Maryland

1-12002

23-2715194

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Exhibit

Number

 Description

99.1

 Press release of the Company dated February 13, 2019.

99.2

 Supplemental Reporting Information of the Company for the quarter and year ended December 31, 2018.

ACADIA REALTY TRUST

Dated:

(Registrant)

By:

/s/ John Gottfried

Name:

John Gottfried

February 19, 2019

Title:

Sr. Vice President and Chief Financial Officer

•

Earnings: Generated GAAP earnings per share of $0.09 for the fourth quarter; FFO per share was $0.34 for the fourth quarter, and FFO per share of $0.36 for the fourth quarter before deduction of $0.02 per share for retirement related costs.

•

Core Portfolio Operating Results: Solid Core operating fundamentals and significant progress towards long-term NOI growth goals

◦

Strong same-property net operating income growth of 4.1% for the fourth quarter (excluding redevelopments) driven by profitable lease up in its street and urban portfolio

◦

Achieved substantially all (over 95%) of its 2018 leasing goals

◦

Executed key urban leases at its City Center property in San Francisco, California (Whole Foods) and its State Street property in Chicago, Illinois (Uniqlo)

◦

Solid rent growth of 16.5% and 9.4% on new leases for the quarter on a GAAP and cash basis, respectively

◦

Reported 95.2% leased occupancy as of December 31, 2018

•

Fund Acquisition Activity: Fund V completed a $44.4 million acquisition during the fourth quarter. Fund acquisition volume for 2018 totaled $149.0 million; included within the Fund V pipeline is over $100.0 million of investments currently under contract

•

Balance Sheet: The Company closed a $50 million ten-year financing within its Core Portfolio in the fourth quarter. At December 31, 2018, over 95% of Core debt was fixed at an average rate of 3.7% and maturity of 5.8 years. No shares were issued or purchased during the fourth quarter

•

Guidance: The Company has issued its annual 2019 guidance of net income per share of $0.35 to $0.46 and FFO per share of $1.34 to $1.46. In addition, the Company expects same property net operating income growth of 3.0% to 4.0% for 2019 (excluding redevelopments), which is comprised of 5% to 7% growth within its street/urban portfolio and 0% to 1% within its suburban portfolio

•

City Center (San Francisco): The Company signed a lease with Whole Foods Market for approximately 56,000 square feet, which is subject to certain approvals. City Center is a Target-anchored property located in one of San Francisco’s busiest and most prominent corridors surrounded by a dense and affluent trade area. As previously announced, the Company has commenced a 40,000 square foot expansion of City Center, which is approximately 90% pre-leased.  

•

State Street (Chicago): The Company signed a lease with Uniqlo for approximately 28,000 square feet for space that is currently occupied by H&M. State Street is a 79,000 square foot property that features Nordstrom Rack and is located within the primary urban retail corridor for Chicago’s Loop.

2019 Guidance

2018 Actual

Net income per share attributable to Common Shareholders

$0.35 to $0.46

$

0.38

Impact of transactional activity and tenant recapture

(0.08) to (0.13)

(0.04

)

Depreciation of real estate and amortization of leasing costs

(net of noncontrolling interests' share)

0.96

0.98

Gain on disposition of properties (net of noncontrolling interests' share)

-

(0.01

)

Noncontrolling interest in Operating Partnership

0.02

0.03

Funds from operations, prior to transactional activity, per share

$1.25 to $1.31

$

1.34

Fund acquisitions and related fees

0.01 to 0.03

-

Net Promote and other transactional income

0.01 to 0.05

0.01

Accelerated tenant recapture - GAAP adjustments

0.07

0.03

Funds from operations per share attributable to Common Shareholders and Common OP Unit holders

$1.34 to $1.46

$

1.38

Three Months Ended December 31,

Year Ended

December 31,

2018

2017

2018

2017

Revenues

Rental income

$

55,104

$

50,181

$

208,756

$

198,941

Expense reimbursements

13,284

12,560

48,284

44,907

Other

1,057

3,340

5,173

6,414

Total revenues

69,445

66,081

262,213

250,262

Operating expenses

Depreciation and amortization

30,794

27,689

117,549

104,934

General and administrative

9,984

8,470

34,343

33,756

Real estate taxes

9,184

8,484

36,712

35,946

Property operating

11,688

14,690

45,211

41,668

Impairment charge

—

10,615

—

14,455

Other operating

202

1,197

857

2,184

Total operating expenses

61,852

71,145

234,672

232,943

Operating income (loss)

7,593

(5,064

)

27,541

17,319

Equity in earnings of unconsolidated affiliates inclusive of gain on disposition of properties of $0, $589, $0 and $15,360, respectively

