Acadia Realty Trust Reports First Quarter 2019 Operating Results
News Release
View printer-friendly version << Back
Acadia Realty Trust Reports First Quarter 2019 Operating Results
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").
Highlights
-
Earnings: Generated GAAP earnings per share of
$0.15 and FFO per share of$0.39 for the first quarter - Core Portfolio Operating Results:
◦ Strong same-property net operating income growth of 4.6% for the first quarter (excluding redevelopments)
◦ Continued leasing progress across the portfolio including the
execution of several key street leases at Lincoln Park Chicago along
with
◦ Strong rent spreads of 26.9% and 8.3% on new leases for the quarter on a GAAP and cash basis, respectively
◦ Reported 94.6% leased occupancy as of
-
Core Acquisition Activity: During the first quarter, acquired,
or entered into contracts to acquire a retail portfolio in Soho NYC
for
$96 million , of which$32 million has closed as ofMarch 31, 2019 -
Fund Acquisition Activity: Fund V completed a
$48.5 million acquisition during the first quarter -
Balance Sheet: Maintained conservative leverage levels by
match-funding closed acquisitions; raising gross proceeds during the
first quarter of
$28.2 million at an average price per share of approximately$29 through the Company’s at-the-market (“ATM”) program. AtMarch 31, 2019 , approximately 96% of Core debt was fixed at an average rate of 3.8% with a weighted-average maturity of 5.6 years
“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
FINANCIAL RESULTS
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
Net income attributable to common shareholders for the quarter ended
FFO as Defined by NAREIT
FFO for the quarter ended
CORE PORTFOLIO
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
Driven primarily by the previously discussed expiration of H&M’s lease
and successful re-tenanting to Uniqlo this quarter at
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.
Core Acquisitions
During the first quarter, the Company acquired, or entered into
contracts to acquire, a portfolio of six
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
FUND PLATFORM
Fund Acquisitions
The Company completed the following acquisition during the first quarter 2019:
Family Center at
Fund V has an acquisition pipeline with approximately
Fund Dispositions
The Company completed the following disposition during the first quarter 2019:
BALANCE SHEET
By match-funding its core acquisition activity, the Company has further
strengthened its already-solid, low-leveraged balance sheet. As
of
The Company raised gross proceeds of
2019 GUIDANCE
The Company reaffirms its annual 2019 guidance of net income per share
of
Please refer to the Company’s fourth quarter 2018 supplemental information package for additional details regarding its previously-announced 2019 guidance.
CONFERENCE CALL
Management will conduct a conference call on
|
Live Conference Call: |
||
| Date: | Thursday, April 25, 2019 | |
| Time: | 12:00 PM ET | |
| Dial#: | 844-309-6711 | |
| Passcode: | “Acadia Realty” or “6454798” | |
| Webcast (Listen-only): |
www.acadiarealty.com under Investors, Presentations & Events |
|
|
|
|
|
|
Phone Replay: |
||
| Dial#: | 855-859-2056 | |
| Passcode: | “6454798” | |
| Available Through: | Thursday, May 2, 2019 | |
|
Webcast Replay: |
www.acadiarealty.com under Investors, Presentations & Events |
|
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 | ||||||||||||
|
|
||||||||||||
|
Consolidated Statements of Operations (a) |
||||||||||||
|
Three Months Ended |
||||||||||||
|
2019 |
2018 |
|||||||||||
| Revenues | ||||||||||||
| Rental income | $ | 74,003 | $ | 50,779 | ||||||||
| Expense reimbursements (b) | — | 11,208 | ||||||||||
| Other | 797 | 1,137 | ||||||||||
| Total revenues | 74,800 | 63,124 | ||||||||||
| Operating expenses | ||||||||||||
| Depreciation and amortization | 30,333 | 28,576 | ||||||||||
