UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) YES ☐ NO
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2022, the last business day of the registrant’s most recently completed second fiscal quarter was approximately $
The number of shares of the registrant’s common shares of beneficial interest outstanding on February 15, 2023 was
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DOCUMENTS INCORPORATED BY REFERENCE
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ACADIA REALTY TRUST AND SUBSIDIARIES
FORM 10-K
INDEX
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Item No. |
Description |
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1. |
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4 |
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1A. |
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12 |
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1B. |
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40 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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7A. |
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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9A. |
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Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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Certain Relationships and Related Transactions and Director Independence |
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128 |
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132 |
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133 |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Annual Report on Form 10-K (this “Report”) of Acadia Realty Trust, a Maryland real estate investment trust, (the “Company”) may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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) the economic, political and social impact of, and uncertainty surrounding the COVID-19 pandemic (the “COVID-19 Pandemic”) or future pandemics, including its impact on our tenants and their ability to make rent and other payments or honor their commitments under existing leases; (ii) macroeconomic conditions, such as a disruption of or lack of access to the capital markets and rising inflation; (iii) our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (iv) changes in general economic conditions or economic conditions in the markets in which we may, from time to time, compete, and their effect on our revenues, earnings and funding sources; (v) increases in our borrowing costs as a result of rising inflation, changes in interest rates and other factors, including the discontinuation of USD LIBOR, which is currently anticipated to occur in 2023; (vi) our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; (vii) our investments in joint ventures and unconsolidated entities, including our lack of sole decision-making authority and our reliance on our joint venture partners’ financial condition; (viii) our ability to obtain the financial results expected from our development and redevelopment projects; (ix) our tenants’ ability and willingness to renew their leases with us upon expiration, our ability to re-lease our properties on the same or better terms in the event of nonrenewal or in the event we exercise our right to replace an existing tenant, and obligations we may incur in connection with the replacement of an existing tenant; (x) our potential liability for environmental matters; (xi) damage to our properties from catastrophic weather and other natural events, and the physical effects of climate change; (xii) uninsured losses; (xiii) our ability and willingness to maintain our qualification as a real estate investment trust (REIT) in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches, including increased cybersecurity risks relating to the use of remote technology; (xv) the loss of key executives; (xvi) the accuracy of our methodologies and estimates regarding environmental, social and governance (“ESG”) metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on our ESG efforts; and (xvii) the risk that the Restatement (as defined herein) or material weaknesses in internal controls could negatively affect investor confidence and raise reputational issues.
The factors described above are not exhaustive and additional factors could adversely affect the Company’s future results and financial performance, including the risk factors discussed under the section captioned “Risk Factors” set forth under the headings “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report. These risks and uncertainties should be considered in evaluating any forward-looking statements contained or incorporated by reference herein. Any forward-looking statements 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 to reflect any changes in the Company’s expectations with regard thereto or changes in the events, conditions, or circumstances on which such forward-looking statements are based.
SPECIAL NOTE REGARDING CERTAIN REFERENCES
All references to “Notes” throughout the document refer to the footnotes to the consolidated financial statements of the registrant referenced in Part II, Item 8. Financial Statements.
PART I
ITEM 1. BUSINESS.
GENERAL
Acadia Realty Trust (the “Company”) was formed on March 4, 1993 as a Maryland real estate investment trust (“REIT”). All references to “Acadia,” “we,” “us,” “our” and “Company” refer to the Company and its consolidated subsidiaries. We are a fully integrated REIT focused on the ownership, acquisition, development, and management of high-quality retail properties located primarily in high-barrier-to-entry, supply-constrained, densely populated metropolitan areas in the United States. We currently own or have an ownership interest in these properties through our Core Portfolio (as defined below). We generate additional growth through our Funds (as defined below) in which we co-invest with high-quality institutional investors.
All of our assets are held by, and all of our operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest. As of December 31, 2022, the Company controlled approximately 95% of the Operating Partnership as the sole general partner. As the general partner, the Company is entitled to share, in proportion to its percentage interest,
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in the cash distributions and profits and losses of the Operating Partnership. The limited partners primarily represent entities or individuals that contributed their interests in certain properties or entities to the Operating Partnership in exchange for common or preferred units of limited partnership interest (“Common OP Units” or “Preferred OP Units,” respectively, and collectively, “OP Units”) and employees who have been awarded restricted Common OP Units as long-term incentive compensation (“LTIP Units”). Limited partners holding Common OP and LTIP Units are generally entitled to exchange their units on a one-for-one basis for our common shares of beneficial interest, par value $0.001 per share, of the Company (“Common Shares”). This structure is referred to as an umbrella partnership REIT, or “UPREIT.”
BUSINESS OBJECTIVES AND STRATEGIES
Our primary business objective is to acquire and manage commercial retail properties that will provide cash for distributions to shareholders while also creating the potential for capital appreciation to enhance investor returns. We focus on the following fundamentals to achieve this objective:
Some of these investments historically have also included, and may in the future include joint ventures with private equity investors for the purpose of making investments in operating retailers with significant embedded value in their real estate assets.
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Investment Strategy — Generate External Growth through our Dual Platforms: Core Portfolio and Funds
The objective that acquisitions be accretive on a long-term basis based on our cost of capital, as well as increase the overall Core Portfolio quality and value, is a key strategic consideration to the growth of our Core Portfolio. As such, we constantly evaluate the blended cost of equity and debt and adjust the amount of acquisition activity to align the level of investment activity with capital flows.
Given the growing importance of technology and e-commerce, many of our retail tenants are appropriately focused on omni-channel sales and how to best utilize e-commerce initiatives to drive sales at their stores. Considering these initiatives, we have found retailers are becoming more selective as to the location, size and format of their next-generation stores and are focused on dense, high-traffic retail corridors, where they can utilize smaller and more productive formats closer to their shopping population. Accordingly, our focus for Core Portfolio and Fund acquisitions is on those properties which we believe will not only remain relevant to our tenants but become even more so in the future.
In addition to our Core Portfolio investments in real estate assets, we have also capitalized on our expertise in the acquisition, development, leasing, and management of retail real estate by establishing discretionary opportunity funds. Our Fund platform is an investment vehicle where the Operating Partnership invests, along with outside institutional investors, including, but not limited to, endowments, foundations, pension funds and investment management companies, in primarily opportunistic and value-add retail real estate. To date, we have launched five funds (“Funds”); Acadia Strategic Opportunity Fund, LP (“Fund I,” which was liquidated in 2015), Acadia Strategic Opportunity Fund II, LLC (“Fund II”), Acadia Strategic Opportunity Fund III LLC (“Fund III”), Acadia Strategic Opportunity Fund IV LLC (“Fund IV”) and Acadia Strategic Opportunity Fund V LLC (“Fund V,” and our “current fund”). Due to our level of control, we consolidate these Funds for financial reporting purposes. Fund I and Fund II have also included investments in operating companies through Acadia Mervyn Investors I, LLC (“Mervyns I,” which was liquidated in 2018), Acadia Mervyn Investors II, LLC (“Mervyns II”) and, in certain instances, directly through Fund II, all on a non-recourse basis. These investments comprise, and are referred to as, the Company's Retailer Controlled Property Venture (“RCP Venture”).
The Operating Partnership is the sole general partner or managing member of the Funds and Mervyns II and earns priority distributions or fees for asset management, property management, construction, development, leasing, and legal services. Cash flows from the Funds and the RCP Venture are distributed pro-rata to their respective partners and members (including the Operating Partnership) until each receives a certain cumulative return (“Preferred Return”), and the return of all capital contributions. Thereafter, remaining cash flows are distributed 20% to the Operating Partnership (“Promote”) and 80% to the partners or members (including the Operating Partnership).
See Note 1 to Consolidated Financial Statements for a detailed discussion of the Funds.
Capital Strategy — Balance Sheet Focus and Access to Capital
Our primary capital objective is to maintain a strong and flexible balance sheet through conservative financial practices, including moderate use of leverage within our Core Portfolio, while ensuring access to sufficient capital to fund future growth. We intend to continue financing acquisitions and property development and redevelopment with sources of capital determined by management to be the most appropriate based on, among other factors, availability in current capital markets, pricing, and other commercial and financial terms. Such sources of capital may include the issuance of public equity, unsecured debt, mortgage and construction loans, and other capital alternatives including the issuance of OP Units. We manage our interest rate risk through the use of fixed-rate debt and, where we use variable-rate debt, through the use of certain derivative instruments, including Secured Overnight Financing Rate (“SOFR”) and London Interbank Offered Rate (“LIBOR”) swap agreements and interest rate caps as discussed further in Item 7A of this Report.
We maintain a share repurchase program that authorizes management, at its discretion, to repurchase up to $200.0 million of outstanding Common Shares. The program may be discontinued or extended at any time. We repurchased 1,219,065 shares for $22.4 million, inclusive of fees, during the year ended December 31, 2020. We did not repurchase any shares during the years ended December 31, 2022 or 2021. As of December 31, 2022, management may repurchase up to approximately $122.5 million of Common Shares under the program. See Note 10.
We also maintain an at-the-market equity issuance program (the "ATM Program") that provides us with an efficient and low-cost vehicle for raising capital through public equity issuances on an as-we-go basis to fund our capital needs. Through the ATM Program, we have been able to effectively “match-fund” a portion of the required capital for our Core Portfolio and Fund acquisitions through the issuance of Common Shares over extended periods employing a price averaging strategy. In addition, from time to time, we have issued and intend to continue to issue equity in follow-on offerings separate from our ATM Program. Net proceeds raised through our ATM Program and follow-on offerings are primarily used for acquisitions, both for our Core Portfolio and our pro-rata share of Fund acquisitions and for other general corporate purposes. During the year ended December 31, 2022, we issued 5,525,419 Common Shares under our ATM Program for gross proceeds of $123.9 million. During the year ended December 31, 2021, we issued 2,889,371 Common Shares under our ATM Program for gross proceeds of $64.9 million. No such issuances were made during 2020. See Note 10.
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Operating Strategy — Experienced Management Team with Proven Track Record
Our senior management team has decades of experience in the real estate industry. We have capitalized on our expertise in the acquisition, development/redevelopment, leasing, and management of retail real estate by creating value through property development/redevelopment, re-tenanting and establishing joint ventures, such as the Funds, in which we earn, in addition to a return on our equity interest, promotes, priority distributions and fees.
Operating functions such as leasing, property management, construction, finance and legal are generally provided by our personnel, providing for a vertically integrated operating platform.
INVESTING ACTIVITIES
See Item 2. Properties for a description of the properties in our Core and Fund portfolios. See Significant Developments under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for a detailed discussion of our consolidated and unconsolidated acquisitions, dispositions and financing activity for the year ended December 31, 2022.
Core Portfolio
Our Core Portfolio consists primarily of high-quality street retail and urban assets, as well as suburban properties located in high-barrier-to-entry, trade areas.
As we typically hold our Core Portfolio properties for long-term investment, we review our portfolio and implement programs to renovate and re-tenant targeted properties to enhance their market position. This in turn is expected to strengthen the competitive position of our leasing department to attract and retain quality tenants, increasing cash flow, and consequently, property values. From time to time, we also identify certain properties for disposition and redeploy the capital for acquisitions and for the repositioning of existing properties with greater potential for capital appreciation.
Funds
Our Fund investments consist of suburban shopping centers and urban retail assets structured as wholly-owned or jointly-owned investments.
Structured Finance Program
We also make investments in first mortgages and other notes receivable collateralized by real estate, (which we refer to as our Structured Finance Program) either directly or through entities having an ownership interest therein.
Development and Redevelopment Activities
As part of our investing strategy, we invest in real estate assets that may require significant development. In addition, certain assets may require redevelopment to meet the demand of changing markets. As of December 31, 2022, there were two Fund and two Core Portfolio development projects and five Core Portfolio redevelopment projects. During the year ended December 31, 2022, we placed a portion of two Fund development properties into service and placed two Core properties into development. See Item 2. Properties—Development Activities and Note 2.
GOVERNMENT REGULATIONS AND ENVIRONMENTAL LAWS
We are subject to federal, state and local laws and regulations, including environmental laws and regulations. As of the date of this Report, we do not expect the cost of compliance with such laws and regulations to have a material impact on our capital expenditures, earnings, or competitive position. See Item 1A. Risk Factors — Risks Related to Litigation, Environmental Matters and Governmental Regulation.
We may be liable for the costs of removal or remediation of certain hazardous or toxic substances at our property sites, as well as certain other potential costs relating to hazardous or toxic substances (including government fines and penalties and damages for injuries to persons and adjacent property). These laws may impose liability without regard to whether we knew of, or were responsible for, the presence or disposal of those substances. This liability may be imposed on us in connection with the activities of an operator of, or tenant at our properties. The cost of any required remediation, removal, fines or personal or property damages and our liability therefore could exceed the value of the property and/or our aggregate assets. In addition, the presence of such substances, or the failure to properly dispose of or remove such substances, may adversely impact our ability to sell or rent an affected property or to borrow using that property as collateral, which, in turn, would reduce our revenues and ability to make distributions.
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Our existing properties, as well as properties we may acquire, as commercial facilities, are required to comply with the Americans with Disabilities Act of 1990, as amended (the "ADA"). See Item 1A. Risk Factors — Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unplanned expenditures that could adversely affect our financial condition, cash flows and results of operations.
In addition, we may become subject to new compliance requirements and/or new costs or taxes associated with natural resource or energy usage and related emissions (such as a carbon tax), which could increase our operating costs. Compliance with new laws or regulations related to climate change may require us to make improvements to our existing properties or pay additional taxes and fees assessed on us or our properties. See Item 1A. Risk Factors — Climate change, natural disasters or health crises could adversely affect our properties and business.
CORPORATE HEADQUARTERS
Our executive office is located at 411 Theodore Fremd Avenue, Suite 300, Rye, New York 10580, and our telephone number is (914) 288-8100.
HUMAN CAPITAL
We recognize that our ability to achieve the high standards we set for our company can best be accomplished by curating a diverse team of top talent. We are committed to fostering an energized and motivated workforce through programs and benefits that promote employee satisfaction, advancement, equity, and inclusion.
As of December 31, 2022, we had 115 employees, of whom 94 were located at our executive office and 21 were located at regional property management offices. During 2022, our total turnover rate was approximately 23%. None of our employees are covered by collective bargaining agreements and management believes that its relationship with employees is good.
Diversity, Equity, and Inclusion
Diversity, equity, and inclusion (“DEI”) are fundamental values of our business. We believe that our potential for success is maximized by having a diverse workforce that is reflective of our society and the communities we serve.
As of December 31, 2022, women represent 50% of our employees, 32% of our management-level positions and 22% of the independent trustees on our board of trustees (the "Board"), and racially and ethnically diverse individuals represent 25% of our employees, 24% of our management-level positions, and 11% of the independent trustees on our Board.
Our DEI Program is focused on fostering a professional environment that fully embraces individuals with varied backgrounds, cultures, races, identities, ages, perspectives, beliefs, and values. The four pillars of our DEI Program are awareness, acknowledgment, acceptance and advancement, and our mission is to raise awareness of systemic inequities and promote initiatives to dismantle any such inequities. Through education and awareness – including compulsory unconscious bias training and training dedicated to allyship in 2022 – we are working to establish a corporate culture that is characterized by respect, acceptance, and inclusivity. We believe that we have an individual and institutional responsibility to observe, promote and protect DEI principles. As part of our commitment to promoting DEI principles, we signed the CEO Action for Diversity & Inclusion pledge in 2020, which brings together more than 2,400 CEOs who have pledged to, among other initiatives: (i) cultivate environments that support open dialogue on DEI; (ii) implement unconscious bias education and training; (iii) share DEI programs and initiatives; and (iv) engage boards when developing and evaluating DEI strategies.
We are committed to providing equal employment opportunities without regard to any actual or perceived characteristic protected by applicable local, state or federal laws, rules, or regulations.
Employee Engagement
We have been recognized as a Great Place to Work® based on employee satisfaction surveys for three consecutive years. We analyze the survey results to identify opportunity areas for enhancing employee satisfaction and engagement.
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Training and Development
We believe in investing in talent at all levels within our organization. Whether through property tours that allow employees to learn about the projects they work on, or through access to online learning tutorials, employees are encouraged to take full advantage of professional development opportunities.
Our senior management team focuses on succession planning for senior leadership and business unit lead roles and presents a succession plan to our Board annually.
We are committed to building our own talent pipeline. Through our summer internship program, we hope to plant the seeds for future growth and innovation. This program offers hands-on experience to students looking to specialize in the retail real estate industry and offers our company a fresh perspective. We attempt to recruit diverse candidates for our internship program through partnerships with external organizations.
Health and Wellness
All employees are eligible to participate in our Wellness Program which advocates for and provides resources regarding nutrition, exercise, mental health, and workplace ergonomics. We value the importance of personal growth and encourage employees to participate in company events, health initiatives and training courses.
We offer a comprehensive benefits package to all employees.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)
Achievements and Initiatives
We seek to drive financial performance while engaging in environmentally and socially responsible business practices grounded in sound corporate governance. Our ESG program is overseen by the Board’s Nominating and Corporate Governance Committee (“NCG Committee”). The NCG Committee periodically reviews our ESG strategy, practices and policies, receives regular updates from management regarding our ESG activities and reports to the full Board for further discussion and evaluation as needed and appropriate. Day-to-day management of our ESG program, including developing and guiding the implementation of our ESG initiatives, is performed by our full-time dedicated Director of ESG and our internal ESG Committee, comprised of senior leaders and representatives from various departments. The ESG Committee meets regularly, at least quarterly, and provides periodic updates on our ESG program to our Chief Executive Officer and the Board.
We maintain a robust Enterprise Risk Management (“ERM”) plan to identify and formulate responses to the most critical risks to operations, including those related to climate change and environmental impact. ERM planning serves as an additional forum for the integration of ESG considerations into our business operations.
In addition to a dedicated team of professionals, we have established ESG policies and procedures that inform and guide our ESG approach and drive our ESG goals forward, including a firm-wide ESG Policy and a Tenant Sustainability Guide. We have aligned our sustainability practices to the Global Reporting Initiative (“GRI”) standards and to the Sustainability Accounting Standards Board (“SASB”) and the Task Force on Climate-Related Financial Disclosures (“TCFD”) frameworks. We seek to align our ESG strategy and goals with certain United Nations Sustainable Development Goals ("UN SDGs"), such as goals to combat climate change and to promote the sustainability of our communities.
Below are some highlights of our ESG program. Additional information is available in our Proxy and Corporate Responsibility Report. Such information is not incorporated by reference into, and is not part of this Report.
Environmental
We are committed to understanding the environmental impact of our operations and promoting environmental sustainability while maintaining high standards for our company and our stakeholders.
We are building the resiliency of our portfolio to the physical and transition risks of climate change. For standing investments, we analyze climate-related physical and transition risks and we consider any identified risks as part of our enterprise risk management and budgeting, and capital improvements processes. Climate-related physical and transition risks are also assessed as part of the due diligence process for acquisitions. Understanding climate-related risks in our portfolio enables us to implement mitigation measures, including increased insurance coverage and physical enhancements, such as waterproofing systems, as necessary. In addition, we established a GHG emissions reduction goal for scope 1 and 2 emissions in our portfolio in an effort to reduce our exposure to, and our contribution to, the negative impacts of climate change.
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We prioritize energy efficiency to try to reduce the amount of GHG emissions generated by our properties. Our energy reduction strategy seeks to reduce energy consumption through a variety of measures, including through LED lighting, smart lighting controls upgrades in our parking areas, and smart thermostat installations in our vacant tenant spaces. For substantially all of our properties with landlord-controlled parking areas, we have installed LED parking lot lighting and smart lighting controls .
Our energy reduction strategy is complemented by our renewable energy strategy which seeks to incorporate the use of electricity sourced from on-site and off-site renewable energy projects, such as solar and wind, for the landlord-controlled common areas of our properties. We engage in renewable energy projects through leasing roof and parking lot space at our properties for solar panel arrays and electric vehicle charging stations. This contributes to the production of renewable energy for off-site consumption. Lastly, we are evaluating onsite offtake and using renewable energy credits (RECs).
Our water management program focuses on monitoring and reducing common area water consumption, while encouraging best water management practices by our tenants. We leverage technology to track and analyze our water consumption to identify and decrease excessive use. A majority of our properties benefit from the use of a landscape design focused on drought-resistant, native, pollinator-friendly plantings that save water. For substantially all of our properties with landlord-controlled irrigation, we have installed smart irrigation systems with features like rain sensors, to ensure the irrigation is turned on only when necessary. In addition, we use submeters at certain of our properties to give our retail tenants visibility into their water consumption and a financial incentive to decrease their consumption.
We include a “green” clause into our standard form of retail leases to align tenant and landlord interests in promoting the sustainability of our properties, which provides for, among other requirements, cooperation on environmental and social initiatives, and upgrades. We are proud to be named a 2022 Green Lease Leader by the Institute for Market Transformation/the U.S. Department of Energy’s Better Buildings Alliance and achieved gold status for using “green” leases to engage our tenants in making our properties more sustainable.
Our sustainable practices extend to our corporate offices where we have adopted energy reduction, waste management and water conservation initiatives. These initiatives include, for example, installing LED lighting and automatic occupancy sensors for lighting and equipment, recycling programs, implementing electronic communication systems for tenant billing, and using low-flow faucets. Our corporate headquarters is easily accessible by public transit due to the close proximity to two train stations, helping to reduce air pollution and greenhouse gas emissions from employee travel. As a result of sustainability efforts made at our corporate headquarters, we were awarded the Outstanding Achievement in Land Use Award by the Green Business Partnership in 2019.
Social
DEI are fundamental values of our business. For additional details regarding our DEI Program, as well as employee engagement, employee training and development, and employee health and wellness initiatives, see Item 1. Human Capital.
Employee volunteerism and philanthropy program are key areas of focus for our company. We engage with local charitable and volunteer organizations to connect with those in need and provide support. We also encourage our employees to participate in company-sponsored events and to give back through time, effort, or monetary donations.
We value the importance of community engagement through the facilitation of events at our properties. We engage in partnerships with local communities and non-profit organizations to host community events and fundraisers throughout our portfolio.
The health and well-being of our tenants and their employees and customers are important to us. Our property operations professionals conduct regular inspections, repairs and improvements to maintain safe and secure shopping centers and enhance the retail experience.
We strive to respect and promote human rights in accordance with the UN Guiding Principles on Business and Human Rights. We support freedom of association as proclaimed in the Universal Declaration of Human Rights.
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Governance
We are dedicated to maintaining a high standard for corporate governance predicated on integrity, ethics, diversity, and transparency. All of our Board members stand for re-election every year. We seek to maintain a diverse Board primarily comprised of independent trustees who represent a mix of varied experience, backgrounds, tenure, and skills to ensure a broad range of perspectives is represented. In 2021, our NCG Committee formally committed in its charter to seek to include candidates with a diversity of race, ethnicity, and gender in the pool from which it selects trustee candidates. The Committee annually reviews the composition of the Board and recommends measures to ensure the Board reflects the appropriate balance of knowledge, experience, skills, expertise, and diversity of backgrounds to enable the Company to execute its strategic plan and achieve its objectives. As of December 31, 2022, two of our nine independent trustees are female and one independent trustee represents racial and ethnic diversity.
Additionally, we regularly monitor developments in the area of corporate governance and seek to enhance our corporate governance structure based upon a review of new developments and recommended best practices, considering investor feedback. We believe that sound corporate governance strengthens the accountability of our Board and management and promotes the long-term interests of our shareholders. Governance highlights include: opt-out of the Board self-classification provisions of Subtitle 8; no shareholder rights plan; annual election of trustees; majority voting standard for trustees in uncontested elections with a resignation policy if an incumbent trustee fails to receive the required vote for re-election; independent and diverse Board with a lead independent trustee; regular succession planning; risk oversight by the full Board and committees; claw-back, anti-hedging and anti-pledging policies; annual Say-on-Pay vote; and shareholders’ ability to call a special meeting.
Our Corporate Governance Guidelines and associated policies mandate an elevated level of excellence from our company, the Board and management. Through transparency, alignment of interests, and removal of potential conflicts of interests, we ensure that our decisions and actions advance the interests of our shareholders, employees, and other stakeholders.
We are diligent about cybersecurity risk management, strategy, and governance. Our Board is regularly briefed by management on cybersecurity risks and initiatives, and our employees are trained to help safeguard our systems from unauthorized access, including phishing and hacking. We conduct comprehensive monitoring of our computer networks and we maintain appropriate insurance coverage.
COMPANY WEBSITE
All of our filings with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to such reports, are available at no cost on the Investors page of our website at www.acadiarealty.com, as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. These filings can also be accessed through the SEC’s website at www.sec.gov. Alternatively, we will provide paper copies of our filings, including this Report, at no cost upon request addressed to Investor Relations at Acadia Realty Trust, 411 Theodore Fremd Avenue, Suite 300, Rye, NY 10580, phone number (914) 288-8100 or email investorrelations@acadiarealty.com.
We use, and intend to use, the Investors page of our website as a means of disclosing material nonpublic information and of complying with our 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 our press releases, SEC filings, public conference calls, presentations and webcasts.
The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this Report.
CODE OF ETHICS AND WHISTLEBLOWER POLICIES
Our Board adopted a Code of Business Conduct and Ethics applicable to all employees, as well as a “Whistleblower Policy.” Copies of these documents are available in the Investors – Corporate Governance page of our website at www.acadiarealty.com. We will disclose future amendments to, or waivers from (with respect to our executive officers and trustees), our Code of Business Conduct and Ethics on our website within four business days following the date of such amendment or waiver. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this Report.
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ITEM 1A. RISK FACTORS.
Set forth below are the risk factors that we believe are material to our investors. You should carefully consider these risk factors, together with all of the other information included in this Report, including our consolidated financial statements and related notes thereto, before you decide whether to make an investment in our securities. The occurrence of any of the following risks could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and to make distributions to our shareholders. In such case, the trading price of our Common Shares could decline, and you may lose all or a significant part of your investment. This section includes or refers to certain forward-looking statements. See “Special Note Regarding Forward-Looking Statements”.
The following risk factors are not exhaustive. Other sections of this Report may include additional factors that could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and to make distributions to our shareholders. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may affect our business. Investors should also refer to our quarterly reports on Form 10-Q and current reports on Form 8-K for future periods for material updates to these risk factors.
Risk factors pertaining to our Company generally fall within the following broad areas:
There are risks relating to investments in real estate that could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and make distributions to our shareholders.
Real property investments are subject to multiple risks. Real estate values are affected by several factors, including changes in the general economic climate, local conditions (such as an oversupply of space or a reduction in demand), the quality and philosophy of management, competition from other available space, and the ability to provide adequate maintenance and insurance and to control variable operating costs. Retail properties, in particular, may be affected by changing perceptions of retailers or shoppers regarding the convenience and attractiveness of the property and by the overall climate for the retail industry. Real estate values are also affected by such factors as government regulations, interest rate levels, the availability of financing and potential liability under, and changes in, environmental, zoning, tax, and other laws. A significant portion of our income is derived from rental income from real property. Our income and cash flow would be adversely affected if we were unable to rent our vacant space to viable tenants on economically favorable terms or at all. In the event of default by a tenant, we may experience delays in enforcing, as well as incur substantial costs to enforce, our rights as a landlord. In addition, certain significant expenditures associated with each equity investment (such as mortgage payments, real estate taxes and maintenance costs) are generally not reduced even though there may be a reduction in income from the investment.
We rely on revenues derived from tenants, in particular our key tenants, and a decrease in those revenues could adversely affect our ability to make distributions to our shareholders.
Revenue from our properties depends primarily on the ability of our tenants to pay the full amount of rent and other charges due under their leases on a timely basis. We derive significant revenues from a concentration of 20 key tenants which occupy space at more than one property and collectively account for approximately 19.3% of our consolidated revenue. We could be adversely affected in the event of the bankruptcy or insolvency of, or a downturn in the business of, any of our key tenants, or in the event that any such tenant does not renew its leases as they expire or renews such leases at lower rental rates. See “Item 2. Properties—Major Tenants” for quantified information with respect to the percentage of our minimum rents received from major tenants.
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Anchor tenants and co-tenancy are crucial to the success of retail properties and vacated anchor space directly and indirectly affects our rental revenues.
Certain of our properties are supported by “anchor” tenants. Anchor tenants pay a significant portion of the total rents at a property and contribute to the success of other tenants by drawing large numbers of customers to a property. Vacated anchor space not only directly reduces rental revenues, but, if not re-tenanted with a tenant with comparable consumer attraction, could adversely affect the rest of the property primarily through the loss of customer drawing power. This can also occur through the exercise of the right that most anchors have, to vacate and prevent re-tenanting by paying rent for the balance of the lease term, also known as “going dark”, such as the case of the departure of a “shadow” anchor tenant that is owned by another landlord. In addition, in the event that certain anchor tenants cease to occupy a property, such an action results in a significant number of other tenants having the contractual right to terminate their leases, or pay a reduced rent based on a percentage of the tenant’s sales, at the affected property, which could adversely affect the future income from such property, also known as “co-tenancy.” Although it may not directly reduce our rental revenues, and there are no contractual co-tenancy conditions, vacant retail space adjacent to, or even on the same block as our street and urban properties may similarly affect shopper traffic and re-tenanting activities at our properties. See “Item 2. Properties—Major Tenants”.
The bankruptcy of, or a downturn in the business of, any of our major tenants or a significant number of our smaller tenants may adversely affect our financial condition, cash flows, results of operations and property values.
The bankruptcy of, or a downturn in the business of, any of our major tenants causing them to reject their leases, or to not renew their leases as they expire, or renew at lower rental rates, may adversely affect our cash flows and property values. Furthermore, the impact of vacated anchor space and the potential reduction in customer traffic may adversely impact the balance of tenants at a shopping center.
Historically and from time to time, certain of our tenants experienced financial difficulties and filed for bankruptcy protection, typically under Chapter 11 of the United States Bankruptcy Code. Pursuant to bankruptcy law, tenants have the right to reject some or all of their leases. In the event a tenant exercises this right, the landlord generally has the right to file a claim for lost rent equal to the greater of either one year's rent (including tenant expense reimbursements) for remaining terms greater than one year, or 15% of the rent remaining under the balance of the lease term, but not to exceed three years rent. Actual amounts to be received in satisfaction of those claims will be subject to the tenant's final bankruptcy plan and the availability of funds to pay its creditors. There can be no assurance that our major tenants will not declare bankruptcy, in which case we may be unable to recoup past and future rent in full, and to re-lease a terminated or rejected space on comparable terms or at all.
We may not be able to renew current leases or the terms of re-letting (including the cost of concessions to tenants) may be less favorable to us than current lease terms.
Upon the expiration of current leases for space located in our properties, we may not be able to re-let all or a portion of that space, or the terms of re-letting (including the cost of concessions to tenants) may be less favorable to us than current lease terms. If we are unable to re-let promptly all or a substantial portion of the space located in our properties or if the rental rates we receive upon re-letting are significantly lower than current rates, our net income and ability to make expected distributions to our shareholders will be adversely affected due to the resulting reduction in revenues. There can be no assurance that we will be able to retain tenants in any of our properties upon the expiration of their leases. See “Item 2. Properties—Lease Expirations” for additional information regarding the scheduled lease expirations in our portfolio.
Our business is significantly influenced by demand for retail space generally, and a decrease in such demand may have a greater adverse effect on our business than if we owned a more diversified real estate portfolio.
A decrease in the demand for retail space may have a greater adverse effect on our business and financial condition than if we owned a more diversified real estate portfolio. The market for retail space has been, and could continue to be, adversely affected by weakness in the national, regional, and local economies, the adverse financial condition of some large retailing companies and bankruptcy incidence, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets and increasing consumer purchases through the Internet. To the extent that any of these conditions occur, they are likely to negatively affect market rents for retail space and could adversely affect our financial condition, cash flows, results of operations, the trading price of our Common Shares and our ability to satisfy our debt service obligations and to pay distributions to our shareholders.
E-commerce can have an impact on our business because it may cause a downturn in the business of our current tenants and affect future leases.
The use of the Internet by retail consumers continues to gain in popularity and the migration toward e-commerce is expected to continue. The increase in Internet sales could result in a downturn in the business of our current tenants in their “brick and mortar” locations, adversely impacting their ability to satisfy their rent obligations, and could affect the way future tenants lease space.
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While we devote considerable effort and resources to analyze and respond to tenant trends, preferences, and consumer spending patterns, we cannot predict with certainty what future tenants will want, what future retail spaces will look like and how much revenue will be generated at traditional “bricks and mortar” locations. If we are unable to anticipate and respond promptly to trends in the market because of the illiquid nature of real estate our occupancy levels and financial results could suffer. See the Risk Factor entitled, “Our ability to change our portfolio is limited because real estate investments are illiquid” below.
Many of our real estate costs are fixed, even if income from our properties decreases, which would cause a decrease in net income.
Our financial results depend primarily on leasing space at our properties to tenants on terms favorable to us. Costs associated with real estate investment, such as real estate taxes, insurance, and maintenance costs, generally are not reduced even when a property is not fully occupied, rental rates decrease, or other circumstances cause a reduction in income from the property. As a result, cash flow from the operations of our properties may be reduced if a tenant does not pay its rent or we are unable to fully lease our properties on favorable terms. Additionally, properties that we develop or redevelop may not produce any significant revenue immediately, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with such projects until they are fully occupied.
Our ability to change our portfolio is limited because real estate investments are illiquid.
Equity investments in real estate are relatively illiquid and, therefore, our ability to change our portfolio promptly in response to changed conditions is limited, which could adversely affect our financial condition, cash flows, and ability to satisfy our debt service obligations and to make distributions to our shareholders. In addition, the Internal Revenue Code of 1986, as amended (the “Code”), contains restrictions on a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies. Our Board may establish investment criteria or limitations as it deems appropriate, but it currently does not limit the number of properties in which we may seek to invest or on the concentration of investments in any one geographic region. As discussed under the heading “Our Board may change our investment policy or objectives without shareholder approval” below, we could change our investment, disposition and financing policies and objectives without a vote of our shareholders, but such change may be delayed or more difficult to implement due to the illiquidity of real estate.
We could be adversely affected by conditions in the markets where our properties are geographically concentrated.
Our performance depends on the economic conditions in markets where our properties are geographically concentrated. We have significant exposure to the greater New York and Chicago metropolitan regions, from which we derive 38.2% and 24.6% of the annual base rents within our Core Portfolio, respectively. In addition, our Funds derive 32.8%, 22.6% and 22.2% of their annual base rents in the New York metropolitan, Southeast, and Northeast regions of the United States, respectively. Our operating results could be adversely affected if market conditions, such as an oversupply of space or a reduction in demand for real estate, occur in these areas.
Our development and construction activities could affect our operating results.
We intend to continue the selective development and construction of retail properties. See “Item 1. Business —Investing Activities–Funds–Development Activities”.
As opportunities arise, we may delay construction until sufficient pre-leasing is reached, and financing is in place. Our development and construction activities include the risk that:
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In addition, the entitlement and development of real estate entails extensive approval processes, sometimes involving multiple regulatory jurisdictions. It is common for a project to require multiple approvals, permits and consents from U.S. federal, state and local governing and regulatory bodies. Compliance with these and other regulations and standards is time intensive and costly and may require additional long range infrastructure review and approvals which can add to project cost. In addition, development of properties containing delineated wetlands may require one or more permits from the U.S. federal government and/or state and local governmental agencies. Any of these issues can materially affect the cost, timing and economic viability of our development and redevelopment projects.
At times, we may also be required to use unionized construction workers or to pay the prevailing wage in a jurisdiction to unionized workers, which could increase a project’s costs and the risk of a strike, thereby affecting construction timelines.
Additionally, the time frame required for development, construction and lease-up of these properties means that we may not realize a significant cash return for several years. If any of the above events occur, the development of properties may hinder our growth and could have an adverse effect on our financial condition, cash flows and results of operations. In addition, new development activities, regardless of whether or not they are ultimately successful, typically require substantial time and attention from management.
Developments and acquisitions may fail to perform as expected, which could adversely affect our results of operations.
Our investment strategy includes the development and acquisition of retail properties in supply constrained markets in densely populated areas with high average household incomes and significant barriers to entry. The acquisition of such properties is highly competitive. Additionally, the development and acquisition of such properties entails risks that include the following, any of which could adversely affect our financial condition, cash flows, results of operations, and our ability to meet our debt obligations and make distributions to shareholders:
Historically, Fund I, Mervyns I and Fund III have provided Promote income. There can be no assurance that our joint ventures will continue to operate profitably and thus provide additional Promote income in the future. These factors could limit the return that we receive from such investments or cause our cash flows to be lower than our estimates. In addition, a partner or co-venturer may not have access to sufficient capital to satisfy its funding obligations to the joint venture.
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We may not be able to recover our investments in marketable securities or other investments, which may result in significant losses to us.
Our investments in marketable securities are subject to specific risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer, which may result in significant losses to us. Marketable securities are generally unsecured and may also be subordinated to other obligations of the issuer. As a result, investments in marketable securities are subject to risks of substantial market price volatility, resulting from changes in prevailing interest rates and the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations. These risks may adversely affect the value of outstanding marketable securities and the ability of the issuers to make distribution payments.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 17 for additional discussion regarding the shares held by the Company of Albertsons Companies, Inc. (“Albertsons”).
The economic performance and value of our other investments, which we do not control and are in retail operations, are subject to risks associated with owning and operating retail businesses, as outlined in our other risk factors provided herein. A decline in the value of our other investments may require us to recognize an other-than-temporary impairment (“OTTI”) against such assets. When the fair value of an investment is determined to be less than its amortized cost at the balance sheet date, we assess whether the decline is temporary or other-than-temporary. If we intend to sell an impaired asset, or it is more likely than not that we will be required to sell the impaired asset before any anticipated recovery, then we must recognize an OTTI through charges to earnings equal to the entire difference between the asset’s amortized cost and its fair value at the balance sheet date. When an OTTI is recognized through earnings, a new cost basis is established for the asset, and the new cost basis may not be adjusted through earnings for subsequent recoveries in fair value.
Our real estate assets may be subject to impairment charges.
We periodically assess whether there are any indicators that the value of our real estate assets and other investments may be impaired. A property’s value is considered to be impaired only if the estimated aggregate future undiscounted property cash flows are less than the carrying value of the property. In our estimate of cash flows, we consider factors such as trends and prospects and the effects of demand and competition on expected future operating income. If we are evaluating the potential sale of an asset or redevelopment alternatives, the undiscounted future cash flows consider the most likely course of action as of the balance sheet date based on current plans, intended holding periods and available market information. We are required to make subjective assessments as to whether there are impairments in the value of our real estate assets and other investments. Impairment charges have an immediate direct impact on our earnings. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our operating results in the period in which the charge is taken.
If a third-party vendor fails to provide agreed upon services, we may suffer losses.
We are dependent and rely on third party vendors, including Cloud providers, for redundancy of our network, system data, security, and data integrity. If a vendor fails to provide services as agreed, suffers outages, business interruptions, financial difficulties, or bankruptcy, we may experience service interruption, delays, or loss of information. Cloud computing is dependent upon having access to an Internet connection in order to retrieve data. If a natural disaster, blackout, or other unforeseen event were to occur that disrupted the ability to obtain an Internet connection, we may experience a slowdown or delay in our operations. We conduct appropriate due diligence on all services providers and restrict access, use and disclosure of personal information. We engage vendors with formal written agreements clearly defining the roles of the parties and specifying privacy and data security responsibilities.
Actual or perceived threats associated with epidemics, pandemics or other public health crises, including the COVID-19 Pandemic, have had and could continue to have a material adverse effect on our and our tenants’ businesses, financial condition, results of operations, cash flow, liquidity, and ability to access the capital markets and satisfy debt service obligations.
Epidemics, pandemics, or other public health crises, including the COVID-19 Pandemic, that impact economic and market conditions, particularly in the markets where our properties are located, and preventative measures taken to alleviate their impact may have a material adverse effect on our and our tenants’ businesses, financial condition, results of operations, liquidity, and ability to access capital markets and satisfy debt service obligations.
Our retail tenants depend on in-person interactions with their customers to generate unit-level profitability, and an epidemic, pandemic or other public health crisis may decrease customer willingness to frequent, and “shelter-in-place” or “stay-at-home” orders or recommendations may prevent customers from frequenting our tenants’ businesses, which may result in their inability to maintain profitability and make timely rental payments to us under their leases. Such restrictions may also affect customer behavior longer term by, among other things, creating a preference for e-commerce, discussed further in our risk factors above.
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If we decided to employ higher leverage levels, we would be subject to increased debt service requirements and a higher risk of default on our debt obligations, which could adversely affect our financial conditions, cash flows and ability to make distributions to our shareholders. In addition, increases or changes in interest rates could cause our borrowing costs to rise and may limit our ability to refinance debt.
Although we have historically used moderate levels of leverage, we have incurred, and expect to continue to incur, indebtedness to support our activities. As of December 31, 2022, our outstanding indebtedness was $1,805.4 million, of which $364.6 million was variable-rate indebtedness.
None of our Declaration of Trust, our Bylaws or any policy statement formally adopted by our Board limits either the total amount of indebtedness or the specified percentage of indebtedness that we may incur. Accordingly, we could become more highly leveraged, resulting in increased debt service requirements and a higher risk of default on our debt obligations. This in turn could adversely affect our financial condition, cash flows and ability to make distributions to our shareholders.
Although approximately 79.8% of our outstanding debt has fixed or effectively fixed interest rates, we also borrow funds at variable interest rates. We are exposed to risks related to a potential rising interest rate environment for our current or any future variable interest rate debt, which could cause our borrowing costs to rise and may limit our ability to refinance debt. Interest expense on our variable-rate debt as of December 31, 2022 would increase by approximately $3.6 million annually for a 100-basis-point increase in interest rates. This exposure would increase if we sought additional variable-rate financing based on pricing and other commercial and financial terms. We enter into interest rate hedging transactions, including interest rate swap and cap agreements, with counterparties, generally, the same lenders who made the loan in question. There can be no guarantee that the future financial condition of these counterparties will enable them to fulfill their obligations under these agreements.
We expect that all LIBOR settings relevant to us will cease to be published or will no longer be representative after June 30, 2023. As a result, any of our LIBOR-based borrowings and hedges that extend beyond such date will need to be converted to a replacement rate. U.S. regulators identified the Secured Overnight Financing Rate (“SOFR”) as their preferred alternative to USD LIBOR in derivatives and other financial contracts. We have contracts indexed to LIBOR and are monitoring and evaluating the risks related to potential discontinuation of LIBOR, including transitioning contracts to a new alternative rate and any resulting value transfer that may occur. When USD LIBOR is discontinued, the interest rates of our LIBOR-indexed debt following such event will be based on either alternate base rates, such as SOFR, or agreed upon replacement rates. While the discontinuation of USD LIBOR would not affect our ability to borrow or maintain already outstanding borrowings, it could result in higher interest rates and/or payments under our debt agreements. Additionally, adjustments to systems and mathematical models to properly process and account for alternative rates will be required, which may strain the model risk management and information technology functions and result in substantial incremental costs to the Company.
Our inability to raise capital for new Funds or to carry out our growth strategy could adversely affect our financial condition, cash flows and results of operations.
Our earnings growth strategy is based on the acquisition and development of additional properties, including acquisitions of core properties through our Operating Partnership and our high return investment programs through our Fund platform. The consummation of any future acquisitions will be subject to satisfactory completion of our extensive valuation analysis and due diligence review and to the negotiation of definitive documentation. We cannot be sure that we will be able to implement our strategy because we may have difficulty finding new properties, obtaining necessary entitlements, negotiating with new or existing tenants or securing acceptable financing.
Acquisitions of additional properties entail the risk that investments will fail to perform in accordance with expectations, including operating and leasing expectations. In the context of our business plan, “development” generally means an expansion or renovation of an existing property. Development is subject to numerous risks, including risks of construction delays, cost overruns or uncontrollable events that may increase project costs, new project commencement risks such as the receipt of zoning, occupancy and other required governmental approvals and permits, and incurring development costs in connection with projects that are not pursued to completion.
Historically, a component of our growth strategy has been through private-equity type investments made through our RCP Venture, which have included investments in operating retailers. The inability of such retailers to operate profitably would have an adverse impact on income realized from these investments. Through our investments in joint ventures, we have also invested in operating businesses that have operational risk in addition to the risks associated with real estate investments, including human capital issues, adequate supply of product and material, and merchandising issues.
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Furthermore, if we were unable to obtain sufficient investor capital commitments in order to initiate future Funds, our current growth strategy would be adversely impacted. Because the Operating Partnership is the sole general partner or managing member of our Funds and earns promote distributions or fees for asset management, property management, construction, development, leasing, and legal services, such a situation would also adversely impact the amount of or ability to earn such promotes or fees.
Our structured financing portfolio is subject to specific risks relating to the structure and terms of the instruments and the underlying collateral.
We invest in notes receivables and preferred equity investments that are collateralized by the underlying real estate, a direct interest or the borrower’s ownership interest in the entities that own the properties and/or by the borrower’s personal guarantee. The underlying assets are sometimes subordinate in payment and collateral to more senior loans. The ability of a borrower or entity to make payments on these investments may be subject to the senior lender and/or the performance of the underlying real estate. In the event of a default by the borrower or entity on its senior loan, our investment will only be satisfied after the senior loan and we may not be able to recover the full value of the investment. In the event of a bankruptcy of an entity in which we have a preferred equity interest, or in which the borrower has pledged its interest, the assets of the entity may not be sufficient to satisfy our investment.
We are exposed to possible liability relating to environmental matters.
Under various Federal, state and local environmental laws, statutes, ordinances, rules, and regulations, as an owner of real property, we may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under our property, as well as certain other potential costs relating to hazardous or toxic substances (including government fines and penalties and damages for injuries to persons and adjacent property). These laws may impose liability without regard to whether we knew of, or were responsible for, the presence or disposal of those substances. This liability may be imposed on us in connection with the activities of an operator of, or tenant at, the property. The cost of any required remediation, removal, fines or personal or property damages and our liability therefore could exceed the value of the property and/or our aggregate assets. In addition, the presence of those substances, or the failure to properly dispose of or remove those substances, may adversely affect our ability to sell or rent that property or to borrow using that property as collateral, which, in turn, could reduce our revenues and affect our ability to make distributions.
A property can also be adversely affected either through physical contamination or by virtue of an adverse effect upon value attributable to the migration of hazardous or toxic substances, or other contaminants that have or may have emanated from other properties. Although our tenants are primarily responsible for any environmental damages and claims related to the leased premises, in the event of the bankruptcy or inability of any of our tenants to satisfy any obligations with respect to the property leased to that tenant, we may be required to satisfy such obligations. In addition, we may be held directly liable for any such damages or claims irrespective of the provisions of any lease.
From time to time, in connection with the conduct of our business, and prior to the acquisition of any property from a third party or as required by our financing sources, we authorize the preparation of Phase I environmental reports and, when necessary, Phase II environmental reports, with respect to our properties. Based upon these environmental reports and our ongoing review of our properties, we are currently not aware of any environmental condition with respect to any of our properties that we believe would be reasonably likely to have a material adverse effect on us. There can be no assurance, however, that the environmental reports will reveal all environmental conditions at our properties or that the following will not expose us to material liability in the future:
Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations of our tenants, which could adversely affect our financial condition, cash flows and results of operations.
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Uninsured losses or a loss in excess of insured limits could adversely affect our financial condition, cash flows and results of operations.
We carry comprehensive general liability, all-risk property, extended coverage, loss of rent insurance, and environmental liability on our properties, with policy specifications and insured limits customarily carried for similar properties. However, with respect to those properties where the leases do not provide for abatement of rent under any circumstances, we maintain a minimum of twelve months loss of rent insurance. In addition, there are certain types of losses, such as losses resulting from wars, terrorism or acts of God that generally are not insured because they are either uninsurable or not economically insurable. Should an uninsured loss or a loss in excess of insured limits occur, we could lose capital invested in a property, as well as the anticipated future revenues from a property, while remaining obligated for any mortgage indebtedness or other financial obligations related to the property. Any loss of these types could adversely affect our financial condition, cash flows and results of operations.
We may from time to time be subject to litigation that could negatively impact our financial condition, cash flows, results of operations and the trading price of our Common Shares.
We may from time to time be a defendant in lawsuits and regulatory proceedings relating to our business. Such litigation and proceedings may result in defense costs, settlements, fines, or judgments against us, some of which may not be covered by insurance. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such litigation or proceedings. An unfavorable outcome may result in our having to pay significant fines, judgments, or settlements, which, if uninsured, or if exceeding insurance coverage, could adversely impact our financial condition, cash flows, results of operations and the trading price of our Common Shares. Additionally, certain proceedings or the resolution of certain proceedings may affect the availability or cost of some of our insurance coverage and expose us to increased risks that would be uninsured. See "Item 3. — Legal Proceedings" and the Notes to Consolidated Financial Statements as updated by our subsequent filings with the SEC, for pending litigation, if any.
Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make unplanned expenditures that could adversely affect our financial condition, cash flows and results of operations.
All of our properties are required to comply with the Americans with Disabilities Act, as amended (the “ADA”). The ADA has separate compliance requirements for “public accommodations” and “commercial facilities,” but generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in imposition of fines by the U.S. government or an award of damages to private litigants, or both. While the tenants to whom we lease properties are obligated by law to comply with applicable ADA provisions, and are typically obligated to cover costs of compliance, if required changes involve greater expenditures than anticipated, or if the changes must be made on a more accelerated basis than anticipated, the ability of these tenants to cover costs could be adversely affected. As a result of the foregoing or if a tenant is not obligated to cover the cost of compliance, we could be required to expend funds to comply with the provisions of the ADA, which could adversely affect our financial condition, cash flows and results of operations. In addition, we are required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to the properties. We may be required to make substantial capital expenditures to comply with those requirements, and these expenditures could also adversely affect our financial condition, cash flows and results of operations.
The loss of key management members could have an adverse effect on our business, financial condition, and results of operations.
Our success depends on the contribution of key management members. The loss of the services of Kenneth F. Bernstein, President and Chief Executive Officer, or other key executive-level employees could have a material adverse effect on our business, financial condition, and results of operations. Management continues to strengthen our team and we have CEO succession planning in place, but there can be no assurance that such planning will be capable of implementation or that our efforts will be successful. We have obtained key-man life insurance for Mr. Bernstein. In addition, we have entered into an employment agreement with Mr. Bernstein and into severance agreements with other senior executives; however, Mr. Bernstein and such executives may terminate their employment with us at will.
We have pursued and may in the future continue to pursue extensive growth opportunities, including investing in new markets, which may result in significant demands on our operational, administrative, and financial resources.
We have pursued and may pursue growth opportunities, some of which have been, and in the future may be, in locations in which we have not historically invested. This expansion places significant demands on our operational, administrative, and financial resources. The continued growth of our real estate portfolio can be expected to continue to place a significant strain on our resources. Our future performance will depend in part on our ability to successfully attract and retain qualified management personnel to manage the growth and operations of our business. In addition,
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the acquired properties may fail to operate at expected levels due to the numerous factors that may affect the value of real estate. There can be no assurance that we will have sufficient resources to identify and manage the newly acquired properties.
Our Board may change our investment policy or objectives without shareholder approval.
Our Board may determine to change our investment and financing policies or objectives, our growth strategy and our debt, capitalization, distribution, acquisition, disposition, and operating policies. Our Board may establish investment criteria or limitations as it deems appropriate, but currently does not limit the number of properties in which we may seek to invest or the concentration of investments in any one geographic region. Although our Board has no present intention to revise or amend our strategies and policies, it may do so at any time without a vote by our shareholders. Accordingly, the results of decisions made by our Board as implemented by management may or may not serve the interests of all of our shareholders and could adversely affect our financial condition, cash flows, results of operations, and ability to satisfy our debt service obligations and to make distributions to our shareholders.
Concentration of ownership by certain investors may allow these investors to exert influence over the business and affairs of our Company.
As of December 31, 2022, four institutional shareholders own 5% or more individually, and 54.4% in the aggregate, of our Common Shares. While this ownership concentration does not jeopardize our qualification as a REIT for U.S. federal income tax purposes (due to certain “look-through provisions” of the Code), a significant concentration of ownership may allow an investor or a group of investors to exert a greater influence over our management and affairs and may have the effect of delaying, deferring, or preventing a change in control of us. Additionally, our Board may, in its sole discretion, waive or modify the 9.8% Common Shares ownership limit in our Declaration of Trust with respect to one or more persons if it is satisfied that ownership in excess of the limit will not jeopardize our qualification as a REIT for U.S. federal income tax purposes. From time to time, we have entered into waivers with certain institutional investors, subject to certain representations from such investors, including that the Common Shares held by the investors will be held in the ordinary course of business and not with the purpose or effect of changing or influencing control of us.
Restrictions on a potential change of control could prevent changes that would be beneficial to our shareholders.
Our Board is authorized by our Declaration of Trust to establish and issue one or more series of preferred shares of beneficial interest without shareholder approval. We have not established any series of preferred shares other than the Series A and Series C Preferred OP Units in the Operating Partnership. However, the establishment and issuance of a class or series of preferred shares could make a change of control of us that could be in the best interests of the shareholders more difficult. In addition, we have entered into an employment agreement with our Chief Executive Officer and severance agreements with certain of our executives, which provide that, upon the occurrence of a change in control of us and either the termination of their employment without cause (as defined) or their resignation for good reason (as defined), such executive officers would be entitled to certain termination or severance payments made by us (which may include a lump sum payment equal to defined percentages of annual salary and prior years’ average bonuses, paid in accordance with the terms and conditions of the respective agreement), which could deter a change of control of us that could be in the best interests of our shareholders generally.
Certain provisions of Maryland law may limit the ability of a third party to acquire control of our Company.
Under the provisions of the Maryland General Corporation Law (the “MGCL”) applicable to REITs, certain business combinations, including certain mergers, consolidations, share exchanges and asset transfers and certain issuances and reclassifications of equity securities, between a Maryland REIT and any person who beneficially owns 10% or more of the voting power of the REIT’s outstanding voting shares or an affiliate or an associate, as defined in the MGCL, of the REIT who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding shares of beneficial interest of the REIT (an “interested shareholder”) or an affiliate of the interested shareholder, are prohibited for five years after the most recent date on which the interested shareholder becomes an interested shareholder. After that five-year period, any such business combination must be recommended by the board of trustees of the REIT and approved by the affirmative vote of at least (i) 80% of the votes entitled to be cast by holders of outstanding voting shares of beneficial interest of the REIT and (ii) two-thirds of the votes entitled to be cast by holders of voting shares of beneficial interest of the REIT other than shares held by the interested shareholder with whom, or with whose affiliate, the business combination is to be effected or held by an affiliate or associate of the interested shareholder, unless, among other conditions, the REIT’s common shareholders receive a minimum price, as defined in the MGCL, for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for its common shares.
These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by the board of trustees of the REIT before the interested shareholder becomes an interested shareholder, and a person is not an interested shareholder if the board of trustees approved in advance the transaction by which the person otherwise would have become an interested shareholder. In approving a transaction, our Board may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the Board. We have not elected to opt out of the business combination statute.
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The MGCL also provides that holders of “control shares” of a Maryland REIT (defined as voting shares that, when aggregated with all other shares owned by the acquirer or in respect of which the acquirer is entitled to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise one of three increasing ranges of voting power in electing trustees) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of “control shares”) have no voting rights except to the extent approved by the affirmative vote of holders of at least two-thirds of all the votes entitled to be cast on the matter, excluding shares owned by the acquirer, by officers or by employees who are also trustees of the REIT. Our Bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our shares of beneficial interest. Our Bylaws can be amended by our Board by majority vote or by our shareholders, pursuant to a binding proposal properly submitted for consideration at a meeting of shareholders, by the affirmative vote of a majority of all votes entitled to be cast on the matter, and there can be no assurance that this provision will not be amended or eliminated at any time in the future.
Additionally, Title 3, Subtitle 8 of the MGCL permits our Board, without shareholder approval and regardless of what is currently provided in our Declaration of Trust or Bylaws, to elect to be subject to certain provisions relating to corporate governance that may have the effect of delaying, deferring or preventing a transaction or a change of control of our Company that might involve a premium to the market price of our Common Shares or otherwise be in the best interests of our shareholders. We are subject to some of these provisions (for example, a two-thirds vote requirement for removing a trustee) by provisions of our Declaration of Trust and Bylaws unrelated to Subtitle 8. However, pursuant to the Articles Supplementary filed with the State Department of Assessments and Taxation of Maryland on November 9, 2017, which are referenced in Part IV Item 15 hereto, the Board approved a resolution to opt out of Section 3-803 of Subtitle 8 of Title 3 of the MGCL that allows the Board, without shareholder approval, to elect to classify into three classes with staggered three-year terms. The Articles Supplementary prohibit the Company, without the affirmative vote of a majority of the votes cast on the matter by shareholders entitled to vote generally in the election of trustees, from classifying the Board under Subtitle 8.
