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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 28, 2021

ACADIA REALTY TRUST

(Exact name of registrant as specified in its charter)

 

Maryland		1-12002		23-2715194
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

411 Theodore Fremd Avenue

Suite 300

Rye, New York 10580

(Address of principal executive offices) (Zip Code)

(914) 288-8100

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	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))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading symbol	Name of exchange on which registered
Common shares of beneficial interest, par value $0.001 per share	AKR	The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02.Results of Operations and Financial Condition.

 

On July 28, 2021, Acadia Realty Trust (the “Company”) issued a press release announcing its consolidated financial results for the quarter and year-to-date period ended June 30, 2021. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated herein by reference.

 

On the same day, the Company made available supplemental reporting information regarding the financial results, operations and portfolio of the Company as of and for the quarter and year-to-date period ended June 30, 2021. A copy of the supplemental reporting information is attached to this Current Report on Form 8-K as Exhibit 99.2 and incorporated herein by reference.

 

The information included in this Item 2.02, including the information included in Exhibits 99.1 and 99.2 attached hereto, is intended to be “furnished” pursuant to Item 2.02, and is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any filing under the Securities Act of 1933, as amended (“Securities Act”) or the Exchange Act, or otherwise subject to the liabilities of Sections 11 and 12 (a)(2) of the Securities Act.

Item 9.01.Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number	Description
99.1	Press release dated July 28, 2021
99.2	Supplemental Reporting Information as of and for the quarter and year-to-date period ended June 30, 2021
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.)

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		ACADIA REALTY TRUST
Dated:		(Registrant)
		By:		/s/ John Gottfried
		Name:		John Gottfried
July 29, 2021		Title:		Sr. Vice President and Chief Financial Officer

 

 

 

Exhibit 99.1

 

Sunny Holcomb

(914) 288-8100

 

ACADIA REALTY TRUST REPORTS SECOND QUARTER 2021 OPERATING RESULTS

RYE, NY (July 28, 2021) - Acadia Realty Trust (NYSE: AKR) (“Acadia” or the “Company”) today reported operating results for the quarter and year-to-date period ended June 30, 2021. All per share amounts are on a fully-diluted basis, where applicable.

Acadia operates dual platforms, comprised of a high-quality core real estate portfolio (“Core Portfolio”), through which the Company owns and operates retail assets in the nation’s most dynamic 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") as per NAREIT and before Special Items (discussed below), and net property operating income ("NOI").

Second Quarter and Recent Highlights

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“We are seeing meaningful improvement in our operations as our key markets continue to re-open,” stated Kenneth F. Bernstein, President and CEO of Acadia Realty Trust. “We are energized by the new and exciting retailers that are expanding their real estate presence in our key street markets, evidenced by our robust leasing pipeline and the successful execution of these leases. Looking further ahead, more potential acquisition opportunities are emerging and we are aggressively pursuing these accretive investment opportunities as they become more actionable in both our Core Portfolio and Fund platform.”  

CORE PORTFOLIO

Core Portfolio Operating Results

The Company had an increase in same-property NOI of 13.9% for the second quarter 2021 as compared to the second quarter 2020, driven by rent commencement on new leases and improved credit reserves.

The Core Portfolio was 89.8% occupied and 92.4% leased as of June 30, 2021 compared to 89.5% occupied and 91.0% leased as of March 31, 2021, which reflects progress in its leasing pipeline as further discussed above. The leased rate includes space that is leased but not yet occupied and excludes development and redevelopment properties.

During the second quarter, the Company generated a 7.7% increase in rent spreads on a GAAP basis and 1.8% increase in rent spreads on a cash basis, on 19 conforming new and renewal leases aggregating approximately 227,000 square feet.

The Company continued to expand its Core Portfolio leasing pipeline, which has increased to approximately $14.0 million to date, with approximately 60% signed to date, including Street leases in Chicago, New York City and Washington D.C.  

Core Portfolio Cash Collections

The Company collected 96% of second quarter pre-COVID billings as of July 23, 2021.