| General and administrative | 8,323 | 8,470 | ||||||||||
| Real estate taxes | 9,603 | 8,959 | ||||||||||
| Property operating | 12,347 | 10,338 | ||||||||||
| Other operating | — |
80 |
||||||||||
| Total operating expenses | 60,606 | 56,423 | ||||||||||
| Operating income | 14,194 | 6,701 | ||||||||||
| Equity in earnings of unconsolidated affiliates | 2,271 | 1,684 | ||||||||||
| Interest income | 2,270 | 3,737 | ||||||||||
| Interest expense | (17,859 | ) | (15,890 | ) | ||||||||
| Income (loss) from continuing operations before income taxes | 876 | (3,768 | ) | |||||||||
| Income tax benefit (provision) | 46 | (392 | ) | |||||||||
| Income (loss) from continuing operations before gain on disposition of properties | 922 | (4,160 | ) | |||||||||
| Gain on disposition of properties, net of tax | 2,014 | — | ||||||||||
| Net income (loss) | 2,936 | (4,160 | ) | |||||||||
| Net loss attributable to noncontrolling interests | 9,261 | 11,579 | ||||||||||
| Net income attributable to Acadia | $ | 12,197 | $ | 7,419 | ||||||||
| Less: net income attributable to participating securities | (68 | ) | (44 | ) | ||||||||
| Net income attributable to Common Shareholders - basic and diluted earnings per share | $ | 12,129 | $ | 7,375 | ||||||||
| Weighted average shares for diluted earnings per share | 82,037 | 83,438 | ||||||||||
| Net Earnings per share - basic and diluted (c) | $ | 0.15 | $ | 0.09 | ||||||||
|
ACADIA REALTY TRUST AND SUBSIDIARIES |
|||||||
|
Reconciliation of Consolidated Net Income to Funds From Operations (a, d) (dollars and Common Shares and Units in thousands, except per share data) |
|||||||
|
Three Months Ended |
|||||||
|
2019 |
2018 |
||||||
| Net income attributable to Acadia | $ | 12,197 | $ | 7,419 | |||
|
Depreciation of real estate and amortization of leasing costs (net of noncontrolling interests' share) |
21,999 | 21,085 | |||||
| Gain on disposition of properties (net of noncontrolling interests’ share) | (384 | ) | — | ||||
| Income attributable to Common OP Unit holders | 795 | 477 | |||||
| Distributions - Preferred OP Units | 135 | 135 | |||||
|
Funds from operations attributable to Common Shareholders and Common OP Unit holders |
$ | 34,742 | $ | 29,116 | |||
| Funds From Operations per Share - Diluted | |||||||
| Weighted average number of Common Shares and Common OP Units (e) | 87,969 | 89,067 | |||||
| Diluted Funds from operations, per Common Share and Common OP Unit | $ | 0.39 | $ | 0.33 | |||
|
ACADIA REALTY TRUST AND SUBSIDIARIES |
||||||||
|
Reconciliation of Consolidated Operating Income to Net Property Operating Income (“NOI”) (a) (dollars in thousands) |
||||||||
|
|
Three Months Ended |
|||||||
|
2019 |
2018 |
|||||||
|
Consolidated operating income |
$ | 14,194 | $ | 6,701 | ||||
| Add back: | ||||||||
| General and administrative | 8,323 | 8,470 | ||||||
| Depreciation and amortization | 30,333 | 28,576 | ||||||
| Less: | ||||||||
| Above/below market rent, straight-line rent and other adjustments | (9,299 | ) | (5,527 | ) | ||||
| Consolidated NOI | 43,551 | 38,220 | ||||||
| Noncontrolling interest in consolidated NOI | (12,978 | ) | (8,627 | ) | ||||
| Less: Operating Partnership's interest in Fund NOI included above | (3,503 | ) | (2,157 | ) | ||||
| Add: Operating Partnership's share of unconsolidated joint ventures NOI (f) | 6,595 | 5,648 | ||||||
| NOI - Core Portfolio | $ | 33,665 | $ | 33,084 | ||||
|
|
||||||||||
|
ACADIA REALTY TRUST AND SUBSIDIARIES |
||||||||||
|
Consolidated Balance Sheets (a) |
||||||||||
|
|
As of |
|||||||||
|
|
March 31, |
|
December 31, |
|||||||
| ASSETS | ||||||||||
|
Investments in real estate, at cost |
||||||||||
| Land | $ | 705,402 | $ | 710,469 | ||||||
| Buildings and improvements | 2,731,961 | 2,745,982 | ||||||||
| Construction in progress | 30,413 | 44,092 | ||||||||
| Properties under capital lease (b) | — | 76,965 | ||||||||