Becoming subject to, or the potential to become subject to, these provisions of the MGCL could inhibit, delay, or prevent a transaction or a change of control of our Company that might involve a premium price for our shareholders or otherwise be in our or their best interests. In addition, the provisions of our Declaration of Trust on removal of trustees and the provisions of our Bylaws regarding advance notice of shareholder nominations of trustees and other business proposals and restricting shareholder action outside of a shareholders meeting unless such action is taken by unanimous written consent could have a similar effect.
Our rights and shareholders’ rights to take action against trustees and officers are limited, which could limit recourse in the event of actions not in the best interests of shareholders.
As permitted by Maryland law, our Declaration of Trust eliminates the liability of our trustees and officers to the Company and its shareholders for money damages, except for liability resulting from:
In addition, our Declaration of Trust authorizes, and our Bylaws obligate, us to indemnify each present or former trustee or officer, to the maximum extent permitted by Maryland law, who is made a party to any proceeding because of his or her service to our Company in those or certain other capacities. As part of these indemnification obligations, we may be obligated to fund the defense costs incurred by our trustees and officers.
We operate through a partnership structure, which could have an adverse effect on our ability to manage our assets.
Our primary property-owning vehicle is the Operating Partnership, of which we are the general partner. Our acquisition of properties through the Operating Partnership in exchange for interests in the Operating Partnership may permit certain tax deferral advantages to limited partners who contribute properties to the Operating Partnership. Since properties contributed to the Operating Partnership may have unrealized gains attributable to the differences between the fair market value and adjusted tax basis in such properties prior to contribution, the sale of such properties could cause adverse tax consequences to the limited partners who contributed such properties. Although we, as the general partner of the Operating Partnership, generally have no obligation to consider the tax consequences of our actions to any limited partner, we own several properties subject to material contractual restrictions for varying periods of time designed to minimize the adverse tax consequences to the limited partners who contributed such properties. Such restrictions may result in significantly reduced flexibility to manage some of our assets.
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We currently have an exclusive obligation to seek investments for our Funds, which may prevent us from making acquisitions directly.
Under the terms of the organizational documents of our Funds, our primary goal is to seek investments for the Funds, subject to certain exceptions. We may only pursue opportunities to acquire retail properties directly through the Operating Partnership if (i) the ownership of the acquisition opportunity by the Funds would create a material conflict of interest for us; (ii) we require the acquisition opportunity for a “like-kind” exchange; (iii) the consideration payable for the acquisition opportunity is our Common Shares, OP Units or other securities or (iv) the investment is outside the parameters of our investment goals for the Funds (which, in general, seek more opportunistic level returns). As a result, we may not be able to make attractive acquisitions directly and instead may only receive a minority interest in such acquisitions through the Funds.
Our joint venture investments carry additional risks not present in our direct investments.
Partnership or joint venture investments (that may include, among others, tenancy-in common and other similar investments) may involve risks not otherwise present for investments made solely by us, including the possibility that our partner or co-venturer might become bankrupt, and that our partner or co-venturer may take action contrary to our instructions, requests, policies, or objectives, including with respect to maintaining our qualification as a REIT. Actions by, or disputes with, joint venture partners might result in subjecting properties owned by the joint venture to additional risks. Other risks of joint venture investments include impasses on decisions, such as a sale, because neither we nor a joint venture partner may have full control over the joint venture. Also, there is no limitation under our organizational documents as to the amount of our funds that may be invested in joint ventures.
Additionally, our partners or co-venturers may engage in malfeasance in spite of our efforts to perform a high level of due diligence on them, which may jeopardize an investment and/or subject us to reputational risk. Such acts may or may not be covered by insurance.
Any disputes that may arise between joint venture partners and us may result in potentially costly litigation or arbitration that would prevent our officers and/or trustees from focusing their time and effort on our business. In addition, we may in certain circumstances be liable for the actions of our third-party joint venture partners.
There can be no assurance we have qualified or will remain qualified as a REIT for Federal income tax purposes.
We believe that we have consistently met the requirements for qualification as a REIT for Federal income tax purposes beginning with our taxable year ended December 31, 1993, and we intend to continue to meet these requirements in the future. However, qualification as a REIT involves the application of highly technical and complex provisions of the Code, for which there may be only limited judicial or administrative interpretations. No assurance can be given that we have qualified or will remain qualified as a REIT. The Code provisions and income tax regulations applicable to REITs differ significantly from those applicable to other entities. The determination of various factual matters and circumstances not entirely within our control can potentially affect our ability to continue to qualify as a REIT. In addition, no assurance can be given that future legislation, regulations, administrative interpretations, or court decisions will not significantly change the requirements for qualification as a REIT or adversely affect the Federal income tax consequences of such qualification. Under current law, if we fail to qualify as a REIT, we would not be allowed a deduction for dividends paid to shareholders in computing our net taxable income. In addition, our income would be subject to tax at the regular corporate rates. Also, we could be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. Cash available for distribution to our shareholders would be significantly reduced for each year in which we do not qualify as a REIT. In that event, we would not be required to continue to make distributions. Although we currently intend to continue to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause us, without the consent of our shareholders, to revoke the REIT election or to otherwise take action that would result in disqualification.
Legislative or regulatory tax changes could have an adverse effect on us.
There are a number of issues associated with an investment in a REIT that are related to the Federal income tax laws, including, but not limited to, the consequences of our failing to continue to qualify as a REIT. At any time, the Federal income tax laws governing REITs, or the administrative interpretations of those laws may be amended or modified. Any new laws or interpretations may take effect retroactively and could adversely affect us or our shareholders.
We may be required to borrow funds or sell assets to satisfy our REIT distribution requirements.
Our cash flows may be insufficient to fund distributions required to maintain our qualification as a REIT as a result of differences in timing between the actual receipt of income and the recognition of income for U.S. Federal income tax purposes, or as a result of our inability to currently deduct certain expenditures that we must currently pay, such as capital expenditures, payments of compensation for which Section 162(m) of the Code denies a deduction, any business interest expense that is disallowed under Section 163 (j) of the Code (unless we elect to be an “electing
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real property trade or business”), and the creation of reserves or required amortization payments. While we have historically satisfied these distribution requirements by making cash distributions to our stockholders, a REIT is permitted to satisfy these requirements by making distributions of cash or other property, including, in limited circumstances, its own stock. Assuming we continue to satisfy these distribution requirements with cash, we may need to borrow funds on a short term basis or sell assets, to meet the REIT distribution requirements and avoid the payment of income and excise taxes even if the then prevailing market conditions are not favorable for these borrowings or sales. These cash needs could result from differences in timing between the actual receipt of cash and inclusion of income for U.S. federal income tax purposes, or the effect of non-deductible capital expenditures, the creation of cash reserves or required debt or amortization payments. These sources, however, may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of factors, including the market's perception of our growth potential, our current debt levels, the market price of our common stock, and our current and potential future earnings. Such actions could adversely affect our cash flow and results of operations.
Dividends payable by REITs generally do not qualify for reduced tax rates.
Certain qualified dividends paid by corporations to individuals, trusts and estates that are U.S. shareholders are taxed at capital gain rates, which are lower than ordinary income rates. Dividends of current and accumulated earnings and profits payable by REITs, however, are taxed at ordinary income rates as opposed to the capital gain rates. Pursuant to section 199A of the Code, from 2018 through 2025, certain REIT shareholders will be permitted to deduct 20% of ordinary REIT dividends received. Dividends payable by REITs in excess of these earnings and profits generally are treated as a non-taxable reduction of the shareholders’ basis in the shares to the extent thereof and thereafter as taxable gain. The more favorable rates applicable to regular corporate dividends could cause investors who are individuals, trusts, and estates to perceive investments in REITs, including us, to be relatively less attractive than investments in the stock of non-REIT corporations that pay dividends, which may negatively impact the trading prices of our securities.
Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.
To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders and the ownership of our Common Shares. In order to meet these tests, we may be required to forego investments we might otherwise make and refrain from engaging in certain activities. Thus, compliance with the REIT requirements may hinder our performance.
In addition, if we fail to comply with certain asset ownership tests at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification. As a result, we may be required to liquidate otherwise attractive investments.
We have limits on ownership of our shares of beneficial interest.
For us to qualify as a REIT for Federal income tax purposes, among other requirements, not more than 50% of the value of our shares of beneficial interest may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year, and such shares of beneficial interest must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year (in each case, other than the first such year). Our Declaration of Trust includes certain restrictions regarding transfers of our shares of beneficial interest and ownership limits that are intended to assist us in satisfying these limitations, among other purposes. These restrictions and limits may not be adequate in all cases, however, to prevent the transfer of our shares of beneficial interest in violation of the ownership limitations. The ownership limits contained in our Declaration of Trust may have the effect of delaying, deferring, or preventing a change of control of us.
Actual or constructive ownership of our shares of beneficial interest in excess of the share ownership limits contained in our Declaration of Trust would cause the violative transfer or ownership to be null and void from the beginning and subject to purchase by us at a price equal to the fair market value of such shares (determined in accordance with the rules set forth in our Declaration of Trust). As a result, if a violative transfer were made, the recipient of the shares would not acquire any economic or voting rights attributable to the transferred shares. Additionally, the constructive ownership rules for these limits are complex and groups of related individuals or entities may be deemed a single owner and consequently in violation of the share ownership limits.
Distribution requirements imposed by law limit our operating flexibility.
To maintain our status as a REIT for Federal income tax purposes, we are generally required to distribute to our shareholders at least 90% of our taxable income for each calendar year. Our taxable income is determined without regard to any deduction for dividends paid and by excluding net capital gains. To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable income, we will be subject to Federal corporate income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by
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which our distributions in any year are less than the sum of (i) 85% of our ordinary income for that year; (ii) 95% of our capital gain net income for that year; and (iii) 100% of our undistributed taxable income from prior years. We intend to continue to make distributions to our shareholders to comply with the distribution requirements of the Code and to minimize exposure to Federal income and excise taxes. Differences in timing between the receipt of income and the payment of expenses in determining our income as well as required debt amortization payments and the capitalization of certain expenses could require us to borrow funds on a short-term basis to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT. The distribution requirements also severely limit our ability to retain earnings to acquire and improve properties or retire outstanding debt.
GENERAL RISK FACTORS
The economic environment may cause us to lose tenants and may impair our ability to borrow money to purchase properties, refinance existing debt or finance our current development projects.
Our operations and performance depend on general economic conditions, including consumer health. The U.S. economy has historically experienced financial downturns from time to time, including a decline in consumer spending, credit tightening and high unemployment.
While we currently believe we have adequate sources of liquidity, there can be no assurance that, in the event of a financial downturn, we will be able to obtain secured or unsecured loan facilities to meet our needs, including to purchase additional properties, to complete current development projects, or to successfully refinance our properties as loans become due. To the extent that the availability of credit is limited, it would also adversely impact our notes receivable, as counterparties may not be able to obtain the financing required to repay the loans upon maturity.
Certain sectors of the U. S. economy are still experiencing weakness. Over the past several years, this structural weakness has resulted in periods of high unemployment, rising inflation, the bankruptcy or weakened financial condition of a number of retailers, decreased consumer spending, increased home foreclosures, low consumer confidence, and reduced demand and rental rates for certain retail space. There can be no assurance that an economic recovery will occur or continue. General economic factors that are beyond our control, including, but not limited to, economic recessions, decreases in consumer confidence, reductions in consumer credit availability, increasing consumer debt levels, rising energy costs, higher tax rates, continued business layoffs, downsizing and industry slowdowns, and/or rising inflation, could have a negative impact on the business of our retail tenants. In turn, this could have a material adverse effect on our business because current or prospective tenants may, among other things, (i) have difficulty paying their rent obligations as they struggle to sell goods and services to consumers, (ii) be unwilling to enter into or renew leases with us on favorable terms or at all, (iii) seek to terminate their existing leases with us or request rental concessions on such leases, or (iv) be forced to curtail operations or declare bankruptcy.
Political and economic uncertainty could have an adverse effect on our business.
In the past year, microeconomic and macroeconomic conditions, including the fallout from the COVID-19 Pandemic, the war in Ukraine, supply-chain disruptions, and the recessionary outlook of the current financial markets, has increased volatility in the market and has caused a surge in already increasing inflation and interest rates. We cannot predict how current political and economic uncertainty will affect our critical tenants, joint venture partners, lenders, financial institutions, and general economic conditions, including the health and confidence of the consumer and the volatility of the stock market.
Political and economic uncertainty poses a risk to us in that it may cause consumers to postpone discretionary spending in response to tighter credit, reduced consumer confidence and other macroeconomic factors affecting consumer spending behavior, resulting in a downturn in the business of our tenants. In the event current political and economic uncertainty results in financial turmoil affecting the banking system and financial markets generally or significant financial service institution failures, there could be a new or incremental tightening in the credit markets, low liquidity, and extreme volatility in fixed income, credit, currency, and equity markets. Each of these factors could adversely affect our financial condition, cash flows and results of operations.
Inflation may adversely affect our financial condition, cash flows and results of operations.
Increased inflation could have a more pronounced negative impact on our mortgage and debt interest, any of our remaining development and redevelopment costs, and general and administrative expenses, as these costs could increase at a rate higher than our rents. Also, inflation may adversely affect tenant leases with stated rent increases or limits on such tenant’s obligation to pay its share of operating expenses, which could be lower than the increase in inflation at any given time. It may also limit our ability to recover all of our operating expenses. Inflation could also have an adverse effect on consumer spending, which could impact our tenants’ sales and, in turn, our average rents, and in some cases, our percentage rents, where applicable. In addition, renewals of leases or future leases may not be negotiated on current terms, in which event we may recover a smaller percentage of our operating expenses.
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Competition may adversely affect our ability to purchase properties and to attract and retain tenants.
There are numerous commercial developers, real estate companies, financial institutions, and other investors with greater financial resources than we have that compete with us in seeking properties for acquisition and tenants who will lease space in our properties. Our competitors include other REITs, financial institutions, private funds, insurance companies, pension funds, private companies, family offices, sovereign wealth funds and individuals. This competition may result in a higher cost for properties than we wish to pay. In addition, retailers at our properties (both in our Core Portfolio and in the portfolios of the Funds) face increasing competition from outlet malls, discount shopping clubs, e-commerce, direct mail, and telemarketing, which could (i) reduce rents payable to us and (ii) reduce our ability to attract and retain tenants at our properties leading to increased vacancy rates at our properties.
Changes in market conditions could have an adverse effect on our share price and our ability to access the public equity markets.
The market price of our Common Shares may fluctuate significantly in response to many factors, including:
Many of the factors listed above are beyond our control. Those factors may cause the market price of our Common Shares to decline significantly, regardless of our financial performance, condition, and prospects. We cannot provide any assurance that the market price of our Common Shares will not fall in the future, and it may be difficult for holders to sell such securities at prices they find attractive, or at all. A decline in our share price, as a result of this or other market factors, could unfavorably impact our ability to raise additional equity in the public markets.
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Outages, computer viruses and similar events could disrupt our operations.
We rely on information technology networks and systems, some of which are owned and operated by third parties, to process, transmit and store electronic information. Any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, terrorist or cyber-attacks and similar events. Despite the implementation of network security measures, our systems and those of third parties on which we rely may also be vulnerable to computer viruses and similar disruptions. If we or the third parties on whom we rely are unable to prevent such outages and breaches, our operations could be disrupted.
Increased Information Technology (“IT”) security threats and more sophisticated computer crime could pose a risk to our systems, networks, and services.
Cyber incidents can result from deliberate attacks or unintentional events. There have been an increased number of significant cyber-attacks targeted at the retail, insurance, financial and banking industries that include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data or causing operational disruption. Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access, such as by causing denial-of-service attacks on websites. Cyber-attacks by third parties or insiders utilize techniques that range from highly sophisticated efforts to electronically circumvent network security or overwhelm a website to more traditional intelligence gathering, and social engineering aimed at obtaining information necessary to gain access.
Increased global IT security threats are more sophisticated and targeted computer crimes pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. The open nature of interconnected technologies may allow for a network or Web outage or a privacy breach that reveals sensitive data or transmission of harmful/malicious code to business partners and clients. Because the techniques used to obtain unauthorized access, disable, or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures.
Cyber-attacks may result in substantial financial and reputational cost, including but are not limited to:
The control environment for cyber security is an ever-changing risk landscape across the entire attack surface which includes risks from on-premises, cloud infrastructure, software as a service and mobile applications. While we attempt to mitigate these risks by employing a number of measures, including a dedicated IT team, employee training and background checks, maintenance of backup systems, utilization of third-party service providers to provide redundancy over multiple locations, and comprehensive monitoring of our networks and systems along with purchasing cyber security insurance coverage, our systems, networks, and services remain potentially vulnerable to advanced threats.
Use of social media may adversely impact our reputation and business.
There has been a significant increase in the use of social media platforms, including weblogs, social media websites and other forms of Internet-based communications, which allow individuals access to a broad audience, including our significant business constituents. The availability of information through these platforms is virtually immediate as is its impact and may be posted at any time without affording us an opportunity to redress or correct it timely. This information may be adverse to our interests, may be inaccurate and may harm our reputation, brand image,
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goodwill, performance, prospects, or business. Furthermore, these platforms increase the risk of unauthorized disclosure of material non-public Company information.
Climate change, natural disasters or health crises could adversely affect our properties and business.
Some of our current or future properties could be subject to natural disasters and may be impacted by climate change. To the extent climate change causes adverse changes in weather patterns, rising sea levels or extreme temperatures, our properties in certain markets may be adversely affected. Specifically, properties located in coastal regions, including Florida, Virginia, Georgia, New York, and Massachusetts could be affected by any future increases in sea levels or in the frequency or severity of hurricanes and storms, whether caused by climate change or other factors. Additionally, we own properties in California, which in recent years has experienced intense drought and wildfires and has had earthquake activity.
Climate change could have a variety of direct or indirect adverse effects on our properties and business, including:
Moreover, compliance with new laws or regulations related to climate change, including compliance with “green” building codes, may require us to make improvements to our existing properties or pay additional taxes and fees assessed on us or our properties. Although we strive to identify, analyze, and respond to the risk and opportunities that climate change presents, at this time there can be no assurance that climate change will not have an adverse effect on us.
Public health crises, pandemics, and epidemics, such as those caused by new strains of viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS) and, most recently, the COVID-19 Pandemic, may increase as international travel continues to rise and could adversely impact our business by interrupting our tenants’ business, supply chains and transactional activities, disrupting travel, and negatively impacting local, national, or global economies.
Future terrorist attacks or civil unrest could harm the demand for, and the value of, our properties.
Over the past several years, a number of highly publicized terrorist acts and shootings have occurred at domestic and international retail properties. Future terrorist attacks, civil unrest and other acts of terrorism or war could harm the demand for, and the value of, our properties. Terrorist attacks could directly impact the value of our properties through damage, destruction, loss or increased security costs, and the availability of insurance for such acts may be limited or may be subject to substantial cost increases. To the extent that our tenants are impacted by future attacks, their ability to continue to honor obligations under their existing leases could be adversely affected. A decrease in retail demand could make it difficult for us to renew or re-lease our properties at lease rates equal to or above historical rates. These acts might erode business and consumer confidence and spending and might result in increased volatility in national and international financial markets and economies. Any
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one of these events might decrease demand for real estate, decrease or delay the occupancy of our properties, and limit our access to capital or increase our cost of raising capital.
Increased scrutiny by and changing expectations from investors, tenants, employees, and other stakeholders regarding our ESG practices and reporting could cause us to incur additional costs and adversely impact our reputation, tenant and employee acquisition and retention, and access to capital.
Companies across all industries are facing increasing scrutiny related to their ESG practices and disclosure. Investors, tenants, employees, and other stakeholders have begun to focus increasingly on ESG practices and to place heightened importance on the environmental and social cost of their investments, business decisions and consumer choices. For example, an increasing number of investment funds focus on positive ESG practices and sustainability scores when making an investment decision. Additionally, certain institutional investors have demonstrated increased activism with respect to their existing investments, including by urging companies to take certain actions in areas of perceived ESG significance.
Investors, particularly institutional investors, use or may use third-party benchmarks and scores to assess our ESG practices against our peers and if we are perceived as lagging, such investors may decide to not invest in our Common Shares or to divest from their current investment, and we may face reputational challenges. Alternatively, such investors may decide to actively engage with us to improve ESG disclosure or performance, and may also make voting decisions on this basis. Given increased investor focus and demand, public disclosure regarding ESG practices is becoming more broadly expected. Any disclosure we make may include our policies and practices on a variety of ESG matters, including corporate governance, environmental compliance, human capital management, and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied with our ESG practices, reporting and goals, or with our speed of adoption. If our ESG practices and disclosures do not meet investor, tenant, employee or other stakeholder expectations, which continue to evolve, our reputation and tenant and employee retention, and access to capital may be negatively impacted.
In 2022, the SEC proposed extensive rules aimed at enhancing and standardizing climate-related disclosures in an effort to foster greater consistency, comparability and reliability of climate-related information among public issuers. The proposal, if adopted, would require public issuers to include prescribed climate-related information in their registration statements and annual reports, including information regarding greenhouse gas emissions and climate-related risks and opportunities and related financial impacts, governance and strategy. Additionally, we may become subject to new compliance requirements and/or new costs or taxes associated with natural resource or energy usage and related emissions (such as a “carbon tax”), which could increase our operating costs.
We could incur additional costs relating to implementing, monitoring and reporting various ESG practices and initiatives, as well as complying with applicable law, which could place a strain on our personnel, systems and resources. Our failure, or perceived failure, to meet the goals and objectives we set in any ESG disclosure within the timelines announced or at all, or the expectations of our various stakeholders could negatively impact our reputation, tenant and employee retention, and access to capital.
We previously identified a material weakness in our internal control over financial reporting which resulted in the restatement of certain of our previously issued consolidated financial statements, which resulted in unanticipated costs and may affect investors' confidence and raise reputational issues. If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results.
Effective internal controls over financial reporting are necessary for us to provide reliable and accurate financial reports. We previously identified and reported a deficiency in internal control over financial reporting as of December 31, 2021 and determined that the Company did not maintain effective internal control over financial reporting because of an error in accounting treatment at the time of formation related to the improper consolidation of two investments that are less-than-wholly-owned through the Company’s opportunity funds. As a consequence, these two Fund Investments, which were formed in 2012 and 2013, were adjusted from consolidated investments to investments in unconsolidated affiliates within the restated financial statements, as of and for the years ended December 31, 2020 and 2019, and as of and for each of the quarterly periods ended March 31, 2021 and 2020, June 30, 2021 and 2020, September 30, 2021 and 2020, and December 31, 2020 (collectively, the "Restatement"). The Restatement also included corrections for certain immaterial unrecorded adjustments in the Company's previously issued financial statements. See Item 9A, “Controls and Procedures”, in this Annual Report on Form 10-K for additional information regarding the previously identified material weakness and our actions to date to remediate the material weakness.
The Restatement may affect investor confidence in the accuracy of our financial disclosure and may raise reputational risks for our business, both of which could harm our business and financial results. Additionally, if material weaknesses in our internal control over financial reporting are discovered or occur in the future, our financial statements may contain material misstatements, and we could be required to restate such financial results, which could materially and adversely affect our business and financial results, restrict our ability to access the capital markets, require us to expend significant resources to correct the material weaknesses, subject us to fines, penalties or judgements, harm our reputation or otherwise cause a decline in investor confidence.
28
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
29
ITEM 2. PROPERTIES.
Retail Properties
The discussion and tables in this Item 2. include wholly-owned and partially-owned properties held through our Core Portfolio and our Funds. We define our Core Portfolio as those properties either 100% owned by, or partially owned through joint venture interests by the Operating Partnership or subsidiaries thereof, not including those properties owned through our Funds.
As of December 31, 2022, our Core Portfolio consisted of 143 operating properties totaling approximately 5.6 million square feet (or 5.2 million at our pro rata share) of gross leasable area (“GLA”) excluding five properties under redevelopment and three properties in development. The Core Portfolio properties are located in 13 states and the District of Columbia and primarily consist of street retail and dense suburban shopping centers. These properties are diverse in size, ranging from approximately 1,000 to 800,000 square feet and as of December 31, 2022, were 92.1% occupied and 94.4% leased (or 92.7% occupied and 94.9% leased at our pro rata share), excluding properties under development or redevelopment.
As of December 31, 2022, we owned and operated 49 properties totaling approximately 8.0 million square feet in total (or 1.7 million square feet at our pro rata share) of GLA in our Funds, excluding two properties under development. In addition to shopping centers, the Funds have invested in mixed-use properties, which generally include retail activities. The Fund properties are located in 19 states and the District of Columbia and, as of December 31, 2022, were 88.9% occupied and 92.5% leased (or 86.1% occupied and 91.4% leased at our pro rata share), excluding the properties under development.
Within our Core Portfolio and Funds, we had more than 1,100 retail leases as of December 31, 2022. A significant portion of our rental revenues are from national retailers and consist of rents received under long-term leases. These leases generally provide for the monthly payment of fixed minimum rent and the tenants' pro-rata share of the real estate taxes, insurance, utilities, and common area maintenance of the shopping centers. An insignificant portion of our leases also provide for the payment of rent based on a percentage of a tenant's gross sales in excess of a stipulated annual amount, either in addition to, or in place of, minimum rents, which we refer to as percentage rents. Minimum rents and expense reimbursements accounted for substantially all of our total revenues for the year ended December 31, 2022.
Six of our Core Portfolio properties and two of our Fund properties are subject to long-term ground leases in which a third party owns and has leased the underlying land to us. We pay rent for the use of the land and are responsible for all costs and expenses associated with the building and improvements at all of these locations.
No individual property or tenant contributed in excess of 10% of our total revenues for the years ended December 31, 2022, 2021 or 2020. See Note 7 for information on the mortgage debt pertaining to our properties.
30
The following table sets forth more specific information with respect to each of our Core properties at December 31, 2022:
Property (a) |
|
Key Tenants |
|
Year |
|
Acadia's |
|
|
Gross Leasable |
|
|
In Place |
|
|
Leased |
|
|
Annualized Base |
|
|
ABR/ Per |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
STREET AND URBAN RETAIL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Chicago Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
664 N. Michigan Avenue |
|
Tommy Bahama, |
|
2013 |
|
|
100.0 |
% |
|
|
18,141 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
$ |
3,350,038 |
|
|
$ |
184.67 |
|
840 N. Michigan Avenue |
|
H & M, Verizon |
|
2014 |
|
|
88.4 |
% |
|
|
87,135 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
8,521,951 |
|
|
|
97.80 |
|
Rush and Walton Streets |
|
Lululemon, BHLDN, |
|
2011 |
|
|
100.0 |
% |
|
|
40,384 |
|
|
|
88.2 |
% |
|
|
88.2 |
% |
|
|
6,996,440 |
|
|
|
196.50 |
|
Clark Street and W. Diversey |
|
Starbucks;TJ Maxx; J Crew Factory |
|
2011 |
|
|
100.0 |
% |
|
|
53,277 |
|
|
|
68.3 |
% |
|
|
78.0 |
% |
|
|
1,452,248 |
|
|
|
39.93 |
|
Halsted and Armitage |
|
Serena and Lily, |
|
2011 |
|
|
100.0 |
% |
|
|
51,596 |
|
|
|
97.6 |
% |
|
|
100.0 |
% |
|
|
2,493,561 |
|
|
|
49.52 |
|
North Lincoln Park Chicago |
|
Champion, |
|
2011 |
|
|
100.0 |
% |
|
|
49,921 |
|
|
|
67.9 |
% |
|
|
67.9 |
% |
|
|
1,065,847 |
|
|
|
31.42 |
|
State and Washington |
|
Nordstrom Rack, |
|
2016 |
|
|
100.0 |
% |
|
|
78,771 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
3,364,962 |
|
|
|
42.72 |
|
151 N. State Street |
|
Walgreens |
|
2016 |
|
|
100.0 |
% |
|
|
27,385 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,573,000 |
|
|
|
57.44 |
|
North and Kingsbury |
|
Old Navy, Backcountry |
|
2016 |
|
|
100.0 |
% |
|
|
41,791 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,845,756 |
|
|
|
44.17 |
|
Concord and Milwaukee |
|
— |
|
2016 |
|
|
100.0 |
% |
|
|
13,147 |
|
|
|
80.8 |
% |
|
|
100.0 |
% |
|
|
359,012 |
|
|
|
33.79 |
|
California and Armitage |
|
— |
|
2016 |
|
|
100.0 |
% |
|
|
18,275 |
|
|
|
78.8 |
% |
|
|
78.8 |
% |
|
|
725,404 |
|
|
|
50.40 |
|
Roosevelt Galleria |
|
Petco, Vitamin |
|
2015 |
|
|
100.0 |
% |
|
|
37,995 |
|
|
|
63.4 |
% |
|
|
89.7 |
% |
|
|
698,674 |
|
|
|
29.02 |
|
Sullivan Center |
|
Target |
|
2016 |
|
|
100.0 |
% |
|
|
176,181 |
|
|
|
78.9 |
% |
|
|
78.9 |
% |
|
|
5,023,101 |
|
|
|
36.14 |
|
|
|
|
|
|
|
|
|
|
|
693,999 |
|
|
|
86.1 |
% |
|
|
88.8 |
% |
|
|
37,469,994 |
|
|
$ |
62.71 |
|
|
New York Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Soho Collection |
|
Faherty, Outerknown, |
|
2011 |
|
|
100.0 |
% |
|
|
36,389 |
|
|
|
73.8 |
% |
|
|
90.7 |
% |
|
|
9,137,418 |
|
|
|
340.36 |
|
5-7 East 17th Street |
|
— |
|
2008 |
|
|
100.0 |
% |
|
|
8,593 |
|
|
|
0.0 |
% |
|
|
47.5 |
% |
|
|
- |
|
|
|
— |
|
200 West 54th Street |
|
— |
|
2007 |
|
|
100.0 |
% |
|
|
5,862 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,569,139 |
|
|
|
267.68 |
|
61 Main Street |
|
— |
|
2014 |
|
|
100.0 |
% |
|
|
3,470 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
312,925 |
|
|
|
90.18 |
|
181 Main Street |
|
TD Bank |
|
2012 |
|
|
100.0 |
% |
|
|
11,514 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
980,044 |
|
|
|
85.12 |
|
4401 White Plains Road |
|
Walgreens |
|
2011 |
|
|
100.0 |
% |
|
|
12,964 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
625,000 |
|
|
|
48.21 |
|
Bartow Avenue |
|
— |
|
2005 |
|
|
100.0 |
% |
|
|
14,590 |
|
|
|
80.0 |
% |
|
|
80.0 |
% |
|
|
396,697 |
|
|
|
33.97 |
|
239 Greenwich Avenue |
|
Watches of Switzerland |
|
1998 |
|
|
75.0 |
% |
|
|
16,621 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,793,298 |
|
|
|
107.89 |
|
252-256 Greenwich Avenue |
|
Veronica Beard, |
|
2014 |
|
|
100.0 |
% |
|
|
7,986 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
910,725 |
|
|
|
114.04 |
|
2914 Third Avenue |
|
Planet Fitness |
|
2006 |
|
|
100.0 |
% |
|
|
40,603 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,099,431 |
|
|
|
27.08 |
|
868 Broadway |
|
Dr. Martens |
|
2013 |
|
|
100.0 |
% |
|
|
2,031 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
838,855 |
|
|
|
413.03 |
|
313-315 Bowery (b) |
|
John Varvatos |
|
2013 |
|
|
100.0 |
% |
|
|
6,600 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
527,076 |
|
|
|
79.86 |
|
120 West Broadway |
|
Citizens Bank |
|
2013 |
|
|
100.0 |
% |
|
|
13,838 |
|
|
|
79.8 |
% |
|
|
100.0 |
% |
|
|
2,089,073 |
|
|
|
189.25 |
|
2520 Flatbush Avenue |
|
Bob's Disc. Furniture, |
|
2014 |
|
|
100.0 |
% |
|
|
29,114 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,181,175 |
|
|
|
40.57 |
|
Williamsburg Collection (c) |
|
Sephora, SweetGreen, |
|
2022 |
|
|
100.0 |
% |
|
|
50,842 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
5,027,426 |
|
|
|
98.88 |
|
991 Madison Avenue |
|
Vera Wang, |
|
2016 |
|
|
100.0 |
% |
|
|
7,513 |
|
|
|
91.1 |
% |
|
|
91.1 |
% |
|
|
3,007,496 |
|
|
|
439.24 |
|
Shops at Grand |
|
Stop & Shop (Ahold) |
|
2014 |
|
|
100.0 |
% |
|
|
99,685 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
3,335,287 |
|
|
|
33.46 |
|
Gotham Plaza |
|
Bank of America, |
|
2016 |
|
|
49.0 |
% |
|
|
25,922 |
|
|
|
73.9 |
% |
|
|
91.6 |
% |
|
|
1,588,117 |
|
|
|
82.91 |
|
|
|
|
|
|
|
|
|
|
|
394,137 |
|
|
|
92.1 |
% |
|
|
96.5 |
% |
|
|
34,419,182 |
|
|
|
94.86 |
|
|
Los Angeles Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
31
8833 Beverly Blvd |
|
Luxury Living |
|
2022 |
|
|
100.0 |
% |
|
|
9,757 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,272,860 |
|
|
|
130.46 |
|
Melrose Place Collection |
|
The Row, Chloe, |
|
2019 |
|
|
100.0 |
% |
|
|
14,000 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
2,677,460 |
|
|
|
191.25 |
|
|
|
|
|
|
|
|
|
|
|
23,757 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
3,950,320 |
|
|
|
166.28 |
|
|
District of Columbia Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
1739-53 & 1801-03 |
|
TD Bank |
|
2012 |
|
|
100.0 |
% |
|
|
20,669 |
|
|
|
66.7 |
% |
|
|
66.7 |
% |
|
|
875,265 |
|
|
|
63.53 |
|
14th Street Collection (3 properties) |
|
Mitchell Gold and Bob Williams, Verizon |
|
2021 |
|
|
100.0 |
% |
|
|
19,461 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,410,882 |
|
|
|
72.50 |
|
Rhode Island Place |
|
Ross Dress for Less |
|
2012 |
|
|
100.0 |
% |
|
|
57,667 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
2,080,617 |
|
|
|
36.08 |
|
M Street and Wisconsin Corridor |
|
Lululemon, Duxiana, |
|
2011 |
|
|
24.8 |
% |
|
|
245,249 |
|
|
|
82.1 |
% |
|
|
87.9 |
% |
|
|
12,867,936 |
|
|
|
63.88 |
|
|
|
|
|
|
|
|
|
|
|
343,046 |
|
|
|
85.2 |
% |
|
|
89.4 |
% |
|
|
17,234,700 |
|
|
|
58.95 |
|
|
Boston Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
165 Newbury Street |
|
Starbucks |
|
2016 |
|
|
100.0 |
% |
|
|
1,050 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
303,471 |
|
|
|
289.02 |
|
|
|
|
|
|
|
|
|
|
|
1,050 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
303,471 |
|
|
|
289.02 |
|
|
Dallas Metro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Henderson Avenue Portfolio (14 properties) |
|
Sprouts Market |
|
2022 |
|
|
100.0 |
% |
|
|
121,715 |
|
|
|
91.8 |
% |
|
|
93.1 |
% |
|
|
4,379,233 |
|
|
|
39.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Street and Urban Retail |
|
|
|
|
|
|
|
|
|
1,577,704 |
|
|
|
88.1 |
% |
|
|
91.4 |
% |
|
$ |
97,756,900 |
|
|
$ |
70.37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acadia Share Total Street and Urban Retail |
|
|
|
|
|
|
|
|
|
1,365,719 |
|
|
|
89.0 |
% |
|
|
91.8 |
% |
|
$ |
86,404,051 |
|
|
$ |
71.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SUBURBAN PROPERTIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
New Jersey |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Elmwood Park Shopping Center |
|
Walgreens, Lidl |
|
1998 |
|
|
100.0 |
% |
|
|
143,910 |
|
|
|
83.7 |
% |
|
|
100.0 |
% |
|
$ |
3,245,133 |
|
|
$ |
26.95 |
|
Marketplace of Absecon |
|
Walgreens, Dollar Tree |
|
1998 |
|
|
100.0 |
% |
|
|
104,556 |
|
|
|
92.2 |
% |
|
|
92.2 |
% |
|
|
1,488,815 |
|
|
|
15.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Village Commons |
|
— |
|
1998 |
|
|
100.0 |
% |
|
|
87,128 |
|
|
|
92.1 |
% |
|
|
92.1 |
% |
|
|
2,765,190 |
|
|
|
34.44 |
|
Branch Plaza |
|
LA Fitness, |
|
1998 |
|
|
100.0 |
% |
|
|
123,345 |
|
|
|
98.8 |
% |
|
|
98.8 |
% |
|
|
3,532,225 |
|
|
|
28.98 |
|
Amboy Center |
|
Stop & Shop (Ahold) |
|
2005 |
|
|
100.0 |
% |
|
|
63,290 |
|
|
|
88.4 |
% |
|
|
92.2 |
% |
|
|
1,924,058 |
|
|
|
34.38 |
|
Crossroads Shopping Center |
|
HomeGoods, PetSmart, BJ's Wholesale Club |
|
1998 |
|
|
49.0 |
% |
|
|
311,655 |
|
|
|
85.3 |
% |
|
|
88.5 |
% |
|
|
8,154,634 |
|
|
|
30.68 |
|
New Loudon Center |
|
Price Chopper, |
|
1993 |
|
|
100.0 |
% |
|
|
258,701 |
|
|
|
95.2 |
% |
|
|
95.2 |
% |
|
|
2,249,812 |
|
|
|
9.14 |
|
28 Jericho Turnpike |
|
Kohl's |
|
2012 |
|
|
100.0 |
% |
|
|
96,363 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,996,500 |
|
|
|
20.72 |
|
Bedford Green |
|
Shop Rite, CVS |
|
2014 |
|
|
100.0 |
% |
|
|
90,589 |
|
|
|
75.1 |
% |
|
|
75.1 |
% |
|
|
2,366,064 |
|
|
|
34.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Connecticut |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Town Line Plaza (e) |
|
Wal-Mart, Stop |
|
1998 |
|
|
100.0 |
% |
|
|
206,089 |
|
|
|
97.3 |
% |
|
|
97.3 |
% |
|
|
1,807,822 |
|
|
|
17.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Massachusetts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Methuen Shopping Center |
|
Wal-Mart, |
|
1998 |
|
|
100.0 |
% |
|
|
130,021 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,467,752 |
|
|
|
11.29 |
|
Crescent Plaza |
|
Home Depot, Shaw's |
|
1993 |
|
|
100.0 |
% |
|
|
218,148 |
|
|
|
96.0 |
% |
|
|
100.0 |
% |
|
|
2,066,246 |
|
|
|
9.87 |
|
201 Needham Street |
|
Michael's |
|
2014 |
|
|
100.0 |
% |
|
|
20,409 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
646,965 |
|
|
|
31.70 |
|
163 Highland Avenue |
|
Staples, Petco |
|
2015 |
|
|
100.0 |
% |
|
|
40,505 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,490,575 |
|
|
|
36.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Vermont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The Gateway Shopping Center |
|
Shaw's (Supervalu) |
|
1999 |
|
|
100.0 |
% |
|
|
101,474 |
|
|
|
98.6 |
% |
|
|
98.6 |
% |
|
|
2,205,414 |
|
|
|
22.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Illinois |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Hobson West Plaza |
|
Garden Fresh |
|
1998 |
|
|
100.0 |
% |
|
|
98,962 |
|
|
|
98.7 |
% |
|
|
98.7 |
% |
|
|
1,394,982 |
|
|
|
14.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Indiana |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
32
Merrillville Plaza |
|
Jo-Ann Fabrics, |
|
1998 |
|
|
100.0 |
% |
|
|
235,926 |
|
|
|
78.8 |
% |
|
|
92.8 |
% |
|
|
2,711,118 |
|
|
|
14.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Michigan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bloomfield Town Square |
|
HomeGoods, |
|
1998 |
|
|
100.0 |
% |
|
|
234,951 |
|
|
|
99.4 |
% |
|
|
99.4 |
% |
|
|
4,263,415 |
|
|
|
18.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Delaware |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Town Center and Other |
|
Lowes, Bed Bath & |
|
2003 |
|
|
100.0 |
% |
|
|
800,063 |
|
|
|
94.0 |
% |
|
|
94.0 |
% |
|
|
12,980,977 |
|
|
|
17.26 |
|
Market Square Shopping Center |
|
Trader Joe's, |
|
2003 |
|
|
100.0 |
% |
|
|
102,047 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
3,270,246 |
|
|
|
32.05 |
|
Naamans Road |
|
— |
|
2006 |
|
|
100.0 |
% |
|
|
19,850 |
|
|
|
63.9 |
% |
|
|
63.9 |
% |
|
|
698,462 |
|
|
|
55.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pennsylvania |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mark Plaza |
|
Kmart |
|
1993 |
|
|
100.0 |
% |
|
|
106,856 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
246,274 |
|
|
|
2.30 |
|
Plaza 422 |
|
Home Depot |
|
1993 |
|
|
100.0 |
% |
|
|
156,279 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
909,901 |
|
|
|
5.82 |
|
Chestnut Hill |
|
— |
|
2006 |
|
|
100.0 |
% |
|
|
36,492 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
961,735 |
|
|
|
26.35 |
|
Abington Towne Center (f) |
|
Target, TJ Maxx |
|
1998 |
|
|
100.0 |
% |
|
|
216,871 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,314,679 |
|
|
|
22.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Suburban Properties |
|
|
|
|
|
|
|
|
|
4,004,480 |
|
|
|
93.7 |
% |
|
|
95.7 |
% |
|
$ |
66,158,994 |
|
|
$ |
18.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acadia Share Total Suburban Properties |
|
|
|
|
|
|
|
|
|
3,845,536 |
|
|
|
94.1 |
% |
|
|
95.9 |
% |
|
$ |
62,000,131 |
|
|
$ |
18.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Core Properties |
|
|
|
|
|
|
|
|
|
5,582,184 |
|
|
|
92.1 |
% |
|
|
94.4 |
% |
|
$ |
163,915,894 |
|
|
$ |
33.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acadia Share Total Core Properties |
|
|
|
|
|
|
|
|
|
5,211,255 |
|
|
|
92.7 |
% |
|
|
94.9 |
% |
|
$ |
148,404,182 |
|
|
$ |
32.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
33
The following table sets forth more specific information with respect to each of our Fund properties at December 31, 2022:
Property (a) |
|
Key Tenants |
|
Year |
|
Acadia's |
|
|
Gross Leasable |
|
|
In Place |
|
|
Leased |
|
|
Annualized Base |
|
|
ABR/Per |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fund II Portfolio Detail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
City Point (b) |
|
Primark, Target, Basis Schools, |
|
2007 |
|
|
58.1 |
% |
|
|
541,070 |
|
|
|
64.8 |
% |
|
|
83.0 |
% |
|
$ |
14,408,337 |
|
|
$ |
41.07 |
|
Total - Fund II |
|
|
|
|
|
|
|
|
|
541,070 |
|
|
|
64.8 |
% |
|
|
83.0 |
% |
|
$ |
14,408,337 |
|
|
$ |
41.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fund III Portfolio Detail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
640 Broadway |
|
Swatch |
|
2012 |
|
|
24.5 |
% |
|
|
4,637 |
|
|
|
91.6 |
% |
|
|
91.6 |
% |
|
$ |
1,082,505 |
|
|
$ |
254.89 |
|
Total - Fund III |
|
|
|
|
|
|
|
|
|
4,637 |
|
|
|
91.6 |
% |
|
|
91.6 |
% |
|
$ |
1,082,505 |
|
|
$ |
254.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fund IV Portfolio Detail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
801 Madison Avenue |
|
─ |
|
2015 |
|
|
23.1 |
% |
|
|
2,522 |
|
|
|
— |
% |
|
|
— |
% |
|
$ |
— |
|
|
$ |
— |
|
210 Bowery |
|
─ |
|
2012 |
|
|
23.1 |
% |
|
|
2,538 |
|
|
|
— |
% |
|
|
— |
% |
|
|
— |
|
|
|
— |
|
27 East 61st Street |
|
─ |
|
2014 |
|
|
23.1 |
% |
|
|
4,177 |
|
|
|
— |
% |
|
|
— |
% |
|
|
— |
|
|
|
— |
|
17 East 71st Street |
|
The Row |
|
2014 |
|
|
23.1 |
% |
|
|
8,432 |
|
|
|
82.2 |
% |
|
|
82.2 |
% |
|
|
1,878,913 |
|
|
|
271.05 |
|
1035 Third Avenue (c) |
|
─ |
|
2015 |
|
|
23.1 |
% |
|
|
7,634 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,299,967 |
|
|
|
170.29 |
|
New Jersey |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Paramus Plaza |
|
Ashley Furniture, Marshalls |
|
2013 |
|
|
11.6 |
% |
|
|
153,494 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
3,258,849 |
|
|
|
21.23 |
|
Massachusetts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Restaurants at Fort Point |
|
─ |
|
2016 |
|
|
23.1 |
% |
|
|
15,711 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
1,050,946 |
|
|
|
66.89 |
|
Rhode Island |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
650 Bald Hill Road |
|
Dick's Sporting Goods, |
|
2015 |
|
|
20.8 |
% |
|
|
160,448 |
|
|
|
85.4 |
% |
|
|
85.4 |
% |
|
|
2,052,672 |
|
|
|
14.99 |
|
Delaware |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Eden Square |
|
Giant Food, LA Fitness |
|
2014 |
|
|
22.8 |
% |
|
|
229,171 |
|
|
|
90.9 |
% |
|
|
96.3 |
% |
|
|
3,249,992 |
|
|
|
15.60 |
|
Georgia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Broughton Street Portfolio |
|
H&M, Lululemon, |
|
2014 |
|
|
23.1 |
% |
|
|
95,201 |
|
|
|
86.5 |
% |
|
|
95.5 |
% |
|
|
3,017,138 |
|
|
|
36.62 |
|
California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
146 Geary Street |
|
─ |
|
2015 |
|
|
23.1 |
% |
|
|
10,151 |
|
|
|
— |
% |
|
|
— |
% |
|
|
— |
|
|
|
— |
|
Union and Fillmore |
|
Eileen Fisher, Bonobos |
|
2015 |
|
|
20.8 |
% |
|
|
7,148 |
|
|
|
77.9 |
% |
|
|
77.9 |
% |
|
|
636,247 |
|
|
|
114 |
|
Total - Fund IV |
|
|
|
|
|
|
|
|
|
696,627 |
|
|
|
88.6 |
% |
|
|
91.6 |
% |
|
$ |
16,444,724 |
|
|
$ |
26.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fund V Portfolio Detail |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
New Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Plaza Santa Fe |
|
TJ Maxx, Best Buy, |
|
2017 |
|
|
20.1 |
% |
|
|
224,152 |
|
|
|
97.3 |
% |
|
|
99.4 |
% |
|
$ |
3,998,589 |
|
|
$ |
18.33 |
|
Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wood Ridge Plaza |
|
Kirkland's, Office Depot |
|
2022 |
|
|
18.1 |
% |
|
|
211,674 |
|
|
|
84.5 |
% |
|
|
87.3 |
% |
|
|
3,787,696 |
|
|
$ |
21.19 |
|
La Frontera Plaza |
|
Kohl's, Hobby Lobby |
|
2022 |
|
|
18.1 |
% |
|
|
534,430 |
|
|
|
88.7 |
% |
|
|
94.3 |
% |
|
|
6,532,919 |
|
|
$ |
13.78 |
|
Michigan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
New Towne Center |
|
Kohl's, Jo-Ann's, DSW |
|
2017 |
|
|
20.1 |
% |
|
|
190,530 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
2,344,851 |
|
|
$ |
12.31 |
|
Fairlane Green |
|
TJ Maxx, Michaels |
|
2017 |
|
|
20.1 |
% |
|
|
270,187 |
|
|
|
95.2 |
% |
|
|
95.2 |
% |
|
|
5,051,602 |
|
|
$ |
19.64 |
|
Maryland |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Frederick County (2 properties) |
|
Kohl's, Best Buy, |
|
2019 |
|
|
18.1 |
% |
|
|
530,816 |
|
|
|
88.5 |
% |
|
|
94.8 |
% |
|
|
6,915,187 |
|
|
|
14.72 |
|
Connecticut |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tri-City Plaza |
|
TJ Maxx, HomeGoods, ShopRite |
|
2019 |
|
|
18.1 |
% |
|
|
302,888 |
|
|
|
88.5 |
% |
|
|
91.5 |
% |
|
|
3,812,027 |
|
|
|
14.22 |
|
New Jersey |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Midstate |
|
ShopRite, Best Buy, DSW, PetSmart |
|
2021 |
|
|
20.1 |
% |
|
|
385,116 |
|
|
|
83.8 |
% |
|
|
88.8 |
% |
|
|
6,223,830 |
|
|
|
19.28 |
|
New York |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Shoppes at South Hills |
|
ShopRite, At Home, Ashley Furniture |
|
2022 |
|
|
18.1 |
% |
|
|
512,218 |
|
|
|
74.3 |
% |
|
|
74.3 |
% |
|
|
4,375,401 |
|
|
|
11.50 |
|
Pennsylvania |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Monroe Marketplace |
|
Kohl's, Dick's Sporting Goods, |
|
2021 |
|
|
20.1 |
% |
|
|
371,652 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
4,243,262 |
|
|
|
11.42 |
|
Rhode Island |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
34
Lincoln Commons |
|
Stop and Shop, Marshalls, |
|
2019 |
|
|
20.1 |
% |
|
|
462,021 |
|
|
|
88.0 |
% |
|
|
88.0 |
% |
|
|
5,482,073 |
|
|
|
13.48 |
|
Virginia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Landstown Commons |
|
Best Buy, Burlington Coat Factory, |
|
2019 |
|
|
20.1 |
% |
|
|
386,415 |
|
|
|
90.4 |
% |
|
|
90.4 |
% |
|
|
7,366,896 |
|
|
|
21.08 |
|
Florida |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Palm Coast Landing |
|
TJ Maxx, PetSmart, |
|
2019 |
|
|
20.1 |
% |
|
|
171,799 |
|
|
|
96.9 |
% |
|
|
96.9 |
% |
|
|
3,435,796 |
|
|
|
20.64 |
|
North Carolina |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Hickory Ridge |
|
Kohl's, Best Buy, Dick's Sporting Goods |
|
2017 |
|
|
20.1 |
% |
|
|
380,565 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
4,775,096 |
|
|
|
12.55 |
|
Alabama |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trussville Promenade |
|
Wal-Mart, Regal Cinemas |
|
2018 |
|
|
20.1 |
% |
|
|
463,681 |
|
|
|
95.6 |
% |
|
|
95.6 |
% |
|
|
4,491,844 |
|
|
|
10.14 |
|
Georgia |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Canton Marketplace |
|
Dick's Sporting Goods, TJ Maxx, Best Buy |
|
2021 |
|
|
20.1 |
% |
|
|
351,988 |
|
|
|
89.3 |
% |
|
|
94.4 |
% |
|
|
5,434,763 |
|
|
|
17.29 |
|
Hiram Pavilion |
|
Kohl's, HomeGoods |
|
2018 |
|
|
20.1 |
% |
|
|
362,675 |
|
|
|
99.4 |
% |
|
|
99.4 |
% |
|
|
4,563,956 |
|
|
|
12.66 |
|
California |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Elk Grove Commons |
|
Kohl's, HomeGoods |
|
2018 |
|
|
20.1 |
% |
|
|
242,078 |
|
|
|
98.4 |
% |
|
|
99.1 |
% |
|
|
5,076,275 |
|
|
|
21.31 |
|
Utah |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Family Center at Riverdale |
|
Target, Sportsman's |
|
2019 |
|
|
18.0 |
% |
|
|
372,475 |
|
|
|
85.9 |
% |
|
|
97.9 |
% |
|
|
3,355,288 |
|
|
|
10.49 |
|
Total - Fund V |
|
|
|
|
|
|
|
|
|
6,727,360 |
|
|
|
90.8 |
% |
|
|
93.3 |
% |
|
$ |
91,267,351 |
|
|
$ |
14.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
TOTAL FUND PROPERTIES |
|
|
|
|
|
|
|
|
|
7,969,694 |
|
|
|
88.9 |
% |
|
|
92.5 |
% |
|
$ |
123,202,917 |
|
|
$ |
17.40 |
|
|
Acadia Share of Total Fund Properties |
|
|
|
|
|
|
|
|
|
1,756,761 |
|
|
|
86.1 |
% |
|
|
91.4 |
% |
|
$ |
29,754,638 |
|
|
$ |
19.68 |
|
|
35
Major Tenants
No individual retail tenant accounted for more than 5.1% of total Core Portfolio and Fund base rents for the year ended December 31, 2022 or occupied more than 7.3% of total Core Portfolio and Fund leased GLA as of December 31, 2022. The following table sets forth certain information for our 20 largest retail tenants by base rent for leases in place as of December 31, 2022. The amounts below include our pro-rata share of GLA and annualized base rent for the Operating Partnership’s partial ownership interest in properties including the Funds (GLA and Annualized Base Rent in thousands):
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total |
|
||||||||
Retail Tenant |
|
Number of |
|
|
Total GLA |
|
|
Annualized |
|
|
Total |
|
|
Annualized |
|
|||||
Target |
|
|
5 |
|
|
|
512 |
|
|
$ |
9,036 |
|
|
|
7.3 |
% |
|
|
5.1 |
% |
H&M |
|
|
2 |
|
|
|
60 |
|
|
|
5,144 |
|
|
|
0.9 |
% |
|
|
2.9 |
% |
Royal Ahold (b) |
|
|
6 |
|
|
|
198 |
|
|
|
4,047 |
|
|
|
2.8 |
% |
|
|
2.3 |
% |
TJX Companies (c) |
|
|
26 |
|
|
|
326 |
|
|
|
3,857 |
|
|
|
4.7 |
% |
|
|
2.2 |
% |
Walgreens (d) |
|
|
6 |
|
|
|
85 |
|
|
|
3,794 |
|
|
|
1.2 |
% |
|
|
2.1 |
% |
PetSmart, Inc. |
|
|
13 |
|
|
|
121 |
|
|
|
3,756 |
|
|
|
1.7 |
% |
|
|
2.1 |
% |
Bed, Bath, and Beyond (e) |
|
|
5 |
|
|
|
143 |
|
|
|
3,500 |
|
|
|
2.1 |
% |
|
|
2.0 |
% |
Trader Joe's |
|
|
5 |
|
|
|
54 |
|
|
|
3,355 |
|
|
|
0.8 |
% |
|
|
1.9 |
% |
Kohl's |
|
|
8 |
|
|
|
212 |
|
|
|
2,859 |
|
|
|
3.0 |
% |
|
|
1.6 |
% |
Verizon |
|
|
6 |
|
|
|
28 |
|
|
|
2,844 |
|
|
|
0.4 |
% |
|
|
1.6 |
% |
Lululemon |
|
|
4 |
|
|
|
11 |
|
|
|
2,767 |
|
|
|
0.2 |
% |
|
|
1.6 |
% |
Gap(f) |
|
|
9 |
|
|
|
66 |
|
|
|
2,498 |
|
|
|
0.9 |
% |
|
|
1.4 |
% |
Fast Retailing (g) |
|
|
2 |
|
|
|
32 |
|
|
|
2,388 |
|
|
|
0.5 |
% |
|
|
1.3 |
% |
Ulta Salon Cosmetic & Fragrance |
|
|
14 |
|
|
|
54 |
|
|
|
2,088 |
|
|
|
0.8 |
% |
|
|
1.2 |
% |
Dick's Sporting Goods, Inc |
|
|
6 |
|
|
|
141 |
|
|
|
2,086 |
|
|
|
2.0 |
% |
|
|
1.2 |
% |
Albertsons Companies(h) |
|
|
2 |
|
|
|
123 |
|
|
|
1,981 |
|
|
|
1.8 |
% |
|
|
1.1 |
% |
Bob's Discount Furniture |
|
|
3 |
|
|
|
75 |
|
|
|
1,945 |
|
|
|
1.1 |
% |
|
|
1.1 |
% |
Wakefern Food Corporation (i) |
|
|
4 |
|
|
|
80 |
|
|
|
1,699 |
|
|
|
1.1 |
% |
|
|
1.0 |
% |
Tapestry (j) |
|
|
2 |
|
|
|
4 |
|
|
|
1,696 |
|
|
|
0.1 |
% |
|
|
1.0 |
% |
Watches of Switzerland (k) |
|
|
2 |
|
|
|
14 |
|
|
|
1,625 |
|
|
|
0.2 |
% |
|
|
0.9 |
% |
Total |
|
|
130 |
|
|
|
2,339 |
|
|
|
62,965 |
|
|
|
33.6 |
% |
|
|
35.5 |
% |
36
Lease Expirations
The following tables show scheduled lease expirations on a pro rata basis for retail tenants in place as of December 31, 2022, assuming that none of the tenants will exercise renewal options (GLA and Annualized Base Rent in thousands):
Core Portfolio
|
|
|
|
|
Annualized Base Rent (a, b) |
|
|
GLA |
|
|||||||||||
Leases Maturing in |
|
Number of |
|
|
Current |
|
|
Percentage |
|
|
Square |
|
|
Percentage |
|
|||||
Month to Month |
|
|
4 |
|
|
$ |
156 |
|
|
|
0.1 |
% |
|
|
5 |
|
|
|
0.1 |
% |
2023 |
|
|
51 |
|
|
|
13,088 |
|
|
|
8.8 |
% |
|
|
292 |
|
|
|
6.4 |
% |
2024 |
|
|
66 |
|
|
|
16,024 |
|
|
|
10.8 |
% |
|
|
642 |
|
|
|
14.0 |
% |
2025 |
|
|
67 |
|
|
|
21,350 |
|
|
|
14.4 |
% |
|
|
602 |
|
|
|
13.2 |
% |
2026 |
|
|
71 |
|
|
|
17,650 |
|
|
|
11.9 |
% |
|
|
616 |
|
|
|
13.5 |
% |
2027 |
|
|
56 |
|
|
|
10,513 |
|
|
|
7.1 |
% |
|
|
263 |
|
|
|
5.7 |
% |
2028 |
|
|
57 |
|
|
|
20,087 |
|
|
|
13.5 |
% |
|
|
707 |
|
|
|
15.4 |
% |
2029 |
|
|
38 |
|
|
|
9,910 |
|
|
|
6.7 |
% |
|
|
373 |
|
|
|
8.1 |
% |
2030 |
|
|
19 |
|
|
|
5,055 |
|
|
|
3.4 |
% |
|
|
96 |
|
|
|
2.1 |
% |
2031 |
|
|
26 |
|
|
|
6,161 |
|
|
|
4.2 |
% |
|
|
176 |
|
|
|
3.8 |
% |
2032 |
|
|
46 |
|
|
|
10,009 |
|
|
|
6.7 |
% |
|
|
221 |
|
|
|
4.8 |
% |
Thereafter |
|
|
36 |
|
|
|
18,401 |
|
|
|
12.4 |
% |
|
|
585 |
|
|
|
12.9 |
% |
Total |
|
|
537 |
|
|
$ |
148,404 |
|
|
|
100.0 |
% |
|
|
4,578 |
|
|
|
100.0 |
% |
Funds
|
|
|
|
|
Annualized Base Rent (a, b) |
|
|
GLA |
|
|||||||||||
Leases Maturing in |
|
Number of |
|
|
Current |
|
|
Percentage |
|
|
Square |
|
|
Percentage |
|
|||||
Month to Month |
|
|
7 |
|
|
$ |
84 |
|
|
|
0.3 |
% |
|
|
5 |
|
|
|
0.3 |
% |
2023 |
|
|
51 |
|
|
|
1,200 |
|
|
|
4.0 |
% |
|
|
61 |
|
|
|
4.1 |
% |
2024 |
|
|
87 |
|
|
|
2,449 |
|
|
|
8.2 |
% |
|
|
163 |
|
|
|
10.8 |
% |
2025 |
|
|
90 |
|
|
|
3,392 |
|
|
|
11.4 |
% |
|
|
191 |
|
|
|
12.7 |
% |
2026 |
|
|
95 |
|
|
|
2,588 |
|
|
|
8.7 |
% |
|
|
128 |
|
|
|
8.5 |
% |
2027 |
|
|
81 |
|
|
|
3,330 |
|
|
|
11.2 |
% |
|
|
164 |
|
|
|
10.8 |
% |
2028 |
|
|
52 |
|
|
|
2,243 |
|
|
|
7.5 |
% |
|
|
121 |
|
|
|
8.0 |
% |
2029 |
|
|
36 |
|
|
|
1,671 |
|
|
|
5.6 |
% |
|
|
115 |
|
|
|
7.6 |
% |
2030 |
|
|
30 |
|
|
|
1,118 |
|
|
|
3.8 |
% |
|
|
78 |
|
|
|
5.1 |
% |
2031 |
|
|
38 |
|
|
|
1,515 |
|
|
|
5.1 |
% |
|
|
91 |
|
|
|
6.0 |
% |
2032 |
|
|
44 |
|
|
|
2,755 |
|
|
|
9.3 |
% |
|
|
175 |
|
|
|
11.5 |
% |
Thereafter |
|
|
32 |
|
|
|
7,410 |
|
|
|
24.9 |
% |
|
|
220 |
|
|
|
14.6 |
% |
Total |
|
|
643 |
|
|
$ |
29,755 |
|
|
|
100.0 |
% |
|
|
1,512 |
|
|
|
100.0 |
% |
37
Geographic Concentrations
The following table summarizes our operating retail properties by region, excluding redevelopment properties, as of December 31, 2022. The amounts below include our pro-rata share of GLA and annualized base rent for the Operating Partnership’s partial ownership interest in properties, including the Funds (GLA and Annualized Base Rent in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Total |
|
|||||||||
Region |
|
GLA (a,c) |
|
|
% Occupied (b) |
|
|
Annualized |
|
|
Annualized Base |
|
|
GLA |
|
|
Annualized |
|
||||||
Core Portfolio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
New York Metro (d) |
|
|
1,497 |
|
|
|
91.1 |
% |
|
$ |
56,725 |
|
|
$ |
41.57 |
|
|
|
28.7 |
% |
|
|
38.2 |
% |
Chicago Metro |
|
|
684 |
|
|
|
85.9 |
% |
|
|
36,481 |
|
|
|
62.10 |
|
|
|
13.1 |
% |
|
|
24.6 |
% |
Mid-Atlantic |
|
|
1,438 |
|
|
|
96.2 |
% |
|
|
20,382 |
|
|
|
16.55 |
|
|
|
27.6 |
% |
|
|
13.7 |
% |
New England |
|
|
717 |
|
|
|
97.8 |
% |
|
|
9,988 |
|
|
|
16.46 |
|
|
|
13.8 |
% |
|
|
6.7 |
% |
Washington D.C. Metro |
|
|
159 |
|
|
|
90.1 |
% |
|
|
8,129 |
|
|
|
56.89 |
|
|
|
3.1 |
% |
|
|
5.5 |
% |
Midwest |
|
|
570 |
|
|
|
90.8 |
% |
|
|
8,370 |
|
|
|
16.18 |
|
|
|
10.9 |
% |
|
|
5.6 |
% |
Los Angeles Metro |
|
|
24 |
|
|
|
100.0 |
% |
|
|
3,950 |
|
|
|
166.28 |
|
|
|
0.5 |
% |
|
|
2.7 |
% |
Dallas Metro |
|
|
122 |
|
|
|
91.8 |
% |
|
|
4,379 |
|
|
|
39.20 |
|
|
|
2.3 |
% |
|
|
3.0 |
% |
Total Core Operating Properties |
|
|
5,211 |
|
|
|
92.7 |
% |
|
$ |
148,404 |
|
|
$ |
32.29 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fund Portfolio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Southeast |
|
|
448 |
|
|
|
94.7 |
% |
|
$ |
6,741 |
|
|
$ |
15.90 |
|
|
|
25.6 |
% |
|
|
22.6 |
% |
Northeast |
|
|
526 |
|
|
|
86.7 |
% |
|
|
6,609 |
|
|
|
14.50 |
|
|
|
29.9 |
% |
|
|
22.2 |
% |
New York Metro |
|
|
339 |
|
|
|
66.7 |
% |
|
|
9,749 |
|
|
|
43.13 |
|
|
|
19.3 |
% |
|
|
32.8 |
% |
West |
|
|
116 |
|
|
|
91.1 |
% |
|
|
1,624 |
|
|
|
15.41 |
|
|
|
6.6 |
% |
|
|
5.5 |
% |
Midwest |
|
|
92 |
|
|
|
97.2 |
% |
|
|
1,487 |
|
|
|
16.52 |
|
|
|
5.2 |
% |
|
|
5.0 |
% |
Mid-Atlantic |
|
|
52 |
|
|
|
90.9 |
% |
|
|
741 |
|
|
|
15.60 |
|
|
|
3.0 |
% |
|
|
2.5 |
% |
Southwest |
|
|
180 |
|
|
|
90.0 |
% |
|
|
2,672 |
|
|
|
16.49 |
|
|
|
10.2 |
% |
|
|
9.0 |
% |
San Francisco Metro |
|
|
4 |
|
|
|
30.2 |
% |
|
|
132 |
|
|
|
114.33 |
|
|
|
0.2 |
% |
|
|
0.4 |
% |
Total Fund Operating Properties |
|
|
1,757 |
|
|
|
86.1 |
% |
|
$ |
29,755 |
|
|
$ |
19.68 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
38
Development and Redevelopment Activities
As part of our strategy, we invest in retail real estate assets that may require significant development. As of December 31, 2022, we had the following development or redevelopment projects in various stages of the development process (dollars in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and Development Costs (a) |
|
||||||||||||||||||||||||
Property |
|
Ownership (a) |
|
|
Location |
|
Estimated |
|
Estimated Square |
|
|
Occupied /Leased |
|
|
Key |
|
Description |
|
Incurred (b) |
|
|
Estimated Future Range |
|
|
Estimated Total Range |
|
||||||||||||||||||
Development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CORE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
1238 Wisconsin |
|
|
80.0 |
% |
|
Washington DC |
|
2023 |
|
|
29,000 |
|
|
12%/70% |
|
|
Wolford, Everbody |
|
Redevelopment/addition to existing building with ground level retail, upper floor office and residential units upon completion. Discretionary spend upon securing tenant(s) |
|
$ |
18.3 |
|
|
$ |
14.4 |
|
|
to |
|
$ |
15.2 |
|
|
$ |
32.7 |
|
|
to |
|
$ |
33.5 |
|
|
Henderson - Development 1 & 2 |
|
|
100.0 |
% |
|
Dallas, TX |
|
TBD |
|
|
160,000 |
|
|
|
— |
% |
|
TBD |
|
Ground up development for mixed-use street-level retail spaces and upper level office spaces. |
|
|
10.5 |
|
|
TBD |
|
|
to |
|
TBD |
|
|
TBD |
|
|
to |
|
TBD |
|
||||
FUND III |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Broad Hollow Commons |
|
|
100.0 |
% |
|
Farmingdale, NY |
|
TBD |
|
TBD |
|
|
|
— |
% |
|
TBD |
|
Discretionary spend upon securing necessary approvals and tenant(s) for lease up |
|
|
25.9 |
|
|
|
24.1 |
|
|
to |
|
|
34.1 |
|
|
|
50.0 |
|
|
to |
|
|
60.0 |
|
|
FUND IV |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
717 N. Michigan Avenue |
|
|
100.0 |
% |
|
Chicago, IL |
|
TBD |
|
TBD |
|
|
14%/26% |
|
|
Alo Yoga |
|
Discretionary spend upon securing tenant(s) for lease up |
|
|
116.6 |
|
|
TBD |
|
|
to |
|
TBD |
|
|
TBD |
|
|
to |
|
TBD |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
171.3 |
|
|
$ |
38.5 |
|
|
|
|
$ |
49.3 |
|
|
$ |
82.7 |
|
|
|
|
$ |
93.5 |
|
|||
Major Redevelopment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CORE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
City Center |
|
|
100.0 |
% |
|
San Francisco, CA |
|
2024 |
|
|
241,000 |
|
|
75%/99% |
|
|
Target, Whole Foods, PetSmart |
|
Ground up development of pad sites and street level retail and re-tenanting/redevelopment for Whole Foods |
|
$ |
203.3 |
|
|
$ |
6.7 |
|
|
to |
|
$ |
9.7 |
|
|
$ |
210.0 |
|
|
to |
|
$ |
213.0 |
|
|
555 9th Street |
|
|
100.0 |
% |
|
San Francisco, CA |
|
TBD |
|
|
149,000 |
|
|
65%/81% |
|
|
The Container Store |
|
Re-tenanting and potential split of former 46,000 square foot Nordstrom; façade upgrade and possible vertical expansion |
|
|
0.2 |
|
|
|
17.8 |
|
|
to |
|
|
27.8 |
|
|
|
18.0 |
|
|
to |
|
|
28.0 |
|
|
651-671 West Diversey |
|
|
100.0 |
% |
|
Chicago, IL |
|
TBD |
|
|
46,000 |
|
|
86%/86% |
|
|
TBD |
|
'Discretionary spend for future re-tenanting and re-configuration of approximately 30,000 sf. |
|
|
— |
|
|
TBD |
|
|
to |
|
TBD |
|
|
TBD |
|
|
to |
|
TBD |
|
|||||
Route 6 Mall |
|
|
100.0 |
% |
|
Honesdale, PA |
|
TBD |
|
TBD |
|
|
32%/47% |
|
|
TJ Maxx |
|
Discretionary spend for re-tenanting former 120,000 square foot Kmart anchor space once tenant(s) are secured |
|
|
0.1 |
|
|
|
5.9 |
|
|
to |
|
|
8.9 |
|
|
|
6.0 |
|
|
to |
|
|
9.0 |
|
||
Mad River |
|
|
100.0 |
% |
|
Dayton, OH |
|
TBD |
|
TBD |
|
|
73%/73% |
|
|
TBD |
|
Discretionary spend for the re-tenanting former 33,000 square foot Babies R Us space once tenant(s) are secured |
|
|
— |
|
|
|
1.9 |
|
|
to |
|
|
2.3 |
|
|
|
1.9 |
|
|
to |
|
|
2.3 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
203.6 |
|
|
$ |
32.3 |
|
|
|
|
$ |
48.7 |
|
|
$ |
235.9 |
|
|
|
|
$ |
252.3 |
|
|||
39
ITEM 3. LEGAL PROCEEDINGS.