2,223

2,327

9,302

23,371

Interest income

2,692

5,495

13,231

29,143

Interest expense

(19,096

)

(19,312

)

(69,978

)

(58,978

)

Gain on change in control

—

5,571

—

5,571

(Loss) income from continuing operations before income taxes

(6,588

)

(10,983

)

(19,904

)

16,426

Income tax (provision) benefit

(83

)

13

(934

)

(1,004

)

(Loss) income from continuing operations before gain on disposition of properties

(6,671

)

(10,970

)

(20,838

)

15,422

Gain on disposition of properties, net of tax

—

35,914

5,140

48,886

Net (loss) income

(6,671

)

24,944

(15,698

)

64,308

Net loss (income) attributable to noncontrolling interests

13,801

(4,032

)

47,137

(2,838

)

Net income attributable to Acadia

$

7,130

$

20,912

$

31,439

$

61,470

Less: net income attributable to participating securities

(78

)

(219

)

(267

)

(642

)

Net income attributable to Common Shareholders - basic and diluted earnings per share

$

7,052

$

20,693

$

31,172

$

60,828

Weighted average shares for diluted earnings per share

81,591

83,733

82,080

83,685

Net Earnings per share - basic and diluted ^(b)

$

0.09

$

0.25

$

0.38

$

0.73

Three Months Ended December 31,

Year Ended

December 31,

2018

2017

2018

2017

Net income attributable to Acadia

$

7,130

$

20,912

$

31,439

$

61,470

Depreciation of real estate and amortization of leasing costs (net of

   noncontrolling interests' share)

22,040

20,580

85,852

83,515

Impairment charge (net of noncontrolling interests' share)

—

—

—

1,088

Gain on sale (net of noncontrolling interests’ share)

—

(9,776

)

(994

)

(15,565

)

Income attributable to Common OP Unit holders

462

1,209

2,033

3,609

Distributions - Preferred OP Units

135

135

540

550

Funds from operations attributable to Common Shareholders and Common OP Unit holders

$

29,767

$

33,060

$

118,870

$

134,667

Funds From Operations per Share - Diluted

Weighted average number of Common Shares and Common OP Units ^(d)

87,212

88,990

87,728

88,998

Diluted Funds from operations, per Common Share and Common OP Unit

$

0.34

$

0.37

$

1.35

$

1.51

Three Months Ended December 31,

Year Ended

December 31,

2018

2017

2018

2017

Consolidated operating income (loss)

$

7,593

$

(5,064

)

$

27,541

$

17,319

Add back:

General and administrative

9,984

8,470

34,343

33,756

Depreciation and amortization

30,794

27,689

117,549

104,934

Impairment charge

—

10,615

—

14,455

Less:

Above/below market rent, straight-line rent and other adjustments

(8,030

)

(6,439

)

(23,521

)

(21,110

)

Consolidated NOI

40,341

35,271

155,912

149,354

Noncontrolling interest in consolidated NOI

(10,583

)

(5,917

)

(37,496

)

(28,379

)

Less: Operating Partnership's interest in Fund NOI included above

(2,852

)

(1,382

)

(9,790

)

(7,927

)

Add: Operating Partnership's share of unconsolidated joint ventures NOI ^(e)

6,563

5,124

24,919

19,539

NOI - Core Portfolio

$

33,469

$

33,096

$

133,545

$

132,587

As of

December 31,

2018

December 31,

2017

ASSETS

Investments in real estate, at cost

Land

$

710,469

$

658,835

Buildings and improvements

2,745,982

2,538,338

Construction in progress

44,092

18,642

Properties under capital lease

76,965

76,965

3,577,508

3,292,780

Less: Accumulated depreciation

(416,657

)

(339,862

)

Operating real estate, net

3,160,851

2,952,918

Real estate under development

120,297

173,702

Net investments in real estate

3,281,148

3,126,620

Notes receivable, net

109,613

153,829

Investments in and advances to unconsolidated affiliates

262,410

302,070

Other assets, net

208,570

214,959

Cash and cash equivalents

21,268

74,823

Rents receivable, net

62,191

51,738

Restricted cash

13,580

10,846

Assets of properties held for sale

—

25,362

Total assets

$

3,958,780

$

3,960,247

LIABILITIES

Mortgage and other notes payable, net

$

1,017,288

$

909,174

Unsecured notes payable, net

533,257

473,735

Unsecured line of credit

—

41,500

Accounts payable and other liabilities

214,961

210,052

Capital lease obligation

71,111

70,611

Dividends and distributions payable

24,593

24,244

Distributions in excess of income from, and investments in, unconsolidated affiliates