| Right-of-use assets - finance leases (b) | 82,629 | — | ||||||||
|
Right-of-use assets - operating leases (b) |
11,871 | — | ||||||||
| 3,562,276 | 3,577,508 | |||||||||
| Less: Accumulated depreciation | (438,033 | ) | (416,657 | ) | ||||||
| Operating real estate, net | 3,124,243 | 3,160,851 | ||||||||
| Real estate under development | 193,315 | 120,297 | ||||||||
| Net investments in real estate | 3,317,558 | 3,281,148 | ||||||||
| Notes receivable, net | 109,769 | 109,613 | ||||||||
| Investments in and advances to unconsolidated affiliates | 309,349 | 262,410 | ||||||||
| Other assets, net | 202,206 | 208,570 | ||||||||
| Cash and cash equivalents | 27,765 | 21,268 | ||||||||
| Rents receivable, net | 59,701 | 62,191 | ||||||||
| Restricted cash | 12,527 | 13,580 | ||||||||
| Total assets | $ | 4,038,875 | $ | 3,958,780 | ||||||
| LIABILITIES | ||||||||||
| Mortgage and other notes payable, net | $ | 1,109,160 | $ | 1,017,288 | ||||||
| Unsecured notes payable, net | 481,019 | 533,257 | ||||||||
| Unsecured line of credit | 9,000 | — | ||||||||
| Accounts payable and other liabilities (b) | 293,019 | 286,072 | ||||||||
| Dividends and distributions payable | 24,910 | 24,593 | ||||||||
| Distributions in excess of income from, and investments in, unconsolidated affiliates | 15,415 | 15,623 | ||||||||
| Total liabilities | 1,932,523 | 1,876,833 | ||||||||
| Commitments and contingencies | ||||||||||
| EQUITY | ||||||||||
| Acadia Shareholders' Equity | ||||||||||
|
Common shares, $0.001 par value, authorized 200,000,000 shares, issued and outstanding 82,708,361 and 81,557,472 shares, respectively |
83 | 82 | ||||||||
| Additional paid-in capital | 1,577,503 | 1,548,603 | ||||||||
| Accumulated other comprehensive (loss) income | (11,021 | ) | 516 | |||||||
| Distributions in excess of accumulated earnings | (100,634 | ) | (89,696 | ) | ||||||
| Total Acadia shareholders’ equity | 1,465,931 | 1,459,505 | ||||||||
| Noncontrolling interests | 640,421 | 622,442 | ||||||||
| Total equity | 2,106,352 | 2,081,947 | ||||||||
| Total liabilities and equity | $ | 4,038,875 | $ | 3,958,780 | ||||||
ACADIA REALTY TRUST AND SUBSIDIARIES
Notes to Financial Highlights:
|
(a) |
For additional information and analysis concerning the Company’s balance sheet and 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. |
|
|
(b) |
Effective January 1, 2019, expense reimbursements are combined with Rental income on the consolidated statements of income, right-of-use assets have been established under operating real estate and lease liabilities within accounts payable and other liabilities on the consolidated balance sheets in accordance with Accounting Standards Codification 842, Leases. For more information about the implementation of ASC 842, please refer to the Company’s current Quarterly Report on Form 10-Q. |
|
|
(c) |
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. |
|
|
(d) |
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. |
|
|
(e) |
In addition to the weighted-average Common Shares outstanding, basic and diluted FFO also assume full conversion of a weighted-average 5,214 thousand and 4,966 thousand OP Units into Common Shares for the quarters ended March 31, 2019 and 2018. Diluted FFO also includes: (i) the assumed conversion of Preferred OP Units into 499 thousand and 499 thousand Common Shares for the quarters ended March 31, 2019 and 2018; and (ii) the effect of 222 thousand and 168 thousand restricted share units and LTIP units for the quarters ended March 31, 2019 and 2018. |
|
|
(f) |
The Pro-rata share of NOI is based upon our stated ownership percentages in each operating agreement. Does not include the Operating Partnership's share of NOI from unconsolidated joint ventures within the Funds. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190424006033/en/
Source:
Amy L. Racanello
(914) 288-8100