From time to time, we are a party to various legal proceedings, claims or regulatory inquiries and investigations arising out of, or incident to, our ordinary course of business. While we are unable to predict with certainty the outcome of any particular matter, management does not currently expect, when any such matters are resolved, that our resulting exposure to loss contingencies, if any, will have a material adverse effect on our consolidated financial position.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information, Dividends and Holders of Record of our Common Shares
At February 15, 2023, there were 251 holders of record of our Common Shares, which are traded on the New York Stock Exchange under the symbol “AKR.” Our quarterly dividends are discussed in Note 10 and the characterization of such dividends for federal income tax purposes is discussed in Note 14.
Securities Authorized for Issuance Under Equity Compensation Plans
Our 2020 Share Incentive Plan (the “2020 Plan”) which was approved by our shareholders at the 2020 annual shareholders’ meeting, authorizes us to issue options, restricted shares, LTIP Units and other securities (collectively, the “Awards”) to, among others, the Company’s officers, trustees, and employees up to a total of 2,829,953 Common Shares (on a converted basis). See Note 13 for a discussion of the 2020 Plan.
The following table provides information related to the 2020 Plan as of December 31, 2022:
|
|
Equity Compensation Plan Information |
|
|||||||||
|
|
(a) |
|
|
(b) |
|
|
(c) |
|
|||
|
|
Number of |
|
|
Weighted-average |
|
|
Number of |
|
|||
Equity compensation plans approved by security holders |
|
|
— |
|
|
$ |
— |
|
|
|
1,540,116 |
|
Equity compensation plans not approved by security holders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
|
— |
|
|
$ |
— |
|
|
|
1,540,116 |
|
Remaining Common Shares available under the 2020 Plan are as follows:
Outstanding Common Shares as of December 31, 2022 |
|
|
95,120,773 |
|
Outstanding OP Units as of December 31, 2022 |
|
|
5,135,755 |
|
Total Outstanding Common Shares and OP Units |
|
|
100,256,528 |
|
|
|
|
|
|
Common Shares and OP Units pursuant to the 2020 Plan |
|
|
2,829,953 |
|
Less: Issuance of Restricted Shares and LTIP Units Granted |
|
|
(1,289,837 |
) |
Number of Common Shares remaining available |
|
|
1,540,116 |
|
40
Share Price Performance
The following graph compares the cumulative total shareholder return for our Common Shares for the period commencing December 31, 2017, through December 31, 2022, with the cumulative total return on the Russell 2000 Index (“Russell 2000”), the NAREIT All Equity REITs Index (the “All Equity”) and the NAREIT Equity Shopping Centers Index (the “Equity Shopping Centers”) (previously SNL REIT Shopping Center Index which was discontinued) over the same period. Total return values for the Russell 2000, the All Equity, the Equity Shopping Centers and the Common Shares were calculated based upon cumulative total return assuming the investment of $100.00 in each of the Russell 2000, the All Equity, the Equity Shopping Centers and our Common Shares on December 31, 2017, and assuming reinvestment of dividends. The shareholder return as set forth in the table below is not necessarily indicative of future performance. The information in this section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.
|
|
At December 31, |
|
|||||||||||||||||||||
Index |
|
2017 |
|
|
2018 |
|
|
2019 |
|
|
2020 |
|
|
2021 |
|
|
2022 |
|
||||||
Acadia Realty Trust |
|
$ |
100.00 |
|
|
$ |
90.60 |
|
|
$ |
103.08 |
|
|
$ |
57.63 |
|
|
$ |
91.27 |
|
|
$ |
62.81 |
|
Russell 2000 Index |
|
|
100.00 |
|
|
|
88.99 |
|
|
|
111.70 |
|
|
|
134.00 |
|
|
|
153.85 |
|
|
|
122.41 |
|
NAREIT All Equity REITs Index |
|
|
100.00 |
|
|
|
95.96 |
|
|
|
123.46 |
|
|
|
117.14 |
|
|
|
165.51 |
|
|
|
124.22 |
|
NAREIT Equity Shopping Centers Index |
|
|
100.00 |
|
|
|
85.45 |
|
|
|
106.84 |
|
|
|
77.31 |
|
|
|
127.60 |
|
|
|
111.60 |
|
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
None.
Issuer Purchases of Equity Securities
The Company maintains a share repurchase program which authorizes management, at its discretion, to repurchase up to $200.0 million of its outstanding Common Shares. The program may be discontinued or extended at any time. The Company repurchased 1,219,065 shares for $22.4 million, inclusive of fees, during the year ended December 31, 2020. The Company did not repurchase any shares during the years ended December 31, 2022 or 2021. As of December 31, 2022, management may repurchase up to approximately $122.5 million of the Company’s outstanding Common Shares under this program.
41
ITEM 6. [RESERVED]
Not applicable.
42
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
OVERVIEW
As of December 31, 2022, there were 202 properties, which we own or have an ownership interest in, within our Core Portfolio and Funds. Our Core Portfolio consists of those properties either 100% owned, or partially owned through joint venture interests by the Operating Partnership, or subsidiaries thereof, not including those properties owned through our Funds. These properties primarily consist of street and urban retail, and suburban shopping centers. See Item 2. Properties for a summary of our wholly-owned and partially-owned retail properties and their physical occupancies at December 31, 2022.
The majority of our operating income is derived from rental revenues from operating properties, including expense recoveries from tenants, offset by operating and overhead expenses.
Our primary business objective is to acquire and manage commercial retail properties that will provide cash for distributions to shareholders while also creating the potential for capital appreciation to enhance investor returns. We focus on the following fundamentals to achieve this objective:
SIGNIFICANT DEVELOPMENTS DURING THE year ended December 31, 2022
Acquisitions
During the year ended December 31, 2022, we made four new consolidated investments in our Core Portfolio and Fund V acquired three unconsolidated properties totaling $425.0 million, inclusive of transaction costs, as described below (Note 2).
43
On June 27, 2022, we made an $18.5 million investment in Fund II and Mervyns II increasing our ownership in each by 11.67% to 40.00%. Additionally, on August 1, 2022, we made an additional $5.8 million investment in Fund II and increased our ownership by 21.67% to 61.67% (Note 1). As the Company retained its controlling interest in Fund II and Mervyns II, we accounted for these additional investments as equity transactions.
In addition, and as discussed below, Fund III obtained the venture partner's interest in its 640 Broadway investment through a foreclosure proceeding and subsequently consolidated the property (Note 2, Note 4).
On January 27, 2023, Fund V acquired a 90% interest in an unconsolidated venture. The venture purchased a shopping center referred to as Mohawk Commons in Schenectady, New York, for $62.1 million, inclusive of transaction costs (Note 17).
Dispositions of Real Estate
During the year ended December 31, 2022, we disposed of one Core property and one Core land parcel, five consolidated Fund properties and one land parcel, and two unconsolidated investments, as follows:
44
We recognized aggregate gains of $57.1 million on the sales of the above properties, excluding the gain recognized on the sale of our unconsolidated interest in Self Storage Management and Promenade at Manassas, during the year ended December 31, 2022, of which our share is $23.3 million.
In addition, during the third quarter of 2022, we entered into an agreement to sell a property for approximately $18.0 million. As this disposition is deemed probable within one year, this property has been classified as "held-for-sale" on the Company's consolidated balance sheet (Note 17).
Financing Activity
During the year ended December 31, 2022, we effected the following financing activities (Note 7):
The Operating Partnership has a $700.0 million senior unsecured credit facility, as amended (the “Credit Facility”), with Bank of America, N.A. as administrative agent, comprised of a $300.0 million senior unsecured revolving credit facility (the “Revolver”) which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating, and a $400.0 million senior unsecured term loan (the “Term Loan”) which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating. Currently, the Revolver bears interest at SOFR + 1.50% and the Term Loan bears interest at SOFR + 1.65%. The Revolver matures on June 29, 2025, subject to two six-month extension options, and the Term Loan matures on June 29, 2026. The Credit Facility provides for an accordion feature, which allows for one or more increases in the revolving credit facility or term loan facility, for a maximum aggregate principal amount not to exceed $900.0 million. The Credit Facility is guaranteed by the Company and certain subsidiaries of the Company.
On April 6, 2022, the Operating Partnership entered into the $175.0 million term loan facility, with Bank of America, N.A. as administrative agent, which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating, and which matures on April 6, 2027. The proceeds of the $175.0 million term loan were used to pay down the Revolver. Currently the $175.0 million term loan bears interest at SOFR + 1.60%. The $175.0 million term loan is guaranteed by the Company and certain subsidiaries of the Company.
On July 29, 2022, the Operating Partnership entered into the $75.0 million term loan, with TD Bank, N.A. as administrative agent, which bears interest at a floating rate based on SOFR with margins based on leverage or credit rating and which matures on July 29, 2029. Currently the $75.0 million term loan bears interest at SOFR + 2.05%. The proceeds of the $75.0 million term loan were used to pay down the Revolver. The $75.0 million term loan is guaranteed by the Company and certain subsidiaries of the Company.
Structured Financing Investments
During the year ended December 31, 2022, we:
45
ATM Program Activity
We sold 5,525,419 Common Shares under our ATM Program during the year ended December 31, 2022 for gross proceeds of $123.9 million, or $119.5 million net of issuance costs, at a weighted-average gross price per share of $22.43 (Note 10).
Albertsons
On January 20, 2023, Mervyns II received cash dividends totaling $28.2 million related to the special dividend received from its investment in Albertsons Companies Inc. ("Albertsons") (Note 4). The special dividend was originally scheduled to be paid on November 7, 2022 and was delayed by a temporary restraining order which enjoined Albertsons from paying the special dividend. The Company's proportionate share of the special dividend was $11.3 million. The special dividend will be recognized in the first quarter of 2023 given the uncertainty that existed as of December 31, 2022, which was resolved following the lifting of the temporary restraining order by the Supreme Court of the State of Washington on January 17, 2023 (Note 17).
Fund II and City Point Refinancing
During the second and third quarter, we further increased our effective ownership in Fund II from 28.33% to 61.67% (Note 1). The purchase price of the combined 33.34% interest was $120.8 million, inclusive of $112.0 million of assumed obligations.
Additionally, in August 2022, through Fund II, we refinanced and de-levered City Point. The outstanding mortgage debt of $257.9 million and term loan of $40.0 million were refinanced with a single mortgage loan of $198.0 million, with initial proceeds of $132.2 million (Note 7). We provided a loan, through a separate lending subsidiary, to other Fund II investors in City Point, through a separate borrower subsidiary, to fund the investors' pro rata contribution necessary to complete the refinancing of the City Point debt, of which $65.9 million was funded at closing ("City Point Loan") (Note 3). In addition, the remaining partners have certain redemption rights that could enable us to further increase our ownership in Fund II (Note 10).
46
RESULTS OF OPERATIONS
See Note 12 in the Notes to Consolidated Financial Statements for an overview of our three reportable segments.
Comparison of Results for the Year Ended December 31, 2022 to the Year Ended December 31, 2021
The results of operations by reportable segment for the year ended December 31, 2022 compared to the year ended December 31, 2021 are summarized in the table below (in millions, totals may not add due to rounding):
|
|
Year Ended |
|
|
Year Ended |
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|
Increase (Decrease) |
|
|||||||||||||||||||||||||||||||||||||||
|
|
Core |
|
|
Funds |
|
|
SF |
|
|
Total |
|
|
Core |
|
|
Funds |
|
|
SF |
|
|
Total |
|
|
Core |
|
|
Funds |
|
|
SF |
|
|
Total |
|
||||||||||||
Revenues |
|
$ |
202.5 |
|
|
$ |
123.7 |
|
|
$ |
— |
|
|
$ |
326.3 |
|
|
$ |
181.3 |
|
|
$ |
111.2 |
|
|
$ |
— |
|
|
$ |
292.5 |
|
|
$ |
21.2 |
|
|
$ |
12.5 |
|
|
$ |
— |
|
|
$ |
33.8 |
|
Depreciation and amortization |
|
|
(75.6 |
) |
|
|
(60.3 |
) |
|
|
— |
|
|
|
(135.9 |
) |
|
|
(69.1 |
) |
|
|
(54.3 |
) |
|
|
— |
|
|
|
(123.4 |
) |
|
|
6.5 |
|
|
|
6.0 |
|
|
|
— |
|
|
|
12.5 |
|
Property operating expenses, other |
|
|
(60.3 |
) |
|
|
(41.6 |
) |
|
|
— |
|
|
|
(101.9 |
) |
|
|
(57.0 |
) |
|
|
(41.9 |
) |
|
|
— |
|
|
|
(98.9 |
) |
|
|
3.3 |
|
|
|
(0.3 |
) |
|
|
— |
|
|
|
3.0 |
|
General and administrative expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(44.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(40.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4.0 |
|
Impairment charges |
|
|
— |
|
|
|
(33.3 |
) |
|
|
— |
|
|
|
(33.3 |
) |
|
|
— |
|
|
|
(9.9 |
) |
|
|
— |
|
|
|
(9.9 |
) |
|
|
— |
|
|
|
23.4 |
|
|
|
— |
|
|
|
23.4 |
|
Gain on disposition of properties |
|
|
7.2 |
|
|
|
49.9 |
|
|
|
— |
|
|
|
57.2 |
|
|
|
4.6 |
|
|
|
5.9 |
|
|
|
— |
|
|
|
10.5 |
|
|
|
2.6 |
|
|
|
44.0 |
|
|
|
— |
|
|
|
46.7 |
|
Operating income |
|
|
73.9 |
|
|
|
38.4 |
|
|
|
— |
|
|
|
68.2 |
|
|
|
59.9 |
|
|
|
10.9 |
|
|
|
— |
|
|
|
30.7 |
|
|
|
14.0 |
|
|
|
27.5 |
|
|
|
— |
|
|
|
37.5 |
|
Interest income |
|
|
— |
|
|
|
— |
|
|
|
14.6 |
|
|
|
14.6 |
|
|
|
— |
|
|
|
— |
|
|
|
9.1 |
|
|
|
9.1 |
|
|
|
— |
|
|
|
— |
|
|
|
5.5 |
|
|
|
5.5 |
|
Equity in (losses) earnings of |
|
|
(45.9 |
) |
|
|
13.0 |
|
|
|
— |
|
|
|
(32.9 |
) |
|
|
0.4 |
|
|
|
5.0 |
|
|
|
— |
|
|
|
5.3 |
|
|
|
(46.3 |
) |
|
|
8.0 |
|
|
|
— |
|
|
|
(38.2 |
) |
Interest expense |
|
|
(37.9 |
) |
|
|
(42.3 |
) |
|
|
— |
|
|
|
(80.2 |
) |
|
|
(29.5 |
) |
|
|
(38.6 |
) |
|
|
— |
|
|
|
(68.0 |
) |
|
|
8.4 |
|
|
|
3.7 |
|
|
|
— |
|
|
|
12.2 |
|
Realized and unrealized holding gains (losses) |
|
|
1.2 |
|
|
|
(35.6 |
) |
|
|
(0.6 |
) |
|
|
(35.0 |
) |
|
|
— |
|
|
|
53.7 |
|
|
|
(4.5 |
) |
|
|
49.1 |
|
|
|
1.2 |
|
|
|
(89.3 |
) |
|
|
3.9 |
|
|
|
(84.1 |
) |
Income tax provision |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
Net (loss) income |
|
|
(8.8 |
) |
|
|
(26.4 |
) |
|
|
14.0 |
|
|
|
(65.3 |
) |
|
|
30.8 |
|
|
|
30.9 |
|
|
|
4.5 |
|
|
|
26.0 |
|
|
|
(39.6 |
) |
|
|
(57.3 |
) |
|
|
9.5 |
|
|
|
(91.3 |
) |
Net loss attributable |
|
|
— |
|
|
|
5.5 |
|
|
|
— |
|
|
|
5.5 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5.5 |
) |
|
|
— |
|
|
|
(5.5 |
) |
Net loss (income) attributable |
|
|
1.0 |
|
|
|
23.3 |
|
|
|
— |
|
|
|
24.3 |
|
|
|
(2.3 |
) |
|
|
(0.2 |
) |
|
|
— |
|
|
|
(2.5 |
) |
|
|
(3.3 |
) |
|
|
(23.5 |
) |
|
|
— |
|
|
|
(26.8 |
) |
Net (loss) income attributable to Acadia |
|
$ |
(7.8 |
) |
|
$ |
2.4 |
|
|
$ |
14.0 |
|
|
$ |
(35.4 |
) |
|
$ |
28.5 |
|
|
$ |
30.7 |
|
|
$ |
4.5 |
|
|
$ |
23.5 |
|
|
$ |
(36.3 |
) |
|
$ |
(28.3 |
) |
|
$ |
9.5 |
|
|
$ |
(58.9 |
) |
Core Portfolio
The results of operations for our Core Portfolio segment are depicted in the table above under the headings labeled “Core.” Segment net income attributable to Acadia for our Core Portfolio decreased $36.3 million for the year ended December 31, 2022 compared to the prior year as a result of the changes further described below.
Revenues for our Core Portfolio increased $21.2 million for the year ended December 31, 2022 compared to the prior year primarily due to (i) $15.1 million from Core Portfolio property acquisitions in 2021 and 2022 (Note 2), (ii) $2.2 million from lease up within the Core Portfolio, (iii) $2.1 million collection of cash for a fully reserved tenant, (iv) $1.8 million from the write off of two tenant's below market leases, and (v) $0.9 million from the conversion of tenants from cash to accrual basis. These increases were offset by a $0.9 million credit loss benefit related to the collection of previously reserved tenants accounts in 2021.
Depreciation and amortization for our Core Portfolio increased $6.5 million for the year ended December 31, 2022 compared to the prior year primarily due to Core Portfolio acquisitions in 2021 and 2022.
Property operating expenses, other operating and real estate taxes for our Core Portfolio increased $3.3 million for the year ended December 31, 2022 compared to the prior year primarily due to Core Portfolio property acquisitions in 2021 and 2022.
The gain on disposition of properties for our Core Portfolio of $7.2 million for the year ended December 31, 2022 relates to the sale of 330-340 River Street of $7.4 million offset by a loss of $0.2 million for the sale of the Henderson Parcel. The gain on disposition of properties for our Core Portfolio of $4.6 million for the year ended December 31, 2021 relates to the sale of 60 Orange Street (Note 3).
Equity in (losses) earnings of unconsolidated affiliates for our Core Portfolio decreased $46.3 million for the year ended December 31, 2022 compared to the prior year primarily due to the Company's $50.8 million proportionate share of an impairment charge at 840 N. Michigan Avenue
47
(Note 4). This decrease was offset by (i) a $2.2 million decrease in credit loss reserves in 2022 at unconsolidated properties related to the COVID-19 Pandemic, and (ii) $1.3 million for the acceleration of a below market tenant lease at a property in 2022.
Interest expense for our Core Portfolio increased $8.4 million for the year ended December 31, 2022 compared to the prior year primarily due to $7.1 million from higher average outstanding borrowings in 2022, and by $1.3 million higher average interest rates in 2022.
Realized and unrealized holding gains (losses) on investments and other for our Core Portfolio includes $1.2 million related to the bargain purchase gain on the acquisition of the Williamsburg Collection (Note 2).
Net loss attributable to noncontrolling interests for our Core Portfolio decreased $3.3 million for the year ended December 31, 2022 compared to the prior year based on the noncontrolling interests’ share of the variances discussed above.
Funds
The results of operations for our Funds segment are depicted in the table above under the headings labeled “Funds.” Segment net income attributable to Acadia for the Funds decreased $28.3 million for the year ended December 31, 2022 compared to the prior year as a result of the changes described below.
Revenues for the Funds increased $12.5 million for the year ended December 31, 2022 compared to the prior year primarily due to (i) $13.7 million from consolidated Fund property acquisitions in 2021 (Note 2), (ii) $4.4 million related to the completion and rent commencement from development projects placed in service during 2021, (iii) $4.0 million from new tenant lease up, and (iv) a $3.0 million increase from the consolidation of a previously unconsolidated investment. These increases were offset by a $11.4 million decrease from consolidated Fund property dispositions in 2021 and 2022 and $1.0 million decrease due to reversals of credit loss reserves in 2021.
Depreciation and amortization for the Funds increased $6.0 million for the year ended December 31, 2022 compared to the prior year primarily due to Fund property acquisitions in 2021 (Note 2).
Impairment charges for the Funds increased $23.4 million for the year ended December 31, 2022 compared to the prior year (Note 8). Impairment charges totaling $33.3 million during 2022 relate to 146 Geary Street and 717 N. Michigan Avenue in Fund IV. Impairment charges totaling $9.9 million in 2021 related to 27 East 61st Street and 210 Bowery in Fund IV.
Gain on disposition of properties for the Funds increased $44.0 million for the year ended December 31, 2022 compared to the prior year due to the sales of Cortlandt Crossing at Fund III, Wake Forest Crossing, Lincoln Place, Mayfair and Dauphin at Fund IV, and a New Towne outparcel at Fund V in 2022 compared to the dispositions of 654 Broadway at Fund III, and the NE Grocer Portfolio and 110 University at Fund IV in 2021 (Note 2, Note 11).
Equity in (losses) earnings of unconsolidated affiliates for the Funds increased $8.0 million for the year ended December 31, 2022 compared to the prior year due to the $12.8 million gain on sale of Promenade at Manassas in 2022 offset by a $3.2 million gain on sale related to two land parcels at Riverdale Family Center in Fund V (Note 5) in 2021.
Interest expense for the Funds increased $3.7 million for the year ended December 31, 2022 compared to the prior year primarily due to $6.6 million from higher average rates in 2022, offset by $2.6 million from lower average outstanding borrowings in 2022.
Realized and unrealized holding gains (losses) on investments and other for the Funds decreased $89.3 million for the year ended December 31, 2022 compared to the prior year primarily due to a $38.9 million mark-to-market unrealized loss on the Investment in Albertsons offset by $ 1.5 million related to the Company's proportionate share of the gain on sale of Fund III's interest in Self Storage Management (Note 4) in 2022 compared to a $51.9 million mark-to-market unrealized gain on the Investment in Albertsons in 2021.
Net loss (income) attributable to redeemable noncontrolling interests for the Funds increased $5.5 million for the year ended December 31, 2022 compared to the prior year due to the City Point Loan in 2022 (Note 10).
Net loss attributable to noncontrolling interests for the Funds decreased $23.5 million for the year ended December 31, 2022 compared to the prior year based on the noncontrolling interests’ share of the variances discussed above. Net loss attributable to noncontrolling interests in the Funds includes asset management fees earned by the Company of $9.5 million and $11.1 million for the years ended December 31, 2022 and 2021, respectively.
48
Structured Financing
The results of operations for our Structured Financing segment are depicted in the table above under the headings labeled “SF.” Interest and other income for the Structured Financing portfolio increased $5.5 million for the year ended December 31, 2022 compared to the prior year period primarily due to new notes issued in 2021 and 2022 (Note 3). Realized and unrealized holding gains (losses) on investments and other for the Structured Financing Portfolio increased $3.9 million for the year ended December 31, 2022 compared to the prior year due to a decrease in the allowance for credit loss.
Unallocated
The Company does not allocate general and administrative expense and income taxes to its reportable segments. These unallocated amounts are depicted in the table above under the headings labeled “Total.” Unallocated general and administrative expense increased $4.0 million for the year ended December 31, 2022 compared to the prior year due to $2.0 million related to acquisition costs (Note 2) and $2.0 million from an increase in salaries.
Discussions of 2020 items and comparisons between the year ended December 31, 2021 and 2020, respectively, that are not included in this Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
NON-GAAP FINANCIAL MEASURES
Net Property Operating Income
The following discussion of net property operating income (“NOI”) and rent spreads on new and renewal leases includes the activity from both our consolidated and our pro-rata share of unconsolidated properties within our Core Portfolio. Our Funds invest primarily in properties that typically require significant leasing and development. Given that the Funds are finite-life investment vehicles, these properties are sold following stabilization. For these reasons, we believe NOI and rent spreads are not meaningful measures for our Fund investments.
NOI represents property revenues less property expenses. We consider NOI and rent spreads on new and renewal leases for our Core Portfolio to be appropriate supplemental disclosures of Core Portfolio operating performance due to their widespread acceptance and use within the REIT investor and analyst communities. NOI and rent spreads on new and renewal leases are presented to assist investors in analyzing our property performance, however, our method of calculating these may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
A reconciliation of consolidated operating income to net operating income (loss) - Core Portfolio follows (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Consolidated operating income (loss) |
|
$ |
68,230 |
|
|
$ |
30,656 |
|
|
$ |
(115,062 |
) |
Add back: |
|
|
|
|
|
|
|
|
|
|||
General and administrative |
|
|
44,066 |
|
|
|
40,125 |
|
|
|
35,798 |
|
Depreciation and amortization |
|
|
135,917 |
|
|
|
123,439 |
|
|
|
147,229 |
|
Impairment charges |
|
|
33,311 |
|
|
|
9,925 |
|
|
|
85,598 |
|
|
|
|
|
|
|
|
|
|
|
|||
Less: |
|
|
|
|
|
|
|
|
|
|||
Above/below-market rent, straight-line rent and other adjustments (a) |
|
|
(20,182 |
) |
|
|
(19,488 |
) |
|
|
13,581 |
|
Gain on disposition of properties |
|
|
(57,161 |
) |
|
|
(10,521 |
) |
|
|
(683 |
) |
Consolidated NOI |
|
|
204,181 |
|
|
|
174,136 |
|
|
|
166,461 |
|
|
|
|
|
|
|
|
|
|
|
|||
Redeemable noncontrolling interest in consolidated NOI |
|
|
(1,919 |
) |
|
|
— |
|
|
|
— |
|
Noncontrolling interest in consolidated NOI |
|
|
(57,957 |
) |
|
|
(48,401 |
) |
|
|
(46,316 |
) |
Less: Operating Partnership's interest in Fund NOI included above |
|
|
(15,310 |
) |
|
|
(12,337 |
) |
|
|
(11,518 |
) |
Add: Operating Partnership's share of unconsolidated joint ventures NOI (b) |
|
|
14,965 |
|
|
|
13,811 |
|
|
|
15,659 |
|
NOI - Core Portfolio |
|
$ |
143,960 |
|
|
$ |
127,209 |
|
|
$ |
124,286 |
|
49
Same-Property NOI includes Core Portfolio properties that we owned for both the current and prior periods presented, but excludes those properties which we acquired, sold or expected to sell, redeveloped and developed during these periods. The following table summarizes Same-Property NOI for our Core Portfolio (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Core Portfolio NOI |
|
$ |
143,960 |
|
|
$ |
127,209 |
|
Less properties excluded from Same-Property NOI |
|
|
(23,515 |
) |
|
|
(13,954 |
) |
Same-Property NOI |
|
$ |
120,445 |
|
|
$ |
113,255 |
|
|
|
|
|
|
|
|
||
Percent change from prior year period |
|
|
6.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
||
Components of Same-Property NOI: |
|
|
|
|
|
|
||
Same-Property Revenues |
|
$ |
170,575 |
|
|
$ |
165,841 |
|
Same-Property Operating Expenses |
|
|
(50,130 |
) |
|
|
(52,586 |
) |
Same-Property NOI |
|
$ |
120,445 |
|
|
$ |
113,255 |
|
Rent Spreads on Core Portfolio New and Renewal Leases
The following table summarizes rent spreads on both a cash basis and straight-line basis for new and renewal leases based on leases executed within our Core Portfolio for the periods presented. Cash basis represents a comparison of rent most recently paid on the previous lease as compared to the initial rent paid on the new lease. Straight-line basis represents a comparison of rents as adjusted for contractual escalations, abated rent, and lease incentives for the same comparable leases. The table below includes embedded option renewals for which the renewed rent was equal to or approximated existing base rent.
|
|
Year Ended December 31, 2022 |
|
|||||
Core Portfolio New and Renewal Leases |
|
Cash Basis |
|
|
Straight- |
|
||
Number of new and renewal leases executed |
|
|
76 |
|
|
|
76 |
|
GLA commencing |
|
|
713,312 |
|
|
|
713,312 |
|
New base rent |
|
$ |
33.80 |
|
|
$ |
34.85 |
|
Expiring base rent |
|
$ |
30.68 |
|
|
$ |
30.09 |
|
Percent growth in base rent |
|
|
10.2 |
% |
|
|
15.8 |
% |
Average cost per square foot (a) |
|
$ |
15.65 |
|
|
$ |
15.65 |
|
Weighted average lease term (years) |
|
|
5.4 |
|
|
|
5.4 |
|
50
Funds from Operations
We consider funds from operations (“FFO”) as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) to be meaningful non-GAAP measure 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 our performance. It is helpful as it excludes 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 real estate. Our method of calculating FFO 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 our performance or to cash flows as a measure of liquidity. Consistent with the NAREIT definition, we define FFO as net income (computed in accordance with GAAP), excluding gains (losses) from sales of depreciated property and impairment of depreciable real estate, 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. A reconciliation of net income attributable to Acadia to FFO follows (dollars in thousands, except per share amounts):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net (loss) income attributable to Acadia |
|
$ |
(35,445 |
) |
|
$ |
23,548 |
|
|
$ |
(8,976 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Depreciation of real estate and amortization of leasing costs (net of |
|
|
104,910 |
|
|
|
93,388 |
|
|
|
106,220 |
|
Impairment charges (net of noncontrolling interests' share) (a) |
|
|
58,481 |
|
|
|
2,294 |
|
|
|
17,323 |
|
Gain on disposition of properties (net of noncontrolling interests' share) |
|
|
(22,137 |
) |
|
|
(4,163 |
) |
|
|
(291 |
) |
(Loss) Income attributable to Common OP Unit holders |
|
|
(1,800 |
) |
|
|
1,584 |
|
|
|
(370 |
) |
Distributions - Preferred OP Units |
|
|
492 |
|
|
|
492 |
|
|
|
495 |
|
Funds from operations attributable to Common Shareholders and |
|
$ |
104,501 |
|
|
$ |
117,143 |
|
|
$ |
114,401 |
|
|
|
|
|
|
|
|
|
|
|
|||
Less: Impact of City Point share conversion (b) |
|
|
(906 |
) |
|
|
— |
|
|
|
— |
|
Funds from operations attributable to Common Shareholders and |
|
$ |
103,595 |
|
|
$ |
117,143 |
|
|
$ |
114,401 |
|
|
|
|
|
|
|
|
|
|
|
|||
Funds From Operations per Share - Diluted |
|
|
|
|
|
|
|
|
|
|||
Basic weighted-average shares outstanding, GAAP earnings |
|
|
94,575,251 |
|
|
|
87,653,818 |
|
|
|
86,441,922 |
|
Weighted-average OP Units outstanding |
|
|
6,299,222 |
|
|
|
5,115,319 |
|
|
|
4,993,267 |
|
Basic weighted-average shares and OP Units outstanding, FFO |
|
|
100,874,473 |
|
|
|
92,769,137 |
|
|
|
91,435,189 |
|
Assumed conversion of Preferred OP Units to Common Shares |
|
|
463,898 |
|
|
|
464,623 |
|
|
|
464,623 |
|
Assumed conversion of LTIP units and restricted share units to |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted weighted-average number of Common Shares and Common |
|
|
101,338,371 |
|
|
|
93,233,760 |
|
|
|
91,899,812 |
|
|
|
|
|
|
|
|
|
|
|
|||
Diluted Funds from operations, per Common Share and Common OP Unit (c) |
|
$ |
1.02 |
|
|
$ |
1.26 |
|
|
$ |
1.24 |
|
51
LIQUIDITY AND CAPITAL RESOURCES
Uses of Liquidity and Cash Requirements
Generally, our principal uses of liquidity are (i) distributions to our shareholders and OP unit holders, (ii) investments which include the funding of our capital committed to the Funds and property acquisitions and development/re-tenanting activities within our Core Portfolio, (iii) distributions to our Fund investors, (iv) debt service and loan repayments and (v) share repurchases.
Distributions
In order to qualify as a REIT for federal income tax purposes, we must currently distribute at least 90% of our taxable income to our shareholders. During the year ended December 31, 2022, we paid dividends and distributions on our Common Shares, Common OP Units and Preferred OP Units totaling $68.3 million.
Investments
During the year ended December 31, 2022, we made four new consolidated investments in our Core Portfolio and Fund V acquired three unconsolidated properties totaling $425.0 million as described below (Note 2, Note 4):
On June 27, 2022, we made an $18.5 million investment in Fund II and Mervyns II increasing our ownership in each by 11.67% to 40.00%. Additionally, on August 1, 2022, we made an additional $5.8 million investment in Fund II and increased our ownership by 21.67% to 61.67% (Note 1). As the Company retained its controlling interest in Fund II and Mervyns II, we accounted for these additional investments as equity transactions.
On January 27, 2023, Fund V acquired a 90% interest in an unconsolidated venture. The venture purchased a shopping center referred to as Mohawk Commons in Schenectady, New York, for $62.1 million, inclusive of transaction costs (Note 17).
Structured Financing Investments
On August 1, 2022, we originated the City Point Loan to other Fund II investors of $65.9 million (Note 3, Note 10). We funded $7.5 million of a $12.8 million construction loan commitment to an unconsolidated venture (Note 4). Fund V originated a temporary bridge loan of $31.7 million to an unconsolidated venture in the third quarter (Note 4).
52
Capital Commitments
During the year ended December 31, 2022, we made capital contributions aggregating $25.6 million to our Funds and $106.1 million to Fund II along with the City Point Loan to other Fund II investors (see Structured Financing Investments above) (Note 10). Additionally, we made an additional $24.3 million investment in Fund II and Mervyns II, increasing our ownership from 28.33% in each to 61.67% and 40.00%, respectively (Note 1).
At December 31, 2022, our share of the remaining capital commitments to our Funds aggregated $44.8 million as follows:
Development Activities
During the year ended December 31, 2022, capitalized costs associated with development activities totaled $4.9 million (Note 2). At December 31, 2022, we had a total of nine consolidated projects and one unconsolidated project under development or redevelopment, for which the estimated total cost to complete these projects through 2025 was $70.8 million to $98.0 million, and our estimated share was approximately $49.7 million to $69.2 million. Substantially all remaining development and redevelopment costs are discretionary, which could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in Part I, Item 1A. Risk Factors.
Debt
A summary of our consolidated debt, which includes the full amount of Fund related obligations and excludes our pro rata share of debt at our unconsolidated subsidiaries, is as follows (in thousands):
|
|
December 31, |
|
|
December 31, |
|
||
|
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
||
Total Debt - Fixed and Effectively Fixed Rate |
|
$ |
1,440,773 |
|
|
$ |
1,038,803 |
|
Total Debt - Variable Rate |
|
|
364,641 |
|
|
|
780,935 |
|
|
|
|
1,805,414 |
|
|
|
1,819,738 |
|
Net unamortized debt issuance costs |
|
|
(12,697 |
) |
|
|
(7,946 |
) |
Unamortized premium |
|
|
343 |
|
|
|
446 |
|
Total Indebtedness |
|
$ |
1,793,060 |
|
|
$ |
1,812,238 |
|
As of December 31, 2022, our consolidated indebtedness aggregated $1,805.4 million, excluding unamortized premium of $0.3 million and unamortized loan costs of $12.7 million, and were collateralized by 31 properties and related tenant leases. Stated interest rates on our outstanding indebtedness ranged from 3.35% to LIBOR + 3.65% with maturities that ranged from January 2023 to April 2035, without regard to available extension options. Taking into consideration $1,264.0 million of notional principal under variable to fixed-rate swap agreements currently in effect, $1,440.8 million of the portfolio debt, or 79.8%, was fixed at a 5.19% weighted-average interest rate and $364.6 million, or 20.2% was floating at a 6.13% weighted average interest rate as of December 31, 2022. Our variable-rate debt includes $103.8 million of debt subject to interest rate caps.
Without regard to available extension options, at December 31, 2022 there is $333.0 million of debt maturing in 2023 at a weighted-average interest rate of 6.06%; there is $7.1 million of scheduled principal amortization due in 2023; and our share of scheduled 2023 principal payments and maturities on our unconsolidated debt was $47.2 million. In addition, $251.7 million of our total consolidated debt and $45.0 million of our
53
pro-rata share of unconsolidated debt will come due in 2024. As it relates to the aforementioned maturing debt in 2023 and 2024, we have options to extend consolidated debt aggregating $51.2 million and $0.0 million at December 31, 2022, respectively; however, there can be no assurance that we will be able to successfully execute any or all of its available extension options. As it relates to the remaining maturing debt in 2023 and 2024, we may not have sufficient cash on hand to repay such indebtedness, and, therefore, we expect to refinance at least a portion of this indebtedness or select other alternatives based on market conditions as these loans mature; however, there can be no assurance that we will be able to obtain financing at acceptable terms or at all. Our ability to obtain financing could be affected by various risks and uncertainties, including, but not limited to, the effects of the current inflationary environment, rising interest rates, and other risks detailed in Part I, Item 1A. Risk Factors
Share Repurchase Program
We maintain a share repurchase program under which $122.5 million remains available as of December 31, 2022 (Note 10). The Company did not repurchase any of its Common Shares under this program during the year ended December 31, 2022.
Sources of Liquidity
Our primary sources of capital for funding our short-term (less than 12 months) and long-term (12 months and longer) liquidity needs include (i) the issuance of both public equity and OP Units, (ii) the issuance of both secured and unsecured debt, (iii) unfunded capital commitments from noncontrolling interests within our Funds, (iv) future sales of existing properties, (v) repayments of structured financing investments, and (vi) cash on hand and future cash flow from operating activities. Our cash on hand in our consolidated subsidiaries at December 31, 2022 totaled $17.2 million. Our remaining sources of liquidity are described further below.
ATM Program
We have an ATM Program (Note 10) that provides us with an efficient and low-cost vehicle for raising capital through public equity issuances on an as-we-go basis to fund our capital needs. Through this program, we have been able to effectively “match-fund” the required capital for our Core Portfolio and Fund acquisitions through the issuance of Common Shares over extended periods employing a price averaging strategy. In addition, from time to time, we have issued and intend to continue to issue, equity in follow-on offerings separate from our ATM Program. Net proceeds raised through our ATM Program and follow-on offerings are primarily used for acquisitions, both for our Core Portfolio and our pro-rata share of Fund acquisitions, and for general corporate purposes. During the year ended December 31, 2022, we sold 5,525,419 shares under our ATM Program for gross proceeds of $123.9 million, or $119.5 million net of issuance costs, at a weighted-average gross price per share of $22.43.
Fund Capital
During the year ended December 31, 2022, Funds II and V called for capital contributions of $175.8 million and $121.7 million, respectively, of which our aggregate share was $131.7 million, inclusive of $106.1 million to Fund II along with the City Point Loan to other Fund II investors (see Structured Financing Investments above). At December 31, 2022, unfunded capital commitments from noncontrolling interests within our Funds II, III, IV and V were zero, $1.4 million, $32.2 million, and $137.5 million, respectively.
Asset Sales and Other Transactions
During the year ended December 31, 2022, we disposed of one Core property, five consolidated Fund properties, two land parcels and two unconsolidated investments as follows (Note 2):
54
We recognized aggregate gains of $57.1 million on the sales of the above properties during the year ended December 31, 2022, excluding the gain recognized on the sale of our unconsolidated properties, of which our share was $23.3 million.
In January 2023, we recognized cash dividends totaling $28.2 million related to the special dividend received from Mervyns II investment in Albertsons, of which our share was $11.3 million (Note 17).
Structured Financing Repayments
During the year ended December 31, 2022, we received full payment on a $16.0 million and $13.5 million first mortgage loan, respectively (Note 3). In January 2022, through an affiliate of Fund III, foreclosed on one Structured Financing loan in the amount of $10.0 million including accrued interest (exclusive of default interest and other amounts due on the loan that have not been recognized), which had previously been in default. We also have one Structured Financing investment in the amount of $21.6 million including accrued interest (exclusive of default interest and other amounts due on the loan that have not been recognized), that previously matured and has not been repaid. Scheduled maturities of Structured Financing loans include $39.3 million maturing during 2023 (Note 3).
Financing and Debt
As of December 31, 2022, we had $173.5 million of additional capacity under existing consolidated Core and Fund revolving debt facilities. In addition, at that date within our Core and Fund portfolios, we had 94 unleveraged consolidated properties with an aggregate carrying value of approximately $1.8 billion, although there can be no assurance that we would be able to obtain financing for these properties at favorable terms, if at all.
Inflation and Economic Condition Considerations
In the past two years, microeconomic and macroeconomic conditions, including the fallout from the COVID-19 Pandemic, the war in Ukraine, supply-chain disruptions, and the recessionary outlook of the current financial markets, has increased volatility in the market and has caused a surge in already increasing inflation and interest rates. We believe we manage our properties in a cost-conscious manner to minimize recurring operational expenses and utilize multi-year contracts to alleviate the impact of inflation on our business and our tenants. Most of our leases require tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. These provisions are designed to partially mitigate the impact of inflation; however, current inflation levels are much greater than the contractual rent increases we obtain from our tenant base. The rate hikes enacted by the Federal Reserve have had a significant impact on interest rate indexes such as LIBOR, SOFR and the Prime Rate. As of December 31, 2022, approximately 79.8% of our outstanding debt is fixed or effectively fixed interest rate with the remaining 20.2% indexed to LIBOR, SOFR or Prime plus an applicable margin per the loan agreement. As of December 31, 2022, we were counterparty to 36 interest rate swap agreements and three interest rate cap agreements, all of which qualify for and are designated as hedging instruments, which helps to alleviate the impact of rising interest rates on our operations. While we have not experienced any material negative impacts at this time, we are actively managing our business to respond to the ongoing economic and social impact from such events. See Item 1A Risk Factors.
55
HISTORICAL CASH FLOW
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
The following table compares the historical cash flow for the year ended December 31, 2022 with the cash flow for the year ended December 31, 2021 (in millions, totals may not add due to rounding):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2022 |
|
|
2021 |
|
|
Variance |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net cash provided by operating activities |
|
$ |
133.2 |
|
|
$ |
105.0 |
|
|
$ |
28.2 |
|
Net cash used in investing activities |
|
|
(124.2 |
) |
|
|
(198.5 |
) |
|
|
74.3 |
|
Net cash (used in) provided by financing activities |
|
|
(4.4 |
) |
|
|
91.3 |
|
|
|
(95.7 |
) |
Increase (decrease) in cash and restricted cash |
|
$ |
4.7 |
|
|
$ |
(2.2 |
) |
|
$ |
6.9 |
|
Operating Activities
Our operating activities provided $28.2 million more cash during the year ended December 31, 2022 as compared to the year ended December 31, 2021, primarily due to Core and Fund property acquisitions and an increase in cash receipts from tenants.
