of the Company. They are helpful as they exclude various items included in net income that are not indicative of the operating performance, such as gains (losses) from sales of depreciated property, depreciation and amortization, and impairment of depreciable real estate. In addition, NOI excludes interest expense. The Company’s method of calculating FFO and NOI may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO does not represent cash generated from operations as defined by generally accepted accounting principles (“GAAP”) and is not indicative of cash available to fund all cash needs, including distributions. It should not be considered as an alternative to net income for the purpose of evaluating the Company’s performance or to cash flows as a measure of liquidity. Consistent with the NAREIT definition, the Company defines FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of depreciated property, plus depreciation and amortization, impairment of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures. | |||||
| (d) | In addition to the weighted average Common Shares outstanding, basic and diluted FFO also assume full conversion of a weighted average 4,755,686 and 4,522,623 OP Units into Common Shares for the quarters ended March 31, 2017 and 2016, respectively. Diluted FFO also includes the assumed conversion of Preferred OP Units into 496,102 and 428,121 Common Shares the quarters ended March 31, 2017 and 2016. In addition, diluted FFO also includes the effect of 136,985 and 138,317 employee share options, restricted share units and LTIP units for the quarters ended March 31, 2017 and 2016, respectively. | |||||
| (e) | The Pro-rata portion share of NOI is based upon our stated ownership percentages in each operating agreement. | |||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170424006490/en/
Source:
Acadia Realty Trust
Amy L. Racanello, (914) 288-8100