All amounts are based upon pre-COVID billings (original contract rents without regard to deferral or abatement agreements) and exclude the impact of any security deposits applied against tenant accounts.

 

Core Structured Financing Activity

 

The Company funded a $16.0 million Structured Financing investment.

 

Core Balance Sheet and Liquidity

As previously announced, the Company closed on a $700.0 million amended and restated unsecured credit facility, which replaced its existing $600.0 million credit facility. The amended and restated unsecured credit facility provides for an increase in the Company’s existing revolving credit facility from $250.0 million to $300.0 million and an increase in the Company’s existing term loan facility from $350.0 million to $400.0 million. The amended and restated unsecured credit facility has an accordion feature expandable to $900.0 million, subject to customary conditions, and, inclusive of extension options, matures on June 29, 2026.

The Company has raised gross proceeds during the second quarter of $46.0 million at an average price per share of approximately $22.37 through the ATM Program.

 

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OPERATIONS UPDATE

COVID-19 Pandemic Impact on Operations

Second quarter 2021 credit losses and abatements were de minimis due to a benefit of approximately $2.2 million of cash collections on previously-reserved tenant accounts received during the quarter, which included $1.8 million related to the Core Portfolio and $0.4 million related to the Funds.

The amounts below represent the Company's pro-rata share of credit losses and abatements, inclusive of a benefit of approximately $2.2 million of credit loss (recoveries) mentioned above, and straight-line rent reserves primarily associated with the COVID-19 Pandemic (in millions) for the six months ended June 30, 2021:

 

 

“Credit Loss and Abatements – Billed Rents and Recoveries” represent reserves taken against a tenant’s rent and recoveries that were billable pursuant to the terms of a lease agreement. “Straight-Line Rent Reserves” represent reserves against a tenant’s straight-line rent balance. The balance is derived from the cumulative difference, generally from inception of the lease, between a tenant’s billed rents and the amount of rent recognized in earnings on a straight-line basis over the life of the lease.

CONSOLIDATED FINANCIAL RESULTS

A complete reconciliation, in dollars and per share amounts, of (i) net income attributable to Acadia to FFO (as defined by NAREIT and before Special Items) attributable to common shareholders and common OP Unit holders and (ii) operating income or loss to NOI is included in the financial tables of this release.

Net Income

Net income attributable to Acadia for the quarter ended June 30, 2021 was $3.9 million, or $0.04 per share, which included (i) $0.7 million, or $0.01 per share, from the unrealized mark-to-market gain on Albertsons and (ii) $1.5 million, or $0.02 per share, attributable to an aggregate gain on dispositions of Fund investments. Net income attributable to Acadia for the quarter ended June 30, 2020 was $19.4 million, or $0.22 per share, which included $24.9 million, or $0.27 per share from the monetization of and unrealized mark-to-market gain on Albertsons, which was offset by $9.4 million, or $0.10 per share, related to credit loss, straight-line rent reserves and tenant abatements, primarily due to the COVID-19 Pandemic.

Net income attributable to Acadia for the six months ended June 30, 2021 was $9.1 million, or $0.10 per share, which included (i) $2.4 million, or $0.03 per share, from the unrealized mark-to-market gain on Albertsons and (ii) $6.6 million, or $0.07 per share, attributable to an aggregate gain on dispositions of Core Portfolio and Fund investments was offset by $3.7 million, or $0.04 per share, related to credit loss, straight-line rent reserves and tenant abatements, primarily due to the COVID-19 Pandemic. Net income attributable to Acadia for the six months ended June 30, 2020 was $11.0 million, or $0.12 per share, which included $24.9 million of Acadia's share, or $0.27 per share from the monetization of and unrealized mark-to-market gain on Albertsons, which was offset by (i) $12.4 million of Acadia's share, or $0.14 per share, attributable to impairment charges within the Funds and (ii) $13.6 million, or $0.15 per share, related to credit loss, straight-line rent reserves and tenant abatements, primarily due to the COVID-19 Pandemic.