15,623

15,292

Total liabilities

1,876,833

1,744,608

Commitments and contingencies

EQUITY

Acadia Shareholders' Equity

Common shares, $0.001 par value, authorized 200,000,000 shares, issued and outstanding 81,557,472 and 83,708,140 shares, respectively

82

84

Additional paid-in capital

1,548,603

1,596,514

Accumulated other comprehensive income

516

2,614

Distributions in excess of accumulated earnings

(89,696

)

(32,013

)

Total Acadia shareholders’ equity

1,459,505

1,567,199

Noncontrolling interests

622,442

648,440

Total equity

2,081,947

2,215,639

Total liabilities and equity

$

3,958,780

$

3,960,247

(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.

(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 4,906 thousand and 4,717 thousand OP Units into Common Shares for the quarters ended December 31, 2018 and 2017 and 4,942 thousand and 4,741 thousand OP Units into Common Shares for the year ended December 31, 2018 and 2017, respectively. Diluted FFO also includes: (i) the assumed conversion of Preferred OP Units into 499 thousand and 499 thousand Common Shares for the quarters ended December 31, 2018 and 2017 and 499 thousand and 505 thousand Common Shares for the year ended December 31, 2018 and 2017, respectively; and (ii) the effect of 215 thousand and 40 thousand restricted share units and LTIP units for the quarters ended December 31, 2018 and 2017 and 207 thousand and 69 thousand for the year ended December 31, 2018 and 2017, respectively.

(e)

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.

Table of Contents

Supplemental Report – December 31, 2018

Section I - Fourth Quarter 2018 Earnings Press Release

Section II - Financial Information

Section III – Core Portfolio Information

Company Information

3

Core Properties

26

Market Capitalization

4

Core Top Tenants

30

Operating Statements

Core Lease Expirations

31

Consolidated Income Statements

5

Core New and Renewal Rent Spreads

32

Income Statement - Pro-rata Adjustments

7

Core Capital Expenditures

33

Consolidated Balance Sheet

8

Balance Sheet - Pro-rata Adjustments

9

Funds from Operations (“FFO”), Adjusted FFO (“AFFO”)

11

EBITDA

13

Same Property Net Operating Income

14

Fee Income

15

Section IV - Fund Information

Structured Financing

16

Other Information

Fund Overview

34

Transactional Activity

17

Fund Properties

35

2019 Guidance

18

Fund Lease Expirations

38

Net Asset Valuation Information

19

Development and Redevelopment Activity

39

Selected Financial Ratios

20

Debt Analysis

Summary

22

Detail

23

Maturities

25

Important Notes

41

Supplemental Report – December 31, 2018

Company Information

Acadia Realty Trust is a fully-integrated equity real estate investment trust, focused on the ownership, acquisition, redevelopment and management of high-quality retail properties located in key street and urban retail corridors as well as suburban locations within high-barrier-to-entry, densely-populated metropolitan areas. Acadia owns, or has an ownership interest in, these properties through its core portfolio and through a series of opportunistic/value-add investment funds. Additional information may be found on the Company’s website at www.acadiarealty.com.

Contact Information

Corporate Headquarters

Investor Relations

New York Stock Exchange

411 Theodore Fremd Avenue

Amy Racanello

Symbol AKR

Suite 300

Senior Vice President,

Rye, NY 10580

Capital Markets & Investments

(914) 288-3345

aracanello@acadiarealty.com

Analyst Coverage

Bank of America / Merrill Lynch

BTIG

KeyBanc Capital Markets, Inc.

Craig Schmidt - (646) 855-3640

Michael Gorman - (212) 738-6138

Todd Thomas - (917) 368-2286

craig.schmidt@baml.com

mgorman@btig.com

tthomas@key.com

Green Street Advisors

Citigroup - Global Markets

J.P. Morgan Securities, Inc.

Daniel Busch - (949) 640-8780

Christy McElroy - (212) 816-6981

Michael W. Mueller, CFA - (212) 622-6689

dbusch@greenstreetadvisors.com

christy.mcelroy@citi.com

michael.w.mueller@jpmorgan.com

3

Market Capitalization

Supplemental Report – December 31, 2018

(Including pro-rata share of Fund debt, in thousands)

Changes in Total Outstanding Common

Weighted Average

Total Market

Capitalization

Shares and OP Units (in thousands)

Diluted EPS

FFO

Capitalization

($)