Investing Activities
During the year ended December 31, 2022 as compared to the year ended December 31, 2021, our investing activities used $74.3 million less cash, primarily due to (i) $160.7 million more cash received from the disposition of properties, (ii) $60.1 million more cash received from return of capital from unconsolidated affiliates and other, (iii) $57.9 million less cash used in the issuance of notes receivable, and (iv) $29.5 million more cash received from proceeds from notes receivable. These sources of cash were primarily offset by (i)$139.9 million more cash used for investments in and advances to unconsolidated affiliate, (ii) $81.5 million more cash used to acquire properties in 2022, and (iii) $10.4 million more cash used for development, construction and property improvement costs.
56
Financing Activities
Our financing activities used $95.7 million more cash during the year ended December 31, 2022 as compared to the year ended December 31, 2021, primarily from (i) $125.0 million more cash used by net borrowings, (ii) $78.6 million more cash used for the acquisition of and distributions to noncontrolling interests, and (iii) $25.1 million more cash used in dividends paid to common shareholders. These uses of cash were partially offset by (i) $79.3 million more cash provided by contributions from noncontrolling interests and (ii) $55.6 million more cash provided by the sale of Common Shares.
OFF-BALANCE SHEET ARRANGEMENTS
We have the following investments made through joint ventures (that may include, among others, tenancy-in common and other similar investments) for the purpose of investing in operating properties. We account for these investments using the equity method of accounting. As such, our financial statements reflect our investment and our share of income and loss from, but not the individual assets and liabilities, of these joint ventures.
See Note 4 in the Notes to Consolidated Financial Statements, for a discussion of our unconsolidated investments. The Operating Partnership’s pro-rata share of unconsolidated non-recourse debt related to those investments is as follows (dollars in millions):
|
|
Operating Partnership |
|
|
December 31, 2022 |
|||||||||
Investment |
|
Ownership |
|
|
Pro-rata Share of |
|
|
Effective Interest Rate (a) |
|
|
Maturity Date |
|||
Eden Square |
|
|
22.8 |
% |
|
$ |
5.1 |
|
|
|
6.41 |
% |
|
Mar 2023 |
Gotham Plaza |
|
|
49.0 |
% |
|
|
8.7 |
|
|
|
5.09 |
% |
|
Jun 2023 |
Renaissance Portfolio |
|
|
20.0 |
% |
|
|
32.0 |
|
|
|
3.81 |
% |
|
Aug 2023 |
3104 M Street |
|
|
20.0 |
% |
|
|
0.8 |
|
|
|
7.50 |
% |
|
Jan 2024 |
Crossroads |
|
|
49.0 |
% |
|
|
29.8 |
|
|
|
3.94 |
% |
|
Oct 2024 |
Tri-City Plaza (c) |
|
|
18.1 |
% |
|
|
7.0 |
|
|
|
3.01 |
% |
|
Oct 2024 |
Frederick Crossing (c) |
|
|
18.1 |
% |
|
|
4.4 |
|
|
|
3.26 |
% |
|
Dec 2024 |
Paramus Plaza (b) |
|
|
11.6 |
% |
|
|
3.3 |
|
|
|
6.43 |
% |
|
Dec 2024 |
Frederick County Square (c) |
|
|
18.1 |
% |
|
|
4.1 |
|
|
|
4.00 |
% |
|
Jan 2025 |
840 N. Michigan Avenue |
|
|
88.4 |
% |
|
|
65.0 |
|
|
|
4.36 |
% |
|
Feb 2025 |
Wood Ridge Plaza (b) |
|
|
18.1 |
% |
|
|
5.9 |
|
|
|
7.63 |
% |
|
Mar 2025 |
650 Bald Hill Road |
|
|
20.8 |
% |
|
|
3.3 |
|
|
|
3.75 |
% |
|
Jun 2026 |
La Frontera |
|
|
18.1 |
% |
|
|
10.0 |
|
|
|
6.68 |
% |
|
Jun 2027 |
Family Center at Riverdale (b) |
|
|
18.0 |
% |
|
|
6.1 |
|
|
|
5.99 |
% |
|
Nov 2027 |
Georgetown Portfolio |
|
|
50.0 |
% |
|
|
7.5 |
|
|
|
4.72 |
% |
|
Dec 2027 |
Total |
|
|
|
|
$ |
193.0 |
|
|
|
|
|
|
||
57
CRITICAL ACCOUNTING ESTIMATES
Management’s discussion and analysis of financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Consolidated Financial Statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. We base our estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect the significant judgments and estimates used by us in the preparation of our Consolidated Financial Statements.
Impairment of Properties and Investments in and Advances to Unconsolidated Affiliates
On a periodic basis, we assess whether there are any indicators that the value of real estate assets, including undeveloped land and construction in progress, may be impaired. A property’s value is impaired only if the estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. The determination of undiscounted cash flows requires significant estimates by management. In management’s estimate of cash flows, it considers factors such as expected future sale of an asset or development alternatives, capitalization rates and the undiscounted future cash flows analysis, which is probability-weighted based upon management’s best estimate of the likelihood of the alternative courses of action. Expected future cash flows and recoverability conclusions could be materially impacted by changes in items such as future leasing activity, occupancy, property operating costs, market pricing, our view or strategy relative to a tenant’s business or industry, the manner in which a property is used and the expected hold period of an asset. Subsequent changes in estimated undiscounted cash flows arising from changes in anticipated actions could affect the determination of whether an impairment exists and whether the effects could have a material impact on the Company’s net income. To the extent an impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the fair value of the property.
The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties and other investments. These assessments have a direct impact on the Company’s estimates of the projected future cash flows, anticipated holding periods or market conditions change, its evaluation of the impairment charges may be different, and such differences could be material to the Company’s consolidated financial statements. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.
We periodically review our investment in unconsolidated joint ventures and other cost-method investments for other-than-temporary declines in market value. An impairment charge is recorded for a decline that is considered to be other-than-temporary as a reduction in the carrying value of the investment.
During 2022 and 2021, the Company recognized impairment charges on properties of $33.3 million and $9.9 million, respectively. See Note 8 for a discussion of impairments recognized during the periods presented.
Additionally, during 2022, the Company impaired its unconsolidated investment in 840 N. Michigan Avenue resulting in a charge of $50.8 million. See Note 4 for a discussion of impairments recognized during the periods presented.
Bad Debts
We assess the collectability of our accounts receivable related to tenant revenues under ASC Topic 842 “Leases” (“ASC 842”). Management exercises judgment in assessing collectability and considers customer credit worthiness, assessment of risk associated with the tenant, and current economic trends, among other factors. In addition to the lease-specific collectability assessment performed under ASC 842, the Company may also recognize a general reserve based on the Company’s historical collection experience, as provided under ASC 450-20, as a reduction to Lease income for its portfolio of operating lease receivables which are not expected to be fully collectible. Billed tenant receivables, and receivables arising from the straight-lining of rents, are reserved when management deems the collectability of substantially all future lease payments from a specific lease is not probable, at which point, the Company will begin recognizing revenue from such leases prospectively on a cash basis, based on actual amounts received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term, the Company will reinstate the receivables balance, including those arising from the straight-lining of rents, adjusting for the amount related to the period when the lease was accounted for on a cash basis.
Rents receivable at December 31, 2022 and 2021 are shown net of an allowance for doubtful accounts of $32.1 million and $38.5 million, respectively (Note 11). Rental income for the years ended December 31, 2022, 2021 and 2020 are reported net of adjustments to allowances for doubtful accounts of $(0.4) million, $(0.1) million, and $46.4 million, respectively.
58
Real Estate
Real estate assets are stated at cost less accumulated depreciation. Expenditures for acquisition, development, construction and improvement of properties, as well as significant renovations are capitalized. Interest costs are capitalized until construction is substantially complete. Construction in progress includes costs for significant property expansion and development. Depreciation is computed on the straight-line basis over estimated useful lives of 40 years for buildings, the shorter of the useful life or lease term for tenant improvements and five years for furniture, fixtures, and equipment. Expenditures for maintenance and repairs are charged to operations as incurred.
Upon acquisitions of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, and identified intangibles such as above and below-market leases and acquired in-place leases) and acquired liabilities in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805 “Business Combinations” and ASC Topic 350 “Intangibles – Goodwill and Other,” and allocate purchase price based on their relative fair values. When acquisitions of properties do not meet the criteria for business combinations, as is the case for the majority of the Company’s acquisitions, no goodwill is recorded, and acquisition costs are capitalized. We assess fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property.
Revenue Recognition and Accounts Receivable
Leases with tenants are accounted for as operating leases. Minimum rents are recognized on a straight-line basis over the non-cancelable term of the respective leases. Certain of these leases also provide for percentage rents based upon the level of sales achieved by the tenant. Percentage rent is recognized in the period when the tenants’ sales breakpoint is met. In addition, leases typically provide for the reimbursement to us of real estate taxes, insurance, and other property operating expenses. These reimbursements are recognized as revenue in the period the expenses are incurred.
We assess the collectability of our accounts receivable related to tenant revenues as described under the heading “Bad Debts” above.
Structured Financings
Real estate notes receivable investments and preferred equity investments (“Structured Financings”) are intended to be held to maturity and are carried at cost less an allowance for credit loss. Interest income from Structured Financings is recognized on the effective interest method over the expected life of the loan. Under the effective interest method, interest or fees to be collected at the origination of the Structured Financing investment is recognized over the term of the loan as an adjustment to yield. Changes in cash flows from previous estimates are included in future interest income on a prospective basis and a new effective interest rate is computed based on the current cost basis of the instrument and remaining cash flows.
Allowances for credit loss related to our Structured Financing investments are established based upon management’s quarterly review of the investments. In performing this review, management considers the estimated net recoverable value of the investment as well as other factors, including the fair value of any collateral, the amount and status of any senior debt, and the prospects for the borrower. Because this determination is based upon projections of future economic events, which are inherently subjective, the amounts ultimately realized from the Structured Financings may differ materially from the carrying value at the balance sheet date. Interest income recognition is generally suspended for investments when, in the opinion of management, a full recovery of income and principal becomes doubtful. Income recognition is resumed when the suspended investment becomes contractually current, and performance is demonstrated to be resumed.
Notes receivable at December 31, 2022 and 2021 are reported net of an allowance for credit loss of $0.9 million and $5.8 million, respectively (Note 3).
Recently Issued Accounting Pronouncements
Reference is made to Note 1 for information about recently issued and recently adopted accounting pronouncements.
59
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Information as of December 31, 2022
Our primary market risk exposure is to changes in interest rates related to our mortgage and other debt. See Note 7 in the Notes to Consolidated Financial Statements, for certain quantitative details related to our mortgage and other debt.
Currently, we manage our exposure to fluctuations in interest rates primarily through the use of fixed-rate debt and interest rate swap and cap agreements. As of December 31, 2022, we had total mortgage and other notes payable of $1,805.4 million, excluding the unamortized premium of $0.3 million and unamortized debt issuance costs of $12.7 million, of which $1,440.8 million, or 79.8% was fixed-rate, inclusive of debt with rates fixed through the use of derivative financial instruments, and $364.6 million, or 20.2%, was variable-rate based upon LIBOR rates plus certain spreads. As of December 31, 2022, we were party to 36 interest rate swap and three interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $1,264.0 million and $103.8 million of LIBOR or SOFR-based variable-rate debt, respectively. For a discussion of the risks associated with the discontinuation of LIBOR, see Item 1A. Risk Factors—Risks Related to Our Liquidity and Indebtedness — If we decided to employ higher leverage levels, we would be subject to increased debt service requirements and a higher risk of default on our debt obligations, which could adversely affect our financial conditions, cash flows and ability to make distributions to our shareholders. In addition, increases or changes in interest rates could cause our borrowing costs to rise and may limit our ability to refinance debt.
The following table sets forth information as of December 31, 2022 concerning our long-term debt obligations, including principal cash flows by scheduled maturity and weighted average interest rates of maturing amounts (dollars in millions):
Core Consolidated Mortgage and Other Debt
Year |
|
Scheduled |
|
|
Maturities |
|
|
Total |
|
|
Weighted-Average |
|
||||
2023 |
|
$ |
2.1 |
|
|
$ |
— |
|
|
$ |
2.1 |
|
|
|
— |
% |
2024 |
|
|
1.7 |
|
|
|
7.3 |
|
|
|
9.0 |
|
|
|
4.7 |
% |
2025 |
|
|
2.1 |
|
|
|
228.3 |
|
|
|
230.4 |
|
|
|
4.1 |
% |
2026 |
|
|
2.4 |
|
|
|
400.0 |
|
|
|
402.4 |
|
|
|
4.1 |
% |
2027 |
|
|
2.2 |
|
|
|
200.1 |
|
|
|
202.3 |
|
|
|
4.0 |
% |
Thereafter |
|
|
4.3 |
|
|
|
161.6 |
|
|
|
165.9 |
|
|
|
4.4 |
% |
|
|
$ |
14.8 |
|
|
$ |
997.3 |
|
|
$ |
1,012.1 |
|
|
|
|
|
Fund Consolidated Mortgage and Other Debt
Year |
|
Scheduled |
|
|
Maturities |
|
|
Total |
|
|
Weighted-Average |
|
||||
2023 |
|
$ |
5.0 |
|
|
$ |
333.0 |
|
|
$ |
338.0 |
|
|
|
6.1 |
% |
2024 |
|
|
2.6 |
|
|
|
240.0 |
|
|
|
242.6 |
|
|
|
3.6 |
% |
2025 |
|
|
0.2 |
|
|
|
178.4 |
|
|
|
178.6 |
|
|
|
6.1 |
% |
2026 |
|
|
0.1 |
|
|
|
34.0 |
|
|
|
34.1 |
|
|
|
6.8 |
% |
2027 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
% |
Thereafter |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
$ |
7.9 |
|
|
$ |
785.4 |
|
|
$ |
793.3 |
|
|
|
|
|
Mortgage Debt in Unconsolidated Partnerships (at our Pro-Rata Share)
Year |
|
Scheduled |
|
|
Maturities |
|
|
Total |
|
|
Weighted-Average |
|
||||
2023 |
|
$ |
1.5 |
|
|
$ |
45.7 |
|
|
$ |
47.2 |
|
|
|
4.3 |
% |
2024 |
|
|
1.3 |
|
|
|
43.7 |
|
|
|
45.0 |
|
|
|
4.0 |
% |
2025 |
|
|
0.5 |
|
|
|
74.6 |
|
|
|
75.1 |
|
|
|
4.6 |
% |
2026 |
|
|
0.4 |
|
|
|
3.0 |
|
|
|
3.4 |
|
|
|
3.8 |
% |
2027 |
|
|
0.3 |
|
|
|
22.0 |
|
|
|
22.3 |
|
|
|
5.9 |
% |
Thereafter |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
$ |
4.0 |
|
|
$ |
189.0 |
|
|
$ |
193.0 |
|
|
|
|
|
60
Without regard to available extension options, in 2023, $340.1 million of our total consolidated debt and $47.2 million of our pro-rata share of unconsolidated outstanding debt will become due. In addition, $251.7 million of our total consolidated debt and $45.0 million of our pro-rata share of unconsolidated debt will become due in 2024. As it relates to the maturing debt in 2023 and 2024, we have options to extend consolidated debt aggregating $51.2 million and $0.0 million, respectively; however, there can be no assurance that the Company will be able to successfully execute any or all of its available extension options. As we intend on refinancing some or all of such debt at the then-existing market interest rates, which may be greater than the current interest rate, our interest expense would increase by approximately $6.8 million annually if the interest rate on the refinanced debt increased by 100 basis points. After giving effect to noncontrolling interests, our share of this increase would be $1.3 million. Interest expense on our variable-rate debt of $364.6 million, net of variable to fixed-rate swap agreements currently in effect, as of December 31, 2022, would increase $3.6 million if interest rates increased by 100 basis points. After giving effect to noncontrolling interests, our share of this increase would be $1.2 million. We may seek additional variable-rate financing if and when pricing and other commercial and financial terms warrant. As such, we would consider hedging against the interest rate risk related to such additional variable-rate debt through interest rate swaps and protection agreements, or other means.
Based on our outstanding debt balances as of December 31, 2022, the fair value of our total consolidated outstanding debt would decrease by approximately $5.4 million if interest rates increase by 1%. Conversely, if interest rates decrease by 1%, the fair value of our total outstanding debt would increase by approximately $6.5 million.
As of December 31, 2022, and 2021, we had consolidated notes receivable of $123.9 million and $153.9 million, respectively. We determined the estimated fair value of our notes receivable by discounting future cash receipts utilizing a discount rate equivalent to the rate at which similar notes receivable would be originated under conditions then existing.
Based on our outstanding notes receivable balances as of December 31, 2022, the fair value of our total outstanding notes receivable would decrease by approximately $0.4 million if interest rates increase by 1%. Conversely, if interest rates decrease by 1%, the fair value of our total outstanding notes receivable would increase by approximately $2.6 million.
Summarized Information as of December 31, 2021
As of December 31, 2021, we had total mortgage and other notes payable of $1,819.7 million, excluding the unamortized premium of $0.4 million and unamortized debt issuance costs of $7.9 million, of which $1,038.8 million, or 57.1% was fixed-rate, inclusive of debt with rates fixed through the use of derivative financial instruments, and $780.9 million, or 42.9%, was variable-rate based upon LIBOR, SOFR or Prime rates plus certain spreads. As of December 31, 2021, we were party to 28 interest rate swap and three interest rate cap agreements to hedge our exposure to changes in interest rates with respect to $860.4 million and $110.5 million of variable-rate debt, respectively.
Interest expense on our variable-rate debt of $780.9 million as of December 31, 2021, would have increased $7.8 million if corresponding rate indices increased by 100 basis points. Based on our outstanding debt balances as of December 31, 2021, the fair value of our total outstanding debt would have decreased by approximately $8.4 million if interest rates increased by 1%. Conversely, if interest rates decreased by 1%, the fair value of our total outstanding debt would have increased by approximately $16.0 million.
Changes in Market Risk Exposures from December 31, 2021 to December 31, 2022
Our interest rate risk exposure from December 31, 2021, to December 31, 2022, has decreased on an absolute basis, as the $780.9 million of variable-rate debt as of December 31, 2021, has decreased to $364.6 million as of December 31, 2022. As a percentage of our overall debt, our interest rate risk exposure has decreased as our variable-rate debt accounted for 42.9% of our consolidated debt as of December 31, 2021 compared to 20.2% as of December 31, 2022.
61
ITEM 8. FINANCIAL STATEMENTS.
ACADIA REALTY TRUST AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
|
|
Page |
|
|
|
Financial Statements: |
|
|
|
63 |
|
Consolidated Balance Sheets as of December 31, 2022 and 2021 |
|
65 |
Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 |
|
66 |
|
67 |
|
|
68 |
|
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 |
|
70 |
|
72 |
|
|
|
|
Financial Statement Schedules: |
|
|
|
118 |
|
|
119 |
|
|
124 |
62
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Trustees
Acadia Realty Trust
Rye, New York
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Acadia Realty Trust (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedules listed in the accompanying index (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 1, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of Impairment of Real Estate and Real Estate Related Investments
As described in Notes 2, 4 and 6 to the consolidated financial statements, as of December 31, 2022, the Company’s net investment in real estate was $3.5 billion, the net carrying value of intangible lease assets was $0.1 billion, and the carrying value of investments in and advances to unconsolidated affiliates was $0.3 billion. The Company tests the recoverability of the real estate and intangible lease assets held by the Company and its unconsolidated affiliates, whenever events or changes in circumstances indicate that amounts may not be recoverable. The Company identified impairment indicators, which resulted in the Company recording impairment charges of $33.3 million in 2022 related to its consolidated real estate investments and $50.8 million, representing the Company’s share of real estate impairment related to its unconsolidated affiliate.
63
We identified the assessment of impairment of the real estate and intangible lease assets held by the Company and its unconsolidated affiliates as a critical audit matter due to the complexity of management’s judgments relating to: (i) the assessment of impairment indicators for the real estate and intangible lease assets held by the Company and its unconsolidated affiliates, including long-term vacancy, recurring negative cash flows and tenant bankruptcies, (ii) the assessment of assumptions used in the expected future undiscounted cash flows for certain properties, and (iii) the assessment of assumptions used in the measurement of impairment of certain properties, including discount rates, market rents and capitalization rates, given the inherent uncertainties that exist related to the Company’s forecasts and how various economic and other factors could affect the Company’s forecasted future cash flows. Auditing management’s assumptions relating to its assessment of potential impairment indicators, market rents and capitalization rates used in the cash flow projections, and the discount rates used in the measurement of impairment, involved especially challenging auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or knowledge required.
The primary procedures we performed to address this critical audit matter included:
/s/ BDO USA, LLP
We have served as the Company's auditor since 2005.
March 1, 2023
64
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
|
December 31, |
|
|
December 31, |
|
||
(dollars in thousands, except per share amounts) |
|
2022 |
|
|
2021 |
|
||
ASSETS |
|
|
|
|
|
|
||
Investments in real estate, at cost |
|
|
|
|
|
|
||
Operating real estate, net |
|
$ |
|
|
$ |
|
||
Real estate under development |
|
|
|
|
|
|
||
Net investments in real estate |
|
|
|
|
|
|
||
Notes receivable, net |
|
|
|
|
|
|
||
Investments in and advances to unconsolidated affiliates |
|
|
|
|
|
|
||
Other assets, net |
|
|
|
|
|
|
||
Right-of-use assets - operating leases, net |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
||
Rents receivable, net |
|
|
|
|
|
|
||
Assets of properties held for sale |
|
|
|
|
|
|
||
Total assets (a) |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
LIABILITIES |
|
|
|
|
|
|
||
Mortgage and other notes payable, net |
|
$ |
|
|
$ |
|
||
Unsecured notes payable, net |
|
|
|
|
|
|
||
Unsecured line of credit |
|
|
|
|
|
|
||
Accounts payable and other liabilities |
|
|
|
|
|
|
||
Lease liability - operating leases, net |
|
|
|
|
|
|
||
Dividends and distributions payable |
|
|
|
|
|
|
||
Distributions in excess of income from, and investments in, unconsolidated affiliates |
|
|
|
|
|
|
||
Total liabilities (a) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Redeemable noncontrolling interests |
|
|
|
|
|
|
||
EQUITY |
|
|
|
|
|
|
||
Acadia Shareholders' Equity |
|
|
|
|
|
|
||
Common shares, $ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
Distributions in excess of accumulated earnings |
|
|
( |
) |
|
|
( |
) |
Total Acadia shareholders’ equity |
|
|
|
|
|
|
||
Noncontrolling interests |
|
|
|
|
|
|
||
Total equity |
|
|
|
|
|
|
||
Total liabilities, equity and redeemable noncontrolling interests |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these consolidated financial statements
65
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Year Ended December 31, |
|
|||||||||
(in thousands except per share amounts) |
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
Revenues |
|
|
|
|
|
|
|
|
|
|||
Rental income |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Other |
|
|
|
|
|
|
|
|
|
|||
Total revenues |
|
|
|
|
|
|
|
|
|
|||
Operating expenses |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|||
General and administrative |
|
|
|
|
|
|
|
|
|
|||
Real estate taxes |
|
|
|
|
|
|
|
|
|
|||
Property operating |
|
|
|
|
|
|
|
|
|
|||
Impairment charges |
|
|
|
|
|
|
|
|
|
|||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Gain on disposition of properties |
|
|
|
|
|
|
|
|
|
|||
Operating Income (loss) |
|
|
|
|
|
|
|
|
( |
) |
||
Equity in (losses) earnings of unconsolidated affiliates |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Interest income |
|
|
|
|
|
|
|
|
|
|||
Realized and unrealized holding (losses) gains on investments and other |
|
|
( |
) |
|
|
|
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
(Loss) income from continuing operations before income taxes |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Income tax provision |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net (loss) income |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Net loss attributable to redeemable noncontrolling interests |
|
|
|
|
|
|
|
|
|
|||
Net loss (income) attributable to noncontrolling interests |
|
|
|
|
|
( |
) |
|
|
|
||
Net (loss) income attributable to Acadia |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Basic (loss) earnings per share |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Diluted (loss) earnings per share |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
The accompanying notes are an integral part of these consolidated financial statements
66
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|||
Unrealized gain (loss) on valuation of swap agreements |
|
|
|
|
|
|
|
|
( |
) |
||
Reclassification of realized interest on swap agreements |
|
|
|
|
|
|
|
|
|
|||
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
( |
) |
||
Comprehensive income (loss) |
|
|
|
|
|
|
|
|
( |
) |
||
Comprehensive loss attributable to redeemable noncontrolling interests |
|
|
|
|
|
|
|
|
|
|||
Comprehensive loss (income) attributable to noncontrolling interests |
|
|
|
|
|
( |
) |
|
|
|
||
Comprehensive income (loss) attributable to Acadia |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
The accompanying notes are an integral part of these consolidated financial statements.
67
ACADIA REALTY TRUST AND SUBSIDIARIES
Years Ended December 31, 2022, 2021 and 2020
|
|
Acadia Shareholders |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(in thousands, except per share amounts) |
|
Common |
|
|
Share |
|
|
Additional |
|
|
Accumulated |
|
|
Distributions |
|
|
Total |
|
|
Noncontrolling |
|
|
Total |
|
|
Redeemable Noncontrolling Interest |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at January 1, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||||
Issuance of Common Shares, net |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|||||
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|||
Dividends/distributions declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Acquisition of noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
||
City Point Loan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
City Point Loan accrued interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Employee and trustee stock compensation, net |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||||
Noncontrolling interest distributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Noncontrolling interest contributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Comprehensive income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||
Reclassification of redeemable noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Reallocation of noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Balance at December 31, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at January 1, 2021 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||||
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|||
Cancellation of OP Units |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Issuance of Common Shares |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|||||
Dividends/distributions declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Employee and trustee stock compensation, net |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||||
Noncontrolling interest distributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Noncontrolling interest contributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
||
Comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||||
Reallocation of noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Balance at December 31, 2021 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
68
|
|
Acadia Shareholders |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
(in thousands, except per share amounts) |
|
Common |
|
|
Share |
|
|
Additional |
|
|
Accumulated |
|
|
Distributions |
|
|
Total |
|
|
Noncontrolling |
|
|
Total |
|
|
Redeemable Noncontrolling Interest |
|
|||||||||
Balance at January 1, 2020 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||||
Conversion of OP Units to Common Shares by limited partners of the Operating Partnership |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|||
Cumulative effect of change in accounting principle |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Dividends/distributions declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Employee and trustee stock compensation, net |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||||
Repurchase of Common Shares |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Acquisition of noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
— |
|
||
Noncontrolling interest distributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Noncontrolling interest contributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
||
Comprehensive (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
Reallocation of noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Balance at December 31, 2020 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
||||||
The accompanying notes are an integral part of these consolidated financial statements.
69
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|||
Gain on disposition of properties and other investments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net unrealized holding losses (gains) on investments |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Stock compensation expense |
|
|
|
|
|
|
|
|
|
|||
Straight-line rents |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Equity in losses (earnings) of unconsolidated affiliates |
|
|
|
|
|
( |
) |
|
|
|
||
Distributions of operating income from unconsolidated affiliates |
|
|
|
|
|
|
|
|
|
|||
Adjustments to straight-line rent reserves |
|
|
( |
) |
|
|
|
|
|
|
||
Amortization of financing costs |
|
|
|
|
|
|
|
|
|
|||
Non-cash lease expense |
|
|
|
|
|
|
|
|
|
|||
Adjustments to allowance for credit loss |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Impairment charges |
|
|
|
|
|
|
|
|
|
|||
Termination of ground lease |
|
|
|
|
|
( |
) |
|
|
|
||
Gain on debt extinguishment |
|
|
|
|
|
|
|
|
( |
) |
||
Other, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Changes in assets and liabilities: |
|
|
— |
|
|
|
— |
|
|
|
|
|
Rents receivable |
|
|
|
|
|
|
|
|
( |
) |
||
Other liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Accounts payable and accrued expenses |
|
|
( |
) |
|
|
|
|
|
|
||
Prepaid expenses and other assets |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Lease liability - operating leases |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
|
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|||
Acquisitions of real estate |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Proceeds from the disposition of properties and other investments, net |
|
|
|
|
|
|
|
|
|
|||
Investments in and advances to unconsolidated affiliates and other |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Development, construction and property improvement costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Deposits for properties under purchase contract |
|
|
( |
) |
|
|
|
|
|
|
||
Deposits for properties under sales contract |
|
|
|
|
|
|
|
|
|
|||
Change in control of previously unconsolidated affiliate |
|
|
|
|
|
|
|
|
|
|||
Return of capital from unconsolidated affiliates and other |
|
|
|
|
|
|
|
|
|
|||
Payment of deferred leasing costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Acquisition of investment interests |
|
|
( |
) |
|
|
|
|
|
|
||
Proceeds from notes receivable |
|
|
|
|
|
|
|
|
|
|||
Issuance of notes receivable |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|||
Proceeds from unsecured debt |
|
|
|
|
|
|
|
|
|
|||
Principal payments on unsecured debt |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Proceeds from the sale (repurchase) of Common Shares |
|
|
|
|
|
|
|
|
( |
) |
||
Capital contributions from noncontrolling interests |
|
|
|
|
|
|
|
|
|
|||
Principal payments on mortgage and other notes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Distributions to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Dividends paid to Common Shareholders |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Proceeds received from mortgage and other notes |
|
|
|
|
|
|
|
|
|
|||
Deferred financing and other costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Acquisition of noncontrolling interest |
|
|
( |
) |
|
|
|
|
|
|
||
Payments of finance lease obligations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net cash (used in) provided by financing activities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Increase (decrease) in cash and restricted cash |
|
|
|
|
|
( |
) |
|
|
|
||
Cash of $ |
|
|
|
|
|
|
|
|
|
|||
Cash of $ |
|
$ |
|
|
$ |
|
|
$ |
|
|||
70
ACADIA REALTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
|
|
|
|||
Cash paid during the period for interest, net of capitalized interest of $ |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Cash paid for income taxes, net of (refunds) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|||
Supplemental disclosure of non-cash investing and financing activities |
|
|
|
|
|
|
|
|
|
|||
Distribution declared and payable on January 13, 2023, and January 14, 2022 and January 15, 2020, respectively |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Assumption of accounts payable and accrued expenses through acquisition of real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Right-of-use assets, operating leases exchanged for operating lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Issuance of note receivable used as capital contributions from redeemable noncontrolling interests |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Accrued interest on note receivable recorded to redeemable noncontrolling interest |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Reclassification of non-controlling interest in excess of amount paid to additional paid-in capital |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Adjustment to equity as a result of the implementation of CECL (defined below) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Note receivable exchanged for real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Acquisition of real estate through assumption of debt |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Right-of-use assets, finance leases (modified) obtained in exchange for finance lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Right of use assets, operating leases terminated in exchange for finance lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
Settlement of note receivable through cancellation of OP Units |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Change in control of previously unconsolidated investment |
|
|
|
|
|
|
|
|
|
|||
Increase in real estate |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Increase in mortgage notes payable |
|
|
|
|
|
|
|
|
|
|||
Decrease in investments in and advances to unconsolidated affiliates |
|
|
|
|
|
|
|
|
|
|||
Decrease in notes receivable |
|
|
|
|
|
|
|
|
|
|||
Decrease (increase) in reserve on note receivable |
|
|
( |
) |
|
|
|
|
|
|
||
Decrease in accrued interest on notes receivable |
|
|
|
|
|
|
|
|
|
|||
Change in other assets and liabilities |
|
|
|
|
|
|
|
|
|
|||
Acquisition of noncontrolling interest asset |
|
|
|
|
|
|
|
|
( |
) |
||
Increase in cash and restricted cash upon change of control |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The accompanying notes are an integral part of these consolidated financial statements.
71
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization, Basis of Presentation and Summary of Significant Accounting Policies
Organization
Acadia Realty Trust, a Maryland real estate investment trust (collectively with its subsidiaries, the “Company”), is a fully-integrated equity real estate investment trust (“REIT”) focused on the ownership, acquisition, development, and management of retail properties located primarily in high-barrier-to-entry, supply-constrained, densely populated metropolitan areas in the United States.
All of the Company’s assets are held by, and all of its operations are conducted through, Acadia Realty Limited Partnership (the “Operating Partnership”) and entities in which the Operating Partnership owns an interest. As of December 31, 2022 and 2021, the Company controlled approximately
As of December 31, 2022, the Company has ownership interests in
The Operating Partnership is the sole general partner or managing member of the Funds and Mervyns II and earns fees or priority distributions for asset management, property management, construction, development, leasing, and legal services. Cash flows from the Funds and Mervyns II are distributed pro-rata to their respective partners and members (including the Operating Partnership) until each receives a certain cumulative return (“Preferred Return”) and the return of all capital contributions. Thereafter, remaining cash flow is distributed
The following table summarizes the general terms and Operating Partnership’s equity interests in the Funds and Mervyns II (dollars in millions):
Entity |
|
Formation |
|
Operating |
|
|
Capital Called |
|
|
Unfunded |
|
|
Equity Interest |
|
|
Preferred |
|
|
Total |
|
||||||
Fund II and Mervyns II (c,d) |
|
6/2004 |
|
|
% |
|
$ |
|
|
$ |
|
|
|
% |
|
|
% |
|
$ |
|
||||||
Fund III |
|
5/2007 |
|
|
% |
|
|
|
|
|
|
|
|
% |
|
|
% |
|
|
|
||||||
Fund IV |
|
5/2012 |
|
|
% |
|
|
|
|
|
|
|
|
% |
|
|
% |
|
|
|
||||||
Fund V (e) |
|
8/2016 |
|
|
% |
|
|
|
|
|
|
|
|
% |
|
|
% |
|
|
|
||||||
72
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
Segments
Principles of Consolidation
The consolidated financial statements include the consolidated accounts of the Company and its investments in partnerships and limited liability companies in which the Company has control, including where the Company has been determined to be a primary beneficiary of a variable interest entity ("VIE"), in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810 “Consolidation” (“ASC Topic 810”). The ownership interests of other investors in these entities are recorded as noncontrolling interests. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition and the collectability of notes receivable and rents receivable. Application of these estimates and assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates.
Summary of Significant Accounting Policies
Real Estate
Land, buildings, and personal property are carried at cost less accumulated depreciation. Improvements and significant renovations that extend the useful life of the properties are capitalized, while replacements, maintenance, and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Real estate under development includes costs for significant property expansion and development.
Depreciation is computed on the straight-line basis over estimated useful lives of the assets as follows:
Buildings and improvements |
Useful lives of |
Furniture and fixtures |
Useful lives, ranging from |
Tenant improvements |
Shorter of economic life or lease terms |
Purchase Accounting – Upon acquisitions of real estate, the Company assesses the fair value of acquired assets and assumed liabilities (including land, buildings and improvements, and identified intangibles such as above- and below-market leases and acquired in-place leases) and assumed liabilities in accordance with ASC Topic 805, “Business Combinations” and ASC Topic 350 “Intangibles – Goodwill and Other,” and allocates the acquisition price based on their relative fair values. When acquisitions of properties do not meet the criteria for business combinations, they are accounted for as asset acquisitions; therefore,
The Company assesses fair value of its tangible assets acquired and assumed liabilities based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information at the measurement period. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property.
In determining the value of above- and below-market leases, the Company estimates the present value difference between contractual rent obligations and estimated market rate of leases at the time of the transaction. To the extent there were fixed-rate options at below-market rental
73
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
rates, the Company included these periods along with the current term below-market rent in arriving at the fair value of the acquired leases. The discounted difference between contract and market rents is being amortized to rental income over the remaining applicable lease term, inclusive of any option periods.
In determining the value of acquired in-place leases, the Company considers market conditions at the time of the transaction and values the costs to execute similar leases during the expected lease-up period from vacancy to existing occupancy, including carrying costs. The value assigned to in-place leases and tenant relationships is amortized over the estimated remaining term of the leases. If a lease were to be terminated prior to its scheduled expiration, all unamortized costs (e.g., lease intangibles) relating to that lease would be written off.
The Company estimates the value of any assumption of mortgage debt based on market conditions at the time of acquisitions including prevailing interest rates, terms, and ability to obtain financing for a similar asset. Mortgage debt discounts or premiums are amortized into interest expense over the remaining term of the related debt instrument.
Real Estate Under Development – The Company capitalizes certain costs related to the development of real estate. Interest and real estate taxes incurred during the period of the construction, expansion or development of real estate are capitalized and depreciated over the estimated useful life of the building. The Company will cease the capitalization of these costs when construction activities are substantially completed and the property is available for occupancy by tenants, but no later than one year from the completion of major construction activity at which time the project is placed in service and depreciation commences. If the Company suspends substantially all activities related to the development of a qualifying asset, the Company will cease capitalization of interest and taxes until activities are resumed.
Real Estate Impairment – The Company reviews its real estate, real estate under development and right-of-use assets for impairment when there is an event or a change in circumstances that indicates that the carrying amount may not be recoverable. In cases where the Company does not expect to recover its carrying amounts on properties held for use, the Company reduces its carrying amounts to fair value. The determination of anticipated undiscounted cash flows is inherently subjective, requiring significant estimates made by management, and considers the most likely expected course of action at the balance sheet date based on current plans, intended holding periods and available market information. If the Company is evaluating the potential sale of an asset, the undiscounted future cash flows analysis is probability-weighted based upon management’s best estimate of the likelihood of the alternative courses of action as of the balance sheet date. Such cash flow projections consider factors such as expected future operating income, trends, and prospects, as well as the effects of demand, competition, and other factors. If an impairment is indicated, an impairment loss is recognized based on the excess of the carrying amount of the asset over its estimated fair value. See Note 8 for information about impairment charges recorded during the periods presented.
Dispositions of Real Estate – The Company recognizes property sales in accordance with ASC Topic 610-20 “Other Income—Gains and losses from the derecognition of nonfinancial assets.” Sales of real estate include the sale of land, operating properties, and investments in real estate joint ventures. Gains on sale of investment properties are recognized, and the related real estate derecognized, when the Company has satisfied its performance obligations by transferring control of the property. Typically, the timing of payment and satisfaction of performance obligations occur simultaneously on the disposition date upon transfer of the property’s ownership.
Real Estate Held for Sale – The Company generally considers assets to be held for sale when it has entered into a contract to sell the property, all material due diligence requirements have been satisfied, and management believes it is probable that the disposition will occur within one year. Assets that are classified as held for sale are recorded at the lower of their carrying amount or fair value, less cost to sell.
Notes Receivable
Notes receivable include certain loans that are held for investment and are collateralized by real estate-related investments and may be subordinate to other senior loans. Notes receivable are reported net of allowance for credit loss ("CECL") and are recorded at stated principal amounts or at initial investment less accretive yield for loans purchased at a discount, which is accreted over the life of the note. The Company defers loan origination and commitment fees, net of origination costs, and amortizes them over the term of the related loan. Changes in cash flows from previous estimates are included in future interest income on a prospective basis and a new effective interest rate is computed based on the current cost basis of the instrument and remaining cash flows. The Company evaluates the collectability of both principal and interest based upon an assessment of the underlying collateral value to determine whether it is impaired. Allowance for credit loss represents management’s estimate of future losses based on national historical economic loss rates for similar obligations, management’s estimate of future economic impacts and factors specific to the borrower. Certain of the Company’s loans are considered “collateral dependent” in that settlement of the amount is likely to be achieved by obtaining access to the collateral (e.g., notes in default). The same valuation techniques are used to value the collateral for such collateral dependent instruments as those used to determine the fair value of real estate investments for impairment purposes. Given the small number of notes outstanding, the Company believes the characteristics of its notes are not sufficiently similar to allow an evaluation as a group for credit loss allowance. As such, all of the Company’s notes are evaluated individually for this purpose. Interest income on performing notes is
74
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Investments in and Advances to Unconsolidated Joint Ventures
Some of the Company’s joint ventures obtain non-recourse third-party financing on their property investments, contractually limiting the Company’s exposure to losses. The Company recognizes income for distributions in excess of its investment where there is no recourse to the Company and no intention or obligation to contribute additional capital. For investments in which there is recourse to the Company or an obligation or intention to contribute additional capital exists, distributions in excess of the investment are recorded as a liability.
When characterizing distributions from equity investees within the Company's consolidated statements of cash flows, all distributions received are first applied as returns on investment to the extent there are cumulative earnings related to the respective investment and are classified as cash inflows from operating activities. If cumulative distributions are in excess of cumulative earnings, distributions are considered return of investment. In such cases, the distribution is classified as cash inflows from investing activities.
To the extent that the Company’s carrying basis in an unconsolidated affiliate is different from the basis reflected at the joint venture level, the basis difference is amortized over the life of the related assets and included in the Company’s share of equity in earnings (losses) of unconsolidated affiliates the joint venture.
The Company periodically reviews its investments in unconsolidated joint ventures for other-than-temporary losses in investment value. Any decline that is not expected to be recovered based on the underlying assets of the investment, is considered other than temporary and an impairment charge is recorded as a reduction in the carrying value of the investment. During the periods presented there were no impairment charges related to the Company’s investments in unconsolidated joint ventures.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed the limits insured by the Federal Deposit Insurance Corporation.
Restricted Cash
Restricted cash consists principally of cash held for real estate taxes, construction costs, property maintenance, insurance, minimum occupancy, and property operating income requirements at specific properties as required by certain loan agreements.
Deferred Costs
External fees and costs paid in the successful negotiation of leases are deferred and amortized on a straight-line basis over the terms of the respective leases. External fees and costs incurred in connection with obtaining financing are deferred and amortized as a component of interest expense over the term of the related debt obligation on a straight-line basis, which approximates the effective interest method.
Derivative Instruments and Hedging Activities
The Company measures derivative instruments at fair value and records them as assets or liabilities, depending on its rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated and that qualified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Accumulated other comprehensive loss until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings.
Although the Company's derivative contracts are subject to master netting arrangements, which serve as credit mitigants to both the Company and its counterparties under certain situations, the Company does not net its derivative fair values or any existing rights or obligations to cash collateral on the consolidated balance sheets. The Company does not use derivatives for trading or speculative purposes. For the periods presented, all of the Company's derivatives qualified and were designated as cash flow hedges, and none of its derivatives were deemed ineffective.
75
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Noncontrolling Interests
Noncontrolling interests represent the portion of equity that the Company does not own in those entities it consolidates. The Company identifies its noncontrolling interests separately within the equity section on the Company’s consolidated balance sheets. The amounts of consolidated net earnings attributable to the Company and to the noncontrolling interests are presented separately on the Company’s consolidated statements of operations. Noncontrolling interests also include amounts related to common and preferred OP Units issued to unrelated third parties in connection with certain property acquisitions. In addition, the Company periodically issues common OP Units and LTIPs to certain employees of the Company under its share-based incentive program. Unit holders generally have the right to redeem their units for Common Shares subject to blackout and other limitations. Common and restricted OP Units are included in the caption Noncontrolling interest within the equity section on the Company’s consolidated balance sheets.
Variable Interest Entities
The Company consolidates a VIE in which it is considered the primary beneficiary. The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The Company assesses the accounting treatment and determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders that conclusion. In determining whether the Company is the primary beneficiary, it evaluates its control rights as well as economic interests in the entity held either directly or indirectly by the Company. Each entity is assessed on an individual basis to determine the rights provided to each party and whether those rights are protective or participating. For all VIEs, the Company reviews such agreements in order to determine which party has the power to direct the activities that most significantly impact the entity's economic performance.
For those entities evaluated under the voting interest model, the Company consolidates the entity if it has a controlling financial interest. The Company has a controlling financial interest in a voting interest entity (“VOE”) if it owns a majority voting interest in the entity. Investments in entities for which the Company has the ability to exercise significant influence over but does not have financial or operating control through its voting interest and entities which are VIEs but where the Company is not the primary beneficiary, are accounted for using the equity method of accounting. Accordingly, the Company’s share of the earnings (or losses) of these entities are included in consolidated net income or loss.
Revenue Recognition and Accounts Receivable
The Company accounts for its leases under ASC 842. Pursuant to ASC 842, the Company has made an accounting policy election to not separate the non-lease components from its leases, such as common area maintenance, and has accounted for each of its leases as a single lease component. In addition, the Company has elected to account only for those taxes that it pays on behalf of the tenant as reimbursable costs and will not account for those taxes paid directly by the tenant. Minimum rents from tenants are recognized using the straight-line method over the non-cancelable lease term of the respective leases. Lease termination fees are recognized upon the effective termination of a tenant’s lease when the Company has no further obligations under the lease. As of December 31, 2022 and 2021, unbilled rents receivable relating to the straight-lining of rents of $
The Company assesses the collectability of its accounts receivable related to tenant revenues under ASC 842. The Company estimates the collectability of the accounts receivable related to billed rents, straight-line rents, recoveries from tenants, and other revenue taking into consideration the Company's historical write-off experience, tenant creditworthiness, current economic trends, and remaining lease terms. Rents receivable at December 31, 2022 and 2021 are shown net of an allowance for doubtful accounts of $
Stock-Based Compensation
Stock-based compensation expense for all equity-classified stock-based compensation awards is based on the grant date fair value estimated in accordance with current accounting guidance for share-based payments. The Company recognizes these compensation costs for only those shares or units expected to vest on a straight-line or graded-vesting basis, as appropriate, over the requisite service period of the award. The Company includes stock-based compensation within general and administrative expense on the consolidated statements of operations.
Income Taxes
76
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company has made an election to be taxed, and believes it qualifies, as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). To maintain REIT status for Federal income tax purposes, the Company is generally required to distribute at least
The Company is permitted to participate in certain activities and still maintain its qualification as a REIT, so long as these activities are conducted in entities that elect to be treated as taxable subsidiaries under the Code. As such, the Company is subject to Federal and state income taxes on the income from these activities.
Although it may qualify for REIT status for federal income tax purposes, the Company is subject to state or local income or franchise taxes in certain jurisdictions in which some of its properties are located. In addition, taxable income from non-REIT activities managed through the Company’s Taxable REIT Subsidiary (“TRS”) is fully subject to federal, state and local income taxes.
The Company accounts for TRS income taxes under the liability method as required by ASC Topic 740, “Income Taxes.” Under the liability method, deferred income taxes are recognized for the temporary differences between the GAAP basis and tax basis of the TRS income, assets, and liabilities.
In March 2020, Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) temporarily relaxed existing limitations on the use and carryback of net operating losses incurred by our TRSs. Net operating losses generated in taxable years beginning in 2019, 2020 or 2021 can be carried back to the preceding 5 years. In addition, TRSs can fully offset their taxable income for taxable years beginning before 2022 using net operating loss carrybacks and carryforwards and can fully offset their taxable income for taxable years beginning after 2021 using pre-2019 net operating loss carryforwards. Any post-2018 net operating loss carryforwards can be used to offset up to
Recent Accounting Pronouncements
In January 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-01 Reference Rate Reform (Topic 848) which modifies ASC 848, which was intended to provide relief related to “contracts and transactions that reference LIBOR or a reference rate that is expected to be discontinued as a result of reference rate reform.” ASU 2021-01 expands the scope of ASC 848 to include all affected derivatives and give reporting entities the ability to apply certain aspects of the contract modification and hedge accounting expedients to derivative contracts affected by the discounting transition. ASU 2021-01 also adds implementation guidance to clarify which optional expedients in ASC 848 may be applied to derivative instruments that do not reference LIBOR or a reference rate that is expected to be discontinued, but that are being modified as a result of the discounting transition. The Company has elected the optional practical expedient under ASU 2020-04 and 2021-01, which allows entities to account for the modification as if the modification was not substantial. As a result, the implementation of this guidance did not have an effect on the Company’s consolidated financial statements.
In December 2022, the FASB issued ASU 2022-06 Reference Rate Reform (Topic 848). The guidance in this update defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The amendments are effective for all entities in scope upon issuance of the ASU. The Company plans to transition all variable rate loans currently indexed to LIBOR to SOFR or another applicable benchmark index based on discussions with its lenders.
Any other recently issued accounting standards or pronouncements not disclosed above have been excluded as they are not relevant to the Company, or they are not expected to have a material impact on the consolidated financial statements.
77
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Real Estate
The Company’s consolidated real estate is comprised of the following for the periods presented (in thousands):
|
|
December 31, |
|
|
December 31, |
|
||
|
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
||
Land |
|
$ |
|
|
$ |
|
||
Buildings and improvements |
|
|
|
|
|
|
||
Tenant improvements |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
(Note 11) |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
Less: Accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Operating real estate, net |
|
|
|
|
|
|
||
Real estate under development |
|
|
|
|
|
|
||
Net investments in real estate |
|
$ |
|
|
$ |
|
||
Acquisitions and Foreclosure
During the years ended December 31, 2022 and 2021, the Company acquired (through purchase, investment, or foreclosure) the following consolidated retail properties and other real estate investments (dollars in thousands):
Property and Location |
|
Percent |
|
Date of |
|
Purchase |
|
|
2022 Acquisitions and Foreclosure |
|
|
|
|
|
|
|
|
Core |
|
|
|
|
|
|
|
|
121 Spring Street - New York, NY |
|
|
Jan 12, 2022 |
|
$ |
|
||
Williamsburg Collection - Brooklyn, NY (a) |
|
(a) |
|
Feb 18, 2022 |
|
|
|
|
8833 Beverly Boulevard - West Hollywood, CA |
|
|
Mar 2, 2022 |
|
|
|
||
Henderson Avenue Portfolio - Dallas, TX (b) |
|
|
Apr 18, 2022 |
|
|
|
||
Subtotal Core |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund III |
|
|
|
|
|
|
|
|
640 Broadway - New York, NY (Foreclosure) (c) |
|
|
Jan 26, 2022 |
|
|
|
||
Subtotal Fund III |
|
|
|
|
|
|
|
|
Total 2022 Acquisitions and Foreclosure |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
2021 Acquisitions |
|
|
|
|
|
|
|
|
Core |
|
|
|
|
|
|
|
|
14th Street Portfolio - Washington, DC |
|
|
Dec 23, 2021 |
|
$ |
|
||
Subtotal Core |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund V |
|
|
|
|
|
|
|
|
Canton Marketplace - Canton, GA |
|
|
Aug 20, 2021 |
|
|
|
||
Monroe Marketplace - Selinsgrove, PA |
|
|
Sept 9, 2021 |
|
|
|
||
Monroe Marketplace (Parcel) - Selinsgrove, PA |
|
|
Nov 12, 2021 |
|
|
|
||
Midstate - East Brunswick, NJ |
|
|
Dec 14, 2021 |
|
|
|
||
Subtotal Fund V |
|
|
|
|
|
|
|
|
Total 2021 Acquisitions |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
78
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2022 and 2021, the Company capitalized $
Purchase Price Allocations
The purchase prices for the 2022 Acquisitions and Foreclosure and 2021 Acquisitions were allocated to the acquired assets and assumed liabilities based on their estimated relative fair values at the dates of acquisition.
|
|
Year Ended December 31, |
|
|
Year Ended December 31, |
|
||
|
|
2022 |
|
|
2021 |
|
||
Net Assets Acquired |
|
|
|
|
|
|
||
Land |
|
$ |
|
|
$ |
|
||
Buildings and improvements |
|
|
|
|
|
|
||
Acquisition-related intangible assets (Note 6) |
|
|
|
|
|
|
||
Accounts receivable, prepaids and other assets |
|
|
|
|
|
|
||
Accounts payable and other liabilities |
|
|
( |
) |
|
|
|
|
Acquisition-related intangible liabilities (Note 6) |
|
|
( |
) |
|
|
( |
) |
Net assets acquired |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Consideration |
|
|
|
|
|
|
||
Cash |
|
$ |
|
|
$ |
|
||
Carrying value of note receivable exchanged in foreclosure (Note 3) |
|
|
|
|
|
|
||
Existing interest in previously unconsolidated investment (Note 4) |
|
|
|
|
|
|
||
Debt assumed |
|
|
|
|
|
|
||
Liabilities assumed |
|
|
|
|
|
|
||
Total consideration |
|
|
|
|
|
|
||
on bargain purchase |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
The Company determines the fair value of the individual components of income producing real estate asset acquisitions primarily through calculating the "as-if vacant" value of a building, using an income approach, which relies significantly upon internally determined assumptions. The Company has determined that these estimates primarily rely on Level 3 inputs, which are unobservable inputs based on our own assumptions.
|
|
2022 |
|
|
2021 |
|
||||||||
|
|
Low |
|
High |
|
|
Low |
|
High |
|
||||
Exit Capitalization Rate |
|
|
% |
|
% |
|
|
% |
|
% |
||||
Annual net rental rate per square foot on acquired buildings |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
||||
Annual net rental rate per square foot on acquired ground lease |
|
$ |
|
$ |
|
|
$ |
|
$ |
|
||||
79
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The estimate of the portion of the "as-if vacant" value that is allocated to the land underlying the acquired real estate relies on Level 3 inputs and is primarily determined by reference to recent comparable transactions.
Dispositions
During the years ended December 31, 2022 and 2021, the Company disposed of the following consolidated properties and other real estate investments (in thousands):
Property and Location |
|
Owner |
|
Date Sold |
|
Sale Price |
|
|
Gain (Loss) |
|
||
2022 Dispositions |
|
|
|
|
|
|
|
|
|
|
||
NE Grocer Portfolio (Selected Assets) - Pennsylvania |
|
Fund IV |
|
|
$ |
|
|
$ |
|
|||
New Towne (Parcel) - Canton, MI |
|
Fund V |
|
|
|
|
|
|
|
|||
Cortlandt Crossing - Westchester County, NY |
|
Fund III |
|
|
|
|
|
|
|
|||
Lincoln Place - Fairview Heights, IL |
|
Fund IV |
|
|
|
|
|
|
|
|||
Wake Forest Crossing - Wake Forest, NC |
|
Fund IV |
|
|
|
|
|
|
|
|||
Henderson Avenue (Parcel) - Dallas, TX |
|
Core |
|
|
|
|
|
|
( |
) |
||
330-340 River Street - Cambridge, MA |
|
Core |
|
|
|
|
|
|
|
|||
Total 2022 Dispositions |
|
|
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
2021 Dispositions |
|
|
|
|
|
|
|
|
|
|
||
60 Orange St - Bloomfield, NJ |
|
Core |
|
|
$ |
|
|
$ |
|
|||
654 Broadway - New York, NY |
|
Fund III |
|
|
|
|
|
|
|
|||
NE Grocer Portfolio (Selected Assets) - ME |
|
Fund IV |
|
|
|
|
|
|
|
|||
Total 2021 Dispositions (a) |
|
|
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
The aggregate rental revenue, expenses and pre-tax income reported within continuing operations for the aforementioned consolidated properties that were sold as well as the lease that was terminated (Note 11) during the years ended December 31, 2022 and 2021 were as follows (in thousands):
|
|
|
Year Ended December 31, |
|
|||||||||
|
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
Revenues |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Expenses |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gain on disposition of properties |
|
|
|
|
|
|
|
|
|
|
|||
Net income attributable to noncontrolling interests |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income attributable to Acadia |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
Properties Held for Sale
At December 31, 2022, the Company had one property under contract for sale with assets totaling $
Real Estate Under Development and Construction in Progress
Real estate under development represents the Company’s consolidated properties that have not yet been placed into service while undergoing substantial development or construction.
80
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Development activity for the Company’s consolidated properties comprised the following during the periods presented (dollars in thousands):
|
|
January 1, 2022 |
|
|
Year Ended December 31, 2022 |
|
|
December 31, 2022 |
|
|||||||||||||||||||
|
|
Number of |
|
|
Carrying |
|
|
Transfers In |
|
|
Capitalized |
|
|
Transfers Out |
|
|
Number of |
|
|
Carrying |
|
|||||||
Core |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
|||||||
Fund II (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fund III |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fund IV (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
|||||||
|
|
January 1, 2021 |
|
|
Year Ended December 31, 2021 |
|
|
December 31, 2021 |
|
|||||||||||||||||||
|
|
Number of |
|
|
Carrying |
|
|
Transfers In |
|
|
Capitalized |
|
|
Transfers Out |
|
|
Number of |
|
|
Carrying |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Core |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
|||||||
Fund II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fund III |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fund IV (a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
|||||||
The number of properties in the tables above refers to projects comprising the entire property under development; however, certain projects represent a portion of a property. At December 31, 2022, consolidated development projects included: portions of the Henderson Portfolio, City Center, 555 9th Street, 651-671 West Diversey, Route 6 Mall and Mad River for the Core Portfolio, portions of City Point Phase I and II at Fund II, Broad Hollow Commons at Fund III, and a portion of 717 N. Michigan Avenue at Fund IV. In addition, at December 31, 2022, the Company had one Core unconsolidated development project, 1238 Wisconsin Avenue.