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FFO as Defined by NAREIT

FFO for the quarter ended June 30, 2021 was $28.3 million, or $0.31 per share, and included $0.7 million, or $0.01 per share, from the unrealized mark-to-market gain on Albertsons. FFO for the quarter ended June 30, 2020 was $44.9 million, or $0.49 per share, which included $24.9 million, or $0.27 per share, from the monetization of and unrealized mark-to-market gain on Albertsons that was offset by $9.4 million, or $0.10 per share, related to credit loss and straight-line rent reserves, primarily due to the COVID-19 Pandemic.

 

FFO for the six months ended June 30, 2021 was $52.7 million, or $0.57 per share, and included $2.4 million, or $0.03 per share, from the unrealized mark-to-market gain on Albertsons and was offset by $3.7 million, or $0.04 per share, related to credit loss, straight-line reserves and tenant abatements, primarily due to the COVID-19 Pandemic. FFO for the six months ended June 30, 2020 was $72.7 million, or $0.79 per share, inclusive of $24.9 million, or $0.27 per share, from the monetization and unrealized mark-to-market gain of Albertsons, which was offset by $13.6 million, or $0.15 per share, related to credit loss, straight-line rent reserves and tenant abatements, primarily due to the COVID-19 Pandemic.

 

FFO before Special Items

FFO before Special Items for the quarter ended June 30, 2021 was $27.6 million, or $0.30 per share, which excluded $0.7 million, or $0.01 per share, from the unrealized mark-to-market gain on Albertsons. For the quarter ended June 30, 2020, FFO before Special Items was $26.6 million, or $0.29 per share, which excluded $18.4 million, or $0.20 per share, of unrealized mark-to-market gain on Albertsons.  

FFO before Special Items for the six months ended June 30, 2021 was $50.2 million, or $0.54 per share, which excluded $2.4 million, or $0.03 per share, from the unrealized mark-to-market gain on Albertsons. For the six months ended June 30, 2020, FFO before Special Items was $54.3 million, or $0.59 per share, which excluded $18.4 million, or $0.20 per share, of unrealized mark-to-market gain on Albertsons.

 

FUND PLATFORM

Fund Acquisitions

Fund V has approximately $170.0 million of new investments under contract and/or agreements in principle. No assurance can be given that the Company will successfully close on such acquisitions under contract, which are subject to customary conditions and market uncertainty.

Fund Dispositions

Northeast Grocer Portfolio (Fund IV). Fund IV completed the disposition of four properties (aggregate 560,000 square-foot) located in Maine within its Northeast Grocer Portfolio for $39.9 million and repaid the properties' $23.5 million mortgages. Two properties remain within the grocery portfolio, both located in Pennsylvania.

654 Broadway (Fund III). Fund III completed the disposition of a 16,000 square-foot property located in New York City for $10.0 million.

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2021 GUIDANCE

The Company again raised its annual 2021 guidance to reflect improved outlook on leasing and credit reserves. Presented below is the revised 2021 guidance.

 

 

Please refer to the second quarter 2021 supplemental information package for additional details on certain other assumptions related to revised 2021 guidance.

 

 

CONFERENCE CALL

Management will conduct a conference call on Thursday, July 29, 2021 at 11:00 AM ET to review the Company’s earnings and operating results. Dial-in and webcast information is listed below.

Live Conference Call:

Date:            Thursday, July 29, 2021

Time:           11:00 AM ET

Dial#:         844-309-6711

Passcode:     “Acadia Realty” or “9089155”

Webcast (Listen-only):  www.acadiarealty.com under Investors, Presentations & Events

Phone Replay:

Dial#:            855-859-2056

Passcode:      “9089155”

Available Through:   Thursday, August 5, 2021

Webcast Replay:     www.acadiarealty.com under Investors, Presentations & Events

 

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The Company uses, and intends to use, the Investors page of its website, which can be found at www.acadiarealty.com, as a means of disclosing material nonpublic information and of complying with its disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the Investors page, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, the website is not incorporated by reference into, and is not a part of, this document.