%

Based on Net

Debt ¹

Common

Shares

Common OP Units

Total

Quarter

YTD

Quarter

YTD

Equity Capitalization

Common Shares

81,557

Balance at 12/31/2017

83,708

4,716

88,424

Common Operating Partnership ("OP") Units

5,030

Other

11

289

300

Combined Common Shares and OP Units

86,587

Share repurchases

(1,304

)

—

(1,304

)

OP Conversions

36

(36

)

—

Share Price at December 31, 2018

$

23.76

Balance at 3/31/2018

82,451

4,969

87,420

83,438

83,438

89,067

89,067

Other

13

18

31

Equity Capitalization - Common Shares and OP Units

$

2,057,307

Share repurchases

(990

)

—

(990

)

Preferred OP Units

11,864

²

OP Conversions

29

(29

)

—

Total Equity Capitalization

2,069,171

68%

69%

Balance at 6/30/2018

81,503

4,958

86,461

81,756

82,592

87,485

88,272

Other

1

—

1

Debt Capitalization

OP Conversions

46

(46

)

—

Consolidated debt

1,560,333

Balance at 9/30/2018

81,550

4,912

86,462

81,566

82,245

87,251

87,900

Adjustment to reflect pro-rata share of debt

(596,557

)

Other

(3

)

128

125

Total Debt Capitalization

963,776

32%

31%

OP Conversions

10

(10

)

—

Balance at 12/31/2018

81,557

5,030

86,587

81,591

82,080

87,212

87,728

Total Market Capitalization

$

3,032,947

³

100%

100%

1.

Reflects debt net of Core Portfolio cash of $12,982 and pro-rata share of Funds cash of $3,452 for total cash netted against debt of $16,434.

2.

Represents 188 Series A and 136,593 Series C Preferred OP Units convertible into 25,067 and 474,278 Common OP Units, respectively, multiplied by the Common Share price at quarter end.

3.

Market capitalization comprises (fixed-rate debt includes notional principal fixed through interest rate swap transactions):

4

Consolidated Income Statement

Supplemental Report – December 31, 2018

(in thousands)

December 31, 2018 ¹

CONSOLIDATED INCOME STATEMENT

Quarter

Year to Date

Revenues

Rental income

$

55,104

$

208,756

Expense reimbursements

13,284

48,284

Other

1,057

5,173

Total revenues

69,445

262,213

Operating expenses

Depreciation and amortization

30,794

117,549

General and administrative

9,984

34,343

Real estate taxes

9,184

36,712

Property operating

11,688

45,211

Other operating

202

857

Total operating expenses

61,852

234,672

Operating income

7,593

27,541

Equity in earnings of unconsolidated affiliates

2,223

9,302

Interest income

2,692

13,231

Interest expense

(19,096

)

(69,978

)

Loss from continuing operations before income taxes

(6,588

)

(19,904

)

Income tax benefit (provision)

(83

)

(934

)

Loss from continuing operations

(6,671

)

(20,838

)

Gain on disposition of properties, net of tax

—

5,140

Net loss

(6,671

)

(15,698

)

Net loss attributable to noncontrolling interests

13,801

47,137

Net income attributable to Acadia

$

7,130

$

31,439

5

Income Statement - Detail

Supplemental Report – December 31, 2018

(in thousands)

December 31, 2018 ¹

CORE PORTFOLIO AND FUND INCOME

Quarter

Year to Date

PROPERTY REVENUES

Minimum rents

$

47,997

$

186,011

Percentage rents

139

609

Expense reimbursements - CAM

6,172

20,642

Expense reimbursements - Taxes

7,113

27,642

Other property income

784

3,242

Total Property Revenues

62,205

238,146

PROPERTY EXPENSES

Property operating - CAM

10,491

34,998

Other property operating (Non-CAM)

2,189

10,520

Real estate taxes

9,184

36,712

Total Property Expenses

21,864

82,230

NET OPERATING INCOME - PROPERTIES

40,341

155,916

OTHER INCOME (EXPENSE)

Interest income

2,692

13,231

Straight-line rent income

2,093

8,705

Above/below-market rent

5,116

13,531

Interest expense ²

(16,712

)

(61,073

)

Amortization of finance costs

(1,658

)

(6,008

)

Above/below-market interest expense

26

104

Asset and property management expense

719

(363

)

Other income/expense

(171

)

513

Transaction costs

—

(161

)

Capital lease interest

(752

)

(3,001

)

CORE PORTFOLIO AND FUND INCOME

31,694

121,394

FEE INCOME

Asset and property management fees

219

876

Promote income from funds, net

—

—

Net promote and other transactional income

—

—

Transactional fees ³

54

415

Income tax provision

(83

)

(934

)

Total Fee Income

190

357

General and Administrative