During the year ended December 31, 2022, the Company:
At December 31, 2021, consolidated development projects included: portions of City Center, 555 9th Street, Route 6 Mall and Mad River for Core, portions of City Point Phase I and II at Fund II, Broad Hollow Commons at Fund III and 717 N. Michigan Avenue at Fund IV. In addition, at December 31, 2021, the Company had one Core unconsolidated development project, 1238 Wisconsin Avenue. During the year ended December 31, 2021, the Company:
81
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Notes Receivable, Net
The Company’s notes receivable, net are generally collateralized either by the underlying properties or the borrowers’ ownership interests in the entities that own the properties, and were as follows (dollars in thousands):
|
|
December 31, |
|
|
December 31, |
|
|
December 31, 2022 |
|
|||||||||||
Description |
|
2022 |
|
|
2021 |
|
|
Number |
|
|
Maturity Date |
|
|
Interest Rate |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Core Portfolio (a) |
|
$ |
|
|
$ |
|
|
|
|
|
- |
|
|
|
||||||
Fund III |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Total notes receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for credit loss |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Notes receivable, net |
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|||||
During the year ended December 31, 2022, the Company:
During the year ended December 31, 2021, the Company:
82
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Default
One Core Portfolio note aggregating $
Allowance for Credit Losses
The Company monitors the credit quality of its notes receivable on an ongoing basis and considers indicators of credit quality such as loan payment activity, the estimated fair value of the underlying collateral, the seniority of the Company’s loan in relation to other debt secured by the collateral and the prospects of the borrower.
Earnings from these notes and mortgages receivable are reported within the Company’s Structured Financing segment (Note 12). Interest receivable is included in Other assets (Note 5).
The Company’s estimated allowance for credit losses related to its Structured Financing segment has been computed for its amortized cost basis in the portfolio, including accrued interest (Note 5), factoring historical loss experience in the United States for similar loans, as adjusted for current conditions, as well as the Company’s expectations related to future economic conditions. Due to the lack of comparability across the Structured Financing portfolio, each loan was evaluated separately. As a result, there were three non-collateral-dependent loans with a total amortized cost of $
83
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Investments in and Advances to Unconsolidated Affiliates
The Company accounts for its investments in and advances to unconsolidated affiliates primarily under the equity method of accounting as it has the ability to exercise significant influence but does not have financial or operating control over the investment, which is maintained by each of the unaffiliated partners who co-invest with the Company.
|
|
|
|
Ownership Interest |
|
December 31, |
|
|
December 31, |
|
||
Portfolio |
|
Property |
|
December 31, 2022 |
|
2022 |
|
|
2021 |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Core: |
|
840 N. Michigan Avenue (a,h) |
|
|
$ |
|
|
$ |
|
|||
|
|
Renaissance Portfolio |
|
|
|
|
|
|
|
|||
|
|
Gotham Plaza |
|
|
|
|
|
|
|
|||
|
|
Georgetown Portfolio (b) |
|
|
|
|
|
|
|
|||
|
|
1238 Wisconsin Avenue (b, c) |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Mervyns II: |
|
KLA/ABS (d) |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||
Fund III: |
|
Self Storage Management (b) |
|
|
|
|
|
|
|
|||
|
|
640 Broadway (e) |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Fund IV: |
|
Fund IV Other Portfolio |
|
|
|
|
|
|
|
|||
|
|
650 Bald Hill Road |
|
|
|
|
|
|
|
|||
|
|
Paramus Plaza |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Fund V: |
|
Family Center at Riverdale (a) |
|
|
|
|
|
|
|
|||
|
|
Tri-City Plaza |
|
|
|
|
|
|
|
|||
|
|
Frederick County Acquisitions |
|
|
|
|
|
|
|
|||
|
|
Wood Ridge Plaza |
|
|
|
|
|
|
|
|||
|
|
La Frontera Village |
|
|
|
|
|
|
|
|||
|
|
Shoppes at South Hills (f) |
|
|
|
|
|
|
|
|||
|
|
Mohawk Commons |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Various: |
|
Due from (to) Related Parties |
|
|
|
|
|
|
|
|
||
|
|
Other (g) |
|
|
|
|
|
|
|
|
||
|
|
Investments in and advances to |
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Core: |
|
Crossroads (h) |
|
|
$ |
|
|
$ |
|
|||
|
|
840 N. Michigan Avenue (a, h) |
|
|
$ |
|
|
|
|
|||
|
|
Distributions in excess of income from, |
|
|
|
$ |
|
|
$ |
|
||
84
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2022, the Company:
85
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2021, the Company:
Fees from Unconsolidated Affiliates
The Company earned property management, construction, development, legal and leasing fees from its investments in unconsolidated partnerships totaling $
In addition, the Company paid certain unaffiliated partners of its joint ventures, $
Summarized Financial Information of Unconsolidated Affiliates
The following combined and condensed Balance Sheets and Statements of operations, in each period, summarize the financial information of the Company’s investments in unconsolidated affiliates that were held as of December 31, 2022, and accordingly exclude the results of any investments disposed of or consolidated prior to that date (in thousands):
|
|
December 31, |
|
|
December 31, |
|
||
|
|
2022 |
|
|
2021 |
|
||
Combined and Condensed Balance Sheets |
|
|
|
|
|
|
||
Assets: |
|
|
|
|
|
|
||
Rental property, net |
|
$ |
|
|
$ |
|
||
Real estate under development |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Liabilities and partners’ equity: |
|
|
|
|
|
|
||
Mortgage notes payable |
|
$ |
|
|
$ |
|
||
Other liabilities |
|
|
|
|
|
|
||
Partners’ equity |
|
|
|
|
|
|
||
Total liabilities and partners’ equity |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Company's share of accumulated equity |
|
$ |
|
|
$ |
|
||
Basis differential |
|
|
|
|
|
|
||
Deferred fees, net of portion related to the Company's interest |
|
|
|
|
|
|
||
Amounts receivable/payable by the Company |
|
|
|
|
|
|
||
Investments in and advances to unconsolidated affiliates, net of Company's |
|
|
|
|
|
|
||
Investments carried at fair value or cost |
|
|
|
|
|
|
||
Company's share of distributions in excess of income from and |
|
|
|
|
|
|
||
Investments in and advances to unconsolidated affiliates |
|
$ |
|
|
$ |
|
||
86
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended December 31, |
|
|||||||||
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
Combined and Condensed Statements of Operations |
|
|
|
|
|
|
|
|
|
|||
Total revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Operating and other expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss on extinguishment of debt |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Impairment of Investment (a) |
|
|
( |
) |
|
|
|
|
|
— |
|
|
Gain on disposition of properties (b) |
|
|
|
|
|
|
|
|
|
|||
Net (loss) income attributable to unconsolidated affiliates |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Company’s share of equity in net (loss) income of unconsolidated affiliates |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Income attributable to unconsolidated affiliates recently sold or consolidated |
|
|
|
|
|
|
|
$ |
|
|||
Basis differential amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Company’s equity in (losses) earnings of unconsolidated affiliates |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
5
Other assets, net and accounts payable and other liabilities are comprised of the following for the periods presented:
|
|
December 31, |
|
|
December 31, |
|
||
(in thousands) |
|
2022 |
|
|
2021 |
|
||
Other Assets, Net: |
|
|
|
|
|
|
||
Lease intangibles, net (Note 6) |
|
$ |
|
|
$ |
|
||
Derivative financial instruments (Note 8) |
|
|
|
|
|
|
||
Deferred charges, net (a) |
|
|
|
|
|
|
||
Accrued interest receivable (Note 3) |
|
|
|
|
|
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Due from seller |
|
|
|
|
|
|
||
Income taxes receivable |
|
|
|
|
|
|
||
Deposits |
|
|
|
|
|
|
||
Corporate assets, net |
|
|
|
|
|
|
||
Other receivables |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
(a) Deferred Charges, Net: |
|
|
|
|
|
|
||
Deferred leasing and other costs |
|
$ |
|
|
$ |
|
||
Deferred financing costs related to line of credit |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Accumulated amortization |
|
|
( |
) |
|
|
( |
) |
Deferred charges, net |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Accounts Payable and Other Liabilities: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
Accounts payable and accrued expenses |
|
|
|
|
|
|
||
Deferred income |
|
|
|
|
|
|
||
Tenant security deposits, escrow and other |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Derivative financial instruments (Note 8) |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
87
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
88
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Lease Intangibles
Upon acquisitions of real estate (Note 2), the Company assesses the relative fair value of acquired assets (including land, buildings, and improvements, and identified intangibles such as above- and below-market leases, including below-market options and acquired in-place leases) and assumed liabilities. The lease intangibles are amortized over the remaining terms of the respective leases, including option periods where applicable.
Intangible assets and liabilities are included in Other assets and Accounts payable and other liabilities (Note 5) on the consolidated balance sheets and summarized as follows (in thousands):
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
||||||||||||||||||
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
||||||
Amortizable Intangible Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
In-place lease intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Above-market rent |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortizable Intangible Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Below-market rent |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Above-market ground lease |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
During the year ended December 31, 2022, the Company:
During the year ended December 31, 2021, the Company:
89
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Amortization of in-place lease intangible assets is recorded in depreciation and amortization expense and amortization of above-market rent and below-market rent is recorded as a reduction to and increase to rental income, respectively, in the consolidated statements of operations. Amortization of above-market ground leases are recorded as a reduction to rent expense in the consolidated statements of operations.
The scheduled amortization of acquired lease intangible assets and assumed liabilities as of December 31, 2022 is as follows (in thousands):
Years Ending December 31, |
|
Net Increase in |
|
|
Increase to |
|
|
Reduction of |
|
|
Net (Expense) Income |
|
||||
2023 |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
2024 |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
2025 |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
2026 |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
2027 |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Thereafter |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
90
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. Debt
A summary of the Company’s consolidated indebtedness is as follows (dollars in thousands):
|
|
Interest Rate at |
|
|
|
Carrying Value at |
|
|||||||
|
|
December 31, |
|
December 31, |
|
Maturity Date at |
|
December 31, |
|
|
December 31, |
|
||
|
|
2022 |
|
2021 |
|
December 31, 2022 |
|
2022 |
|
|
2021 |
|
||
Mortgages Payable |
|
|
|
|
|
|
|
|
|
|
|
|
||
Core Fixed Rate |
|
|
|
|
$ |
|
|
$ |
|
|||||
Core Variable Rate - Swapped (a) |
|
|
|
|
|
|
|
|
|
|||||
Total Core Mortgages Payable |
|
|
|
|
|
|
|
|
|
|
|
|
||
Fund II Variable Rate |
|
SOFR+ |
|
LIBOR+ |
|
|
|
|
|
|
|
|||
Fund II Variable Rate - Swapped (a) |
|
|
|
|
|
|
|
|
|
|
||||
Total Fund II Mortgages Payable |
|
|
|
|
|
|
|
|
|
|
|
|
||
Fund III Variable Rate |
|
SOFR+ |
|
LIBOR+ |
|
|
|
|
|
|
|
|||
Fund IV Fixed Rate |
|
|
|
|
|
|
|
|
|
|||||
Fund IV Variable Rate |
|
LIBOR+ |
|
LIBOR+ |
|
|
|
|
|
|
|
|||
Fund IV Variable Rate - Swapped (a) |
|
|
|
|
|
|
|
|
|
|
|
|||
Total Fund IV Mortgages and Other Notes Payable |
|
|
|
|
|
|
|
|
|
|
|
|
||
Fund V Fixed Rate |
|
|
|
|
|
|
|
|
|
|||||
Fund V Variable Rate |
|
LIBOR + |
|
LIBOR + |
|
|
|
|
|
|
|
|||
Fund V Variable Rate - Swapped (a) |
|
|
|
|
|
|
|
|
|
|||||
Total Fund V Mortgages Payable |
|
|
|
|
|
|
|
|
|
|
|
|
||
Net unamortized debt issuance costs |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Unamortized premium |
|
|
|
|
|
|
|
|
|
|
|
|
||
Total Mortgages Payable |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
Unsecured Notes Payable |
|
|
|
|
|
|
|
|
|
|
|
|
||
Core Variable Rate Unsecured |
|
|
|
|
$ |
|
|
$ |
|
|||||
Fund II Unsecured Notes Payable |
|
|
|
LIBOR+ |
|
|
|
|
|
|
|
|
||
Fund IV Subscription Facility |
|
|
|
SOFR+ |
|
|
|
|
|
|
|
|
||
Fund V Subscription Facility |
|
SOFR+ |
|
LIBOR+ |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Net unamortized debt issuance costs |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Total Unsecured Notes Payable |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
Unsecured Line of Credit |
|
|
|
|
|
|
|
|
|
|
|
|
||
Core Unsecured Line of Credit - Variable Rate |
|
SOFR+ |
|
LIBOR + |
|
|
$ |
|
|
$ |
|
|||
Core Unsecured Line of Credit -Swapped (a) |
|
|
|
|
|
|
|
|
|
|||||
Total Unsecured Line of Credit |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Total Debt - Fixed Rate (b) |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
Total Debt - Variable Rate (c) |
|
|
|
|
|
|
|
|
|
|
|
|
||
Total Debt |
|
|
|
|
|
|
|
|
|
|
|
|
||
Net unamortized debt issuance costs |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Unamortized premium |
|
|
|
|
|
|
|
|
|
|
|
|
||
Total Indebtedness |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
91
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Credit Facilities
The Operating Partnership has a $
On April 6, 2022, the Operating Partnership entered into a $
On July 29, 2022, the Operating Partnership entered into the $
The Company has entered into various swap agreements to effectively fix its interest costs on a portion of its Revolver and term loans, as described above, at December 31, 2022 (Note 8).
Mortgages and Other Notes Payable
During the year ended December 31, 2022, the Company (amounts represent balances at the time of transactions):
92
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2021, the Company (amounts represent balances at the time of transactions):
At December 31, 2022 and 2021, the Company’s mortgages were collateralized by
Unsecured Notes Payable
Unsecured notes payable for which total availability was $
93
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unsecured Revolving Line of Credit
At December 31, 2022 and 2021, the Company had a total of $
Scheduled Debt Principal Payments
The scheduled principal repayments, without regard to available extension options (described further below), of the Company’s consolidated indebtedness, as of December 31, 2022 are as follows (in thousands):
Year Ending December 31, |
|
|
|
|
2023 |
|
$ |
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
Thereafter |
|
|
|
|
|
|
|
|
|
Unamortized premium |
|
|
|
|
Net unamortized debt issuance costs |
|
|
( |
) |
Total indebtedness |
|
$ |
|
|
The table above does not reflect available extension options (subject to customary conditions) on consolidated debt with balances as of December 31, 2022 of $
See Note 4 for information about liabilities of the Company’s unconsolidated affiliates.
8. Financial Instruments and Fair Value Measurements
The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy
94
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps and interest rate swaps; and Level 3, for financial instruments or other assets/liabilities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring the Company to develop its own assumptions.
Items Measured at Fair Value on a Recurring Basis
The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, the Company has also provided the unobservable inputs.
Money Market Funds — The Company has money market funds, which at times have zero balances and are included in Cash and cash equivalents in the consolidated balance sheets, and are comprised of government securities and/or U.S. Treasury bills. These funds were classified as Level 1 as the Company used quoted prices from active markets to determine their fair values.
Equity Investments – Albertsons became publicly traded during 2020 (Note 4). Upon Albertsons’ IPO, the Company’s Investment in Albertsons has a readily determinable market value (traded on an exchange) and is being accounted for as a Level 1 investment.
Derivative Assets — The Company has derivative assets, which are included in Other assets, net on the consolidated balance sheets, and comprised of interest rate swaps and caps. The derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. See “Derivative Financial Instruments,” below.
Derivative Liabilities — The Company has derivative liabilities, which are included in Accounts payable and other liabilities on the consolidated balance sheets and are comprised of interest rate swaps. These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. See “Derivative Financial Instruments,” below.
The Company did not have any transfers into or out of Level 1, Level 2, and Level 3 measurements during the year ended December 31, 2022 or 2021.
The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in thousands):
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
||||||||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Derivative financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investment in Albertsons (Note 4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative financial instruments |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
95
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Items Measured at Fair Value on a Nonrecurring Basis
Impairment Charges
During 2022, the Company reduced its holding period and intended use, and projected operating income at certain properties.
|
|
|
|
|
|
|
|
|
|
Impairment Charge |
|
|||||
Property and Location |
|
Owner |
|
Triggering Event |
|
Level 3 Inputs |
|
Effective Date |
|
Total |
|
|
Acadia's Share |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2022 Impairment Charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
146 Geary Street, |
|
Fund IV |
|
|
Projections of: holding period, net operating income, cap rate, incremental costs |
|
Sept 30, 2022 |
|
$ |
|
|
$ |
|
|||
717 N. Michigan Avenue, |
|
Fund IV |
|
|
Offering price |
|
Sept 30, 2022 |
|
|
|
|
|
|
|||
Total 2022 Impairment Charges |
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2021 Impairment Charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
210 Bowery commercial unit, |
|
Fund IV |
|
|
Projections of: holding period, net operating income, cap rate, incremental costs |
|
Sept 30, 2021 |
|
$ |
|
|
$ |
|
|||
27 E. 61st Street |
|
Fund IV |
|
|
Projections of: holding period, net operating income, cap rate, incremental costs |
|
Sept 30, 2021 |
|
|
|
|
|
|
|||
Total 2021 Impairment Charges |
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
96
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derivative Financial Instruments
The Company had the following interest rate swaps and caps for the periods presented (dollars in thousands):
|
|
|
|
|
|
|
|
|
Strike Rate |
|
|
|
|
Fair Value |
|
|||||||||||||
Derivative |
|
Aggregate Notional Amount |
|
|
Effective Date |
|
Maturity Date |
|
Low |
|
|
|
High |
|
|
Balance Sheet |
|
December 31, |
|
|
December 31, |
|
||||||
Core |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest Rate Swaps |
|
$ |
|
|
|
|
|
% |
|
— |
|
|
% |
|
|
$ |
( |
) |
|
$ |
( |
) |
||||||
Interest Rate Swap |
|
|
|
|
|
|
|
% |
|
— |
|
|
% |
|
|
|
|
|
|
|
||||||||
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fund II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest Rate Swap (a) |
|
$ |
|
|
|
|
|
% |
|
— |
|
|
% |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fund III |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest Rate Cap |
|
$ |
|
|
|
|
|
% |
|
— |
|
|
% |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fund IV |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest Rate Swaps |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
( |
) |
||||
Interest Rate Caps |
|
|
|
|
|
|
|
% |
|
— |
|
|
% |
|
|
|
|
|
|
|
||||||||
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||||
Fund V |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest Rate Swaps (b) |
|
$ |
|
|
|
|
|
% |
|
— |
|
|
% |
|
|
$ |
|
|
$ |
|
||||||||
Interest Rate Swaps |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total asset derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||||
Total liability derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
( |
) |
|
$ |
( |
) |
||||||
All of the Company’s derivative instruments have been designated as cash flow hedges and hedge the future cash outflows on variable-rate debt (Note 7). It is estimated that approximately $
During the first quarter of 2021, the Company terminated
97
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its debt funding and, from time to time, through the use of derivative financial instruments. The Company enters into derivative financial instruments to manage exposures that result in the receipt or payment of future known and uncertain cash amounts, the values of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.
The Company is exposed to credit risk in the event of non-performance by the counterparties to the swaps if the derivative position has a positive balance. The Company believes it mitigates its credit risk by entering into swaps with major financial institutions. The Company continually monitors and actively manages interest costs on its variable-rate debt portfolio and may enter into additional interest rate swap positions or other derivative interest rate instruments based on market conditions.
Credit Risk-Related Contingent Features
The Company has agreements with each of its swap counterparties that contain a provision whereby if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its swaps, resulting in an acceleration of payment under the swaps.
Other Financial Instruments
The Company’s other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands, inclusive of amounts attributable to noncontrolling interests where applicable):
|
|
|
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
|||||||||||
|
|
Level |
|
|
Carrying |
|
|
Estimated |
|
|
Carrying |
|
|
Estimated |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Notes Receivable (a) |
|
|
3 |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
City Point Loan (a) |
|
|
3 |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Mortgage and Other Notes Payable (a) |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment in non-traded equity securities (b) |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unsecured notes payable and Unsecured line of credit (c) |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Company’s cash and cash equivalents, restricted cash, rents receivable, accounts payable and certain financial instruments included in other assets and other liabilities had fair values that approximated their carrying values due to their short maturity profiles at December 31, 2022.
9
The Company is involved in various matters of litigation arising out of, or incidental to, its business. While the Company is unable to predict with certainty the outcome of any particular matter, management does not expect, when such litigation is resolved, that the Company’s resulting exposure to loss contingencies, if any, will have a material adverse effect on its consolidated financial position or results of operations.
98
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Commitments and Guaranties
In conjunction with the development and expansion of various properties, the Company has entered into agreements with general contractors for the construction or development of properties aggregating approximately $
At December 31, 2022 and 2021, the Company had Core and Fund letters of credit outstanding of $
99
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Common Shares and Units
In addition to the ATM Program activity discussed below, the Company completed the following transactions in its Common Shares during the year ended December 31, 2022:
In addition to the ATM Program and share repurchase activity discussed below, the Company completed the following transactions in its Common Shares during the year ended December 31, 2021:
ATM Program
The Company has an at-the-market equity issuance program (“ATM Program”) that provides the Company an efficient vehicle for raising public equity capital to fund its needs. The Company entered into its current $
Share Repurchase Program
During 2018, the Company’s board of trustees (the “Board”) approved a new share repurchase program, which authorizes management, at its discretion, to repurchase up to $
Dividends and Distributions
The following table sets forth the distributions declared and/or paid during the periods presented:
Date Declared |
|
Amount Per Share |
|
|
Record Date |
|
Payment Date |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
||||
|
$ |
|
|
|
||||
|
$ |
|
|
|
||||
|
$ |
|
|
|
||||
|
$ |
|
|
|
||||
|
$ |
|
|
|
||||
|
$ |
|
|
|
||||
|
$ |
|
|
|
||||
100
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accumulated Other Comprehensive Income (Loss)
The following tables set forth the activity in accumulated other comprehensive income (loss) for the years ended December 31, 2022, 2021 and 2020 (in thousands):
|
|
Acadia's Share |
|
|
Balance at January 1, 2022 |
|
$ |
( |
) |
|
|
|
|
|
Other comprehensive income before reclassifications - swap agreements |
|
|
|
|
Reclassification of realized interest on swap agreements |
|
|
|
|
Net current period other comprehensive income |
|
|
|
|
Net current period other comprehensive loss attributable to redeemable noncontrolling |
|
|
|
|
Net current period other comprehensive income attributable to noncontrolling |
|
|
( |
) |
Balance at December 31, 2022 |
|
$ |
|
|
|
|
|
|
|
Balance at January 1, 2021 |
|
$ |
( |
) |
|
|
|
|
|
Other comprehensive income before reclassifications - swap agreements |
|
|
|
|
Reclassification of realized interest on swap agreements |
|
|
|
|
Net current period other comprehensive income |
|
|
|
|
Net current period other comprehensive income attributable to noncontrolling |
|
|
( |
) |
Balance at December 31, 2021 |
|
$ |
( |
) |
|
|
|
|
|
Balance at January 1, 2020 |
|
$ |
( |
) |
|
|
|
|
|
Other comprehensive loss before reclassifications |
|
|
( |
) |
Reclassification of realized interest on swap agreements |
|
|
|
|
Net current period other comprehensive loss |
|
|
( |
) |
Net current period other comprehensive income attributable to noncontrolling |
|
|
|
|
Balance at December 31, 2020 |
|
$ |
( |
) |
101
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Noncontrolling Interests
The following tables summarize the change in the noncontrolling interests for the years ended December 31, 2022, 2021 and 2020 (dollars in thousands):
|
|
Noncontrolling |
|
|
Noncontrolling |
|
|
Total |
|
|
Redeemable Noncontrolling Interests (c) |
|
||||
Balance at January 1, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Distributions declared of $ |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net loss for the year ended December 31, 2022 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Conversion of |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Other comprehensive income - unrealized gain on valuation of swap agreements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reclassification of realized interest expense on swap agreements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Acquisition of noncontrolling interest (d) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
City Point Loan |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
City Point Loan accrued interest |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Noncontrolling interest contributions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncontrolling interest distributions |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Employee Long-term Incentive Plan Unit Awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reclassification of redeemable noncontrolling interests(e) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Reallocation of noncontrolling interests (f) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at December 31, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at January 1, 2021 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Distributions declared of $ |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net income for the year ended December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Conversion of |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Cancellation of OP units(g) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Other comprehensive income - unrealized gain on valuation of swap agreements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reclassification of realized interest expense on swap agreements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncontrolling interest contributions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncontrolling interest distributions |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Employee Long-term Incentive Plan Unit Awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reallocation of noncontrolling interests (f) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Balance at December 31, 2021 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
102
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Balance at January 1, 2020 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Distributions declared of $ |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net income (loss) for the year ended December 31, 2020 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Conversion of |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Other comprehensive loss - unrealized loss on valuation of swap agreements |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Reclassification of realized interest expense on swap agreements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncontrolling interest contributions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Noncontrolling interest distributions |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Employee Long-term Incentive Plan Unit Awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rebalancing adjustment (c) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Acquisition of noncontrolling interest |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cumulative effect of change in accounting principle |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||
Balance at December 31, 2020 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
103
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Preferred OP Units
There were
In 1999 the Operating Partnership issued
During 2016, the Operating Partnership issued
Redeemable Noncontrolling Interests
Williamsburg Portfolio
In connection with the Williamsburg Portfolio acquisition in February 2022 (Note 2), the Company evaluated the Williamsburg Noncontrolling Interest ("NCI"), which represents the venture partner's one-time right to put its
City Point Loan
In August 2022, the Company provided a loan, through a separate lending subsidiary, to other Fund II investors in City Point, through a separate borrower subsidiary, to fund the investors' pro rata contribution necessary to complete the refinancing of the City Point debt (Note 7), of which $
In connection with the City Point Loan, each partner has a one-time right to put its City Point NCI to the Company for redemption in exchange for the settlement of its proportion of the City Point Loan amount plus either (i) a fixed cash amount or (ii) a cash amount equal to the value of fixed number of Common Shares of the Company on the trading day prior to the election, at a future point in time beginning in August 2023 ("redemption value"). As a result of granting these redemption rights, the City Point NCI, net of the City Point Loan, has been reclassified and presented as redeemable noncontrolling interests on the Company's consolidated balance sheets. Given the carrying value of the City Point NCI at the time of the transaction exceeded the maximum redemption value, the Company did not recognize any initial adjustment to accrete the City Point NCI to the redemption value. The Company is required to periodically evaluate the maximum redemption amount of the NCI interest and recognize an increase in the carrying value of the City Point NCI if the redemption value exceeds the then current carrying value. At December 31, 2022, the Company determined that the carrying value exceeded the maximum redemption value and no adjustment was required.
104
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. Leases
Operating Leases
As Lessor
The Company is engaged in the operation of shopping centers and other retail properties that are either owned or, with respect to certain shopping centers, operated under long-term ground leases (see below) that expire at various dates through June 20, 2066, with renewal options. Space in the shopping centers is leased to tenants pursuant to agreements that provide for terms ranging generally from
Reserve Analysis
The activity for the reserves related to billed rents and straight-line rents (including those under specific operating leases where the collection of rents is assessed not to be probable) is as follows:
|
|
Year Ended December 31, 2022 |
|
|||||||||||||||||
|
|
|
|
|
Specific Allowance |
|
|
|
|
|
|
|
||||||||
|
|
Balance at |
|
|
Provision (Recovery), Net |
|
|
Write-Offs |
|
|
General Allowance |
|
|
Balance at |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for credit loss - billed rents |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
Straight-line rent reserves |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|||
Total - credit losses and reserves |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
|
|
Year Ended December 31, 2021 |
|
|||||||||||||||||
|
|
|
|
|
Specific Allowance |
|
|
|
|
|
|
|
||||||||
|
|
Balance at |
|
|
Provision (Recovery), Net |
|
|
Write-Offs |
|
|
General Allowance |
|
|
Balance at |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for credit loss - billed rents |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
Straight-line rent reserves |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Total - credit losses and reserves |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
Tenant Settlement
On September 24, 2021, the Company entered into a conditional settlement agreement with its former tenant ("Former Tenant") and lease guarantor at one of its Core properties for the payment by Former Tenant and guarantor of a minimum of $
As Lessee
During the year ended December 31, 2022, there were
105
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended December 31, 2021, the Company:
Additional disclosures regarding the Company’s leases as lessee are as follows:
|
|
Year Ended December 31, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Lease Cost |
|
|
|
|
|
|
||
Finance lease cost: |
|
|
|
|
|
|
||
Amortization of right-of-use assets |
|
$ |
|
|
$ |
|
||
Interest on lease liabilities |
|
|
|
|
|
|
||
Subtotal |
|
|
|
|
|
|
||
Operating lease cost |
|
|
|
|
|
|
||
Variable lease cost |
|
|
|
|
|
|
||
Total lease cost |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Other Information |
|
|
|
|
|
|
||
Weighted-average remaining lease term - finance leases (years) |
|
|
|
|
|
|
||
Weighted-average remaining lease term - operating leases (years) |
|
|
|
|
|
|
||
Weighted-average discount rate - finance leases |
|
|
% |
|
|
% |
||
Weighted-average discount rate - operating leases |
|
|
% |
|
|
% |
||
Right-of-use assets – finance leases are included in Operating real estate (Note 2) in the consolidated balance sheet. Lease liabilities – finance leases are included in Accounts payable and other liabilities in the consolidated balance sheet (Note 5). Operating lease cost comprises amortization of right-of-use assets for operating properties (related to ground rents) or amortization of right-of-use assets for office and corporate assets and is included in Property operating expense or General and administrative expense, respectively, in the consolidated statements of
106
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
operations. Finance lease cost comprises amortization of right-of-use assets for certain ground leases, which is included in Property operating expense, as well as interest on lease liabilities, which is included in Interest expense in the consolidated statements of operations.
Lease Obligations
The scheduled future minimum (i) rental revenues from rental properties under the terms of non-cancelable tenant leases greater than one year (assuming no new or renegotiated leases or option extensions for such premises) and (ii) rental payments under the terms of all non-cancelable operating and finance leases in which the Company is the lessee, principally for office space, land, and equipment, as of December 31, 2022, are summarized as follows (in thousands):
|
|
|
|
|
Minimum Rental Payments |
|
||||||
Year Ending December 31, |
|
Minimum Rental |
|
|
Operating Leases (b) |
|
|
Finance |
|
|||
2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
2024 |
|
|
|
|
|
|
|
|
|
|||
2025 |
|
|
|
|
|
|
|
|
|
|||
2026 |
|
|
|
|
|
|
|
|
|
|||
2027 |
|
|
|
|
|
|
|
|
|
|||
Thereafter |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Interest |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
During the years ended December 31, 2022, 2021 and 2020, no single tenant or property collectively comprised more than
107
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. Segment Reporting
The Company has
The following tables set forth certain segment information for the Company (in thousands):
|
|
As of or for the Year Ended December 31, 2022 |
|
|||||||||||||||||
|
|
Core |
|
|
Funds |
|
|
Structured |
|
|
Unallocated |
|
|
Total |
|
|||||
Revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Property operating expenses, other operating and real estate taxes |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Impairment charges |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||
Gain on disposition of properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating income |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity in (losses) earnings of unconsolidated affiliates |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Realized and unrealized holding gains (losses) on investments and other |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Income tax provision |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Net (loss) income |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Net loss attributable to redeemable noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loss attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (loss) income attributable to Acadia |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate at cost (a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Total Assets (a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cash paid for acquisition of real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cash paid for development and property improvement costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
108
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
As of or for the Year Ended December 31, 2021 |
|
|||||||||||||||||
|
|
Core |
|
|
Funds |
|
|
Structured |
|
|
Unallocated |
|
|
Total |
|
|||||
Revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Property operating expenses, other operating and real estate taxes |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Impairment charges |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||
Gain on disposition of properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity in income of unconsolidated affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Realized and unrealized holding gains (losses) on investments and other |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Income tax provision |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Net income |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Net (income) attributable to redeemable noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (income) attributable to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Net income attributable to Acadia |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate at cost (a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Total Assets (a) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cash paid for acquisition of real estate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cash paid for development and property improvement costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
109
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
As of or for the Year Ended December 31, 2020 |
|
|||||||||||||||||
|
|
Core |
|
|
Funds |
|
|
Structured |
|
|
Unallocated |
|
|
Total |
|
|||||
Revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Property operating expenses, other operating and real estate taxes |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Impairment charges |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Gain on disposition of properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating income (loss) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity in losses of unconsolidated affiliates |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Realized and unrealized holding gains (losses) on investments and other |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Income tax provision |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Net income (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Net (income) loss attributable to redeemable noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (income) loss attributable to noncontrolling interests |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Acadia |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate at cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Total Assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cash paid for acquisition of real estate and leasehold interest |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Cash paid for development and property improvement costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Share Incentive Plan
On March 23, 2020, the Board approved the 2020 Share Incentive Plan (the “2020 Plan”), which increased the aggregate number of Common Shares authorized for issuance by
Restricted Shares and LTIP Units
During the year ended December 31, 2022, the Company issued
110
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For valuation of the 2022 and 2021 Performance Shares, a Monte Carlo simulation was used to estimate the fair values based on probability of satisfying the market conditions and the projected share prices at the time of payments, discounted to the valuation dates over the
The total value of the above Restricted Share Units and LTIP Units as of the grant date was $
In addition, members of the Board have been issued shares and units under the 2020 Plan. During 2022, the Company issued
In 2009, the Company adopted the Long-Term Investment Alignment Program (the “Program”) pursuant to which the Company may grant awards to employees, entitling them to receive up to
As payments to other employees are not subject to further Board approval, compensation relating to these awards will be recorded based on the estimated fair value at each reporting period in accordance with ASC Topic 718, Compensation – Stock Compensation. The awards in connection with Fund IV were determined to have
The Company recognized $
111
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the status of the Company’s unvested Restricted Shares and LTIP Units is presented below:
Unvested Restricted Shares and LTIP Units |
|
Common |
|
|
Weighted |
|
|
LTIP Units |
|
|
Weighted |
|
||||
Unvested at January 1, 2020 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Vested |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Unvested at December 31, 2020 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Vested |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Unvested at December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Vested |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Unvested at December 31, 2022 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
The weighted-average grant date fair value for Restricted Shares and LTIP Units granted for the years ended December 31, 2022 and 2021 were $
Other Plans
On a combined basis, the Company incurred a total of $
Employee Share Purchase Plan
The Acadia Realty Trust Employee Share Purchase Plan (the “Purchase Plan”) allows eligible employees of the Company to purchase Common Shares through payroll deductions. The Purchase Plan provides for employees to purchase Common Shares on a quarterly basis at a
Deferred Share Plan
The Company maintains a Trustee Deferral and Distribution Election program, under which the participating Trustees earn deferred compensation.
Employee 401(k) Plan
The Company maintains a 401(k) plan for employees under which the Company currently matches
112
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14
The Company has elected to qualify as a REIT in accordance with Sections 856 through 860 of the Code and intends at all times to qualify as a REIT under the Code. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least
In the normal course of business, the Company or one or more of its subsidiaries is subject to examination by Federal, state and local jurisdictions, in which it operates, where applicable. The Company expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense. For the three years ended December 31, 2022, the Company recognized no material adjustments regarding its tax accounting treatment for uncertain tax provisions. As of December 31, 2022, the tax years that remain subject to examination by the major tax jurisdictions under applicable statutes of limitations are generally the year 2019 and forward.
Reconciliation of Net Income to Taxable Income
Reconciliation of GAAP net income attributable to Acadia to taxable income (loss) is as follows:
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net (loss) income attributable to Acadia |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Deferred rental and other (loss) income (a) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Book/tax difference - depreciation and amortization (a) |
|
|
|
|
|
|
|
|
|
|||
Straight-line rent and above- and below-market rent adjustments (a) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Book/tax differences - equity-based compensation |
|
|
|
|
|
|
|
|
|
|||
Joint venture equity in earnings (losses), net and other investments (a) |
|
|
|
|
|
|
|
|
( |
) |
||
Impairment charges and reserves |
|
|
|
|
|
|
|
|
|
|||
Acquisition costs (a) |
|
|
|
|
|
|
|
|
|
|||
(Loss) gain on disposition of properties |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Book/tax differences - miscellaneous |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Taxable income |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Distributions declared (b) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
113
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Characterization of Distributions
The Company has determined that the cash distributed to the shareholders for the periods presented is characterized as follows for Federal income tax purposes:
|
|
Year Ended December 31, |
|
|||||||||||||||||||||
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||||||||||||||
|
|
Per Share |
|
|
% |
|
|
Per Share |
|
|
% |
|
|
Per Share |
|
|
% |
|
||||||
Ordinary income - Section 199A |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||
Qualified dividend |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||
Capital gain |
|
|
|
|
|
% |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||||
Total (a) |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||||
Taxable REIT Subsidiaries
Income taxes have been provided for using the liability method as required by ASC Topic 740, “Income Taxes.” The Company’s TRS income (loss) and provision for income taxes associated with the TRS for the periods presented are summarized as follows (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
TRS loss before income taxes |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
(Provision) benefit for income taxes: |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
|
|
|
|
|
|
|
|||
State and local |
|
|
|
|
|
|
|
|
( |
) |
||
TRS net loss before noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Noncontrolling interests |
|
|
|
|
|
|
|
|
|
|||
TRS net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The income tax provision for the Company differs from the amount computed by applying the statutory Federal income tax rate to income (loss) before income taxes as follows. Amounts are not adjusted for temporary book/tax differences (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Federal tax benefit at statutory tax rate |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
TRS state and local taxes, net of Federal benefit |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Tax effect of: |
|
|
|
|
|
|
|
|
|
|||
Permanent differences, net |
|
|
|
|
|
|
|
|
|
|||
Adjustment to deferred tax reserve |
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
REIT state and local income and franchise taxes |
|
|
|
|
|
|
|
|
|
|||
Total provision for income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|||
As of December 31, 2022, and 2021, the Company’s deferred tax assets were $
Under GAAP a reduction of the carrying amounts of deferred tax assets by a valuation allowance is required, if, based on the evidence available, it is more likely than not (a likelihood of more than
114
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basic earnings (loss) per Common Share is computed by dividing net income (loss) attributable to Common Shareholders by the weighted average Common Shares outstanding (Note 10). During the periods presented, the Company had unvested LTIP Units which provide for non-forfeitable rights to dividend equivalent payments. Accordingly, these unvested LTIP Units are considered participating securities and are included in the computation of basic earnings per Common Share pursuant to the two-class method.
Diluted earnings per Common Share reflects the potential dilution of the conversion of obligations and the assumed exercises of securities including the effects of Restricted Share Units issued under the Company’s Share Incentive Plans (Note 13). The effect of such shares is excluded from the calculation of earnings per share when anti-dilutive as indicated in the table below.
|
Year Ended December 31, |
|
|||||||||
(dollars in thousands) |
2022 |
|
|
2021 |
|
|
2020 |
|
|||
Numerator: |
|
|
|
|
|
|
|
|
|||
Net (loss) income attributable to Acadia |
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Less: net income attributable to participating securities |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
(Loss) income from continuing operations net of income attributable to participating securities for basic (loss) earnings per share |
|
( |
) |
|
|
|
|
|
( |
) |
|
Impact of City Point Loan share conversion option (a) |
|
( |
) |
|
|
|
|
|
|
||
(Loss) income from continuing operations net of income attributable to participating securities for diluted (loss) earnings per share |
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|||
Denominator: |
|
|
|
|
|
|
|
|
|||
Weighted average shares for basic earnings (loss) per share |
|
|
|
|
|
|
|
|
|||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|||
Series A Preferred OP Units |
|
|
|
|
|
|
|
|
|||
Employee unvested restricted shares |
|
|
|
|
|
|
|
|
|||
City Point Loan common stock conversion option (Note 10) (a) |
|
|
|
|
|
|
|
|
|||
Denominator for diluted earnings per share |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Basic (loss) earnings per Common Share from continuing operations attributable to Acadia |
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Diluted (loss) earnings per Common Share from continuing operations attributable to Acadia |
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|||
Anti-Dilutive Shares Excluded from Denominator: |
|
|
|
|
|
|
|
|
|||
Series A Preferred OP Units |
|
|
|
|
|
|
|
|
|||
Series A Preferred OP Units - Common share equivalent |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Series C Preferred OP Units |
|
|
|
|
|
|
|
|
|||
Series C Preferred OP Units - Common share equivalent |
|
|
|
|
|
|
|
|
|||
Restricted shares |
|
|
|
|
|
|
|
|
|||
115
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. Variable Interest Entities
Pursuant to GAAP consolidation guidance, the Company consolidates certain VIEs for which the Company is the primary beneficiary. The Operating Partnership is considered a VIE in which the Company is the primary beneficiary because the limited partners do not have substantive kick-out or participating rights. As of December 31, 2022 and December 31, 2021, the Operating Partnership held interests in the Funds and two consolidated entities owning properties that were determined to be VIEs in which the Company is the primary beneficiary as it has (i) the power to direct the activities of the entity that most significantly impact the entity's economic performance, and (ii) the obligation to absorb the entity's losses or receive benefits from the entity that could potentially be significant to the entity.
The majority of the operations of these VIEs are funded with fees earned from investment opportunities or cash flows generated from the properties. The Company has not provided financial support to any of these VIEs that it was not previously contractually required to provide, which consists primarily of funding any capital commitments and capital expenditures, which are deemed necessary to continue to operate the entity and any operating cash shortfalls the entity may experience.
Since the Company conducts its business through and substantially all of its interests are held by the Operating Partnership, the assets and liabilities on the consolidated balance sheets represent the assets and liabilities of the Operating Partnership.
(dollars in thousands) |
|
December 31, 2022 |
|
|
December 31, 2021 |
|
||
VIE ASSETS |
|
|
|
|
|
|
||
Operating real estate, net |
|
$ |
|
|
$ |
|
||
Real estate under development |
|
|
|
|
|
|
||
Notes receivable, net |
|
|
|
|
|
|
||
Investments in and advances to unconsolidated affiliates |
|
|
|
|
|
|
||
Other assets, net |
|
|
|
|
|
|
||
Right-of-use assets - operating leases, net |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
||
Rents receivable, net |
|
|
|
|
|
|
||
Total VIE assets (a) |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
VIE LIABILITIES |
|
|
|
|
|
|
||
Mortgage and other notes payable, net |
|
$ |
|
|
$ |
|
||
Unsecured notes payable, net |
|
|
|
|
|
|
||
Accounts payable and other liabilities |
|
|
|
|
|
|
||
Lease liability - operating leases, net |
|
|
|
|
|
|
||
Total VIE liabilities (a) |
|
$ |
|
|
$ |
|
||
The Company also holds variable interest in certain VIEs which are not consolidated as it is determined that the Company is not the primary beneficiary (Note 4). The Company's involvement with such entities is in the form of direct and indirect equity interests and fee arrangements. The maximum exposure to loss is limited to the amount of the Company's equity investment in these VIEs, except with regard to the Company's remaining $
116
ACADIA REALTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. Subsequent Events
Albertsons
On January 17, 2023, Albertsons announced that the State of Washington’s Supreme Court denied a motion by the Attorney General of the State of Washington to hear an appeal from the trial court’s denial of its request to enjoin Albertsons from paying its previously announced $
Acquisitions
On January 27, 2023, Fund V acquired a
117
ACADIA REALTY TRUST
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
|
|
Balance at |
|
|
Charged to |
|
|
Adjustments |
|
|
Deductions |
|
|
Balance at |
|
|||||
Year Ended December 31, 2022: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for deferred tax asset |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Allowance for uncollectible accounts |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|||
Allowance for notes receivable |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|||
Year Ended December 31, 2021: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for deferred tax asset |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Allowance for uncollectible accounts |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|||
Allowance for notes receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Year Ended December 31, 2020: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for deferred tax asset |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
$ |
|
|||||
Allowance for uncollectible accounts |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Allowance for notes receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
118
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2022
|
|
|
|
|
Initial Cost |
|
|
|
|
|
Amount at Which |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Description and |
|
Encumbrances |
|
|
Land |
|
|
Buildings & |
|
|
Increase |
|
|
Land |
|
|
Buildings & |
|
|
Total |
|
|
Accumulated |
|
|
Date of |
|
|
Life on which |
||||||||
Core Portfolio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Crescent Plaza |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1993 |
(a) |
|
|||||||||
New Loudon Center |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1993 |
(a) |
|
|||||||||
Mark Plaza |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1993 |
(c) |
|
|||||||||
Plaza 422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1993 |
(c) |
|
|||||||||
Route 6 Mall |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1994 |
(c) |
|
|||||||||
Abington Towne Center |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
Bloomfield Town Square |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
Elmwood Park Shopping Center Elmwood Park, NJ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
Merrillville Plaza |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
Marketplace of Absecon |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
239 Greenwich Avenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
Hobson West Plaza |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
Village Commons Shopping Center Smithtown, NY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
Town Line Plaza |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
Branch Shopping Center |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
Methuen Shopping Center |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 |
(a) |
|
|||||||||
The Gateway Shopping Center |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1999 |
(a) |
|
|||||||||
Mad River Station |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1999 |
(a) |
|
|||||||||
Brandywine Holdings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 |
(a) |
|
|||||||||
Bartow Avenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 |
(c) |
|
|||||||||
Amboy Road |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 |
(a) |
|
|||||||||
Chestnut Hill |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
(a) |
|
|||||||||
2914 Third Avenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
(a) |
|
|||||||||
West 54th Street |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 |
(a) |
|
|||||||||
5-7 East 17th Street |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
(a) |
|
|||||||||
651-671 W Diversey |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
(a) |
|
|||||||||
15 Mercer Street |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
(a) |
|
|||||||||
4401 White Plains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
(a) |
|
|||||||||
56 E. Walton |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
(a) |
|
|||||||||
841 W. Armitage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
(a) |
|
|||||||||
2731 N. Clark |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
(a) |
|
|||||||||
2140 N. Clybourn |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
(a) |
|
|||||||||
853 W. Armitage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
(a) |
|
|||||||||
2299 N. Clybourn Avenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
(a) |
|
|||||||||
843-45 W. Armitage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
(a) |
|
|||||||||
1525 W. Belmont Avenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
(a) |
|
|||||||||
2206-08 N. Halsted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
(a) |
|
|||||||||
2633 N. Halsted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
(a) |
|
|||||||||
50-54 E. Walton |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
(a) |
|
|||||||||
662 W. Diversey |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
(a) |
|
|||||||||
119
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
|
|
|
|
|
Initial Cost |
|
|
|
|
|
Amount at Which |
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Description and |
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Encumbrances |
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Land |
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Buildings & |
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Increase |
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Land |
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Buildings & |
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Total |
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Accumulated |
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Date of |
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Life on which |
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837 W. Armitage |
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2012 |
(a) |
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823 W. Armitage |
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2012 |
(a) |
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851 W. Armitage |
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2012 |
(a) |
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1240 W. Belmont Avenue |
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2012 |
(a) |
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21 E. Chestnut |
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2012 |
(a) |
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819 W. Armitage |
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2012 |
(a) |
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1520 Milwaukee Avenue |
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2012 |
(a) |
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Rhode Island Place Shopping Center Washington, D.C. |
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2012 |
(a) |
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930 Rush Street |
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2012 |
(a) |
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28 Jericho Turnpike |
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2012 |
(a) |
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181 Main Street |
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2012 |
(a) |
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83 Spring Street |
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2012 |
(a) |
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179-53 & 1801-03 Connecticut Avenue Washington, D.C. |
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2012 |
(a) |
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639 West Diversey |
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2012 |
(a) |
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664 North Michigan |
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2013 |
(a) |
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8-12 E. Walton |
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2013 |
(a) |
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3200-3204 M Street |
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2013 |
(a) |
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868 Broadway |
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2013 |
(a) |
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313-315 Bowery |
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2013 |
(a) |
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120 West Broadway |
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2013 |
(a) |
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11 E. Walton |
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2014 |
(a) |
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61 Main Street |
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2014 |
(a) |
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865 W. North Avenue |
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2014 |
(a) |
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152-154 Spring St. |
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2014 |
(a) |
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2520 Flatbush Ave |
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2014 |
(a) |
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252-256 Greenwich Avenue |
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2014 |
(a) |
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|||||||||
Bedford Green |
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2014 |
(a) |
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131-135 Prince Street |
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2014 |
(a) |
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|||||||||
Shops at Grand Ave |
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2014 |
(a) |
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|||||||||
201 Needham Street |
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2014 |
(a) |
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|||||||||
City Center |
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2015 |
(a) |
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|||||||||
163 Highland Avenue |
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( |
) |
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2015 |
(a) |
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||||||||
Roosevelt Galleria |
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2015 |
(a) |
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|||||||||
Route 202 Shopping Center |
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2015 |
(a) |
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|||||||||
991 Madison Avenue |
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( |
) |
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2016 |
(a) |
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||||||||
165 Newbury Street |
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2016 |
(a) |
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|||||||||
Concord & Milwaukee |
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2016 |
(a) |
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|||||||||
State & Washington |
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2016 |
(a) |
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|||||||||
151 N. State Street |
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2016 |
(a) |
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|||||||||
North & Kingsbury |
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2016 |
(a) |
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|||||||||
Sullivan Center |
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2016 |
(a) |
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|||||||||
California & Armitage |
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2016 |
(a) |
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|||||||||
120
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
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Initial Cost |
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|
Amount at Which |
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|||||||||||||||||
Description and |
|
Encumbrances |
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|
Land |
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|
Buildings & |
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|
Increase |
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|
Land |
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|
Buildings & |
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|
Total |
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|
Accumulated |
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|
Date of |
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|
Life on which |
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555 9th Street |
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2016 |
(a) |
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|||||||||
Market Square |
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2017 |
(a) |
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|||||||||
613-623 W. Diversey |
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2018 |
(c) |
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51 Greene Street |
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2019 |
(a) |
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53 Greene Street |
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2019 |
(a) |
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|||||||||
41 Greene Street |
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2019 |
(a) |
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47 Greene Street |
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2019 |
(a) |
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|||||||||
849 W Armitage |
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2019 |
(a) |
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|||||||||
912 W Armitage |
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2019 |
(a) |
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|||||||||
Melrose Place Collection |
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2019 |
(a) |
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45 Greene Street |
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2019 |
(a) |
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|||||||||
565 Broadway |
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2019 |
(a) |
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907 W Armitage |
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2019 |
(a) |
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37 Greene Street |
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2020 |
(a) |
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917 W Armitage |
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2020 |
(a) |
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|||||||||
Brandywine Town Center |
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2020 |
(a) |
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|||||||||
1324 14th Street |
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2021 |
(a) |
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|||||||||
1526 14th Street |
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2021 |
(a) |
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|||||||||
1529 14th Street |
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2021 |
(a) |
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|||||||||
121 Spring St |
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2022 |
(a) |
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|||||||||
8833 Beverly Blvd |
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2022 |
(a) |
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|||||||||
Williamsburg Portfolio |
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2022 |
(a) |
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|||||||||
Henderson Portfolio |
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2022 |
(a) |
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|||||||||
Fund II: |
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||||||||
City Point |
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2007 |
(c) |
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|||||||||
Fund III: |
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||||||||
640 Broadway |
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2012 |
(a) |
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|||||||||
Fund IV: |
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||||||||
210 Bowery |
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( |
) |
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2012 |
(c) |
|
||||||||
27 E. 61st Street |
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2014 |
(c) |
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|||||||||
17 E. 71st Street |
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2014 |
(a) |
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|||||||||
1035 Third Avenue |
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2015 |
(a) |
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|||||||||
801 Madison Avenue |
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( |
) |
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2015 |
(c) |
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||||||||
2208-2216 Fillmore Street |
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2015 |
(a) |
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2207 Fillmore Street |
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2015 |
(a) |
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146 Geary St. |
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( |
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2015 |
(a) |
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1964 Union Street |
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2016 |
(c) |
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Restaurants at Fort Point |
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2016 |
(a) |
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717 N. Michigan |
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( |
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2016 |
(a) |
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18 E. Broughton St. |
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2018 |
(a) |
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20 E. Broughton St. |
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2018 |
(a) |
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25 E. Broughton St. |
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2018 |
(a) |
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109 W. Broughton St. |
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2018 |
(a) |
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204-206 W. Broughton St. |
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2018 |
(a) |
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121
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
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Initial Cost |
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Amount at Which |
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Description and |
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Encumbrances |
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Land |
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Buildings & |
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Increase |
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Land |
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Buildings & |
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Total |
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Accumulated |
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Date of |
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Life on which |
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216-218 W. Broughton St. |
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2018 |
(a) |
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220 W. Broughton St. |
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2018 |
(a) |
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223 W. Broughton St. |
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2018 |
(a) |
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226-228 W. Broughton St. |
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2018 |
(a) |
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309/311 W. Broughton St. |
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2018 |
(a) |
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230-240 W. Broughton St. |
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2020 |
(a) |
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102 E. Broughton St. |
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2020 |
(a) |
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Fund V: |
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||||||||
Plaza Santa Fe |
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2017 |
(a) |
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Hickory Ridge |
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2017 |
(a) |
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|||||||||
New Towne Plaza |
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2017 |
(a) |
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|||||||||
Fairlane Green |
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2017 |
(a) |
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Trussville Promenade |
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2018 |
(a) |
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Elk Grove Commons |
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2018 |
(a) |
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|||||||||
Hiram Pavilion |
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2018 |
(a) |
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|||||||||
Palm Coast Landing |
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2019 |
(a) |
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|||||||||
Lincoln Commons |
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2019 |
(a) |
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|||||||||
Landstown Commons |
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2019 |
(a) |
|
|||||||||
Canton Marketplace |
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2021 |
(a) |
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|||||||||
Monroe Marketplace |
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2021 |
(a) |
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|||||||||
Midstate Mall |
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2021 |
(a) |
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|||||||||
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||||||||
Real Estate Under Development |
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|
||||||||
Debt of Assets Held for Sale |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
Unamortized Loan Costs |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
Unamortized Premium |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
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|
|
— |
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|
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|
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|
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
||||||||
Notes:
The following table reconciles the activity for real estate properties from January 1, 2020 to December 31, 2022 (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Balance at beginning of year |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Improvements and other |
|
|
|
|
|
|
|
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|
|||
Property acquisitions |
|
|
|
|
|
|
|
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|
|||
Property dispositions or held for sale assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Right-of-use assets - finance leases obtained and reclassified |
|
|
|
|
|
|
|
|
( |
) |
||
Capital lease reclassified as Right-of-use assets - finance lease |
|
|
|
|
|
|
|
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|
|||
Consolidation of previously unconsolidated investments |
|
|
|
|
|
|
|
|
|
|||
Impairment charges |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at end of year |
|
$ |
|
|
$ |
|
|
$ |
|
|||
122
ACADIA REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
The following table reconciles accumulated depreciation from January 1, 2020 to December 31, 2022 (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Balance at beginning of year |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Depreciation related to real estate |
|
|
|
|
|
|
|
|
|
|||
Property dispositions or held for sale assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Right-of-use assets - finance leases reclassified |
|
|
|
|
|
|
|
|
( |
) |
||
Balance at end of year |
|
$ |
|
|
$ |
|
|
$ |
|
|||
123
ACADIA REALTY TRUST
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
December 31, 2022
(in thousands)
Description |
|
Effective |
|
Final Maturity |
|
Face Amount |
|
|
Net Carrying Amount of |
|
||
First Mortgage Loan |
|
|
4/1/2020 |
|
$ |
|
|
$ |
|
|||
Mezzanine Loan |
|
|
1/9/2024 |
|
|
|
|
|
|
|||
First Mortgage Loan |
|
|
9/17/2024 |
|
|
|
|
|
|
|||
Other |
|
|
4/12/2026 |
|
|
|
|
|
|
|||
Mezzanine Loan |
|
|
12/11/2027 |
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
$ |
|
|
|
|
||
Allowance for credit loss |
|
|
|
|
|
|
|
|
|
( |
) |
|
Net carrying amount of notes receivable |
|
|
|
|
|
|
|
|
$ |
|
||
The Company monitors the credit quality of its notes receivable on an ongoing basis and considers indicators of credit quality such as loan payment activity, the estimated fair value of the underlying collateral, the seniority of the Company's loan in relation to other debt secured by the collateral, the personal guarantees of the borrower and the prospects of the borrower.