 

About Acadia Realty Trust

Acadia Realty Trust is an equity real estate investment trust focused on delivering long-term, profitable growth via its dual – Core Portfolio and Fund – operating platforms and its disciplined, location-driven investment strategy. Acadia Realty Trust is accomplishing this goal by building a best-in-class core real estate portfolio with meaningful concentrations of assets in the nation’s most dynamic corridors; making profitable opportunistic and value-add investments through its series of discretionary, institutional funds; and maintaining a strong balance sheet. For further information, please visit www.acadiarealty.com.

 

Safe Harbor Statement

Certain statements in this press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations are generally identifiable by the use of the words, such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project,” or the negative thereof, or other variations thereon or comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results and financial performance to be materially different from future results and financial performance expressed or implied by such forward-looking statements, including, but not limited to: (i) economic, political and social uncertainty surrounding the COVID-19 Pandemic, including (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance to businesses, including the Company’s tenants, that have suffered significant declines in revenues as a result of governmental restrictions to contain or mitigate the COVID-19 Pandemic, as well as to adversely impacted individuals, (b) the rate and efficacy of COVID-19 vaccines, (c) the duration of any such orders or other formal recommendations for social distancing and the speed and extent to which revenues of the Company’s retail tenants recover following the lifting of any such orders or recommendations, (d) temporary or permanent migration out of major cities by customers, including cities where the Company’s properties are located, which may have a negative impact on the Company’s tenants’ businesses, (e) the potential impact of any such events on the obligations of the Company’s tenants to make rent and other payments or honor other commitments under existing leases, (f) to the extent we were seeking to sell properties in the near term, significantly greater uncertainty regarding our ability to do so at attractive prices, and (g) the potential adverse impact on returns from development and redevelopment projects; (ii) the ability and willingness of the Company’s tenants (in particular its major tenants) and other third parties to satisfy their obligations under their respective contractual arrangements with the Company; (iii) macroeconomic conditions, such as a disruption of or lack of access to the capital markets; (iv) the Company’s success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (v) changes in general economic conditions or economic conditions in the markets in which the Company may, from time to time, compete, and their effect on the Company’s revenues, earnings and funding sources; (vi) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of the London Interbank Offered Rate after 2021; (vii) the Company’s ability to pay down, refinance, restructure or extend its indebtedness as it becomes due; (viii) the Company’s investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners’ financial condition; (ix) the Company’s ability to obtain the financial results expected from its development and redevelopment projects; (x) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration, the Company’s ability to re-lease its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant, and obligations the Company may incur in connection with the replacement of an existing tenant; (xi) the Company’s liability for environmental matters; (xii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) uninsured losses; (xiv) the Company’s ability and willingness to maintain

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its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xv) information technology security breaches, including increased cybersecurity risks relating to the use of remote technology during the COVID-19 Pandemic; and (xvi) the loss of key executives. The risks described above are not exhaustive and additional factors could adversely affect the Company’s business and financial performance, including the risk factors discussed under the section captioned “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and other periodic or current reports the Company files with the SEC. Any forward-looking statements in this press release speak only as of the date hereof. The Company 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 the Company’s expectations with regard thereto or change in the events, conditions or circumstances on which such forward-looking statements are based.

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ACADIA REALTY TRUST AND SUBSIDIARIES

Consolidated Statements of Income ^(a)  

(dollars and Common Shares in thousands, except per share data)

 

 

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ACADIA REALTY TRUST AND SUBSIDIARIES

Reconciliation of Consolidated Net Income to Funds From Operations ^{(a, c)}  

(dollars and Common Shares and Units in thousands, except per share data)

 

 

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ACADIA REALTY TRUST AND SUBSIDIARIES

Reconciliation of Consolidated Operating Income (Loss) to Net Property Operating Income (“NOI”) ^(a)  

(dollars in thousands)

 

 

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ACADIA REALTY TRUST AND SUBSIDIARIES

Consolidated Balance Sheets ^(a)  

(dollars in thousands)

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ACADIA REALTY TRUST AND SUBSIDIARIES