The following table reconciles the activity for loans on real estate from January 1, 2020 to December 31, 2022 (in thousands):
|
|
Reconciliation of Loans on Real Estate |
|
|||||||||
|
|
Year Ended December 31, |
|
|||||||||
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Balance at beginning of year |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Additions |
|
|
|
|
|
|
|
|
|
|||
Repayments |
|
|
( |
) |
|
|
|
|
|
|
||
Conversion of OP Units |
|
|
|
|
|
( |
) |
|
|
|
||
Conversion to real estate through receipt of deed or through foreclosure |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Allowance for credit loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at end of year |
|
$ |
|
|
$ |
|
|
$ |
|
|||
124
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
We conducted an evaluation, under the supervision and with the participation of management including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2022 to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Management of Acadia Realty Trust is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13(a)-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022 as required by the Securities Exchange Act of 1934 Rule 13(a)-15(c). In making this assessment, we used the criteria set forth in the framework in Internal Control–Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). Based on our evaluation under the COSO criteria, our management concluded that our internal control over financial reporting was effective as of December 31, 2022 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
BDO USA, LLP, an independent registered public accounting firm that audited our Financial Statements included in this Annual Report, has issued an attestation report on our internal control over financial reporting as of December 31, 2022, which also appears in this Item 9A.
Acadia Realty Trust
Rye, New York
March 1, 2023
Remediation Efforts of Prior Year Material Weakness
We disclosed a material weakness in our internal control over financial reporting in our Form 10-K for the year ended December 31, 2021. During 2022, we implemented new and enhanced existing internal controls, related to evaluating the accounting treatment of less-than-wholly-owned investments to remediate the material weakness.
As a result of the remediation efforts, we have concluded that the material weakness has been remediated as of December 31, 2022.
Changes in Internal Control Over Financial Reporting
During the three months ended December 31, 2022, other than the remediation of the material weakness described above, there were no changes in the Company’s internal control over financial reporting that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
125
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Trustees
Acadia Realty Trust
Rye, New York
Opinion on Internal Control over Financial Reporting
We have audited Acadia Realty Trust’s (the “Company’s”) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedules, and our report dated March 1, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ BDO USA, LLP
New York, New York
March 1, 2023
126
ITEM 9B. OTHER INFORMATION.
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
None.
PART III
In accordance with the rules of the SEC, certain information required by Part III is omitted and is incorporated by reference into this Report from our definitive proxy statement relating to our 2023 annual meeting of shareholders (our “2023 Proxy Statement”) that we intend to file with the SEC no later than April 30, 2023.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The information under the following headings in the 2023 Proxy Statement is incorporated herein by reference:
ITEM 11. EXECUTIVE COMPENSATION.
The information under the following headings in the 2023 Proxy Statement is incorporated herein by reference:
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The information under the heading “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” in the 2023 Proxy Statement is incorporated herein by reference.
The information under Item 5. of this Report under the heading “(c) Securities authorized for issuance under equity compensation plans” is incorporated herein by reference.
The information under the following headings in the 2023 Proxy Statement is incorporated herein by reference:
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The information under the heading “AUDIT COMMITTEE INFORMATION” in the 2023 Proxy Statement is incorporated herein by reference.
127
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
1. |
Financial Statements: See “Index to Financial Statements” at Item 8. |
|
|
|
|
2. |
Financial Statement Schedule: See “Schedule II—Valuation and Qualifying Accounts” at Item 8. |
|
|
|
|
3. |
Financial Statement Schedule: See “Schedule III—Real Estate and Accumulated Depreciation” at Item 8. |
|
|
|
|
4. |
Financial Statement Schedule: See “Schedule IV—Mortgage Loans on Real Estate” at Item 8. |
|
|
|
|
5. |
For the year ended December 31, 2022, 840 N. Michigan Avenue is considered a significant subsidiary of the Company based upon reaching certain income thresholds per the SEC Regulation S-X Rule 3-09. As such, the Company has included audited financial statements of 840 N. Michigan Avenue as Exhibit 99.3 to this annual report on Form 10-K. Additionally, the Company’s Equity in earnings of unconsolidated affiliates from 840 N. Michigan Avenue for the year ended December 31, 2022, exceeded 10% of the Company’s income from continuing operations per the SEC Regulation S-X Rule 4-08(g). As the Company has included separate audited financial statements for the investee in its annual report, it has not separately disclosed the summarized financial information of the investee. |
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6. |
Exhibits: See index of exhibits below and incorporated herein by reference. |
The following is an index to all exhibits including (i) those filed with this Report and (ii) those incorporated by reference herein:
Exhibit |
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Description |
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Method of Filing |
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Declaration of Trust of the Company |
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Incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012. |
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First Amendment to Declaration of Trust of the Company |
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Incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012. |
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Second Amendment to Declaration of Trust of the Company |
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Incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012. |
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Third Amendment to Declaration of Trust of the Company |
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Incorporated by reference to Exhibit 3.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 2012. |
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Fourth Amendment to Declaration of Trust |
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Incorporated by reference to Exhibit 3.1 (a) to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998. |
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Fifth Amendment to Declaration of Trust |
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Incorporated by reference to Exhibit 3.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009. |
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Sixth Amendment to Declaration of Trust |
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Incorporated by reference to Exhibit 3.01 to the Company’s Current Report on Form 8-K filing on July 28, 2017. |
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Articles Supplementary |
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Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 9, 2017. |
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Amended and Restated Bylaws of the Company |
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Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on April 28, 2022. |
|
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Description of Acadia Realty Trust Securities Registered Under Section 12 of the Securities Exchange Act of 1934, as amended |
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Filed herewith |
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Acadia Realty Trust 2020 Share Incentive Plan |
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Incorporated by reference to page 63 of the Company’s 2020 Definitive Proxy Statement filed with the SEC on March 24, 2020. |
128
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Description of Long-Term Investment Alignment Program |
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Incorporated by reference to page 20 to the Company’s 2009 Annual Proxy Statement filed with the SEC April 9, 2009. |
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Amended and Restated Employment Agreement between the Company and Kenneth F. Bernstein |
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Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 1, 2014. |
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129
Exhibit |
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Description |
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Method of Filing |
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Form of Second Amended and Restated Severance Agreement, effective as of February 26, 2018, with each of: John Gottfried, Executive Vice President and Chief Financial Officer; Jason Blacksberg, Executive Vice President, Chief Legal Officer and Secretary; and Joseph M. Napolitano, Senior Vice President and Chief Administrative Officer |
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Incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. |
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Form of 2018 Long-Term Incentive Plan Award Agreement (time- and performance-based) |
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Incorporated by reference to Exhibit 10.14 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2018. |
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Form of Assignments and Assumptions of Carried Interest with respect to the Company's Long-Term Incentive Alignment Program |
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Incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. |
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Form of Omnibus Amendment to the Series of Assignments and Assumptions of Carried Interest with respect to the Company's Long-Term Incentive Alignment Program |
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Incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. |
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Form of 2018 Long-Term Incentive Plan Award Agreement (Time-Based Only) |
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Incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K for the year ended December 31, 2017. |
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Form of Long-Term Incentive Plan Award Agreement (Time-Based Only) (Chief Executive Officer) |
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Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. |
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Form of Long-Term Incentive Plan Award Agreement (Time and Performance Based) (Chief Executive Officer) |
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Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. |
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Form of Long-Term Incentive Plan Award Agreement (Time and Performance Based) (SVP/EVP) |
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Filed herewith |
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Form of Long-Term Incentive Plan Award Agreement (Time and Performance Based) (Chief Executive Officer) |
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Filed herewith |
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Second Amended and Restated Credit Agreement dated as of June 29, 2021, by and among Acadia Realty Limited Partnership, as borrower, Acadia Realty Trust and certain subsidiaries of Acadia Realty Limited Partnership from time to time party thereto, as guarantors, Bank of America, N.A., as administrative agent, Wells Fargo Bank, National Association, Truist Bank, and PNC Bank, National Association, as syndication agents, BofA Securities, Inc. and Wells Fargo Securities, LLC, as joint bookrunners, and BofA Securities, Inc., Wells Fargo Securities, LLC, Truist Bank and PNC Capital Markets LLC, as joint lead arrangers and the lenders party thereto |
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Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 2, 2021. |
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First Amendment to the Second Amended and Restated Credit Agreement dated as of March 3, 2022, by and among Acadia Realty Limited Partnership, as borrower, Acadia Realty Trust and certain subsidiaries of Acadia Realty Limited Partnership from time to time party thereto, as guarantors, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as administrative agent |
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Filed herewith |
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Second Amendment to the Second Amended and Restated Credit Agreement dated as of December 21, 2022, by and among Acadia Realty Limited Partnership, as borrower, Acadia Realty Trust and certain subsidiaries of Acadia Realty Limited Partnership from time to time party thereto, as guarantors, the Lenders and L/C Issuers from time to time |
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Filed herewith |
130
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party thereto, and Bank of America, N.A., as administrative agent |
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Credit Agreement dated as of April 6, 2022, by and among Acadia Realty Trust, Acadia Realty Limited Partnership, Bank of America, N.A., as administrative agent, BofA Securities, Inc., as sole lead arranger and sole bookrunner and the lenders party thereto |
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Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 11, 2022. |
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Exhibit |
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Description |
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Method of Filing |
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List of Subsidiaries of Acadia Realty Trust |
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Filed herewith |
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Consent of Registered Public Accounting Firm |
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Filed herewith |
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Consent of Registered Public Accounting Firm - 840 North Michigan Avenue, Tenant-in-Common Interests |
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Filed herewith |
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Certification of Chief Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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Filed herewith |
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Certification of Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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Filed herewith |
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Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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Furnished herewith |
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Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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Furnished herewith |
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Amended and Restated Agreement of Limited Partnership Agreement dated July 23, 2019 |
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Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019. |
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Certificate of Designation of Series A Preferred Operating Partnership Units of Limited Partnership Interest of Acadia Realty Limited Partnership |
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Incorporated by reference to Exhibit 10.1(C) to the Company's Annual Report on Form 10-K filed for the year ended December 31, 1999. |
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840 North Michigan Avenue, Tenant-in-Common Interests Combined Financial Statements for the Years Ended December 31, 2022 and 2021 and Independent Auditor’s Report |
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Filed herewith |
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101.INS |
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XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
|
Filed herewith |
101.SCH |
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Inline XBRL Taxonomy Extension Schema Document |
|
Filed herewith |
101.CAL |
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Inline XBRL Taxonomy Extension Calculation Document |
|
Filed herewith |
101.DEF |
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Inline XBRL Taxonomy Extension Definitions Document |
|
Filed herewith |
101.LAB |
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Inline XBRL Taxonomy Extension Labels Document |
|
Filed herewith |
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Document |
|
Filed herewith |
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
|
Filed herewith |
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|
131
ITEM 16. Form 10-K SUMMARY.
None.
132
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
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ACADIA REALTY TRUST |
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(Registrant) |
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By: |
/s/ Kenneth F. Bernstein |
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Kenneth F. Bernstein |
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Chief Executive Officer, |
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President and Trustee |
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By: |
/s/ John Gottfried |
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John Gottfried |
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Executive Vice President and |
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Chief Financial Officer |
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By: |
/s/ Richard Hartmann |
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Richard Hartmann |
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Senior Vice President and |
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Chief Accounting Officer |
Dated: March 1, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature |
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Title |
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Date |
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/s/ Kenneth F. Bernstein |
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Chief Executive Officer, President and Trustee (Principal Executive Officer) |
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March 1, 2023 |
(Kenneth F. Bernstein) |
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/s/ John Gottfried |
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Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
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March 1, 2023 |
(John Gottfried) |
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/s/ Richard Hartmann |
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Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) |
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March 1, 2023 |
(Richard Hartmann) |
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/s/ Douglas Crocker II |
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Trustee |
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March 1, 2023 |
(Douglas Crocker II) |
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/s/ Mark A. Denien |
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Trustee |
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March 1, 2023 |
(Mark A. Denien) |
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/s/ Lorrence T. Kellar |
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Trustee |
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March 1, 2023 |
(Lorrence T. Kellar) |
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/s/ Kenneth A. McIntyre |
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Trustee |
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March 1, 2023 |
(Kenneth A. McIntyre) |
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/s/ William T. Spitz |
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Trustee |
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March 1, 2023 |
(William T. Spitz) |
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/s/ Lynn Thurber |
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Trustee |
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March 1, 2023 |
(Lynn Thurber) |
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/s/ Lee S. Wielansky |
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Trustee |
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March 1, 2023 |
(Lee S. Wielansky) |
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133
/s/ Hope B. Woodhouse |
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Trustee |
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March 1, 2023 |
(Hope B. Woodhouse) |
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/s/ C. David Zoba |
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Trustee |
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March 1, 2023 |
(C. David Zoba) |
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134
EXHIBIT 4.1
DESCRIPTION OF SECURITIES
REGISTERED UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
The following is a summary of the material terms of the common shares of beneficial interest, par value $0.001 per share (the “Common Shares”), of Acadia Realty Trust, a Maryland real estate investment trust (the “Company,” “our,” “we,” or “us”), as well as certain relevant provisions of the declaration of trust of the Company, as amended (the “Declaration of Trust”), and amended and restated bylaws of the Company (the “Bylaws”), the Maryland General Corporation Law (the “MGCL”) and the Maryland REIT Law (the “MRL”). A more complete description is available by referring to the full text of the Declaration of Trust, the Bylaws, the MGCL and the MRL.
General
Under our Declaration of Trust, we may issue 200,000,000 shares of beneficial interest, which may consist of Common Shares or such other types or classes of securities of the Company as the board of trustees of the Company (the “Board”) may create and authorize from time to time. The Common Shares have equal dividend, liquidation and other rights, have no preference or exchange rights, and generally have no appraisal rights. Holders of Common Shares have no conversion, sinking fund or redemption rights, or preemptive rights to subscribe for any of our securities.
Transfer Agent and Registrar
The transfer agent and registrar for the Common Shares is American Stock Transfer & Trust Company, which has an address at 40 Wall Street, New York, New York 10005.
Listing
The Common Shares are listed on the New York Stock Exchange under the symbol “AKR”.
Distributions
Holders of Common Shares are entitled to receive distributions out of assets that we can legally use to pay distributions, when and if they are authorized by our Board and declared by us, and to share ratably in our assets that are legally available for distribution to our shareholders in the event we are liquidated, dissolved or our affairs are wound up.
Voting Rights
Holders of Common Shares have the right to vote on all matters presented to our shareholders, including the election of trustees, except as otherwise provided by Maryland law. Maryland law and our Declaration of Trust prohibit us from merging with or consolidating into another entity where we are not the surviving entity, or selling all or substantially all of our assets, without the approval of the holders of not less than two-thirds of the outstanding shares that are entitled to vote on such matters. Holders of Common Shares are entitled to one vote per share on all matters upon which shareholders are entitled to vote.
There is no cumulative voting in the election of our trustees, which means that holders of more than 50% of the Common Shares voting for the election of trustees can elect all of the trustees if they choose to do so and the holders of the remaining shares cannot elect any trustees.
Restrictions on Ownership and Transfer
To qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), we must satisfy certain ownership requirements that may limit the ownership and transferability of the Common Shares. Specifically, not more than 50% in value of our outstanding Common Shares may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year, and the Common Shares must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of twelve months or during a proportionate part of a shorter taxable year.
In order to ensure that we continue to qualify as a REIT under the Code, our Declaration of Trust contains provisions intended to assist us in satisfying the requirements described above. In regard to the ownership requirements, the Declaration of Trust prohibits any person from owning, directly or indirectly, by virtue of (i) the attribution rules of the Code or (ii) being a beneficial owner as defined in Rule 13d-3 promulgated under the Securities Exchange Act or 1934, as amended (the “Exchange Act”), more than 9.8% in value or number of the issued and outstanding shares of any class or series of our shares of beneficial interest, subject to certain exceptions. The trustees may waive this limitation if such ownership will not jeopardize our status as a REIT. As a condition of such waiver, the trustees may require opinions of counsel satisfactory to them and/or an undertaking from the applicant with respect to preserving our REIT status under the Code.
Our Declaration of Trust also provides that any purported transfer or issuance of any class or series of our shares of beneficial interest or our securities convertible into such shares that would (i) violate the 9.8% limitation described above, (ii) result in shares being owned by fewer than 100 persons for purposes of the REIT provisions of the Code, (iii) result in our being “closely held” within the meaning of Section 856(h) of the Code, or (iv) otherwise jeopardize our REIT status under the Code will be null and void and the proposed transferee will not acquire any rights in the shares, and will be deemed to have never had an interest therein.
Moreover, shares of beneficial interest transferred, or proposed to be transferred, in contravention of the 9.8% limitation described above or in a manner that would otherwise jeopardize our status as a REIT will be subject to purchase by us at a price equal to the fair market value of such shares (determined in accordance with the rules set forth in our Declaration of Trust). From and after the date fixed for purchase, and so long as payment of the purchase price for the shares to be redeemed has been made or duly provided for, the holder of any shares in violation of the 9.8% limitation described above so called for purchase will cease to be entitled to dividends, distributions, voting rights and other benefits with respect to such shares, excepting only the right to payment of the purchase price. Any dividend or distribution paid to a proposed transferee on such shares prior to the discovery by the Company that such shares have been transferred in violation of the limitations described above shall be repaid to us upon demand.
Any certificates evidencing the Common Shares bear a legend referring to the restrictions described above.
The ownership limitations described above could have the effect of delaying, deferring or preventing a takeover or other transaction in which holders of some, or a majority, of Common Shares might receive a premium for their shares over the then prevailing market price or which such holders might believe to be otherwise in their best interest.
Certain Provisions of Our Declaration of Trust and Bylaws
Number of Trustees; Election of Trustees, Removal of Trustees and Filling of Vacancies
Our Declaration of Trust provides that the Board will consist of not less than two nor more than fifteen persons, and that the number of trustees will be set by the trustees then in office. Our Board currently consists of ten trustees, each of whom serves until the next annual meeting of shareholders and until his or her successor is duly elected and qualifies. Each trustee is elected by the vote of the majority of the votes cast by the holders of Common Shares at a meeting duly called at which a quorum is present; provided that if the number of nominees exceeds the number of trustees to be elected, the trustees will be elected by a plurality of the votes cast by the holders of Common Shares at a meeting duly called at which a quorum is established. A majority of the votes cast means that the number of shares voted “for” a nominee must exceed 50% of the sum of the votes cast “for” plus the votes cast “against” or “withheld” with respect to that nominee. If a nominee that is already serving as a trustee is not elected, such trustee shall offer to tender his or her resignation to the Board. The nominating and corporate governance committee of the Board will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken.
Our Declaration of Trust provides that the shareholders may, at any time, remove any trustee, with or without cause, by the affirmative vote of not less than two-thirds of all the votes entitled to be cast generally in the election of trustees. Any vacancy (including a vacancy created by an increase in the number of trustees) may be filled, at any regular meeting or at any special meeting called for that purpose, by a majority of the trustees remaining in office, even if the remaining trustees do not constitute a quorum. Any trustee elected to fill a vacancy will serve for the remainder of the full term of the trusteeship in which the vacancy occurred and until his or her successor is duly elected and qualifies.
Limitation of Liability and Indemnification of Trustees and Officers
Our Declaration of Trust authorizes and our Bylaws obligate us, to the maximum extent permitted under Maryland law, to indemnify our trustees and officers in their capacity as such. Section 8-301(15) of the MRL permits a Maryland REIT to indemnify or advance expenses to trustees and officers to the same extent as is permitted for directors and officers of a Maryland corporation under the MGCL. The MGCL requires a Maryland corporation (unless its charter provides otherwise, which our Declaration of Trust does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that capacity. The MGCL permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to or in which they may be made, or threatened to be made, a party or witness by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received, unless, in either case, a court orders indemnification, and then only for expenses. In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of (i) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation and (ii) a written undertaking by such director or officer or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.
Our Declaration of Trust authorizes us, and our Bylaws require us, to the maximum extent permitted by Maryland law, to indemnify (i) any present or former trustee or officer or (ii) any individual who, while serving as our trustee or officer and at our request, serves or has served another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner, member, manager, or trustee, from and against any claim or liability to which such person may become subject or which such person may incur by reason of his or her service in such capacity or capacities, and to pay or reimburse his or her reasonable expenses in advance of final disposition of such a proceeding.
Our Bylaws also permit us, subject to the approval of our Board, to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and to any employee or agent of our Company or a predecessor of our Company.
In addition to the above, we have purchased and maintain insurance on behalf of all of our trustees and executive officers against liability asserted against or incurred by them in their official capacities with us, whether or not we are required or have the power to indemnify them against the same liability.
Advance Notice of Trustee Nominations and New Business
Our Bylaws provide that (a) with respect to an annual meeting of shareholders, nominations of individuals for election to our Board and the proposal of other business to be considered by shareholders may be made only (i) pursuant to our Company’s notice of the meeting, (ii) by or at the direction of the Board or (iii) by a shareholder who is a shareholder of record both at the time of giving of notice by the shareholder and at the time of the meeting, who is entitled to vote at the meeting in the election of the individual so nominated or such other business and has complied with the advance notice procedures set forth in the Bylaws and (b) with respect to special meetings of shareholders, only the business specified in our Company’s notice of meeting may be brought before the meeting of shareholders and nominations of individuals for election to the Board may be made only (i) by or at the direction of the Board or (ii) provided that the meeting has been called for the purpose of electing trustees by a shareholder who is a shareholder of record both at the time of giving of notice by the shareholder and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated and has complied with the advance notice provisions set forth in the Bylaws.
Amendments to our Declaration of Trust and Bylaws
In general, our Declaration of Trust may be amended by the affirmative vote of the holders of not less than a majority of the Common Shares then outstanding and entitled to vote thereon. However, amendments with respect to certain provisions relating to the ownership requirements, reorganizations and certain mergers or consolidations or the sale of substantially all of our assets, require the affirmative vote of the holders of not less than two-thirds of the Common Shares then outstanding and entitled to vote thereon. Our trustees, by a two-thirds vote, may amend the provisions of the Declaration of Trust from time to time to effect any change deemed necessary by our trustees to allow us to qualify and continue to qualify as a REIT. Our Bylaws provide that our Board has the power to adopt, alter or repeal any provision of our Bylaws and to make new Bylaws. In addition, shareholders may alter or repeal any provision of the Bylaws and adopt new Bylaws with the approval of a majority of all votes entitled to be cast on the matter.
Termination of Operations or our REIT Status
Our Declaration of Trust permits the termination and the discontinuation of our operations by the affirmative vote of the holders of not less than two-thirds of the outstanding shares entitled to vote at a
meeting of shareholders called for that purpose. In addition, the Declaration of Trust permits the trustees to terminate our REIT status at any time without a vote of shareholders.
Anti-Takeover Effect of Certain Provisions of the Declaration of Trust
The limitation on ownership and transfer of shares of beneficial interest set forth in our Declaration of Trust could have the effect of discouraging offers to acquire us or of hampering the consummation of a contemplated acquisition. Similarly, the Board, without shareholder approval, could authorize the Company to issue additional classes or series of Common Shares or other shares of beneficial interest. Any such shares could, depending upon the terms of the particular class or series, delay, defer or prevent a transaction or a change of control of the Company, even if such transaction or change of control involved a premium price for the shareholders of the Company or shareholders believe that such transaction or change of control may be in their best interests.
Forum Selection Clause
Our Bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of any duty owed by us or by any of our trustees or officers or other employees to us or to our shareholders, (iii) any action asserting a claim against us or any of our trustees or officers or other employees arising pursuant to any provision of the MRL, the MGCL or our Declaration of Trust or Bylaws or (iv) any action asserting a claim against us or any of our trustees or officers or other employees that is governed by the internal affairs doctrine shall be, in each case, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division.
Certain Provisions of Maryland Law
Control Share Acquisitions
The MGCL, as applicable to Maryland REITs, provides that a holder of “control shares” of a Maryland REIT acquired in a “control share acquisition” has no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares of beneficial interest owned by the acquiror, by officers or by trustees who are employees of the REIT. “Control shares” are voting shares of beneficial interest which, if aggregated with all other such shares of beneficial interest previously acquired by the acquiror, or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing trustees within one of the following ranges of voting power: (i) one-tenth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more of all voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained shareholder approval. A “control share acquisition” means the acquisition of control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses of the meeting), may compel the board of trustees of the REIT to call a special meeting of shareholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the REIT may itself present the question at any shareholders meeting.
If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then, subject to certain conditions and limitations, the REIT
may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or, if a meeting of shareholders is held at which the voting rights of such shares are considered and not approved, as of the date of such meeting. If voting rights for control shares are approved at a shareholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.
The control share acquisition statute does not apply (i) to shares acquired in a merger, consolidation or share exchange if the REIT is a party to the transaction or (ii) to acquisitions approved or exempted by the declaration of trust or bylaws of the REIT.
Our Bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our Company’s shares of beneficial interest. There can be no assurance that this provision will not be amended or eliminated at any time in the future, and may be amended or eliminated with retroactive effect.
Business Combinations
Under the MGCL, as applicable to Maryland REITs, certain “business combinations” (including a merger, consolidation, share exchange or, in certain circumstances, an asset transfer or issuance or reclassification of equity securities) between a Maryland REIT and any person who beneficially owns ten percent or more of the voting power of the REIT’s outstanding voting shares of beneficial interest or an affiliate or associate of the REIT who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of ten percent or more of the voting power of the then-outstanding voting shares of beneficial interest of the REIT (an “Interested Shareholder”) or an affiliate thereof are prohibited for five years after the most recent date on which the Interested Shareholder becomes an Interested Shareholder. Thereafter, any such business combination must generally be recommended by the board of trustees of such REIT and approved by the affirmative vote of at least (a) 80% of the votes entitled to be cast by holders of outstanding voting shares of beneficial interest of the REIT and (b) two-thirds of the votes entitled to be cast by holders of voting shares of the REIT other than shares held by the Interested Shareholder with whom (or with whose affiliate) the business combination is to be effected, unless, among other conditions, the REIT’s common shareholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the Interested Shareholder for its shares.
These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by the board of trustees of the REIT prior to the time that the Interested Shareholder becomes an Interested Shareholder. A person is not an Interested Shareholder under the statute if the board of trustees approved in advance the transaction by which he otherwise would have become an Interested Shareholder. The board of trustees may provide that its approval is subject to compliance with any terms and conditions determined by the board.
We have not elected to opt-out of the business combination statute. The business combination statute may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change of control of us under circumstances that otherwise could provide our shareholders with the opportunity to realize a premium over the then-current market price or that our shareholders may otherwise believe is in their best interests.
Subtitle 8
Subtitle 8 of Title 3 of the MGCL permits a Maryland REIT with a class of equity securities registered under the Exchange Act and at least three independent trustees to elect to be subject, by provision in its declaration of trust or bylaws or a resolution of its board of trustees and notwithstanding any contrary provision in the declaration of trust or bylaws, to any or all of five provisions of the MGCL, which provide for:
Through provisions in our Declaration of Trust and Bylaws unrelated to Subtitle 8, we already (i) require the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of trustees to remove a trustee from our Board, (ii) vest in our Board the exclusive power to fix the number of trustees, (iii) vest in our Board the exclusive power to fill vacancies and (iv) require, unless called by our chairman of our Board, our chief executive officer, our president or our Board, the written request of shareholders entitled to cast not less than 40% of all the votes entitled to be cast at such a meeting to call a special meeting. We have opted out of the provision of Subtitle 8 that would have permitted our Board, without shareholder approval, to elect to classify our Board into three classes with staggered three-year terms (also referred to as a classified board), and we are prohibited from electing to be subject to such provision of the MGCL unless such election is first approved by our shareholders by the affirmative vote of a majority of the votes cast on the matter by shareholders entitled to vote generally in the election of trustees.
Exhibit 10.11
[Form of Long-Term Incentive Plan Award Agreement (Time and Performance Based)]
ACADIA REALTY TRUST
[___] LONG-TERM INCENTIVE PLAN
AWARD AGREEMENT
[___] LONG-TERM INCENTIVE PLAN AWARD AGREEMENT made as of the date set forth on Schedule A hereto between Acadia Realty Trust, a Maryland real estate investment trust (the “Company”), its subsidiary Acadia Realty Limited Partnership, a Delaware limited partnership and the entity through which the Company conducts substantially all of its operations (the “Partnership”), and the party listed on Schedule A (the “Grantee”).
RECITALS
NOW, THEREFORE, the Company, the Partnership and the Grantee agree as follows:
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“Award LTIP Units” has the meaning set forth in Section 3.
“Cause” means the Grantee has: (A) deliberately made a misrepresentation in connection with, or willfully failed to cooperate with, a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or willfully destroyed or failed to preserve documents or other materials known to be relevant to such investigation, or willfully induced others to fail to cooperate or to produce documents or other materials; (B) materially breached (other than as a result of the Grantee’s incapacity due to physical or mental illness or death) his/her material duties hereunder, which breach is demonstrably willful and deliberate on the Grantee’s part, is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and such breach is not cured within a reasonable period of time after written notice from the Company specifying such Breach (but in any event, no less than ninety (90) days thereafter) in which Grantee is diligently pursuing cure; (C) engaged in conduct constituting a material act of willful misconduct in connection with the performance of his/her duties, including, without limitation, misappropriation of funds or property of the Company other than the occasional customary and de minimis use of Company property for personal purposes; (D) materially violated a material Company policy, including but not limited to a policy set forth in the Company’s employee handbook; (E) disparaged the Company, its officers, trustees, employees or partners; (F) committed a felony or misdemeanor involving moral turpitude, deceit, dishonesty or fraud.
“Change of Control” means that any of the following events has occurred: (A) any Person or “group” of Persons, as such terms are used in Sections 13 and 14 of the Exchange Act, other than any employee benefit plan sponsored by the Company, becomes the “beneficial owner,” as such term is used in Section 13 of the Exchange Act (irrespective of any vesting or waiting periods) of (i) the Company’s Common Shares in an amount equal to thirty percent (30%) or more of the sum total of the Common Shares issued and outstanding immediately prior to such acquisition as if they were a single class and disregarding any equity raise in connection with the financing of such transaction; provided, however, that in determining whether a Change of Control has occurred, Common Shares which are acquired in an acquisition by (i) the Company or any of its subsidiaries or (ii) an employee benefit plan (or a trust forming a part thereof) maintained by the Company or any of its subsidiaries shall not constitute an acquisition which can cause a Change of Control; or (B) the approval of the dissolution or liquidation of the Company by the Board of Trustees of the Company (the “Board”); or (C) the approval of the sale or other disposition of all or substantially all of its assets in one or more transactions (including, without limitation, the approval of a transaction or series of transactions to sell or dispose of all or substantially all of the assets in the Company’s core business line to any Person or “group” of Persons, as such terms are used in Sections 13 and 14 of the Exchange Act); or (D) a turnover, during any two-year
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period, of the majority of the members of the Board, without the consent of the majority of the members of the Board as to the appointment of the new Board members.
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Shares” means shares of beneficial ownership of the Company, par value $0.001 per share, either currently existing or authorized hereafter.
“Disability” means (i) if the Grantee is a party to a Service Agreement (as defined in Section 5(b) below), and “Disability” is defined therein, such definition, or (ii) if the Grantee is not party to a Service Agreement that defines “Disability,” a reasonable determination by the Company that the Grantee has become physically or mentally incapable of performing his duties to the Company and/or Partnership and such disability has disabled the Grantee for a cumulative period of one hundred eighty (180) days within a twelve (12) month period.
“Effective Date” means [___].
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means, as of a particular date, the “Fair Market Value” (as defined in the Plan) of one Common Share; provided, however, if such date is the date of a Public Announcement with respect to a Change of Control, then the fair market value shall be, as determined by the Board, the total consideration payable for one Common Share in the transaction that ultimately results in a Change of Control.
“Good Reason” means the Grantee shall have the right to terminate his/her employment within the 90-day period following the Company’s failure to cure any of the following events that shall constitute “Good Reason” if not cured within the 30-day period following written notice of such default to the Company by the Grantee (the “Good Reason Cure Period”): (A) upon the occurrence of any material breach of this Agreement by the Company; (B) without the Grantee’s consent, a material, adverse alteration in the nature of the Grantee’s duties, responsibilities or authority, or in the 18-month period following a Change of Control only, upon the determination by the Grantee (which determination will be conclusive and binding upon the parties hereto provided it has been made in good faith and in all events will be presumed to have been made in good faith unless otherwise shown clear and convincing evidence) that a material negative change in circumstances has occurred following a Change of Control; (C) without the Grantee’s consent, upon a reduction in the Grantee’s base salary or a reduction of ten percent (10%) or greater in Grantee’s other compensation and employee benefits (which includes a ten percent (10%) or greater reduction in target cash and equity bonus, or a ten percent (10%) or greater reduction in total bonus opportunity, but in all cases excludes any grants made under the Long-Term Incentive Alignment Program); or (D) if the Company relocates the Grantee’s office requiring the Grantee to increase
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his/her commuting time by more than one hour, or in the 18-month period following a Change of Control only, upon the Company requiring the Grantee to travel away from the Grantee’s office in the course of discharging the Grantee’s responsibilities or duties hereunder at least twenty percent (20%) more than was required of the Grantee in any of the three (3) full years immediately prior to the Change of Control, without, in either case, the Grantee’s prior written consent. Any notice hereunder by the Grantee must be made within ninety (90) days after the Grantee first knows or has reason to know about the occurrence of the event alleged to be Good Reason.
“LTIP Units” means units of limited partnership interest of the Partnership designated as “LTIP Units” in the Partnership Agreement awarded under the LTIP, having the rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption set forth in the Partnership Agreement.
“Partnership Agreement” means the Second Amended and Restated Limited Partnership Agreement of the Partnership, effective as of December 31, 2018, among the Company, as general partner, and the limited partners who are parties thereto, as amended from time to time.
“Performance Period” means the period beginning on the Effective Date and ending on the Valuation Date.
“Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, other entity or “group” (as defined in the Exchange Act).
“Public Announcement” means, with respect to a Change of Control, the earliest press release, filing with the Securities and Exchange Commission, or other publicly available or widely disseminated communication issued by the Company or another Person who is a party to such transaction which discloses the consideration payable in connection with and other material terms of the transaction that ultimately results in the Change of Control; provided, however, that if such consideration is subsequently increased or decreased, then the term “Public Announcement” shall be deemed to refer to the most recent such press release, filing or communication disclosing a change in the consideration whereby the final consideration and material terms of the transaction that ultimately results in the Change of Control are announced.
“Securities Act” means the Securities Act of 1933, as amended.
“Special LTIP Units” means LTIP Units as defined in the Partnership Agreement and designated as Special LTIP Units pursuant to Section 8 of this Agreement.
“Units” means OP Units (as defined in the Partnership Agreement) that are outstanding or are issuable upon the conversion, exercise, exchange or redemption
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of any securities of any kind convertible, exercisable, exchangeable or redeemable for OP Units.
“Valuation Date” means [___].
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(A) Sixty percent (60%) of the earned Performance-Based LTIP Units shall become vested on [___]; and
(B) Forty percent (40%) of the earned Performance-Based LTIP Units shall become vested in substantially equal installments on each of [___] and [___].
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[Signature page follows]
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IN WITNESS WHEREOF, the undersigned have caused this Award Agreement to be executed as of [___].
ACADIA REALTY TRUST
By:
[__________]
411 Theodore Fremd Avenue
Suite 300
Rye, NY 10580
ACADIA REALTY LIMITED PARTNERSHIP
By: Acadia Realty Trust, its general partner
By:
[__________]
411 Theodore Fremd Avenue
Suite 300
Rye, NY 10580
GRANTEE
[Name]
[Signature Page to LTIP Award Agreement]
Exhibit 10.12
[Form of Long-Term Incentive Plan Award Agreement (Time and Performance Based) – (Chief Executive Officer)]
ACADIA REALTY TRUST
[___] LONG-TERM INCENTIVE PLAN
AWARD AGREEMENT
[___] LONG-TERM INCENTIVE PLAN AWARD AGREEMENT made as of the date set forth on Schedule A hereto between Acadia Realty Trust, a Maryland real estate investment trust (the “Company”), its subsidiary Acadia Realty Limited Partnership, a Delaware limited partnership and the entity through which the Company conducts substantially all of its operations (the “Partnership”), and the party listed on Schedule A (the “Grantee”).
RECITALS
NOW, THEREFORE, the Company, the Partnership and the Grantee agree as follows:
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“Award LTIP Units” has the meaning set forth in Section 3.
“Cause” means the Grantee has: (A) deliberately made a misrepresentation in connection with, or willfully failed to cooperate with, a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or willfully destroyed or failed to preserve documents or other materials known to be relevant to such investigation, or willfully induced others to fail to cooperate or to produce documents or other materials; (B) materially breached (other than as a result of the Grantee’s incapacity due to physical or mental illness or death) his/her material duties hereunder, which breach is demonstrably willful and deliberate on the Grantee’s part, is committed in bad faith or without reasonable belief that such breach is in the best interests of the Company and such breach is not cured within a reasonable period of time after written notice from the Company specifying such Breach (but in any event, no less than ninety (90) days thereafter) in which Grantee is diligently pursuing cure; (C) engaged in conduct constituting a material act of willful misconduct in connection with the performance of his/her duties, including, without limitation, misappropriation of funds or property of the Company other than the occasional customary and de minimis use of Company property for personal purposes; (D) materially violated a material Company policy, including but not limited to a policy set forth in the Company’s employee handbook; (E) disparaged the Company, its officers, trustees, employees or partners; (F) committed a felony or misdemeanor involving moral turpitude, deceit, dishonesty or fraud.
“Change of Control” means that any of the following events has occurred: (A) any Person or “group” of Persons, as such terms are used in Sections 13 and 14 of the Exchange Act, other than any employee benefit plan sponsored by the Company, becomes the “beneficial owner,” as such term is used in Section 13 of the Exchange Act (irrespective of any vesting or waiting periods) of (i) the Company’s Common Shares in an amount equal to thirty percent (30%) or more of the sum total of the Common Shares issued and outstanding immediately prior to such acquisition as if they were a single class and disregarding any equity raise in connection with the financing of such transaction; provided, however, that in determining whether a Change of Control has occurred, Common Shares which are acquired in an acquisition by (i) the Company or any of its subsidiaries or (ii) an employee benefit plan (or a trust forming a part thereof) maintained by the Company or any of its subsidiaries shall not constitute an acquisition which can cause a Change of Control; or (B) the approval of the dissolution or liquidation of the Company by the Board of Trustees of the Company (the “Board”); or (C) the approval of the sale or other disposition of all or substantially all of its assets in one or more transactions (including, without limitation, the approval of a transaction or series of transactions to sell or dispose of all or substantially all of the assets in the Company’s core business line to any Person or “group” of Persons, as such terms are used in Sections 13 and 14 of the Exchange Act); or (D) a turnover, during any two-year
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period, of the majority of the members of the Board, without the consent of the majority of the members of the Board as to the appointment of the new Board members.
“Code” means the Internal Revenue Code of 1986, as amended.
“Common Shares” means shares of beneficial ownership of the Company, par value $0.001 per share, either currently existing or authorized hereafter.
“Disability” means (i) if the Grantee is a party to a Service Agreement (as defined in Section 5(b) below), and “Disability” is defined therein, such definition, or (ii) if the Grantee is not party to a Service Agreement that defines “Disability,” a reasonable determination by the Company that the Grantee has become physically or mentally incapable of performing his duties to the Company and/or Partnership and such disability has disabled the Grantee for a cumulative period of one hundred eighty (180) days within a twelve (12) month period.
“Effective Date” means [___].
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means, as of a particular date, the “Fair Market Value” (as defined in the Plan) of one Common Share; provided, however, if such date is the date of a Public Announcement with respect to a Change of Control, then the fair market value shall be, as determined by the Board, the total consideration payable for one Common Share in the transaction that ultimately results in a Change of Control.
“Good Reason” means the Grantee shall have the right to terminate his/her employment within the 90-day period following the Company’s failure to cure any of the following events that shall constitute “Good Reason” if not cured within the 30-day period following written notice of such default to the Company by the Grantee (the “Good Reason Cure Period”): (A) upon the occurrence of any material breach of this Agreement by the Company; (B) without the Grantee’s consent, a material, adverse alteration in the nature of the Grantee’s duties, responsibilities or authority, or in the 18-month period following a Change of Control only, upon the determination by the Grantee (which determination will be conclusive and binding upon the parties hereto provided it has been made in good faith and in all events will be presumed to have been made in good faith unless otherwise shown clear and convincing evidence) that a material negative change in circumstances has occurred following a Change of Control; (C) without the Grantee’s consent, upon a reduction in the Grantee’s base salary or a reduction of ten percent (10%) or greater in Grantee’s other compensation and employee benefits (which includes a ten percent (10%) or greater reduction in target cash and equity bonus, or a ten percent (10%) or greater reduction in total bonus opportunity, but in all cases excludes any grants made under the Long-Term Incentive Alignment Program); or (D) if the Company relocates the Grantee’s office requiring the Grantee to increase
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his/her commuting time by more than one hour, or in the 18-month period following a Change of Control only, upon the Company requiring the Grantee to travel away from the Grantee’s office in the course of discharging the Grantee’s responsibilities or duties hereunder at least twenty percent (20%) more than was required of the Grantee in any of the three (3) full years immediately prior to the Change of Control, without, in either case, the Grantee’s prior written consent. Any notice hereunder by the Grantee must be made within ninety (90) days after the Grantee first knows or has reason to know about the occurrence of the event alleged to be Good Reason.
“LTIP Units” means units of limited partnership interest of the Partnership designated as “LTIP Units” in the Partnership Agreement awarded under the LTIP, having the rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption set forth in the Partnership Agreement.
“Partnership Agreement” means the Second Amended and Restated Limited Partnership Agreement of the Partnership, effective as of December 31, 2018, among the Company, as general partner, and the limited partners who are parties thereto, as amended from time to time.
“Performance Period” means the period beginning on the Effective Date and ending on the Valuation Date.
“Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, other entity or “group” (as defined in the Exchange Act).
“Public Announcement” means, with respect to a Change of Control, the earliest press release, filing with the Securities and Exchange Commission, or other publicly available or widely disseminated communication issued by the Company or another Person who is a party to such transaction which discloses the consideration payable in connection with and other material terms of the transaction that ultimately results in the Change of Control; provided, however, that if such consideration is subsequently increased or decreased, then the term “Public Announcement” shall be deemed to refer to the most recent such press release, filing or communication disclosing a change in the consideration whereby the final consideration and material terms of the transaction that ultimately results in the Change of Control are announced.
“Securities Act” means the Securities Act of 1933, as amended.
“Special LTIP Units” means LTIP Units as defined in the Partnership Agreement and designated as Special LTIP Units pursuant to Section 8 of this Agreement.
“Units” means OP Units (as defined in the Partnership Agreement) that are outstanding or are issuable upon the conversion, exercise, exchange or redemption
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of any securities of any kind convertible, exercisable, exchangeable or redeemable for OP Units.
“Valuation Date” means [___].
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(A) Sixty percent (60%) of the earned Performance-Based LTIP Units shall become vested on [___]; and
(B) Forty percent (40%) of the earned Performance-Based LTIP Units shall become vested in substantially equal installments on each of [___] and [___].
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[Signature page follows]
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IN WITNESS WHEREOF, the undersigned have caused this Award Agreement to be executed as of [___].
ACADIA REALTY TRUST
By:
[__________]
411 Theodore Fremd Avenue
Suite 300
Rye, NY 10580
ACADIA REALTY LIMITED PARTNERSHIP
By: Acadia Realty Trust, its general partner
By:
[__________]
411 Theodore Fremd Avenue
Suite 300
Rye, NY 10580
GRANTEE
Kenneth F. Bernstein
Exhibit 10.14
Execution Copy
FIRST AMENDMENT
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
FIRST AMENDMENT, dated as of March 3, 2022 (this “Amendment”), to the Second Amended and Restated Credit Agreement, dated as of June 29, 2021, by and among Acadia Realty Limited Partnership, a Delaware limited partnership (the “Borrower”), Acadia Realty Trust, a Maryland real estate investment trust (the “REIT”) and certain subsidiaries of the Borrower from time to time party thereto, as guarantors, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent (as amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”). Any term used herein and not otherwise defined herein shall have the meaning assigned to such term in the Credit Agreement (as amended by this Amendment).
WHEREAS, the Borrower and the Lenders party hereto have agreed to modify the Credit Agreement as herein set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
171315032
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THIS AMENDMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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[The remainder of this page left blank intentionally]
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IN WITNESS WHEREOF, the undersigned have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date hereof.
BORROWER:
ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA REALTY TRUST, its General Partner
By: /s/ Jason Blacksberg
Name: Jason Blacksberg
Title: Senior Vice President
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
GUARANTORS:
Each of the Guarantors is hereby executing this Amendment for the purposes of acknowledging its agreement to the representations and warranties made by such Guarantor under Section 3 of this Amendment, the affirmations made by such Guarantor under Section 4 of this Amendment and the ratifications, affirmations, confirmations and agreements made under Section 5 of this Amendment.
ACADIA REALTY TRUST, a Maryland real estate investment trust
By: /s/ Jason Blacksberg
Name: Jason Blacksberg
Title: Senior Vice President
ACADIA 1520 MILWAUKEE AVENUE LLC, a Delaware limited liability company
ACADIA 2914 THIRD AVENUE LLC, a Delaware limited liability company
ACADIA 5-7 EAST 17TH STREET LLC, a Delaware limited liability company
ACADIA 83 SPRING STREET LLC, a Delaware limited liability company
ACADIA BARTOW AVENUE LLC, a Delaware limited liability company
ACADIA CHESTNUT LLC, a Delaware limited liability company
ACADIA GOLD COAST LLC, a Delaware limited liability company
ACADIA MAD RIVER PROPERTY LLC, a Delaware limited liability company
ACADIA MERCER STREET LLC, a Delaware limited liability company
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
ACADIA RUSH WALTON LLC, a Delaware limited liability company
ACADIA TOWN LINE, LLC, a Connecticut limited liability company
ACADIA WEST 54TH STREET LLC, a Delaware limited liability company
ACADIA WEST SHORE EXPRESSWAY LLC, a Delaware limited liability company
MARK PLAZA FIFTY L.P., a Pennsylvania limited partnership
By: ACADIA MARK PLAZA LLC, its General Partner
ACADIA MARK PLAZA LLC, a Delaware limited liability company
RD ABINGTON ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
RD ABSECON ASSOCIATES, L.P, a Delaware limited partnership
By: ACADIA ABSECON LLC, its General Partner
ACADIA ABSECON LLC, a Delaware limited liability company
RD BLOOMFIELD ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
RD HOBSON ASSOCIATES, L.P., a Delaware limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
MARK TWELVE ASSOCIATES, LP, a Pennsylvania limited partnership
By: ACADIA HOBSON LLC, its General Partner
ACADIA HOBSON LLC, a Delaware limited liability company
RD METHUEN ASSOCIATES LIMITED PARTNERSHIP, a Massachusetts limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
ACADIA PROPERTY HOLDINGS, LLC, a Delaware limited liability company
ACADIA 181 MAIN STREET LLC, a Delaware limited liability company
ACADIA CHICAGO LLC, a Delaware limited liability company
ACADIA CONNECTICUT AVENUE LLC, a Delaware limited liability company
8-12 EAST WALTON LLC, a Delaware limited liability company
RD BRANCH ASSOCIATES, L.P., a New York limited partnership
By: Acadia Property Holdings, LLC, its General Partner
ACADIA WEST DIVERSEY LLC, a Delaware limited liability company
868 BROADWAY LLC, a Delaware limited liability company
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
120 WEST BROADWAY LLC, a Delaware limited liability company
11 EAST WALTON LLC, a Delaware limited liability company
865 WEST NORTH AVENUE LLC, a Delaware limited liability company
61 MAIN STREET OWNER LLC, a Delaware limited liability company
252-264 GREENWICH AVENUE RETAIL LLC, a Delaware limited liability company
2520 FLATBUSH AVENUE LLC, a Delaware limited liability company
ACADIA CLARK-DIVERSEY LLC, a Delaware limited liability company
ACADIA NEW LOUDON LLC, a Delaware limited liability company
131-135 PRINCE STREET LLC, a Delaware limited liability company
201 NEEDHAM STREET OWNER LLC, a Delaware limited liability company
SHOPS AT GRAND AVENUE LLC, a Delaware limited liability company
2675 GEARY BOULEVARD LP, a Delaware limited partnership
By: 2675 City Center Partner LLC, its General Partner
2675 CITY CENTER PARTNER LLC, a Delaware limited liability company
ACADIA NAAMANS ROAD LLC, a Delaware limited liability company
ACADIA CRESCENT PLAZA LLC, a Delaware limited liability company
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
RD ELMWOOD ASSOCIATES, L.P., a Delaware limited partnership
By: Acadia Elmwood Park LLC, its General Partner
ACADIA ELMWOOD PARK LLC, a Delaware limited liability company
ROOSEVELT GALLERIA LLC, a Delaware limited liability company
ACADIA 56 EAST WALTON LLC, a Delaware limited liability company
ACADIA SECOND CITY 843-45 WEST ARMITAGE LLC, a Delaware limited liability company
ACADIA SECOND CITY 1521 WEST BELMONT LLC, a Delaware limited liability company
ACADIA SECOND CITY 2206-08 NORTH HALSTEAD LLC, a Delaware limited liability company
ACADIA SECOND CITY 2633 NORTH HALSTEAD LLC, a Delaware limited liability company
HEATHCOTE ASSOCIATES, L.P., a New York limited partnership
By: Acadia Heathcote LLC, its General Partner
ACADIA HEATHCOTE LLC, a Delaware limited liability company
152-154 SPRING STREET RETAIL LLC, a Delaware limited liability company
ACADIA 152-154 SPRING STREET RETAIL LLC, a Delaware limited liability company
165 NEWBURY STREET OWNER LLC, a Delaware limited liability company
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
ACADIA 639 WEST DIVERSEY LLC, a Delaware limited liability company
ACADIA BRENTWOOD LLC, a Delaware limited liability company
41 GREENE STREET OWNER LLC, a Delaware limited liability company
47-49 GREENE STREET OWNER LLC, a Delaware limited liability company
51 GREENE STREET OWNER LLC, a Delaware limited liability company
53 GREENE STREET OWNER LLC, a Delaware limited liability company
849 W. ARMITAGE OWNER LLC, a Delaware limited liability company
912 W. ARMITAGE OWNER LLC, a Delaware limited liability company
BEDFORD GREEN LLC, a Delaware limited liability company
ACADIA 4401 WHITE PLAINS ROAD LLC, a Delaware limited liability company
ACADIA MERRILLVILLE LLC, a Delaware limited liability company
37 GREENE STREET OWNER LLC, a Delaware limited liability company
907 W. ARMITAGE OWNER LLC, a Delaware limited liability company
45 GREENE STREET OWNER LLC, a Delaware limited liability company
8436-8452 MELROSE OWNER LP, a Delaware limited partnership
By: 8436-8452 MELROSE GENERAL PARTNER LLC, its General Partner
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
8436-8452 MELROSE GENERAL PARTNER LLC, a Delaware limited liability company
917 W. ARMITAGE OWNER LLC, a Delaware limited liability company
CALIFORNIA & ARMITAGE MAIN OWNER LLC, a Delaware limited liability company
ACADIA TOWN CENTER HOLDCO LLC, a Delaware limited liability company
ACADIA MARKET SQUARE, LLC, a Delaware limited liability company
ACADIA NORTH MICHIGAN AVENUE LLC, a Delaware limited liability company
565 BROADWAY OWNER LLC, a Delaware limited liability company
ACADIA BRANDYWINE HOLDINGS, LLC, a Delaware limited liability company
RD SMITHTOWN, LLC, a New York limited liability company
1324 14TH STREET OWNER LLC, a Delaware limited liability company
1526 14TH STREET OWNER LLC, a Delaware limited liability company
1529 14TH STREET OWNER LLC, a Delaware limited liability company
121 SPRING STREET OWNER LLC, a Delaware limited liability company
By: /s/ Jason Blacksberg
Name: Jason Blacksberg
Title: Senior Vice President
on behalf of the entities listed above
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
LENDERS:
BANK OF AMERICA, N.A., as a Lender
By: /s/ Jeffrey L. Phelps
Name: Jefferey L. Phelps
Title: Senior Vice President
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
By: /s/ Craig V. Koshkarian
Name: Craig V. Koshkarian
Title: Director
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
PNC BANK, NATIONAL ASSOCIATION, as a Lender
By: /s/ Brian P. Kelly
Name: Brian P. Kelly
Title: SVP
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
TRUIST BANK, Successor by Merger to SunTrust Bank, as a Lender
By: /s/ Ryan Almond
Name: Ryan Almond
Title: Director
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
TD BANK, N.A., as a Lender
By: /s/ Gianna Gioia
Name: Gianna Gioia
Title: Vice President
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
JPMORGAN CHASE BANK, N.A., as a Lender
By: /s/ Nora Skelton
Name: Nora Skelton
Title: Vice President
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
CITIBANK, N.A., as a Lender
By: /s/ Chris Albano
Name: Chris Albano
Title: Authorized Signatory
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
PEOPLE’S UNITED BANK, N.A., as a Lender
By: /s/ David R. Jablonowski
Name: David R. Jablonowski
Title: Senior Vice President
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
GOLDMAN SACHS BANK USA, as a Lender
By: /s/ Dan Martis
Name: Dan Martis
Title: Authorized Signatory
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ Jeffrey L. Phelps
Name: Jeffrey L. Phelps
Title: Senior Vice President
Signature Page to First Amendment to Acadia Realty Second Amended and Restated Credit Agreement
Annex I to First Amendment
(see attached)
EXECUTION COPY
Annex I to First Amendment
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of June 29, 2021
among
ACADIA REALTY LIMITED PARTNERSHIP,
as the Borrower,
and
ACADIA REALTY TRUST
and
CERTAIN SUBSIDIARIES OF ACADIA REALTY LIMITED PARTNERSHIP
FROM TIME TO TIME PARTY HERETO,
as Guarantors
BANK OF AMERICA, N.A.,
as Administrative Agent
WELLS FARGO BANK, NATIONAL ASSOCIATION,
TRUIST BANK
and
PNC BANK, NATIONAL ASSOCIATION,
as Syndication Agents
and
The Lenders and L/C Issuers Party Hereto
BOFA SECURITIES, INC.
and
WELLS FARGO SECURITIES, LLC,
as Joint Bookrunners
and
BOFA SECURITIES, INC.,
WELLS FARGO SECURITIES, LLC,
TRUIST SECURITIES, INC.
and
PNC CAPITAL MARKETS LLC,
as Joint Lead Arrangers
TABLE OF CONTENTS
Section Page
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS 1
1.01 Defined Terms 1
1.02 Other Interpretive Provisions 49
1.03 Accounting Terms 50
1.04 Rounding 50
1.05 Times of Day; Rates 51
1.06 Letter of Credit Amounts 51
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS 51
2.01 Committed Loans 51
2.02 Borrowings, Conversions and Continuations of Committed Loans 52
2.03 Letters of Credit 53
2.04 [Reserved] 64
2.05 Prepayments 64
2.06 Termination or Reduction of Commitments 65
2.07 Repayment of Loans 66
2.08 Interest 66
2.09 Fees 67
2.10 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate 67
2.11 Evidence of Debt 68
2.12 Payments Generally; Administrative Agent’s Clawback 68
2.13 Sharing of Payments by Lenders 70
2.14 Extension of Maturity Date in respect of Revolving Credit Facility 71
2.15 Increase in Facilities 72
2.16 Cash Collateral 76
2.17 Defaulting Lenders 77
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY 79
3.01 Taxes 79
3.02 Illegality 83
3.03 Inability to Determine Rates 84
3.04 Increased Costs; Reserves on Eurodollar Rate Loans and LIBOR Floating Rate Loans 87
3.05 Compensation for Losses 89
3.06 Mitigation Obligations; Replacement of Lenders 89
3.07 [Reserved] 90
3.08 Survival 90
ARTICLE IV. CONDITIONS PRECEDENT TO Credit Extensions 90
4.01 Conditions of Effectiveness 90
4.02 Conditions to all Credit Extensions 92
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ARTICLE V. REPRESENTATIONS AND WARRANTIES 93
5.01 Existence, Qualification and Power 93
5.02 Authorization; No Contravention 93
5.03 Governmental Authorization; Other Consents 93
5.04 Binding Effect 93
5.05 Financial Statements; No Material Adverse Effect 93
5.06 Litigation 94
5.07 No Default 94
5.08 Ownership of Property 95
5.09 Environmental Compliance 95
5.10 Insurance 95
5.11 Taxes 95
5.12 ERISA Compliance 95
5.13 Subsidiaries; Equity Interests 96
5.14 Margin Regulations; Investment Company Act 96
5.15 Disclosure 97
5.16 Compliance with Laws 97
5.17 Taxpayer Identification Number 97
5.18 Intellectual Property; Licenses, Etc. 97
5.19 OFAC 97
5.20 Solvency 98
5.21 REIT Status; Stock Exchange Listing 98
5.22 Subsidiary Guarantors 98
5.23 Anti-Corruption Laws; Anti-Money Laundering Laws 98
5.24 Affected Financial Institution 98
5.25 Covered Entities 98
ARTICLE VI. AFFIRMATIVE COVENANTS 98
6.01 Financial Statements 99
6.02 Certificates; Other Information 99
6.03 Notices 101
6.04 Payment of Obligations 102
6.05 Preservation of Existence, Etc. 102
6.06 Maintenance of Properties 103
6.07 Maintenance of Insurance 103
6.08 Compliance with Laws 103
6.09 Books and Records 103
6.10 Inspection Rights 103
6.11 Use of Proceeds 104
6.12 Additional Guarantors 104
6.13 Compliance with Environmental Laws 105
6.14 Further Assurances 105
6.15 Maintenance of REIT Status; Stock Exchange Listing 105
6.16 Material Contracts 105
6.17 Preparation of Environmental Reports 105
6.18 Minimum Amount and Occupancy of Unencumbered Properties 106
6.19 Compliance with Terms of Leases 106
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6.20 Anti-Corruption Laws; Sanctions; Anti-Money Laundering Laws 106
ARTICLE VII. NEGATIVE COVENANTS 107
7.01 Liens 107
7.02 Investments 107
7.03 Indebtedness 107
7.04 Fundamental Changes 107108
7.05 Dispositions 108109
7.06 Restricted Payments 109110
7.07 Change in Nature of Business 110111
7.08 Transactions with Affiliates 110111
7.09 Burdensome Agreements 110111
7.10 Use of Proceeds 111
7.11 Financial Covenants 111
7.12 Accounting Changes 112
7.13 Amendments of Organization Documents 112
7.14 Sanctions 112113
7.15 Subsidiaries of REIT 112113
7.16 Anti-Corruption Laws; Anti-Money Laundering Laws 112113
7.17 Swap Contracts 112113
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES 113
8.01 Events of Default 113
8.02 Remedies Upon Event of Default 115116
8.03 Application of Funds 116
ARTICLE IX. ADMINISTRATIVE AGENT 116117
9.01 Appointment and Authority 117
9.02 Rights as a Lender 117118
9.03 Exculpatory Provisions 117118
9.04 Reliance by Administrative Agent 118119
9.05 Delegation of Duties 118119
9.06 Resignation of Administrative Agent 119120
9.07 Non-Reliance on Administrative Agent, Arrangers, Bookrunners and Other Lenders 120121
9.08 No Other Duties, Etc. 121122
9.09 Administrative Agent May File Proofs of Claim 121122
9.10 Guaranty Matters 122123
9.11 Lender Representations Regarding ERISA 122123
9.12 Recovery of Erroneous Payments 123124
ARTICLE X. CONTINUING GUARANTY 124125
10.01 Guaranty 124125
10.02 Rights of Lenders 125126
10.03 Certain Waivers 125126
10.04 Obligations Independent 125126
10.05 Subrogation 125126
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10.06 Termination; Reinstatement 126127
10.07 Subordination 126127
10.08 Stay of Acceleration 126127
10.09 Condition of the Borrower 126127
10.10 Limitations on Enforcement 127
10.11 Contribution 127128
10.12 Release of Subsidiary Guarantors and Re-designation of Unencumbered Properties 128129
ARTICLE XI. MISCELLANEOUS 131132
11.01 Amendments, Etc. 131132
11.02 Notices; Effectiveness; Electronic Communication 134135
11.03 No Waiver; Cumulative Remedies; Enforcement 136137
11.04 Expenses; Indemnity; Damage Waiver 137
11.05 Payments Set Aside 139140
11.06 Successors and Assigns 139140
11.07 Treatment of Certain Information; Confidentiality 145146
11.08 Right of Setoff 146147
11.09 Interest Rate Limitation 147148
11.10 Integration; Effectiveness 147148
11.11 Survival of Representations and Warranties 148
11.12 Severability 148149
11.13 Replacement of Lenders 148149
11.14 Governing Law; Jurisdiction; Etc. 149150
11.15 Waiver of Jury Trial 150151
11.16 No Advisory or Fiduciary Responsibility 150151
11.17 Electronic Execution; Electronic Records; Counterparts 151152
11.18 USA PATRIOT Act 152153
11.19 Authorized Persons and Authorized Signers 152153
11.20 Acknowledgement and Consent to Bail-In of Affected Financial Institutions 152153
11.21 No Novation 153154
11.22 Acknowledgement Regarding Any Supported QFCs 154
11.23 ENTIRE AGREEMENT 155
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SCHEDULES
1.01(A) Excluded Debt Properties
1.01(B) Existing Letters of Credit
2.01 Commitments, Applicable Percentages and Letter of Credit Sublimits
5.05 Supplement to Interim Financial Statements
5.13 Subsidiaries; Jurisdiction of Incorporation/Organization and Principal Place of Business
11.02 Administrative Agent’s Office; Certain Addresses for Notices; Taxpayer Identification Numbers
EXHIBITS
Form of
A Committed Loan Notice
B [Reserved]
C-1 Revolving Credit Note
C-2 Term Note
D Compliance Certificate
E-1 Assignment and Assumption
E-2 Administrative Questionnaire
F [Reserved]
G Joinder Agreement
H U.S. Tax Compliance Certificates
I Solvency Certificate
J Borrower’s Instruction Certificate
K Borrower Remittance Instructions
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as of June 29, 2021, among ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited partnership (the “Borrower”), ACADIA REALTY TRUST, a Maryland real estate investment trust (the “REIT”) and certain subsidiaries of the Borrower from time to time party hereto, as Guarantors, each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), BANK OF AMERICA, N.A. and WELLS FARGO BANK, NATIONAL ASSOCIATION, as L/C Issuers, and BANK OF AMERICA, N.A., as Administrative Agent.
The Borrower, the REIT, the subsidiaries of the Borrower party thereto as guarantors, the lenders party thereto, the swing line lender party thereto, the letter of credit issuer party thereto and the Administrative Agent are party to that certain Credit Agreement, dated as of February 20, 2018 (as amended or otherwise modified prior to the date hereof, the “Existing Credit Agreement”). The parties hereto desire to amend and restate the Existing Credit Agreement in its entirety, but not as a novation, on the terms and subject to the conditions hereinafter set forth.
In consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree that the Existing Credit Agreement shall be, and hereby is, amended and restated in its entirety as follows, effective on and as of the Closing Date, and hereby further covenant and agree as follows:
“Act” has the meaning specified in Section 11.18.
“Adjusted EBITDA” means, as of any date of determination, (i) EBITDA for the then most recently ended period of four consecutive fiscal quarters minus (ii) the aggregate Annual Capital Expenditure Adjustment for all Properties owned by one or more members of the Consolidated Group, provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the aggregate Annual Capital Expenditure Adjustment attributable to Properties owned by such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Adjusted EBITDA, minus (iii) the Consolidated Group Pro Rata Share of the aggregate Annual Capital Expenditure Adjustment for all Properties owned by one or more Unconsolidated Affiliates.
“Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit E-2 or any other form approved by the Administrative Agent.
“Affected Financial Institution” means (a) any EEA Financial Institution, or (b) any UK Financial Institution.
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. For the avoidance of doubt, in no event shall any Arranger, any Bookrunner, the Administrative Agent, any Syndication Agent or any Managing Agent listed on the cover page hereof or any Lender, in their capacities as such, be deemed to be an affiliate of the Borrower.
“Aggregate Deficit Amount” has the meaning specified in Section 10.11.
“Aggregate Excess Amount” has the meaning specified in Section 10.11.
“Agreement” has the meaning specified in the first introductory paragraph hereto.
“Annual Capital Expenditure Adjustment” means, for any Property, an amount equal to the product of (i) $0.20 multiplied by (ii) the aggregate net rentable area (determined on a square feet basis) of such Property.
“Applicable Percentage” means (a) in respect of the Term Facility, with respect to any Term Lender at any time, the percentage (carried out to the ninth decimal place) of the Term Facility represented by (i) on or prior to the Closing Date, such Term Lender’s Term Commitment at such time, and (ii) thereafter, the principal amount of such Term Lender’s Term Loans at such time and (b) in respect of the Revolving Credit Facility, with respect to any Revolving Credit Lender at any time, the percentage (carried out to the ninth decimal place) of the Revolving Credit Facility represented by such Revolving Credit Lender’s Revolving Credit Commitment at such time, subject to adjustment as provided in Section 2.17. If the commitment of each Revolving Credit Lender to make Revolving Credit Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Revolving Credit Commitments have expired, then the Applicable Percentage of each Revolving Credit Lender in respect of the Revolving Credit Facility shall be determined based on the Applicable Percentage of such Revolving Credit Lender in respect of the Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments made in accordance with the terms of this Agreement. The initial Applicable Percentage of each Lender in respect of each Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which such Lender becomes a party hereto, as applicable.
“Applicable Rate” means (i) at any time prior to the Investment Grade Pricing Effective Date, the Leverage-Based Applicable Rate in effect at such time and (ii) at any time on and after the Investment Grade Pricing Effective Date, the Ratings-Based Applicable Rate in effect at such time.
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“Applicable Revolving Credit Percentage” means with respect to any Revolving Credit Lender at any time, such Revolving Credit Lender’s Applicable Percentage in respect of the Revolving Credit Facility at such time.
“Appropriate Lender” means, at any time, (a) with respect to the Term Facility or the Revolving Credit Facility, a Lender that has a Commitment with respect to such Facility or holds a Term Loan or a Revolving Credit Loan, respectively, at such time and (b) with respect to the Letter of Credit Subfacility, (i) the L/C Issuers and (ii) if any Letters of Credit have been issued pursuant to Section 2.03(a), the Revolving Credit Lenders.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Arrangers” means BofA Securities, Wells Fargo Securities, LLC, Truist Securities, Inc. and PNC Capital Markets LLC, in their capacities as joint lead arrangers for the Facilities.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E-1 or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.
“Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.
“Audited Financial Statements” means the audited consolidated balance sheet of the REIT for the fiscal year ended December 31, 2020, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the REIT, including the notes thereto.
“Authorized Person” means any representative of the Borrower duly designated by the Borrower in accordance with the Borrower’s Instruction Certificate, authorized to bind the Borrower in providing draw requests and requesting disbursements of Loan proceeds.
“Authorized Signer” means any representative of the Borrower duly designated by the Borrower in accordance with the Borrower’s Instruction Certificate, authorized to bind the Borrower and to act for the Borrower for all purposes in connection with the Loan, including providing draw requests and requesting disbursements of Loan proceeds, obtaining information pertaining to the Loan, requesting any action under the Loan Documents, providing any certificates, and appointing and changing any Authorized Persons.
“Availability Period” means, in respect of the Revolving Credit Facility, the period from and including the Closing Date to the earliest of (a) the Maturity Date for the Revolving Credit
3
Facility, (b) the date of termination of the Revolving Credit Facility pursuant to Section 2.06, and (c) the date of termination of the commitment of each Revolving Credit Lender to make Revolving Credit Loans and of the obligation of each L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (y) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of such date.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, rule, regulation or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bank of America” means Bank of America, N.A. and its successors.
“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurodollar Rate determined in accordance with clause (b) of the definition thereof, plus 1.00%; and if Base Rate shall be less than 1.00%, such rate shall be deemed to be 1.00%. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. If the Base Rate is being used as an alternate rate of interest pursuant to Section 3.03, then the Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.
“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Base Rate Revolving Credit Loan” means a Revolving Credit Loan that is a Base Rate Loan.
“Benchmark” means, initially, LIBOR; provided that if a replacement of the Benchmark has occurred pursuant to Section 3.03(c) then “Benchmark” means the applicable Benchmark
4
Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate. Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation thereof.
“Benchmark Replacement” means:
(1) For purposes of Section 3.03(c)(i), the first alternative set forth below that can be determined by the Administrative Agent (and, in the case of the alternative set forth in clause (a) below, that has been consented to in writing by the Borrower):
provided that, if initially LIBOR is replaced with the rate contained in clause (b) above (Daily Simple SOFR plus the applicable spread adjustment) and subsequent to such replacement, the Administrative Agent determines that Term SOFR has become available and is administratively feasible for the Administrative Agent in its sole discretion, and the Administrative Agent notifies the Borrower and each Lender of such availability, then with the Borrower’s written consent from and after the beginning of the Interest Period, relevant interest payment date or payment period for interest calculated, in each case, commencing no less than thirty (30) days after the date of such notice, the Benchmark Replacement shall be as set forth in clause (a) above; and
(2) For purposes of Section 3.03(c)(ii), the sum of (a) the alternate benchmark rate and (b) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Administrative Agent and the Borrower as the replacement Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by a Relevant Governmental Body, for Dollar-denominated syndicated credit facilities at such time;
provided that, if the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement and the other Loan Documents.
Any Benchmark Replacement shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Administrative Agent, such Benchmark Replacement shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative or
5
operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Benchmark Transition Event” means, with respect to any then-current Benchmark other than LIBOR, the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark or a Governmental Authority with jurisdiction over such administrator announcing or stating that all Available Tenors are or will no longer be representative, or made available, or used for determining the interest rate of loans, or shall or will otherwise cease, provided that, at the time of such statement or publication, there is no successor administrator that is satisfactory to the Administrative Agent, that will continue to provide any representative tenors of such Benchmark after such specific date.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined and subject to in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“BofA Securities” means BofA Securities, Inc. and its successors.
“Bookrunners” means BofA Securities and Wells Fargo Securities, LLC, in their capacities as joint bookrunners for the credit facilities under this Agreement.
“Borrower” has the meaning specified in the first introductory paragraph hereto.
“Borrower Materials” has the meaning specified in Section 6.02.
“Borrower Remittance Instructions” means, the Borrower’s remittance instructions provided in the form attached hereto as Exhibit K. The Administrative Agent is authorized to follow the instructions in any Borrower Remittance Instructions delivered to the Administrative Agent until five (5) Business Days following receipt of a new Borrower Remittance Instructions accompanied by evidence, reasonably satisfactory to the Administrative Agent, of the authority of the Person executing such new Borrower Remittance Instructions.
“Borrower’s Instruction Certificate” means a certificate provided by or on behalf of the Borrower in the form attached hereto as Exhibit J, designating certain Authorized Persons and Authorized Signers as set forth therein.
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“Borrowing” means a Committed Borrowing.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan or LIBOR Floating Rate Loan, means any such day that is also a London Banking Day.
“Capitalization Rate” means six and one-quarter percent (6.25%).
“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the L/C Issuers or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and the applicable L/C Issuer(s) shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and such L/C Issuer(s). “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Cash Equivalents” means:
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“CFTC” means the Commodity and Futures Trading Commission, and any successor thereto.
“CFTC Regulations” means any and all regulations, rules, directives, or orders now or hereafter promulgated or issued by CFTC relating to Swap Contracts.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation (including, without limitation, Regulation D issued by the FRB) or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith or in the implementation thereof and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.
“Change of Control” means an event or series of events by which:
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“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 11.01.
“Code” means the Internal Revenue Code of 1986.
“Commitment” means a Term Commitment or a Revolving Credit Commitment, as the context may require.
“Commitment Increase Amendment” has the meaning specified in Section 2.15(g).
“Committed Borrowing” means a Revolving Credit Borrowing, a Term Borrowing or an Incremental Term Loan Borrowing, as the context may require.
“Committed Loan” means a Term Loan or a Revolving Credit Loan, as the context may require.
“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to another, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which shall be substantially in the form of Exhibit A or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.
“Compliance Certificate” means a certificate substantially in the form of Exhibit D.
“Communication” means this Agreement, any Loan Document and any document, any amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to any Loan Document.
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“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Group” means, collectively, the Loan Parties and their Consolidated Subsidiaries.
“Consolidated Group Pro Rata Share” means, with respect to any Unconsolidated Affiliate or any Non-Wholly Owned Consolidated Subsidiary, the percentage interest held by the REIT and its Wholly Owned Subsidiaries, in the aggregate, in such Person determined by calculating the percentage of Equity Interests of such Person owned by the REIT and its Wholly Owned Subsidiaries.
“Consolidated Subsidiaries” means, as to any Person, all Subsidiaries of such Person that are consolidated with such Person for financial reporting purposes under GAAP.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Controlled Joint Venture” means a Subsidiary of the Borrower (the “Designated Subsidiary”) that meets each of the following requirements: (i) the Designated Subsidiary owns or ground leases a Property (the “Designated Property”); (ii) the Borrower (either directly or through Wholly Owned Subsidiaries thereof that are not Controlled Joint Ventures) (A) owns 100% of all voting Equity Interests in the Designated Subsidiary, (B) has exclusive operational control over the Designated Property and the Designated Subsidiary, including the ability to cause the Designated Subsidiary to Dispose of, grant Liens in, or otherwise encumber the Designated Property and other assets, incur, repay and prepay Indebtedness, provide Guarantees and make Restricted Payments, in each case without any requirement for the consent of any other Person; and (iii) no Person other than the Borrower is entitled to receive any distributions or other payments from the Designated Subsidiary except upon Disposition of the Designated Property.
“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.
“Creditor Parties” means, collectively, the Administrative Agent, the Lenders, the L/C Issuers and each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05, and the other Persons to whom the Obligations are owing.
“Daily Simple SOFR” with respect to any applicable determination date means the secured overnight financing rate (“SOFR”) published on such date by the Federal Reserve Bank of New York, as the administrator of the benchmark (or a successor administrator) on the Federal Reserve Bank of New York’s website (or any successor source).
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“Debt Rating” means, as of any date of determination, the rating assigned by a Rating Agency to the REIT’s non-credit enhanced, senior unsecured long term debt as in effect on such date.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate, plus (ii) the Applicable Rate for Base Rate Loans under the Revolving Credit Facility (determined using the highest pricing level applied in the then applicable Pricing Grid), plus (iii) 2.00% per annum; provided, however, that (x) with respect to a Base Rate Loan, the Default Rate shall be an interest rate equal to (i) the Base Rate, plus (ii) the Applicable Rate for Base Rate Loans for the Facility under which such Loan was made (determined using the highest pricing level applied in the then applicable Pricing Grid), plus (iii) 2.00% per annum, (y) with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to (i) the Eurodollar Rate, plus (ii) the Applicable Rate for Eurodollar Rate Loans for the Facility under which such Loan was made (determined using the highest pricing level applied in the then applicable Pricing Grid), plus (iii) 2.00% per annum, and (z) with respect to a LIBOR Floating Rate Loan, the Default Rate shall be an interest rate equal to (i) the LIBOR Daily Floating Rate, plus (ii) the Applicable Rate for LIBOR Floating Rate Loans (determined using the highest pricing level applied in the then applicable Pricing Grid), plus (iii) 2.00% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate then applicable to Letter of Credit Fees, plus 2.00% per annum.
“Defaulting Lender” means, subject to Section 2.17(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within three Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any L/C Issuer or any Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or amounts payable pursuant to Section 11.04(c)) within three Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or any L/C Issuer in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause
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(c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.17(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower, each L/C Issuer and each other Lender promptly following such determination.
“Designated Jurisdiction” means any region, country or territory to the extent that such country, region or territory itself is the subject of any Sanction (which on the Closing Date includes Cuba, Iran, North Korea, Syria, and the Crimea region of Ukraine).
“Development Property” means a Property (a) the primary purpose of which is to be leased in the ordinary course of business or to be sold upon completion, (b) on which construction, redevelopment or material rehabilitation of material improvements has commenced and is continuing to be performed and (c) that is classified as “development in progress” on the Borrower’s balance sheet or as a redevelopment project in any publicly filed financial and operating reporting supplement of the REIT, with any such Property remaining as a Development Property until the earlier of (i) such Property achieving an occupancy rate of 75% (based on net leasable area) and (ii) the first anniversary of the substantial completion of construction of such Property and material improvements as evidenced by a temporary or permanent certificate of occupancy; for the avoidance of doubt, on the date of the earlier of the occurrence of clause (i) or clause (ii) such Property will become a Newly Stabilized Property.
“Direct Owner” means, (i) as to any Unencumbered Property that is owned by or ground leased to a Subsidiary of the Borrower, the Subsidiary of the Borrower that directly owns or ground leases such Unencumbered Property and (ii) as to any Unencumbered First Mortgage Receivable held by a Subsidiary of the Borrower, the Subsidiary of the Borrower that directly holds such Unencumbered First Mortgage Loan Receivable.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith and including any disposition of property to a Division Successor pursuant to a Division.
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“Dividing Person” has the meaning given that term in the definition of “Division.”
“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.
“Division Successor” means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division. A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the occurrence of such Division.
“Disqualified Institution” means (a) any competitor of the REIT and its Affiliates that has been specifically identified by name on the DQ List and (b) an Affiliate of any such identified Person that (i) has been specifically identified to the Administrative Agent in writing by the Borrower or (ii) is clearly identifiable on the basis of such Affiliate’s name; provided that “Disqualified Institutions” shall exclude any Person that the Borrower has designated as no longer being a “Disqualified Institution” by written notice delivered to the Administrative Agent and the Lenders from time to time until such time as Borrower has, in accordance with the terms of this Agreement, re-designated such Person as a “Disqualified Institution”.
“Dollar” and “$” mean lawful money of the United States.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.
“DQ List” means the list of Disqualified Institutions provided by the Borrower to the Administrative Agent prior to the Closing Date, as the same may be updated in writing from time to time after the Closing Date upon notice from the Borrower to the Administrative Agent; provided that no such update shall become effective until the second Business Day after it is provided by the Borrower to the Administrative Agent for dissemination to the Lenders.
“Early Opt-in Effective Date” means, with respect to any Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.
“Early Opt-in Election” means the occurrence of:
(1) a determination by the Administrative Agent, or a notification by the Borrower to the Administrative Agent that the Borrower has made a determination, that U.S. dollar-denominated syndicated credit facilities currently being executed, or that include language similar to that contained in Section 3.03(c), are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR, and
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(2) the joint election by the Administrative Agent and the Borrower to replace LIBOR with a Benchmark Replacement and the provision by the Administrative Agent of written notice of such election to the Lenders.
“EBITDA” means, with respect to the Consolidated Group for any period, the sum of (a) Net Income for such period, in each case, excluding, without duplication, (i) any non-recurring or extraordinary gains and losses for such period, (ii) any income or gain and any loss in each case resulting from the early extinguishment of indebtedness during such period and (iii) any net income or gain or any loss resulting from a Swap Contract (including by virtue of a termination thereof) during such period, plus (b) an amount which, in the determination of Net Income for such period pursuant to clause (a) above, has been deducted for or in connection with: (i) Interest Expense (plus, amortization of deferred financing costs, to the extent included in the determination of Interest Expense per GAAP), (ii) income taxes, (iii) depreciation and amortization, all as determined in accordance with GAAP for such period, (iv) adjustments as a result of the straight lining of rents, (v) non-cash charges and (vi) transaction costs incurred in connection with the Loan Documents (and any amendment, consent, supplement or waiver thereto), plus (c) the Consolidated Group Pro Rata Share of the foregoing items attributable to the Consolidated Group’s interests in Unconsolidated Affiliates; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the foregoing items and components attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary for such period shall be included in the calculation of EBITDA.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Copy” shall have the meaning specified in Section 11.17.
“Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.
“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 11.06(b)(iii)). For the avoidance of doubt, no Disqualified Institution shall be an Eligible Assignee.
“Eligible Ground Lease” means a ground lease that on the date of determination (a) has a minimum remaining term of thirty (30) years, including extension options controlled exclusively
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by the tenant, (b) permits the Loan Party party thereto to grant a Lien thereon to secure the Obligations without the consent of any Person (other than any consent that has been obtained), (c) no default has occurred and is continuing, and no terminating event has occurred by any Loan Party or Subsidiary thereof, thereunder, (d) is not encumbered by any Liens, negative pledges and/or encumbrances, (e) no party thereto is subject to a proceeding under any Debtor Relief Law and (f) is otherwise reasonably acceptable to the Administrative Agent.
“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.
“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
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Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
“ESA” has the meaning specified in Section 6.17.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Eurodollar Rate” means:
“Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate based on clause (a) of the definition of “Eurodollar Rate.”
“Event of Default” has the meaning specified in Section 8.01.
“Excepted Unencumbered Property” means any Unencumbered Property the occupancy rate with respect to which is less than 75% and that is designated as a Excepted Unencumbered Property by Borrower in any calculation of the covenant set forth in clause (ii) of Section 6.18.
“Excluded Debt” means any and all Non-Recourse Indebtedness secured solely by one of (a) the Properties listed on Schedule 1.01(A), (b) Properties owned by Specified Subsidiaries and/or (c) the Equity Interests of the Subsidiary of the Borrower that owns any such Properties.
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“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 11.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii), (a)(iii) or (c), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.
“Existing Credit Agreement” has the meaning specified in the second introductory paragraph hereto.
“Existing Letter of Credit” means a “Letter of Credit” issued pursuant to the terms of, and as defined in, the Existing Credit Agreement and outstanding on the Closing Date and described on Schedule 1.01(B).
“Existing Maturity Date” has the meaning specified in Section 2.14(a).
“Existing Revolving Credit Note” means a “Revolving Credit Note” as defined in the Existing Credit Agreement.
“Existing Term Loan” has the meaning specified in Section 2.01(b).
“Existing Term Note” means a “Term Note” as defined in the Existing Credit Agreement.
“Extension Notice” has the meaning specified in Section 2.14(a).
“Facility” means the Term Facility, the Revolving Credit Facility and/or any Incremental Term Loan Facility, as the context may require.
“Facility Fee” has the meaning specified in Section 2.09(a)(ii).
“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471 (b) (1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement,
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treaty or convention among Governmental Authorities entered into in connection with the implementation of the foregoing.
“Federal Funds Rate” means, for any day, the rate per annum calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depository institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the federal funds effective rate; provided that if the Federal Funds Rate as so determined would be less than zero, such rate shall be deemed to be zero for purposes of the Loan Documents.
“Fee Letters” means, collectively, the several letter agreements, each dated on or after April 26, 2021 and prior to the Closing Date, among the Borrower and an Arranger and any other parties thereto, that are identified therein as a “fee letter”, and “Fee Letter” means any of them individually.
“First Maturity Date Extension” has the meaning specified in Section 2.14(a).
“Fixed Charges” means, with respect to the Consolidated Group, as of any date of determination, an amount equal to the sum, without duplication, of (i) Interest Expense for the most recently ended period of four consecutive fiscal quarters, (ii) scheduled payments of principal on Total Indebtedness made or required be made during the most recently ended fiscal quarter (excluding any balloon payments payable on maturity of any such Total Indebtedness), (iii) the amount of dividends or distributions paid or required to be paid by any member of the Consolidated Group to any Person that is not a member of the Consolidated Group during the most recently ended period of four consecutive fiscal quarters in respect of its preferred Equity Interests and (iv) the Consolidated Group Pro Rata Share of the foregoing items attributable to the Consolidated Group’s interests in Unconsolidated Affiliates. For the avoidance of doubt, with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the foregoing items and components attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Fixed Charges.
“Foreign Lender” means a Lender that is not a U.S. Person.
“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Fronting Exposure” means, at any time there is a Defaulting Lender such Defaulting Lender’s Applicable Revolving Credit Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
“Funds From Operations” means, with respect to any period and without double counting, an amount equal to the Net Income for such period, excluding gains (or losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships
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and joint ventures; provided that “Funds From Operations” shall exclude impairment charges, charges from the early extinguishment of indebtedness and other non-cash charges as evidenced by a certification of a Responsible Officer of the REIT containing calculations in reasonable detail satisfactory to the Administrative Agent. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect “Funds From Operations” on the same basis. In addition, “Funds from Operations” shall be adjusted to remove any impact of the expensing of acquisition costs pursuant to FAS 141 (revised), as issued by the Financial Accounting Standards Board in December of 2007, and effective January 1, 2009, including, without limitation, (i) the addition to Net Income of costs and expenses related to ongoing consummated acquisition transactions during such period; and (ii) the subtraction from Net Income of costs and expenses related to acquisition transactions terminated during such period.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
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“Guarantor Release Notice” has the meaning specified in Section 10.12(b).
“Guarantors” means, collectively, the REIT and each Subsidiary Guarantor.
“Guaranty” means the Guaranty made by the Guarantors under Article X in favor of the Creditor Parties.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“Impacted Loans” has the meaning specified in Section 3.03(a).
“Increase Effective Date” has the meaning specified in Section 2.15(a).
“Incremental Commitments” has the meaning specified in Section 2.15(a).
“Incremental Revolving Commitment” has the meaning specified in Section 2.15(a).
“Incremental Term Commitment” has the meaning specified in Section 2.15(a).
“Incremental Term Loan” means an advance made by an Incremental Term Loan Lender under an Incremental Term Loan Facility.
“Incremental Term Loan Borrowing” means, with respect to any Incremental Term Loan Facility a borrowing consisting of simultaneous Incremental Term Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Incremental Term Loan Lenders with respect to such Incremental Term Loan Facility pursuant to the applicable Commitment Increase Amendment.
“Incremental Term Loan Facility” has the meaning specified in Section 2.15(a).
“Incremental Term Loan Lender” means, at any time, any Lender that holds an Incremental Term Loan.
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
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For all purposes hereof: (a) the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person, (b) the Indebtedness of the Consolidated Group shall include, with respect to the foregoing items and components thereof attributable to Indebtedness of Non-Wholly Owned Consolidated Subsidiaries, only the Consolidated Group Pro Rata Share thereof, (c) the Indebtedness of the Consolidated Group shall include the Consolidated Group Pro Rata Share of the foregoing items and components thereof attributable to Indebtedness of Unconsolidated Affiliates, (d) the amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date and (e) the amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitee” has the meaning specified in Section 11.04(b).
“Indirect Owner” means, (a) as to any Unencumbered Property owned by or ground leased to a Subsidiary of the Borrower, each other Subsidiary of the Borrower that owns a direct or
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indirect interest in the Direct Owner of such Unencumbered Property and (b) as to any Unencumbered First Mortgage Receivable held by a Subsidiary of the Borrower, each other Subsidiary of the Borrower that owns a direct or indirect interest in the Direct Owner of such Unencumbered First Mortgage Receivable.
“Information” has the meaning specified in Section 11.07.
“Interest Expense” means, for any period, without duplication, total interest expense of the Consolidated Group for such period (including the Consolidated Group Pro Rata Share of total interest expense attributable to the Consolidated Group’s ownership interests in Unconsolidated Affiliates and, for the avoidance of doubt, capitalized interest); provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the total interest expense of such Non-Wholly Owned Consolidated Subsidiary for such period shall be included in Interest Expense.
“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan or a LIBOR Floating Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates and (b) as to any Base Rate Loan and any LIBOR Floating Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made.
“Interest Period” means as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one or three months thereafter (in each case, subject to availability), as selected by the Borrower in its Committed Loan Notice, or such other period that is six months or less requested by the Borrower and consented to by all the Appropriate Lenders; provided that:
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any
22
arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
“Investment Grade Credit Rating” means receipt of a Debt Rating of Baa3 or better from Moody’s or BBB- or better from S&P.
“Investment Grade Pricing Effective Date” means the first Business Day following the date on which (i) the REIT has obtained an Investment Grade Credit Rating and (ii) the Borrower has delivered to the Administrative Agent a certificate executed by a Responsible Officer of the Borrower (i) certifying that an Investment Grade Credit Rating has been obtained by the REIT and is in effect (which certification shall also set forth the Debt Rating(s) received, if any, from each Rating Agency as of such date) and (ii) notifying the Administrative Agent that the Borrower has irrevocably elected to have the Ratings-Based Applicable Rate apply to the pricing of the Facilities.
“Investment Grade Release” has the meaning specified in Section 10.12.
“IRS” means the United States Internal Revenue Service.
“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
“ISP” means the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time).
“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the applicable L/C Issuer and the Borrower (or any Subsidiary) or in favor of such L/C Issuer and relating to such Letter of Credit.
“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.
“L/C Advance” means, with respect to each Revolving Credit Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Revolving Credit Percentage.
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“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.
“L/C Issuers” means, collectively, (i) Bank of America and (ii) Wells Fargo, in each case in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder; provided that for so long as any Existing Letter of Credit remains outstanding hereunder, the issuer of such Existing Letter of Credit shall continue to be the L/C Issuer with respect to such Existing Letter of Credit. Any L/C Issuer may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such L/C Issuer, in which case the term “L/C Issuer” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. Each reference herein to the “L/C Issuer” in connection with a Letter of Credit or other matter shall be deemed to be a reference to the relevant L/C Issuer with respect thereto.
“L/C Obligations” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time, including any automatic or scheduled increases provided for by the terms of such Letters of Credit, determined without regard to whether any conditions to drawing could be met at that time, plus (b) the aggregate amount of all Unreimbursed Amounts, including all L/C Borrowings. The L/C Obligations of any Revolving Credit Lender at any time shall be its Applicable Revolving Credit Percentage of the total L/C Obligations at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a) of the UCP or Rule 3.13 or Rule 3.14 of the ISP or similar terms of the Letter of Credit itself, or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be “outstanding” and “undrawn” in the amount so remaining available to be paid, and the obligations of the Borrower and each Revolving Credit Lender shall remain in full force and effect until the L/C Issuers and the Revolving Credit Lenders shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.
“Lender” and “Lenders” have the meanings specified in the first introductory paragraph hereto.
“Lender Party” and “Lender Recipient Party” means collectively, the Lenders and the L/C Issuers.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent, which office may include any Affiliate of such Lender or any domestic or foreign branch of such Lender or such Affiliate. Unless the context otherwise requires each reference to a Lender shall include its applicable Lending Office.
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“Letter of Credit” means any standby letter of credit issued hereunder providing for the payment of cash upon the honoring of a presentation thereunder and shall include the Existing Letters of Credit.
“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable L/C Issuer.
“Letter of Credit Fee” has the meaning specified in Section 2.03(h).
“Letter of Credit Subfacility” means, at any time, an amount equal to the lesser of (a) the aggregate amount of the L/C Issuers’ Letter of Credit Sublimits at such time and (b) the Revolving Credit Facility at such time. The Letter of Credit Subfacility is part of, and not in addition to, the Revolving Credit Facility. On the Closing Date, the amount of the Letter of Credit Subfacility is $60,000,000.
“Letter of Credit Sublimit” means, as to each L/C Issuer, its agreement as set forth in Section 2.03 to issue, amend and extend Letters of Credit in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such L/C Issuer’s name on Schedule 2.01, or in the Assignment and Assumption, New Lender Joinder Agreement or other documentation, which other documentation shall be in form and substance satisfactory to the Administrative Agent, pursuant to which such L/C Issuer becomes an L/C Issuer hereunder, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Leverage-Based Applicable Rate” means the applicable percentages per annum set forth below determined by reference to the ratio of Total Indebtedness to Total Asset Value as set forth in the most recent Compliance Certificate received by the Administrative Agent and the Lenders pursuant to Section 6.02(b):
Leverage-Based Applicable Rate |
||||||
Pricing Level |
Ratio of Total Indebtedness to Total Asset Value |
Revolving Credit Facility |
Term Facility |
|||
Eurodollar Rate, LIBOR Daily Floating Rate and Letters of Credit |
Base Rate |
Facility Fee |
Eurodollar Rate |
Base Rate |
||
I |
< 35% |
1.250% |
0.250% |
0.200% |
1.400% |
0.400% |
II |
≥ 35% but < 40% |
1.350% |
0.350% |
0.200% |
1.500% |
0.500% |
III |
≥ 40% but < 45% |
1.400% |
0.400% |
0.200% |
1.550% |
0.550% |
IV |
≥ 45% but < 50% |
1.450% |
0.450% |
0.250% |
1.650% |
0.650% |
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Leverage-Based Applicable Rate |
||||||
Pricing Level |
Ratio of Total Indebtedness to Total Asset Value |
Revolving Credit Facility |
Term Facility |
|||
Eurodollar Rate, LIBOR Daily Floating Rate and Letters of Credit |
Base Rate |
Facility Fee |
Eurodollar Rate |
Base Rate |
||
V |
≥ 50% but < 55% |
1.550% |
0.550% |
0.300% |
1.800% |
0.800% |
VI |
≥ 55% |
1.700% |
0.700% |
0.350% |
2.000% |
1.000% |
Any increase or decrease in the Leverage-Based Applicable Rate resulting from a change in the ratio of Total Indebtedness to Total Asset Value shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level VI shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance Certificate is delivered.
Notwithstanding anything to the contrary contained in this definition, (a) from the Closing Date through the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b) for the fiscal quarter ending June 30, 2021 the Leverage-Based Applicable Rate in effect shall be at Pricing Level II and (b) the determination of the Leverage-Based Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).
“LIBOR” has the meaning specified in the definition of Eurodollar Rate.
“LIBOR Daily Floating Rate” for any day, a fluctuating rate of interest per annum equal to LIBOR as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by Administrative Agent from time to time), at approximately 11:00 a.m., London time, two (2) London Banking Days prior to such day, for Dollar deposits with a term of one (1) month commencing that day; provided that (x) to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate will be applied in a manner consistent with market practice; provided, further, that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate will be applied in a manner as otherwise reasonably determined by the Administrative Agent and (y) if the LIBOR Daily Floating Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“LIBOR Floating Rate Loan” means a Revolving Credit Loan that bears interest at a rate based on the LIBOR Daily Floating Rate.
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“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, negative pledge, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).
“Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Committed Loan.
“Loan Documents” means this Agreement, including schedules and exhibits hereto, each Note, each Issuer Document, any agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of Section 2.16 of this Agreement, the Fee Letters and any amendments, modifications or supplements hereto or to any other Loan Document or waiver hereof or to any other Loan Document.
“Loan Parties” means, collectively, (a) at any time prior to the Investment Grade Release, the Borrower and the Guarantors and (b) upon and at any time following the Investment Grade Release, the Borrower, the Guarantors (if any) and the Owners.
“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.
“Material Acquisition” means any acquisition or series of acquisitions by a member of the Consolidated Group in which the aggregate purchase price of all assets (including any Equity Interests) acquired pursuant thereto exceeds ten percent (10%) of the Total Asset Value as of the last day of the then most recently ended fiscal quarter of the REIT for which financial statements are publicly available.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, assets, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the REIT or the Borrower and its Subsidiaries taken as a whole; (b) a material adverse effect on the rights and remedies of the Administrative Agent or any Lender under any Loan Document or of the ability of the Loan Parties taken as a whole to perform their obligations under any Loan Document; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.
“Material Contract” means, with respect to any Person, each contract to which such Person is a party involving aggregate consideration payable to or by such Person of $5,000,000 or more in any year or that is otherwise material to the business, condition (financial or otherwise), operations, performance, properties or prospects of such Person.
“Maturity Date” means (a) with respect to the Revolving Credit Facility, the later of (i) fourth anniversary of the Closing Date and (ii) if maturity is extended pursuant to Section 2.14, such extended maturity date as determined pursuant to such Section and (b) with respect to the Term Facility, the fifth anniversary of the Closing Date; provided, however, that, in each case, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.
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“Maturity Date Extension” has the meaning specified in Section 2.14(a).
“Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances an amount equal to 105% of the Fronting Exposure of all L/C Issuers with respect to Letters of Credit issued and outstanding at such time and (ii) otherwise, an amount determined by the Administrative Agent and the L/C Issuers in their sole discretion.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Mortgage Loan Receivable” means any loan or other note receivable owned by or held by the Borrower or a Wholly Owned Subsidiary of the Borrower that is a Domestic Subsidiary, in each case, secured by a mortgage or deed of trust on Real Property.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including the Borrower or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.
“Net Cash Proceeds” means, with respect to any issuance or sale by the REIT of any of its Equity Interests, the excess of (i) the sum of the cash and Cash Equivalents received by the REIT in connection with such issuance or sale, less (ii) underwriting discounts and commissions, and other reasonable out-of-pocket expenses, incurred by the REIT in connection with such issuance or sale, other than any such amounts paid or payable to an Affiliate of the REIT.
“Net Income” means, for any period, the sum, without duplication, of (i) the net income (or loss) of the REIT and its Wholly Owned Subsidiaries for such period and (ii) the aggregate amount of cash actually distributed by Non-Wholly Owned Subsidiaries and Unconsolidated Affiliates during such period to the REIT or its Wholly Owned Subsidiary as a dividend or other distribution; provided, however, that Net Income shall exclude (a) extraordinary gains and extraordinary losses for such period and (b) the net income of any Wholly Owned Subsidiary of the REIT during such period to the extent that the declaration or payment of dividends or similar distributions by such Wholly Owned Subsidiary of such income is not permitted by operation of the terms of its Organization Documents or any agreement, instrument or Law applicable to such Wholly Owned Subsidiary during such period, except that the REIT’s equity in any net loss of any such Wholly Owned Subsidiary for such period shall be included in determining Net Income, and (and in the case of a dividend or other distribution to a Wholly Owned Subsidiary of the REIT, such Wholly Owned Subsidiary is not precluded from further distributing such amount to the REIT as described in clause (b) of this proviso).
“Net Operating Income” means, with respect to any Property for any period, an amount equal to (a) the aggregate gross revenues from the operation of such Property during such period from tenants (as determined in accordance with GAAP), minus (b) the sum of all expenses and other proper charges incurred in connection with the operation of such Property during such period
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(including management fees (which deduction for management fees shall be an amount equal to the greater of (x) three percent (3.00%) of the aggregate base rent and percentage rent due and payable with respect to such Property during such period and (y) the aggregate amount of any actual management, advisory or similar fees paid during such period) and accruals for real estate taxes and insurance, but excluding debt service charges, income taxes, depreciation, amortization and other non-cash expenses), which expenses and accruals shall be calculated in accordance with GAAP.
“New Lender Joinder Agreement” means a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel pursuant to which an Eligible Assignee becomes a Lender.
“Newly Acquired Property” means, as of any date, a Property (other than a Development Property) that has been owned or ground leased for less than four full fiscal quarters as of such date.
“Newly Stabilized Property” means as of any date a Property that as of such date is not a Development Property, but was a Development Property at some time during the most recently ended period of four full fiscal quarters.
“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all Lenders, all Lenders of a Facility or all affected Lenders in accordance with the terms of Section 11.01 and (ii) has been approved by the Required Lenders or the Required Term Lenders or Required Revolving Lenders, as applicable.
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“Non-Recourse Indebtedness” means, with respect to a Person, (a) Indebtedness in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, voluntary bankruptcy, collusive involuntary bankruptcy and other similar customary exceptions to nonrecourse liability) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness, (b) if such Person is a Single Asset Entity, any Indebtedness of such Person (other than Indebtedness described in the immediately following clause (c)), or (c) if such Person is a Single Asset Holding Company, any Indebtedness (“Holdco Indebtedness”) of such Single Asset Holding Company resulting from a Guarantee of, or Lien securing, Indebtedness of a Single Asset Entity that is a Subsidiary of such Single Asset Holding Company, so long as, in each case, either (i) recourse for payment of such Holdco Indebtedness (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, voluntary bankruptcy, collusive involuntary bankruptcy and other similar customary exceptions to nonrecourse liability) is contractually limited to the Equity Interests held by such Single Asset Holding Company in such Single Asset Entity or (ii) such Single Asset Holding Company has no assets other than Equity Interests in such Single Asset Entity and cash and other assets of nominal value incidental to the ownership of such Single Asset Entity.
“Non-Recourse Subsidiary” means a Subsidiary that (a) is not a Specified SubsidiaryLoan Party and (b) is not a Specified Subsidiary, (c) has no Indebtedness other than Non-Recourse
29
Indebtedness and (d) has no assets other than (i) de minimis amounts of cash and (ii) assets securing Non-Recourse Indebtedness.
“Non-Recourse Threshold Amount” means $90,000,000.
“Non-Wholly Owned Consolidated Subsidiary” means a Consolidated Subsidiary of the REIT that is not a Wholly Owned Subsidiary of the REIT.
“Note” means a Term Note, a Revolving Credit Note or a promissory note made by the Borrower in favor of an Incremental Term Loan Lender under an Incremental Term Loan Facility evidencing the Incremental Term Loans made by such Incremental Term Loan Lender under such Incremental Term Loan Facility substantially in a form agreed among the Borrowers, the Administrative Agent and such Incremental Term Loan Lenders, as the context may require.
“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Off-Balance Sheet Arrangement” means any transaction, agreement or other contractual arrangement to which a Non-Wholly Owned Subsidiary or an Unconsolidated Affiliate is a party, under which any member of the Consolidated Group has:
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“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Rate Early Opt-in” means the Administrative Agent and the Borrower have elected to replace LIBOR with a Benchmark Replacement other than a SOFR-based rate pursuant to (1) an Early Opt-in Election and (2) Section 3.03(c)(ii) and paragraph (2) of the definition of “Benchmark Replacement”.
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).
“Outstanding Amount” means (i) with respect to Committed Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Committed Loans occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts.
“Owner” means, as to any Unencumbered Property or Unencumbered First Mortgage Receivable, the Direct Owner of such Unencumbered Property or Unencumbered First Mortgage Receivable, as the case may be, or any Indirect Owner of such Direct Owner.
“Pari Passu Obligations” means Unsecured Indebtedness of any Loan Party (exclusive of the Obligations) owing to a Person that is not a member of the Consolidated Group or an Affiliate thereof.
“Participant” has the meaning specified in Section 11.06(d).
“Participant Register” has the meaning specified in Section 11.06(d).
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“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Act” means the Pension Protection Act of 2006.
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
“Permitted Equity Encumbrances” means
“Permitted Pari Passu Provisions” means provisions that are contained in documentation evidencing or governing Pari Passu Obligations which provisions are the result of (a) limitations on the ability of a Loan Party or any of its Subsidiaries to make Restricted Payments or transfer property to the Borrower or any Guarantor which limitations, taken as a whole, are substantially the same as or less restrictive than those contained in this Agreement, (b) limitations on the creation of any Lien on any assets of a Loan Party that, taken as a whole, are substantially the same as or less restrictive than those contained in this Agreement or (c) any requirement that Pari Passu Obligations be secured on an “equal and ratable basis” to the extent that the Obligations are secured.
“Permitted Property Encumbrances” means:
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“Permitted Swap Contract” means shall mean any Swap Contract entered into in accordance with the terms and provisions of Section 7.17.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Borrower or any ERISA Affiliate or any such Plan to which the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.
“Platform” has the meaning specified in Section 6.02.
“Pricing Grid” means (i) prior to the Investment Grade Pricing Effective Date, the pricing grid set forth in the definition of “Leverage-Based Applicable Rate” and (ii) on and after the Investment Grade Pricing Effective Date, the pricing grid set forth in the definition of “Ratings-Based Applicable Rate”.
“Property” means any real property assets owned or leased or acquired by one or more of the Borrower and its Subsidiaries.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
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“Public Lender” has the meaning specified in Section 6.02.
“Rating Agency” means any of S&P or Moody’s.
“Ratings-Based Applicable Rate” means the applicable percentages per annum determined, at any time, based on the range into which the Debt Ratings then fall, in accordance with the following table:
Ratings-Based Applicable Rate |
||||||
Pricing Level |
Debt Ratings (Moody’s/S&P) |
Revolving Credit Facility |
Term Facility |
|||
Eurodollar Rate, LIBOR Daily Floating Rate and Letters of Credit |
Base Rate |
Facility Fee |
Eurodollar Rate |
Base Rate |
||
I |
≥ A- / A3 |
0.725% |
0.000% |
0.125% |
0.800% |
0.000% |
II |
BBB+ / Baa1 |
0.775% |
0.000% |
0.150% |
0.850% |
0.000% |
III |
BBB / Baa2 |
0.850% |
0.000% |
0.200% |
1.000% |
0.000% |
IV |
BBB- / Baa3 |
1.050% |
0.050% |
0.250% |
1.250% |
0.250% |
V |
< BBB- / Baa3 (or unrated) |
1.400% |
0.400% |
0.300% |
1.650% |
0.650% |
If at any time the REIT has two (2) Debt Ratings, and such Debt Ratings are not equivalent, then: (A) if the difference between such Debt Ratings is one ratings category (e.g. Baa2 by Moody’s and BBB- by S&P), the Ratings-Based Applicable Rate shall be the rate per annum that would be applicable if the higher of the Debt Ratings were used; and (B) if the difference between such Debt Ratings is two ratings categories (e.g. Baa1 by Moody’s and BBB- by S&P) or more, the Ratings-Based Applicable Rate shall be the rate per annum that would be applicable if the rating that is one higher than the lower of the applicable Debt Ratings were used.
Initially, the Ratings-Based Applicable Rate shall be determined based upon the Debt Rating(s) specified in the certificate delivered pursuant to clause (ii) of the definition of “Investment Grade Pricing Effective Date”. Thereafter, each change in the Ratings-Based Applicable Rate resulting from a publicly announced change in a Debt Rating shall be effective, in the case of an upgrade, during the period commencing on the date of delivery by the REIT to the Administrative Agent of notice thereof pursuant to Section 6.03(e) and ending on the date immediately preceding the effective date of the next such change and, in the case of a downgrade, during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.
“Real Property” means real property assets that are (a) owned or acquired by one or more Persons that are not members of the Consolidated Group, (b) located in the United States of
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America and (c) either (i) a retail facility or (ii) a mixed-use facility with respect to which at least 75% of gross income is expected to be generated by the retail component of such facility.
“Recipient” means the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder.
“Recourse Indebtedness” means Indebtedness for borrowed money (other than Indebtedness under the Loan Documents) in respect of which recourse for payment is to any Loan Party, excluding any Indebtedness in which recourse for payment to any Loan Party is limited solely for fraud, misrepresentation, misapplication of cash, waste, failure to pay taxes, environmental claims and liabilities and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guaranty or indemnification agreements in non-recourse financings of real estate. For the avoidance of doubt, “Recourse Indebtedness” shall include Indebtedness arising under Guarantees by a Loan Party of Non-Recourse Indebtedness and Guarantees by a Loan Party of obligations under Swap Contracts to the extent that (x) such Guarantee provides for recourse to such Loan Party or any of its assets and (y) the guarantor’s obligations under such Guarantee have become payable or cash collateral in respect thereof has been demanded. For purposes of Section 8.01(e) the amount of Recourse Indebtedness of such Loan Party arising under any such Guarantee shall be the maximum face amount payable by it thereunder.
“Register” has the meaning specified in Section 11.06(c).
“REIT” has the meaning specified in the first introductory paragraph hereto.
“REIT Status” means, with respect to any Person, (a) the qualification of such Person as a real estate investment trust under the provisions of Sections 856 et seq. of the Code and (b) the applicability to such Person and its shareholders of the method of taxation provided for in Sections 857 et seq. of the Code.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors, consultants, service providers and representatives of such Person and of such Person’s Affiliates.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“Relevant Payment” has the meaning specified in Section 10.11.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.
“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice and (b) with respect to an L/C Credit Extension, a Letter of Credit Application.
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“Required Lenders” means, as of any date of determination, two or more Lenders having greater than 50% of the sum of (a) the Total Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (b) the aggregate unused Commitments; provided that the unused Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders; provided further that, Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Revolving Credit Lender shall be deemed to be held by the applicable L/C Issuer in making such determination.
“Required Revolving Lenders” means, as of any date of determination, two or more Revolving Credit Lenders having greater than 50% of the sum of the (a) Total Revolving Credit Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders; provided further that, the amount of any participation in any Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Revolving Credit Lender shall be deemed to be held by the applicable L/C Issuer in making such determination.
“Required Subsidiary Guarantor” means (a) at all times prior to an Investment Grade Release, each Owner with respect to any Property to be included as an Unencumbered Property, and (b) upon and at all times following an Investment Grade Release, each Owner with respect to any Property to be included as an Unencumbered Property (if any) that is a borrower or guarantor of, or is otherwise obligated in respect of, any Unsecured Indebtedness (other than Indebtedness under the Facilities), but only for so long as such Subsidiary remains obligated in respect of such Unsecured Indebtedness, in each case under clauses (a) and (b), together with their successors and permitted assigns, in each case, to the extent such Subsidiary has not been released from its obligations hereunder in accordance with Section 10.12.
“Required Term Lenders” means, as of any date of determination, two or more Term Lenders having greater than 50% of the Term Facility on such date; provided that the portion of the Term Facility held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Term Lenders.
“Rescindable Amount” has the meaning specified in Section 2.12(b)(ii).
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means (a) in the case of the Borrower, (i) the chief executive officer, president, chief financial officer, treasurer, chief accounting officer or controller of the Borrower (or if the Borrower does not have any officers, of the general partner of the Borrower) designated as an “Authorized Signer” in Section I of the Borrower’s Instruction Certificate, (ii) solely for
36
purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary of the Borrower (or if the Borrower does not have any officers, of the general partner of the Borrower) and (iii) solely for purposes of notices given pursuant to Article II, any officer or employee of the Borrower (or if the Borrower does not have any officers, of the general partner of the Borrower) designated as an “Authorized Person” in Section II of the Borrower’s Instruction Certificate, (b) in the case of any other Loan Party that has one or more officers, (i) the chief executive officer, president, chief financial officer, treasurer, chief accounting officer or controller of the applicable Loan Party for whom the Administrative Agent has received an incumbency certificate, (ii) solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary of the applicable Loan Party and (iii) solely for purposes of notices given pursuant to Article II, any officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent and for whom the Administrative Agent has received an incumbency certificate, and (c) in the case of any other Loan Party that does not have any officers, (i) the chief executive officer, president, chief financial officer, treasurer, chief accounting officer or controller of the general partner, manager, managing member or member, as applicable, of such Loan Party for whom the Administrative Agent has received an incumbency certificate, (ii) solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary of the general partner, manager, managing member or member, as applicable, of such Loan Party and (iii) solely for purposes of notices given pursuant to Article II, any officer or employee of the general partner, manager, managing member or member, as applicable, of such Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent and for whom the Administrative Agent has received an incumbency certificate. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party (or general partner, manager, managing member or member, as applicable, of such Loan Party) and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any Subsidiary thereof, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to such Person’s stockholders, partners or members (or the equivalent Person thereof).
“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Revolving Credit Lenders pursuant to Section 2.01(a).
“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.01(a) and (b) purchase participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption or
37
New Lender Joinder Agreement pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Revolving Credit Exposure” means, as to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Lender’s participation in L/C Obligations at such time.
“Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time. On the Closing Date, the Revolving Credit Facility is $300,000,000.
“Revolving Credit Lender” means, at any time, any Lender that has a Revolving Credit Commitment at such time.
“Revolving Credit Loan” has the meaning specified in Section 2.01(a).
“Revolving Credit Note” means a promissory note made by the Borrower in favor of a Revolving Credit Lender evidencing Revolving Credit Loans made by such Lender, substantially in the form of Exhibit C-1.
“S&P” means S&P Global Ratings, a division of S&P Global, and any successor to its rating agency business.
“Sanction(s)” means any sanction administered or enforced by the United States Government (including without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Second Maturity Date Extension” has the meaning specified in Section 2.14(a).
“Secured Indebtedness” means, with respect to any Person, all Indebtedness of such Person that is secured by a Lien on any asset (including without limitation any Equity Interest) owned or held by any Person or any Subsidiary thereof; provided that a negative pledge shall not, in and of itself, cause any Indebtedness to be considered to be Secured Indebtedness.
“Secured Recourse Indebtedness” means, with respect to any Person, Recourse Indebtedness of such Person that is secured by a Lien.
“Single Asset Entity” means a Person (other than an individual) that (a) only owns or leases pursuant to an Eligible Ground Lease a single real property and/or cash and other assets of nominal value incidental to such Person’s ownership of such real property; (b) is engaged only in the business of owning, developing and/or leasing such real property; and (c) receives substantially all of its gross revenues from such real property. In addition, if the assets of a Person consist solely of (i) Equity Interests in one or more other Single Asset Entities and (ii) cash and other assets of nominal value incidental to such Person’s ownership of the other Single Asset Entities, such Person
38
shall also be deemed to be a Single Asset Entity for purposes of this Agreement (such an entity, a “Single Asset Holding Company”).