Notes to Financial Highlights:

 

 

 

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Exhibit 99.2

 

EALTY TRUST—Q220SUPPLEMENTAL REPFORMATIO

 

 

 

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Visit www.acadiarealty.com for additional investor and portfolio information

 

 

 

 

 

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Notes to income statements, balance sheet and pro rata adjustments:

 

 

 

 

 

 

 

 

 

 

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The revised guidance is based upon Acadia’s current view of existing market conditions and assumptions for the year ending December 31, 2021 and assumes no further government mandated shut-downs. Additionally, given the ongoing uncertainties resulting from the COVID-19 Pandemic, the 2021 guidance does not incorporate any assumptions involving adjustments to its straight-line rent reserves or predictions of the variability that inherently results from those tenants that are, or may be subsequently classified, on the cash basis of accounting. The impact of such amounts could be material. Accordingly, the Company will update its guidance throughout 2021, as appropriate to reflect such items.

 

Other assumptions for 2021 guidance include the following (at the Company’s pro-rata share):

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this supplemental disclosure may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 and as such may involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative thereof or other variations thereon or comparable terminology. Factors which could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to those set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K. These risks and uncertainties should be considered in evaluating any forward-looking statements contained or incorporated by reference herein.

USE OF FUNDS FROM OPERATIONS AS NON-GAAP FINANCIAL MEASURE

The Company considers funds from operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) to be an appropriate supplemental disclosure of operating performance for an equity REIT due to its widespread acceptance and use within the REIT and analyst communities. FFO is presented to assist investors in analyzing the performance of the Company. It is helpful as it excludes various items included in net income that are not indicative of the operating performance, such as gains (or losses) from sales of property and depreciation and amortization. Consistent with the NAREIT definition, the Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Also consistent with NAREIT’s definition of FFO, the Company has elected to include gains and losses incidental to its main business (including those related to its RCP investments such as Albertsons) in FFO.

The Company also provides another supplemental disclosure of operating performance, adjusted funds from operations (“AFFO”). The Company defines AFFO as FFO adjusted for straight line rent, non-real estate depreciation, stock-based compensation, amortization of finance costs and costs of management contracts, tenant improvements, leasing commissions and capital expenditures.

The Company may also provide from time to time another supplemental disclosure of operating performance, FFO Before Special Items. The Company defines FFO Before Special Items as FFO adjusted for certain unusual items including charges, income and gains that management believes are not comparable and indicative of the results of the Company’s operating real estate portfolio.

It should be noted that the Company’s methods of calculating FFO, AFFO or FFO Before Special Items may be different from methods used by other REITs and, accordingly, may not be comparable to such metrics used by other REITs. FFO, AFFO and FFO Before Special Items do not represent cash generated from operations as defined by generally accepted accounting principles (“GAAP”) and are not indicative of cash available to fund all cash needs, including distributions. None of these measures should 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.

USE OF NON-GAAP FINANCIAL MEASURES

Non-GAAP financial measures such as EBITDA, NOI, Same-Property NOI and lease spreads are widely used financial measures in many industries, including the REIT industry, and are presented to assist investors and analysts in analyzing the performance of the Company. They are helpful as they exclude various items included in net income that are not indicative of operating performance, such as gains (or losses) from sales of property and depreciation and amortization and is used in computing various financial ratios as a measure of operational performance. The Company computes EBITDA as the sum of net income before extraordinary items plus interest expense, depreciation, income taxes and amortization, less any gains (losses including impairment charges) on the sale of income producing properties. The Company computes NOI by taking the difference between Property Revenues and Property Expenses as detailed in this reporting supplement. Same-Property NOI includes properties in our Core Portfolio that we owned for both the current and prior periods presented, but excludes those properties which we acquired, sold or expected to sell, and redeveloped during these periods. The Company’s method of calculating EBITDA, NOI and Same-Property NOI may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. EBITDA, NOI and Same-Property NOI do not represent cash generated from operations as defined by GAAP and are not indicative of cash available to fund all cash needs, including distributions. They 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.