“Single Asset Holding Company” has the meaning specified in the definition of Single Asset Entity.
“SOFR” has the meaning specified in the definition of Daily Simple SOFR.
“SOFR Early Opt-in” means the Administrative Agent and the Borrower have elected to replace LIBOR pursuant to (1) an Early Opt-in Election and (2) Section 3.03(c)(i) and paragraph (1) of the definition of “Benchmark Replacement”.
“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“Solvency Certificate” means a Solvency Certificate of the chief financial officer or the chief accounting officer of the REIT, substantially in the form of Exhibit I.
“Specified Event of Default” means any Event of Default other than an Event of Default arising under (a) Section 8.01(b) solely from the Borrower’s or another Loan Party’s failure to perform or observe any term, covenant or agreement contained in any of Sections 6.01(c), 6.02(c), (e) or (h), 6.05(a) (solely with respect to a Subsidiary that is not a Loan Party), (b) or (c), or 6.10 or (b) Section 8.01(c).
“Specified Subsidiary” means any Subsidiary that (a) is not an Ownera Loan Party, and (b) would not be a Subsidiary but for the governing body or management of such Subsidiary being controlled, directly, or indirectly through one or more intermediaries, or both, by the REIT or its Subsidiaries.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the REIT.
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“Subsidiary Guarantor” means, at any time, a Subsidiary that at such time is a party to the Guaranty.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.
“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).
“Tangible Net Worth” means, for the Consolidated Group as of any date of determination, (a) total equity of the Consolidated Group, minus (b) all intangible assets of the Consolidated Group (other than lease intangibles), plus (c) all accumulated depreciation and amortization of the Consolidated Group, in each case on a consolidated basis determined in accordance with GAAP; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the foregoing items and components attributable to the
40
Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Tangible Net Worth.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Borrowing” means a borrowing consisting of simultaneous Term Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01(b).
“Term Commitment” means, as to each Lender, its obligation to make and/or hold Term Loans to the Borrower pursuant to Section 2.01(b) in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Term Lender’s name on Schedule 2.01 under the caption “Term Commitment” or opposite such caption in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which such Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Term Facility” means, (a) at any time on or prior to the Closing Date, the aggregate amount of the Term Lenders’ Term Commitments at such time and (b) at any time after the Closing Date, the aggregate amount of Term Loans of all Term Lenders outstanding at such time. On the Closing Date, the Term Facility is $400,000,000.
“Term Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Term Commitment at such time and (b) at any time after the Closing Date, any Lender that holds a Term Loan at such time.
“Term Loan” means an advance made by a Term Lender under the Term Facility.
“Term Note” means a promissory note made by the Borrower in favor of a Term Lender evidencing Term Loans made by such Term Lender, substantially in the form of Exhibit C-2.
“Term SOFR” means, for the applicable corresponding tenor (or if any Available Tenor of a Benchmark does not correspond to an Available Tenor for the applicable Benchmark Replacement, the closest corresponding Available Tenor and if such Available Tenor corresponds equally to two Available Tenors of the applicable Benchmark Replacement, the corresponding tenor of the shorter duration shall be applied), the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Threshold Amount” means $30,000,000.
“Total Asset Value” means, with respect to the Consolidated Group as at any date of determination, without duplication, the sum of the following:
41
42
Notwithstanding the foregoing, for purposes of calculating Total Asset Value at any time the contribution for certain types of Investments shall be limited, without duplication, as follows (in each case, calculated on the basis of the Consolidated Group Pro Rata Share of such Investment consistent with the foregoing) with any excess over such limit being excluded from Total Asset Value:
43
“Total Credit Exposure” means, as to any Lender at any time, the Applicable Percentage of the Term Facility, the unused Revolving Credit Commitment and Revolving Credit Exposure of such Lender at such time.
“Total Indebtedness” means, as at any date of determination, the aggregate amount of all Indebtedness of the Consolidated Group on such date determined on a consolidated basis; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of Indebtedness attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Total Indebtedness.
“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.
“Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of all Revolving Credit Loans and L/C Obligations.
“Total Secured Indebtedness” means, as at any date of determination, the aggregate amount of all Secured Indebtedness of the Consolidated Group on such date determined on a consolidated basis; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of Secured Indebtedness attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Total Secured Indebtedness.
“Total Unsecured Indebtedness” means, as at any date of determination, the aggregate amount of all Unsecured Indebtedness of the Consolidated Group on such date determined on a consolidated basis; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of Unsecured Indebtedness attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Total Unsecured Indebtedness.
“Type” means, with respect to a Committed Loan, its character as a Base Rate Loan, LIBOR Daily Floating Rate Loan or a Eurodollar Rate Loan.
“UCP” means the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600 (or such later version thereof as may be in effect at the applicable time).
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
44
“Unconsolidated Affiliate” means, at any date, an Affiliate of the REIT whose financial results are not required to be consolidated with the financial results of the REIT in accordance with GAAP.
“Unencumbered Asset Value” means, at any time for the Consolidated Group, without duplication, the sum of the following:
45
Notwithstanding the foregoing, for purposes of calculating Unencumbered Asset Value at any time, the contribution for certain types of Investments shall be limited, without duplication, as follows (in each case, calculated on the basis of the Consolidated Group Pro Rata Share of such Investment consistent with the foregoing) with any excess over such limit being excluded from Unencumbered Asset Value:
“Unencumbered First Mortgage Receivable” means any Mortgage Loan Receivable that meets each of the following criteria:
46
“Unencumbered NOI” means, at any time for the Consolidated Group, the sum of the Net Operating Income of all Unencumbered Properties for the then most recently ended period of four consecutive fiscal quarters, minus Net Operating Income attributable to Unencumbered Properties that were Disposed of by the Consolidated Group during such period, minus the aggregate Annual Capital Expenditure Adjustment for such period with respect to all Unencumbered Properties.
“Unencumbered Property” means any Property that meets each of the following criteria:
47
“United States” and “U.S.” mean the United States of America.
“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).
“Unrestricted Cash” means, at any time, (a) the aggregate amount of cash and Cash Equivalents of a Person at such time that are not subject to any pledge, Lien or control agreement (excluding statutory Liens in favor of any depositary bank where such cash and Cash Equivalents are maintained), minus (b) amounts included in the foregoing clause (a) that are held by a Person other than a member of the Consolidated Group as a deposit or security for Contractual Obligations.
“Unsecured Indebtedness” means, with respect to any Person, all Indebtedness of such Person that is not Secured Indebtedness, including Indebtedness under the Loan Documents.
“Unsecured Interest Expense” means, for any period, the portion of Interest Expense for such period in respect of Total Unsecured Indebtedness determined in accordance with GAAP.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(III).
“USA PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
“Usage” means, with respect to any day, the ratio (expressed as a percentage) of (a) the sum of (i) the Outstanding Amount of Revolving Credit Loans on such day and (ii) the Outstanding Amount of L/C Obligations on such day to (b) the Revolving Credit Commitments in effect on such day.
“Wells Fargo” means Wells Fargo Bank, National Association and its successors.
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“Wholly-Owned” means, with respect to the ownership by any Person of any Property, that one hundred percent (100%) of the title to such Property is held in fee directly or indirectly by, or one hundred percent (100%) of such Property is ground leased pursuant to an Eligible Ground Lease directly or indirectly by, such Person.
“Wholly Owned Subsidiary” means, as to any Person, (a) any corporation 100% of whose Equity Interests (other than directors’ qualifying shares) is at the time owned by such Person and/or one or more Wholly Owned Subsidiaries of such Person and (b) any partnership, association, joint venture, limited liability company or other entity in which such Person and/or one or more Wholly Owned Subsidiaries of such Person have a 100% equity interest at such time; provided that, solely for purposes of clause (c) of the definition of “Unencumbered Property”, the term Wholly Owned Subsidiary shall include a Controlled Joint Venture.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
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The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will immediately notify the applicable L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against such L/C Issuer and its correspondents unless such notice is given as aforesaid.
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The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the Collateral Account. Moneys in the Collateral Account shall be applied by the Administrative Agent to reimburse each L/C Issuer for L/C Disbursements for which it has not been reimbursed, together with related fees, costs, and customary processing charges, and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the L/C Obligations at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Credit Lenders with L/C Obligations representing 66-2/3% of the total L/C Obligations), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived.
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(ii) Upon the request of the Required Lenders, while any Event of Default exists (other than as set forth in clause (b)(i) above), the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
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(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or any L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the applicable L/C Issuer, as the case may be, the amount due. With respect to any payment that the Administrative Agent makes for the account of the Lenders or any L/C Issuer hereunder as to which the Administrative Agent determines (which determination shall be conclusive absent manifest error) that any of the following applies (such payment referred to as the “Rescindable Amount”): (1) the Borrower has not in fact made such payment; (2) the Administrative Agent has made a payment in excess of the amount so paid by the Borrower (whether or not then owed); or (3) the Administrative agent has for any reason otherwise erroneously made such payment; then each of the Lenders or the applicable L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the Rescindable Amount so distributed to such Lender or such L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(iii) Notice. A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
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Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.
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(ii) Each Lender and each L/C Issuer shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender or such L/C Issuer (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (y) the Administrative Agent and the Loan Parties, as applicable,
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against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Loan Parties, as applicable, against any Excluded Taxes attributable to such Lender or such L/C Issuer, in each case, that are payable or paid by the Administrative Agent or a Loan Party in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender and each L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or such L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).
(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii) Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,
(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable
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request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed
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copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(iii) Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
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(y) On the Early Opt-in Effective Date in respect of an Other Rate Early Opt-in, the Benchmark Replacement will replace LIBOR for all purposes hereunder and under any Loan Document in respect of any setting of such Benchmark on such day and all subsequent settings without any amendment to, or further action or consent of any other party to this Agreement or any other Loan Document.
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and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or such L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or such L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or such L/C Issuer, the Borrower will pay to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or such L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.
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including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.
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Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
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Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to another Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.
Each Loan Party represents and warrants to the Administrative Agent and the Lenders that:
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So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, each Loan Party shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03, 6.11, and 6.15) cause each Subsidiary thereof to:
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As to any information contained in materials furnished pursuant to Section 6.02(d), the Loan Parties shall not be separately required to furnish such information under subsection (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Loan Parties to furnish the information and materials described in subsections (a) and (b) above at the times specified therein.
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Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the REIT posts such documents, or provides a link thereto on the REIT’s website on the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents are posted on the REIT’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that the REIT shall notify the Administrative Agent and each Lender (by facsimile or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and each Lender shall be solely responsible for maintaining its copies of such documents.
Each Loan Party hereby acknowledges that (a) the Administrative Agent, the Bookrunners and/or the Arrangers may, but shall not be obligated to, make available to the Lenders and the L/C Issuers materials and/or information provided by or on behalf of any Loan Party hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the REIT or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. Each Loan Party hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” each Loan Party shall be deemed to have authorized the Administrative Agent, the Bookrunners, the Arrangers, the L/C Issuers and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Loan Parties or their respective securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent, the Bookrunners and the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”
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Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.
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So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, no Loan Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly:
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Notwithstanding anything to the contrary contained herein, in no event shall the Borrower be permitted to (i) merge, dissolve or liquidate or consolidate with or into any other Person unless after giving effect thereto the Borrower is the sole surviving Person of such transaction and no Change of Control results therefrom, (ii) consummate a Division or (iii) engage in any transaction pursuant to which it is reorganized or reincorporated in any jurisdiction other than a state of the United States or the District of Columbia.
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For the avoidance of doubt, nothing in this Section 7.05 restricts the issuance, sale or other Disposition of Equity Interests of the REIT, to the extent that such issuance, sale or other Disposition does not result in Change of Control.
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provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Loan Party under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of each L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuers (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuers (including fees and time charges for attorneys who may be employees of any Lender or any L/C Issuer) and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause Third payable to them;
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Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause Fourth held by them;
Fifth, to the Administrative Agent for the account of the L/C Issuers, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Sections 2.03 and 2.16; and
Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Sections 2.03(c) and 2.16, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuers, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 11.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or any L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or any L/C Issuer in any such proceeding.
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Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.
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Anything contained in this Guaranty to the contrary notwithstanding, it is the intention of each Guarantor and the Creditor Parties that the obligations of each Guarantor (other than the REIT) hereunder at any time shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code (Title 11, United States Code) or any comparable provisions of any similar federal or state law. To that end, but only in the event and to the extent that after giving effect to Section 10.11, such Guarantor’s obligations with respect to the Obligations or any payment made pursuant to such Obligations would, but for the operation of the first sentence of this paragraph, be subject to avoidance or recovery in any such proceeding under applicable Debtor Relief Laws after giving effect to Section 10.11, the amount of such Guarantor’s obligations with respect to the Obligations shall be limited to the largest amount which, after giving effect thereto, would not, under applicable Debtor Relief Laws, render such Guarantor’s obligations with respect to the Obligations unenforceable or avoidable or otherwise subject to recovery under applicable Debtor Relief Laws. To the extent any payment actually made pursuant to the Obligations exceeds the limitation of the first sentence of this paragraph and is otherwise subject to avoidance and recovery in any such proceeding under applicable Debtor Relief Laws, the amount subject to avoidance shall in all events be limited to the amount by which such actual payment exceeds such limitation, and the Obligations as limited by the first sentence of this paragraph shall in all events remain in full force and effect and be fully enforceable against such Guarantor. The first sentence of this paragraph is intended solely to preserve the rights of the Creditor Parties hereunder against such Guarantor in such proceeding to the maximum extent permitted by applicable Debtor Relief Laws and neither such Guarantor, the Borrower, any other Guarantor nor any other Person shall have any right or claim under such sentence that would not otherwise be available under applicable Debtor Relief Laws in such proceeding.
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(i) the Borrower shall have delivered to the Administrative Agent, at least five (5) Business Days prior to the date of the proposed release or re-designation (or such shorter period of time as agreed to by the Administrative Agent in writing), a written request for such release or re-designation (a “Guarantor Release Notice”) which shall identify the Subsidiary or Property, as applicable, to which it applies and the proposed date of the release or re-designation,
(ii) the representations and warranties made or deemed made by the Loan Parties in any Loan Document are true and correct in all material respects on and as of the date of such release or re-designation and, both before and after giving effect to such release or re-designation (without duplication of materiality qualifiers set forth in such representations
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and warranties), except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties are true and correct in all material respects on and as of such earlier date without duplication of materiality qualifiers set forth in such representations and warranties) and except that for purposes of this Section 10.12(b), the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01,
(iii) immediately after giving effect to such release or re-designation the Loan Parties shall be in compliance, on a pro forma basis, with the provisions of Section 7.11,
(iv) no Default shall have occurred and be continuing or would result under any other provision of this Agreement after giving effect to such release or re-designation, and
(v) the Borrower shall have delivered to the Administrative Agent an Officer’s Certificate certifying that the conditions in clauses (ii) through (iv) above have been satisfied.
Upon the satisfaction of the conditions in clauses (i) through (v) above, each Unencumbered Property that is owned or ground leased directly or indirectly by a Subsidiary Guarantor that is the subject of a release pursuant to this Section 10.12(b) will immediately upon such release cease to be an Unencumbered Property.
The Administrative Agent will (at the sole cost of the Borrower) following receipt of such Guarantor Release Notice and Officer’s Certificate, and each of the Lenders and each of the L/C Issuers irrevocably authorizes the Administrative Agent to, execute and deliver such documents as the Borrower or such Subsidiary Guarantor may reasonably request as is necessary or desirable to evidence the release of such Subsidiary Guarantor from its obligations under the Guaranty or the re-designation of such Property to no longer be an Unencumbered Property, as applicable, which documents shall be reasonably satisfactory to the Administrative Agent.
(i) the Borrower shall have delivered to the Administrative Agent, at least five (5) Business Days prior to the date of the proposed release or re-designation (or such shorter period of time as agreed to by the Administrative Agent in writing), a Guarantor Release Notice,which notice shall identify the Subsidiary or Property, as applicable, to which it applies, the proposed date of the release or re-designation, as applicable, and specify, in the case of a release of a Subsidiary Guarantor from its obligations under the Guaranty, whether the Subsidiary Guarantor to which such notice relates will be a borrower or guarantor of, or otherwise have payment obligations in respect of, any Unsecured Indebtedness,
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(ii) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects on and as of the effective date of such release or re-designation and, both before and after giving effect to such release or re-designation, except (A) to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, (B) any representation or warranty that is already by its terms qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects as of such applicable date (including such earlier date set forth in the foregoing clause (A)) after giving effect to such qualification and (C) for purposes of this Section 10.12(c), the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01,
(iii) immediately after giving effect to such release or re-designation, the Loan Parties shall be in compliance, on a pro forma basis, with the provisions of Section 7.11,
(iv) no Default shall have occurred and be continuing or would result under any other provision of this Agreement after giving effect to such release or re-designation, and
(v) the Borrower shall have delivered to the Administrative Agent an Officer’s Certificate certifying that the conditions in clauses (ii) through (iv) above have been satisfied.
For the avoidance of doubt, if a Subsidiary Guarantor is a borrower or guarantor of, or is otherwise obligated in respect of, any Indebtedness at the time that it is released from its obligations under the Guaranty, each Unencumbered Property that is owned or ground leased directly or indirectly by such Subsidiary Guarantor that is the subject of a release pursuant to this Section 10.12(c) will immediately upon such release cease to be an Unencumbered Property.
The Administrative Agent will (at the sole cost of the Borrower) following receipt of such Guarantor Release Notice and Officer’s Certificate, and each of the Lenders and each of the L/C Issuers irrevocably authorizes the Administrative Agent to, execute and deliver such documents as the Borrower or such Subsidiary Guarantor may reasonably request as is necessary or desirable to evidence the release of such Subsidiary Guarantor from its obligations under the Guaranty or the re-designation of such Property to no longer be an Unencumbered Property, as applicable, which documents shall be reasonably satisfactory to the Administrative Agent.
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and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuers in addition to the Lenders required above, affect the rights or duties of any L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, (x) affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document or (y) amend or waive, or consent to any departure from, the definitions of “LIBOR”, “Available Tenor”, “Benchmark”, “Benchmark Replacement”, “Benchmark Replacement Conforming Changes”, “Benchmark Transition Event”, “Daily Simple SOFR”, “Early Opt-in Effective Date”, “Early Opt-in Election”, “Other Rate Early Opt-in”, “Relevant Governmental Body”, “SOFR”, “SOFR Early Opt-in”, or “Term SOFR” or the provisions of Section 3.03; and (iii) any Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein,
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Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
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Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and all of the L/C Issuers; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any L/C Issuer from exercising the rights and remedies that inure to its benefit (solely in its capacity as an L/C Issuer) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
138
139
140
141
142
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.
143
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 11.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
144
145
146
For purposes of this Section, “Information” means all information received from any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any L/C Issuer on a nonconfidential basis prior to disclosure by any Loan Party or any Subsidiary thereof, provided that, in the case of information received from any Loan Party or any Subsidiary thereof after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
147
The Administrative Agent, each Lender and each L/C Issuer each acknowledges that (a) the Information may include material non-public information concerning a Loan Party or a Subsidiary thereof, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Laws, including United States Federal and state securities Laws.
Notwithstanding anything herein to the contrary, the Administrative Agent, each Lender, each L/C Issuer and each of their respective Related Parties may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of any transaction and all materials of any kind (including opinions or other tax analyses) that are provided to the Administrative Agent, any Lender, any L/C Issuer or any of their respective Related Parties relating to such tax treatment or tax structure.
148
149
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
150
151
152
Neither the Administrative Agent nor any L/C IsserIssuer shall be responsible for or have any duty to ascertain or inquire into the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document (including, for the avoidance of doubt, in connection with the Administrative Agent’s or any L/C Issuer’s reliance on any Electronic Signature transmitted by telecopy, emailed .pdf or any other electronic means). The Administrative Agent and any L/C Issuer shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any Communication (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution or signed using an Electronic Signature) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).
Each of the Loan Parties and each Lender Party hereby waives (i) any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document based solely on the lack of paper original copies of this Agreement, such other Loan Document, and (ii) waives any claim against the Administrative Agent, each Lender Party and each Related Party for any liabilities arising solely from the Administrative Agent’s and/or any Lender Party’s reliance on or use of Electronic Signatures, including any liabilities arising as a result of the failure of the Loan Parties to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.
153
154
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
155
“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
[signature pages immediately follow]
156
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
BORROWER:
ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA REALTY TRUST, its General Partner
By:
Name: Jason Blacksberg
Title: Senior Vice President
[Signature Page to Second Amended and Restated Credit Agreement]
GUARANTORS:
ACADIA REALTY TRUST, a Maryland real estate investment trust
By:
Name: Jason Blacksberg
Title: Senior Vice President
ACADIA 1520 MILWAUKEE AVENUE LLC, a Delaware limited liability company
ACADIA 2914 THIRD AVENUE LLC, a Delaware limited liability company
ACADIA 5-7 EAST 17TH STREET LLC, a Delaware limited liability company
ACADIA 83 SPRING STREET LLC, a Delaware limited liability company
ACADIA BARTOW AVENUE LLC, a Delaware limited liability company
ACADIA CHESTNUT LLC, a Delaware limited liability company
ACADIA GOLD COAST LLC, a Delaware limited liability company
ACADIA MAD RIVER PROPERTY LLC, a Delaware limited liability company
ACADIA MERCER STREET LLC, a Delaware limited liability company
ACADIA RUSH WALTON LLC, a Delaware limited liability company
[Signature Page to Second Amended and Restated Credit Agreement]
ACADIA TOWN LINE, LLC, a Connecticut limited liability company
ACADIA WEST 54TH STREET LLC, a Delaware limited liability company
ACADIA WEST SHORE EXPRESSWAY LLC, a Delaware limited liability company
MARK PLAZA FIFTY L.P., a Pennsylvania limited partnership
By: ACADIA MARK PLAZA LLC, its General Partner
ACADIA MARK PLAZA LLC, a Delaware limited liability company
RD ABINGTON ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
RD ABSECON ASSOCIATES, L.P, a Delaware limited partnership
By: ACADIA ABSECON LLC, its General Partner
ACADIA ABSECON LLC, a Delaware limited liability company
RD BLOOMFIELD ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
[Signature Page to Second Amended and Restated Credit Agreement]
RD HOBSON ASSOCIATES, L.P., a Delaware limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
MARK TWELVE ASSOCIATES, LP, a Pennsylvania limited partnership
By: ACADIA HOBSON LLC, its General Partner
ACADIA HOBSON LLC, a Delaware limited liability company
RD METHUEN ASSOCIATES LIMITED PARTNERSHIP, a Massachusetts limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
ACADIA PROPERTY HOLDINGS, LLC, a Delaware limited liability company
ACADIA 181 MAIN STREET LLC, a Delaware limited liability company
ACADIA CHICAGO LLC, a Delaware limited liability company
ACADIA CONNECTICUT AVENUE LLC, a Delaware limited liability company
8-12 EAST WALTON LLC, a Delaware limited liability company
RD BRANCH ASSOCIATES, L.P., a New York limited partnership
By: Acadia Property Holdings, LLC, its General Partner
ACADIA WEST DIVERSEY LLC, a Delaware limited liability company
[Signature Page to Second Amended and Restated Credit Agreement]
868 BROADWAY LLC, a Delaware limited liability company
120 WEST BROADWAY LLC, a Delaware limited liability company
11 EAST WALTON LLC, a Delaware limited liability company
865 WEST NORTH AVENUE LLC, a Delaware limited liability company
61 MAIN STREET OWNER LLC, a Delaware limited liability company
252-264 GREENWICH AVENUE RETAIL LLC, a Delaware limited liability company
2520 FLATBUSH AVENUE LLC, a Delaware limited liability company
ACADIA CLARK-DIVERSEY LLC, a Delaware limited liability company
ACADIA NEW LOUDON LLC, a Delaware limited liability company
131-135 PRINCE STREET LLC, a Delaware limited liability company
201 NEEDHAM STREET OWNER LLC, a Delaware limited liability company
SHOPS AT GRAND AVENUE LLC, a Delaware limited liability company
2675 GEARY BOULEVARD LP, a Delaware limited partnership
By: 2675 City Center Partner LLC, its General Partner
[Signature Page to Second Amended and Restated Credit Agreement]
2675 CITY CENTER PARTNER LLC, a Delaware limited liability company
ACADIA NAAMANS ROAD LLC, a Delaware limited liability company
ACADIA CRESCENT PLAZA LLC, a Delaware limited liability company
RD ELMWOOD ASSOCIATES, L.P., a Delaware limited partnership
By: Acadia Elmwood Park LLC, its General Partner
ACADIA ELMWOOD PARK LLC, a Delaware limited liability company
ROOSEVELT GALLERIA LLC, a Delaware limited liability company
ACADIA 56 EAST WALTON LLC, a Delaware limited liability company
ACADIA SECOND CITY 843-45 WEST ARMITAGE LLC, a Delaware limited liability company
ACADIA SECOND CITY 1521 WEST BELMONT LLC, a Delaware limited liability company
ACADIA SECOND CITY 2206-08 NORTH HALSTEAD LLC, a Delaware limited liability company
ACADIA SECOND CITY 2633 NORTH HALSTEAD LLC, a Delaware limited liability company
[Signature Page to Second Amended and Restated Credit Agreement]
HEATHCOTE ASSOCIATES, L.P., a New York limited partnership
By: Acadia Heathcote LLC, its General Partner
ACADIA HEATHCOTE LLC, a Delaware limited liability company
152-154 SPRING STREET RETAIL LLC, a Delaware limited liability company
ACADIA 152-154 SPRING STREET RETAIL LLC, a Delaware limited liability company
165 NEWBURY STREET OWNER LLC, a Delaware limited liability company
ACADIA 639 WEST DIVERSEY LLC, a Delaware limited liability company
ACADIA BRENTWOOD LLC, a Delaware limited liability company
41 GREENE STREET OWNER LLC, a Delaware limited liability company
47-49 GREENE STREET OWNER LLC, a Delaware limited liability company
51 GREENE STREET OWNER LLC, a Delaware limited liability company
53 GREENE STREET OWNER LLC, a Delaware limited liability company
849 W. ARMITAGE OWNER LLC, a Delaware limited liability company
912 W. ARMITAGE OWNER LLC, a Delaware limited liability company
[Signature Page to Second Amended and Restated Credit Agreement]
BEDFORD GREEN LLC, a Delaware limited liability company
ACADIA 4401 WHITE PLAINS ROAD LLC, a Delaware limited liability company
ACADIA MERRILLVILLE LLC, a Delaware limited liability company
37 GREENE STREET OWNER LLC, a Delaware limited liability company
907 W. ARMITAGE OWNER LLC, a Delaware limited liability company
45 GREENE STREET OWNER LLC, a Delaware limited liability company
8436-8452 MELROSE OWNER LP, a Delaware limited partnership
By: 8436-8452 MELROSE GENERAL PARTNER LLC, its General Partner
8436-8452 MELROSE GENERAL PARTNER LLC, a Delaware limited liability company
917 W. ARMITAGE OWNER LLC, a Delaware limited liability company
CALIFORNIA & ARMITAGE MAIN OWNER LLC, a Delaware limited liability company
ACADIA TOWN CENTER HOLDCO LLC, a Delaware limited liability company
ACADIA MARKET SQUARE, LLC, a Delaware limited liability company
ACADIA NORTH MICHIGAN AVENUE LLC, a Delaware limited liability company
[Signature Page to Second Amended and Restated Credit Agreement]
565 BROADWAY OWNER LLC, a Delaware limited liability company
ACADIA BRANDYWINE HOLDINGS, LLC, a Delaware limited liability company
By:
Name: Jason Blacksberg
Title: Senior Vice President
on behalf of the 82 entities listed above
[Signature Page to Second Amended and Restated Credit Agreement]
RD SMITHTOWN, LLC, a Delaware limited liability company
By: ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA REALTY TRUST, its General Partner
By:
Name: Jason Blacksberg
Title: Senior Vice President
[Signature Page to Second Amended and Restated Credit Agreement]
bank of america, n.a., as Administrative Agent
By:
Name: Henry G. Pennell
Title: Vice President
[Signature Page to Second Amended and Restated Credit Agreement]
bank of america, n.a., as a Lender and an L/C Issuer
By:
Name: Gregory Egli
Title: Senior Vice President
[Signature Page to Second Amended and Restated Credit Agreement]
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender and an L/C Issuer
By:
Name: Craig V. Koshkarian
Title: Director
[Signature Page to Second Amended and Restated Credit Agreement]
PNC BANK, NATIONAL ASSOCIATION, as a Lender
By:
Name: Brian Kelly
Title: Senior Vice President
[Signature Page to Second Amended and Restated Credit Agreement]
TRUIST BANK, Successor by Merger to SunTrust Bank, as a Lender
By:
Name: Ryan Almond
Title: Director
[Signature Page to Second Amended and Restated Credit Agreement]
TD BANK, N.A., as a Lender
By:
Name: Gianna Gioia
Title: Vice President
[Signature Page to Second Amended and Restated Credit Agreement]
JPMORGAN CHASE BANK, N.A., as a Lender
By:
Name: Christian Lunt
Title: Executive Director
[Signature Page to Second Amended and Restated Credit Agreement]
CITIBANK, N.A., as a Lender
By:
Name: David Bouton
Title: Authorized Signatory
[Signature Page to Second Amended and Restated Credit Agreement]
PEOPLE’S UNITED BANK, N.A., as a Lender
By:
Name: David J. Jablonowski
Title: Vice President
[Signature Page to Second Amended and Restated Credit Agreement]
GOLDMAN SACHS BANK USA, as a Lender
By:
Name: Rebecca Katz
Title: Authorized Signatory
[Signature Page to Second Amended and Restated Credit Agreement]
Exhibit 10.15
Execution Copy
SECOND AMENDMENT
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDMENT, dated as of December 21, 2022 (this “Amendment”), to the Second Amended and Restated Credit Agreement, dated as of June 29, 2021, by and among Acadia Realty Limited Partnership, a Delaware limited partnership (the “Borrower”), Acadia Realty Trust, a Maryland real estate investment trust (the “REIT”) and certain subsidiaries of the Borrower from time to time party thereto, as guarantors, the Lenders and L/C Issuers from time to time party thereto, and Bank of America, N.A., as Administrative Agent (as heretofore amended, modified, extended, restated, replaced, or supplemented, the “Existing Credit Agreement”). Any term used herein and not otherwise defined herein shall have the meaning assigned to such term in the Existing Credit Agreement, as amended by this Amendment (the “Amended Credit Agreement”).
WHEREAS, the Borrower and the Lenders party hereto have agreed to modify the Existing Credit Agreement as herein set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
The Administrative Agent’s receipt of the following, each of which shall be originals, telecopies or in .pdf or other electronic format in each case in accordance with Section 11.17 of the Existing Credit Agreement as incorporated herein pursuant to Section 8 hereof:
172823271
1
172823271
2
172823271
3
THIS AMENDMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[The remainder of this page left blank intentionally]
172823271
4
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date hereof.
BORROWER:
ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA REALTY TRUST, its General Partner
By: /s/ Jason Blacksberg
Name: Jason Blacksberg
Title: Senior Vice President
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
GUARANTORS:
Each of the Guarantors is hereby executing this Amendment for the purposes of acknowledging its agreement to the representations and warranties made by such Guarantor under Section 3 of this Amendment, the affirmations made by such Guarantor under Section 4 of this Amendment and the ratifications, affirmations, confirmations and agreements made under Section 5 of this Amendment.
ACADIA REALTY TRUST, a Maryland real estate investment trust
By: /s/ Jason Blacksberg
Name: Jason Blacksberg
Title: Senior Vice President
ACADIA 1520 MILWAUKEE AVENUE LLC, a Delaware limited liability company
ACADIA 2914 THIRD AVENUE LLC, a Delaware limited liability company
ACADIA 5-7 EAST 17TH STREET LLC, a Delaware limited liability company
ACADIA 83 SPRING STREET LLC, a Delaware limited liability company
ACADIA BARTOW AVENUE LLC, a Delaware limited liability company
ACADIA CHESTNUT LLC, a Delaware limited liability company
ACADIA GOLD COAST LLC, a Delaware limited liability company
ACADIA MAD RIVER PROPERTY LLC, a Delaware limited liability company
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
ACADIA MERCER STREET LLC, a Delaware limited liability company
ACADIA RUSH WALTON LLC, a Delaware limited liability company
ACADIA TOWN LINE, LLC, a Connecticut limited liability company
ACADIA WEST 54TH STREET LLC, a Delaware limited liability company
ACADIA WEST SHORE EXPRESSWAY LLC, a Delaware limited liability company
MARK PLAZA FIFTY L.P., a Pennsylvania limited partnership
By: ACADIA MARK PLAZA LLC, its General Partner
ACADIA MARK PLAZA LLC, a Delaware limited liability company
RD ABINGTON ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
RD ABSECON ASSOCIATES, L.P, a Delaware limited partnership
By: ACADIA ABSECON LLC, its General Partner
ACADIA ABSECON LLC, a Delaware limited liability company
RD BLOOMFIELD ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
RD HOBSON ASSOCIATES, L.P., a Delaware limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
MARK TWELVE ASSOCIATES, LP, a Pennsylvania limited partnership
By: ACADIA HOBSON LLC, its General Partner
ACADIA HOBSON LLC, a Delaware limited liability company
RD METHUEN ASSOCIATES LIMITED PARTNERSHIP, a Massachusetts limited partnership
By: ACADIA PROPERTY HOLDINGS, LLC, its General Partner
ACADIA PROPERTY HOLDINGS, LLC, a Delaware limited liability company
ACADIA 181 MAIN STREET LLC, a Delaware limited liability company
ACADIA CHICAGO LLC, a Delaware limited liability company
ACADIA CONNECTICUT AVENUE LLC, a Delaware limited liability company
8-12 EAST WALTON LLC, a Delaware limited liability company
RD BRANCH ASSOCIATES, L.P., a New York limited partnership
By: Acadia Property Holdings, LLC, its General Partner
ACADIA WEST DIVERSEY LLC, a Delaware limited liability company
868 BROADWAY LLC, a Delaware limited liability company
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
120 WEST BROADWAY LLC, a Delaware limited liability company
11 EAST WALTON LLC, a Delaware limited liability company
865 WEST NORTH AVENUE LLC, a Delaware limited liability company
61 MAIN STREET OWNER LLC, a Delaware limited liability company
252-264 GREENWICH AVENUE RETAIL LLC, a Delaware limited liability company
2520 FLATBUSH AVENUE LLC, a Delaware limited liability company
ACADIA CLARK-DIVERSEY LLC, a Delaware limited liability company
ACADIA NEW LOUDON LLC, a Delaware limited liability company
131-135 PRINCE STREET LLC, a Delaware limited liability company
201 NEEDHAM STREET OWNER LLC, a Delaware limited liability company
SHOPS AT GRAND AVENUE LLC, a Delaware limited liability company
2675 GEARY BOULEVARD LP, a Delaware limited partnership
By: 2675 City Center Partner LLC, its General Partner
2675 CITY CENTER PARTNER LLC, a Delaware limited liability company
ACADIA NAAMANS ROAD LLC, a Delaware limited liability company
ACADIA CRESCENT PLAZA LLC, a Delaware limited liability company
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
RD ELMWOOD ASSOCIATES, L.P., a Delaware limited partnership
By: Acadia Elmwood Park LLC, its General Partner
ACADIA ELMWOOD PARK LLC, a Delaware limited liability company
ROOSEVELT GALLERIA LLC, a Delaware limited liability company
ACADIA 56 EAST WALTON LLC, a Delaware limited liability company
ACADIA SECOND CITY 843-45 WEST ARMITAGE LLC, a Delaware limited liability company
ACADIA SECOND CITY 1521 WEST BELMONT LLC, a Delaware limited liability company
ACADIA SECOND CITY 2206-08 NORTH HALSTEAD LLC, a Delaware limited liability company
ACADIA SECOND CITY 2633 NORTH HALSTEAD LLC, a Delaware limited liability company
HEATHCOTE ASSOCIATES, L.P., a New York limited partnership
By: Acadia Heathcote LLC, its General Partner
ACADIA HEATHCOTE LLC, a Delaware limited liability company
152-154 SPRING STREET RETAIL LLC, a Delaware limited liability company
ACADIA 152-154 SPRING STREET RETAIL LLC, a Delaware limited liability company
165 NEWBURY STREET OWNER LLC, a Delaware limited liability company
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
ACADIA 639 WEST DIVERSEY LLC, a Delaware limited liability company
ACADIA BRENTWOOD LLC, a Delaware limited liability company
41 GREENE STREET OWNER LLC, a Delaware limited liability company
47-49 GREENE STREET OWNER LLC, a Delaware limited liability company
51 GREENE STREET OWNER LLC, a Delaware limited liability company
53 GREENE STREET OWNER LLC, a Delaware limited liability company
849 W. ARMITAGE OWNER LLC, a Delaware limited liability company
912 W. ARMITAGE OWNER LLC, a Delaware limited liability company
BEDFORD GREEN LLC, a Delaware limited liability company
ACADIA 4401 WHITE PLAINS ROAD LLC, a Delaware limited liability company
ACADIA MERRILLVILLE LLC, a Delaware limited liability company
37 GREENE STREET OWNER LLC, a Delaware limited liability company
907 W. ARMITAGE OWNER LLC, a Delaware limited liability company
45 GREENE STREET OWNER LLC, a Delaware limited liability company
8436-8452 MELROSE OWNER LP, a Delaware limited partnership
By: 8436-8452 MELROSE GENERAL PARTNER LLC, its General Partner
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
8436-8452 MELROSE GENERAL PARTNER LLC, a Delaware limited liability company
917 W. ARMITAGE OWNER LLC, a Delaware limited liability company
CALIFORNIA & ARMITAGE MAIN OWNER LLC, a Delaware limited liability company
ACADIA TOWN CENTER HOLDCO LLC, a Delaware limited liability company
ACADIA MARKET SQUARE, LLC, a Delaware limited liability company
ACADIA NORTH MICHIGAN AVENUE LLC, a Delaware limited liability company
565 BROADWAY OWNER LLC, a Delaware limited liability company
ACADIA BRANDYWINE HOLDINGS, LLC, a Delaware limited liability company
RD SMITHTOWN, LLC, a New York limited liability company
1324 14TH STREET OWNER LLC, a Delaware limited liability company
1526 14TH STREET OWNER LLC, a Delaware limited liability company
1529 14TH STREET OWNER LLC, a Delaware limited liability company
121 SPRING STREET OWNER LLC, a Delaware limited liability company
ACADIA 28 JERICHO TURNPIKE LLC, a Delaware limited liability company
BEVERLY OWNER LP, a Delaware limited partnership
BEVERLY OWNER GP LLC, a Delaware limited liability company
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
2622-2634 HENDERSON AVE OWNER LLC, a Delaware limited liability company
HENDERSON AVE DEV 1 OWNER LLC, a Delaware limited liability company
HENDERSON AVE DEV 2 OWNER LLC, a Delaware limited liability company
HENDERSON AVE GRAND OWNER LLC, a Delaware limited liability company
HENDERSON AVE LAND OWNER LLC, a Delaware limited liability company
HENDERSON AVE LOTS OWNER LLC, a Delaware limited liability company
HENDERSON AVE MAIN OWNER LLC, a Delaware limited liability company
HENDERSON AVE SHOPS OWNER LLC, a Delaware limited liability company
By: /s/ Jason Blacksberg
Name: Jason Blacksberg
Title: Senior Vice President
on behalf of the entities listed above
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
LENDERS:
BANK OF AMERICA, N.A., as a Lender
By: /s/ Gregory Egli
Name: Gregory Egli
Title: Senior Vice President
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
By: /s/ Craig V. Koshkarian
Name: Craig V. Koshkarian
Title: Director
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
PNC BANK, NATIONAL ASSOCIATION, as a Lender
By: /s/ Brian P. Kelly
Name: Brian P. Kelly
Title: SVP
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
TRUIST BANK, Successor by Merger to SunTrust Bank, as a Lender
By: /s/ Trudy Wilson
Name: Trudy Wilson
Title: Vice President
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
TD BANK, N.A., as a Lender
By: /s/ Gianna Gioia
Name: Gianna Gioia
Title: Vice President
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
JPMORGAN CHASE BANK, N.A., as a Lender
By: /s/ Nora Skelton
Name: Nora Skelton
Title: Authorized Signatory
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
CITIBANK, N.A., as a Lender
By: /s/ Chris Albano
Name: Chris Albano
Title: Authorized Signatory
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
M&T BANK, as a Lender
By: /s/ David Moorin
Name: David Moorin
Title: Assistant Vice President
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
GOLDMAN SACHS BANK USA, as a Lender
By: /s/ Keshia Leday
Name: Keshia Leday
Title: Authorized Signatory
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ Carolyn LaBatte-Leavitt
Name: Carolyn LaBatte-Leavitt
Title: Vice President
Signature Page to Second Amendment to Acadia Realty Second Amended and Restated Credit Agreement
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of June 29, 2021
among
ACADIA REALTY LIMITED PARTNERSHIP,
as the Borrower,
and
ACADIA REALTY TRUST
and
CERTAIN SUBSIDIARIES OF ACADIA REALTY LIMITED PARTNERSHIP
FROM TIME TO TIME PARTY HERETO,
as Guarantors
BANK OF AMERICA, N.A.,
as Administrative Agent
WELLS FARGO BANK, NATIONAL ASSOCIATION,
TRUIST BANK
and
PNC BANK, NATIONAL ASSOCIATION,
as Syndication Agents
and
The Lenders and L/C Issuers Party Hereto
BOFA SECURITIES, INC.
and
WELLS FARGO SECURITIES, LLC,
as Joint Bookrunners
and
BOFA SECURITIES, INC.,
WELLS FARGO SECURITIES, LLC,
TRUIST SECURITIES, INC.
and
PNC CAPITAL MARKETS LLC,
as Joint Lead Arrangers
TABLE OF CONTENTS
Section Page
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS 1
1.01 Defined Terms 1
1.02 Other Interpretive Provisions 4948
1.03 Accounting Terms 5048
1.04 Rounding 5049
1.05 Times of Day; Rates 51 49
1.06 Letter of Credit Amounts 5149
1.07 Interest Rates 50
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS 5150
2.01 Committed Loans 5150
2.02 Borrowings, Conversions and Continuations of Committed Loans 5251
2.03 Letters of Credit 53
2.04 [Reserved] 64
2.05 Prepayments 64
2.06 Termination or Reduction of Commitments 65
2.07 Repayment of Loans 6665
2.08 Interest 6665
2.09 Fees 6766
2.10 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate 67
2.11 Evidence of Debt 6867
2.12 Payments Generally; Administrative Agent’s Clawback 68
2.13 Sharing of Payments by Lenders 70
2.14 Extension of Maturity Date in respect of Revolving Credit Facility 7170
2.15 Increase in Facilities 72
2.16 Cash Collateral 7675
2.17 Defaulting Lenders 7776
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY 7978
3.01 Taxes 7978
3.02 Illegality 83
3.03 Inability to Determine Rates; Replacement of Successor Rates 84
3.04 Increased Costs; Reserves on Eurodollar Rate Loans and LIBOR Floating Rate Loans 87 86
3.05 Compensation for Losses 8987
3.06 Mitigation Obligations; Replacement of Lenders 8988
3.07 [Reserved] 9088
3.08 Survival 9088
ARTICLE IV. CONDITIONS PRECEDENT TO Credit Extensions 9088
4.01 Conditions of Effectiveness 9088
4.02 Conditions to all Credit Extensions 9291
i
ARTICLE V. REPRESENTATIONS AND WARRANTIES 9391
5.01 Existence, Qualification and Power 9391
5.02 Authorization; No Contravention 9392
5.03 Governmental Authorization; Other Consents 9392
5.04 Binding Effect 9392
5.05 Financial Statements; No Material Adverse Effect 9392
5.06 Litigation 9493
5.07 No Default 9493
5.08 Ownership of Property 9593
5.09 Environmental Compliance 9593
5.10 Insurance 9593
5.11 Taxes 9593
5.12 ERISA Compliance 9594
5.13 Subsidiaries; Equity Interests 9695
5.14 Margin Regulations; Investment Company Act 9695
5.15 Disclosure 9795
5.16 Compliance with Laws 9795
5.17 Taxpayer Identification Number 9796
5.18 Intellectual Property; Licenses, Etc. 9796
5.19 OFAC 9796
5.20 Solvency 9896
5.21 REIT Status; Stock Exchange Listing 9896
5.22 Subsidiary Guarantors 9896
5.23 Anti-Corruption Laws; Anti-Money Laundering Laws 9896
5.24 Affected Financial Institution 9897
5.25 Covered Entities 9897
ARTICLE VI. AFFIRMATIVE COVENANTS 9897
6.01 Financial Statements 9997
6.02 Certificates; Other Information 9998
6.03 Notices 101100
6.04 Payment of Obligations 102100
6.05 Preservation of Existence, Etc. 102101
6.06 Maintenance of Properties 103101
6.07 Maintenance of Insurance 103101
6.08 Compliance with Laws 103102
6.09 Books and Records 103102
6.10 Inspection Rights 103102
6.11 Use of Proceeds 104102
6.12 Additional Guarantors 104102
6.13 Compliance with Environmental Laws 105103
6.14 Further Assurances 105103
6.15 Maintenance of REIT Status; Stock Exchange Listing 105104
6.16 Material Contracts 105104
6.17 Preparation of Environmental Reports 105104
6.18 Minimum Amount and Occupancy of Unencumbered Properties 106104
6.19 Compliance with Terms of Leases 106105
ii
6.20 Anti-Corruption Laws; Sanctions; Anti-Money Laundering Laws 106105
ARTICLE VII. NEGATIVE COVENANTS 107105
7.01 Liens 107105
7.02 Investments 107105
7.03 Indebtedness 107106
7.04 Fundamental Changes 108107
7.05 Dispositions 109107
7.06 Restricted Payments 110108
7.07 Change in Nature of Business 111109
7.08 Transactions with Affiliates 111109
7.09 Burdensome Agreements 111110
7.10 Use of Proceeds 111110
7.11 Financial Covenants 111110
7.12 Accounting Changes 112111
7.13 Amendments of Organization Documents 112111
7.14 Sanctions 113111
7.15 Subsidiaries of REIT 113111
7.16 Anti-Corruption Laws; Anti-Money Laundering Laws 113112
7.17 Swap Contracts 113112
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES 113112
8.01 Events of Default 113112
8.02 Remedies Upon Event of Default 116115
8.03 Application of Funds 116115
ARTICLE IX. ADMINISTRATIVE AGENT 117116
9.01 Appointment and Authority 117116
9.02 Rights as a Lender 118116
9.03 Exculpatory Provisions 118117
9.04 Reliance by Administrative Agent 119118
9.05 Delegation of Duties 119118
9.06 Resignation of Administrative Agent 120118
9.07 Non-Reliance on Administrative Agent, Arrangers, Bookrunners and Other Lenders 121120
9.08 No Other Duties, Etc. 122121
9.09 Administrative Agent May File Proofs of Claim 122121
9.10 Guaranty Matters 123122
9.11 Lender Representations Regarding ERISA 123122
9.12 Recovery of Erroneous Payments 124123
ARTICLE X. CONTINUING GUARANTY 125123
10.01 Guaranty 125123
10.02 Rights of Lenders 126124
10.03 Certain Waivers 126125
10.04 Obligations Independent 126125
10.05 Subrogation 126125
iii
10.06 Termination; Reinstatement 127125
10.07 Subordination 127126
10.08 Stay of Acceleration 127126
10.09 Condition of the Borrower 127126
10.10 Limitations on Enforcement 127126
10.11 Contribution 128126
10.12 Release of Subsidiary Guarantors and Re-designation of Unencumbered Properties 129127
ARTICLE XI. MISCELLANEOUS 132131
11.01 Amendments, Etc. 132131
11.02 Notices; Effectiveness; Electronic Communication 135134
11.03 No Waiver; Cumulative Remedies; Enforcement 137136
11.04 Expenses; Indemnity; Damage Waiver 137136
11.05 Payments Set Aside 140138
11.06 Successors and Assigns 140139
11.07 Treatment of Certain Information; Confidentiality 146145
11.08 Right of Setoff 147146
11.09 Interest Rate Limitation 148147
11.10 Integration; Effectiveness 148147
11.11 Survival of Representations and Warranties 148147
11.12 Severability 149147
11.13 Replacement of Lenders 149148
11.14 Governing Law; Jurisdiction; Etc. 150148
11.15 Waiver of Jury Trial 151150
11.16 No Advisory or Fiduciary Responsibility 151150
11.17 Electronic Execution; Electronic Records; Counterparts 152151
11.18 USA PATRIOT Act 153152
11.19 Authorized Persons and Authorized Signers 153152
11.20 Acknowledgement and Consent to Bail-In of Affected Financial Institutions 153152
11.21 No Novation 154153
11.22 Acknowledgement Regarding Any Supported QFCs 154153
11.23 ENTIRE AGREEMENT 155154
iv
SCHEDULES
1.01(B) Existing Letters of Credit
2.01 Commitments, Applicable Percentages and Letter of Credit Sublimits
5.05 Supplement to Interim Financial Statements
5.13 Subsidiaries; Jurisdiction of Incorporation/Organization and Principal Place of Business
11.02 Administrative Agent’s Office; Certain Addresses for Notices; Taxpayer Identification Numbers
EXHIBITS
Form of
A Committed Loan Notice
B [Reserved]
C-1 Revolving Credit Note
C-2 Term Note
D Compliance Certificate
E-1 Assignment and Assumption
E-2 Administrative Questionnaire
F [Reserved]Form of Notice of Loan Prepayment
G Joinder Agreement
H U.S. Tax Compliance Certificates
I Solvency Certificate
J Borrower’s Instruction Certificate
K Borrower Remittance Instructions
v
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as of June 29, 2021, among ACADIA REALTY LIMITED PARTNERSHIP, a Delaware limited partnership (the “Borrower”), ACADIA REALTY TRUST, a Maryland real estate investment trust (the “REIT”) and certain subsidiaries of the Borrower from time to time party hereto, as Guarantors, each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), BANK OF AMERICA, N.A. and WELLS FARGO BANK, NATIONAL ASSOCIATION, as L/C Issuers, and BANK OF AMERICA, N.A., as Administrative Agent.
The Borrower, the REIT, the subsidiaries of the Borrower party thereto as guarantors, the lenders party thereto, the swing line lender party thereto, the letter of credit issuer party thereto and the Administrative Agent are party to that certain Credit Agreement, dated as of February 20, 2018 (as amended or otherwise modified prior to the date hereof, the “Existing Credit Agreement”). The parties hereto desire to amend and restate the Existing Credit Agreement in its entirety, but not as a novation, on the terms and subject to the conditions hereinafter set forth.
In consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree that the Existing Credit Agreement shall be, and hereby is, amended and restated in its entirety as follows, effective on and as of the Closing Date, and hereby further covenant and agree as follows:
“Act” has the meaning specified in Section 11.18.
“Adjusted EBITDA” means, as of any date of determination, (i) EBITDA for the then most recently ended period of four consecutive fiscal quarters minus (ii) the aggregate Annual Capital Expenditure Adjustment for all Properties owned by one or more members of the Consolidated Group, provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the aggregate Annual Capital Expenditure Adjustment attributable to Properties owned by such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Adjusted EBITDA, minus (iii) the Consolidated Group Pro Rata Share of the aggregate Annual Capital Expenditure Adjustment for all Properties owned by one or more Unconsolidated Affiliates.
“Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit E-2 or any other form approved by the Administrative Agent.
“Affected Financial Institution” means (a) any EEA Financial Institution, or (b) any UK Financial Institution.
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. For the avoidance of doubt, in no event shall any Arranger, any Bookrunner, the Administrative Agent, any Syndication Agent or any Managing Agent listed on the cover page hereof or any Lender, in their capacities as such, be deemed to be an affiliate of the Borrower.
“Aggregate Deficit Amount” has the meaning specified in Section 10.11.
“Aggregate Excess Amount” has the meaning specified in Section 10.11.
“Agreement” has the meaning specified in the first introductory paragraph hereto.
“Annual Capital Expenditure Adjustment” means, for any Property, an amount equal to the product of (i) $0.20 multiplied by (ii) the aggregate net rentable area (determined on a square feet basis) of such Property.
“Applicable Law” means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject. For purposes of Section 3.01, the term “Applicable Law” shall include FATCA.
“Applicable Percentage” means (a) in respect of the Term Facility, with respect to any Term Lender at any time, the percentage (carried out to the ninth decimal place) of the Term Facility represented by (i) on or prior to the Closing Date, such Term Lender’s Term Commitment at such time, and (ii) thereafter, the principal amount of such Term Lender’s Term Loans at such time and (b) in respect of the Revolving Credit Facility, with respect to any Revolving Credit Lender at any time, the percentage (carried out to the ninth decimal place) of the Revolving Credit Facility represented by such Revolving Credit Lender’s Revolving Credit Commitment at such time, subject to adjustment as provided in Section 2.17. If the commitment of each Revolving Credit Lender to make Revolving Credit Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Revolving Credit Commitments have expired, then the Applicable Percentage of each Revolving Credit Lender in respect of the Revolving Credit Facility shall be determined based on the Applicable Percentage of such Revolving Credit Lender in respect of the Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments made in accordance with the terms of this Agreement. The initial Applicable Percentage of each Lender in respect of each Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which such Lender becomes a party hereto, as applicable.
“Applicable Rate” means (i) at any time prior to the Investment Grade Pricing Effective Date, the Leverage-Based Applicable Rate in effect at such time and (ii) at any time on and after
the Investment Grade Pricing Effective Date, the Ratings-Based Applicable Rate in effect at such time.
“Applicable Revolving Credit Percentage” means with respect to any Revolving Credit Lender at any time, such Revolving Credit Lender’s Applicable Percentage in respect of the Revolving Credit Facility at such time.
“Appropriate Lender” means, at any time, (a) with respect to the Term Facility or the Revolving Credit Facility, a Lender that has a Commitment with respect to such Facility or holds a Term Loan or a Revolving Credit Loan, respectively, at such time and (b) with respect to the Letter of Credit Subfacility, (i) the L/C Issuers and (ii) if any Letters of Credit have been issued pursuant to Section 2.03(a), the Revolving Credit Lenders.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Arrangers” means BofA Securities, Wells Fargo Securities, LLC, Truist Securities, Inc. and PNC Capital Markets LLC, in their capacities as joint lead arrangers for the Facilities.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E-1 or any other form (including electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.
“Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.
“Audited Financial Statements” means the audited consolidated balance sheet of the REIT for the fiscal year ended December 31, 2020, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the REIT, including the notes thereto.
“Authorized Person” means any representative of the Borrower duly designated by the Borrower in accordance with the Borrower’s Instruction Certificate, authorized to bind the Borrower in providing draw requests and requesting disbursements of Loan proceeds.
“Authorized Signer” means any representative of the Borrower duly designated by the Borrower in accordance with the Borrower’s Instruction Certificate, authorized to bind the Borrower and to act for the Borrower for all purposes in connection with the Loan, including providing draw requests and requesting disbursements of Loan proceeds, obtaining information pertaining to the Loan, requesting any action under the Loan Documents, providing any certificates, and appointing and changing any Authorized Persons.
“Availability Period” means, in respect of the Revolving Credit Facility, the period from and including the Closing Date to the earliest of (a) the Maturity Date for the Revolving Credit Facility, (b) the date of termination of the Revolving Credit Facility pursuant to Section 2.06, and (c) the date of termination of the commitment of each Revolving Credit Lender to make Revolving Credit Loans and of the obligation of each L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark that is or may be used for determining the length of an Interest Period or (y) otherwise, any payment period for interest calculated with reference to such Benchmark, as applicable, pursuant to this Agreement as of such date.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, rule, regulation or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bank of America” means Bank of America, N.A. and its successors.
“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurodollar Rate determined in accordance with clause (b) of the definition thereof,Term SOFR plus 1.00%; and if Base Rate shall be less than 1.00%, such rate shall be deemed to be(d) 1.00%. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change. If the Base Rate is being used as an alternate rate of interest pursuant to Section 3.03, then the Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.
“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Base Rate Revolving Credit Loan” means a Revolving Credit Loan that is a Base Rate Loan.
“Benchmark” means, initially, LIBOR; provided that if a replacement of the Benchmark has occurred pursuant to Section 3.03(c) then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate. Any reference to “Benchmark” shall include, as applicable, the published component used in the calculation thereof.
“Benchmark Replacement” means:
(1) For purposes of Section 3.03(c)(i), the first alternative set forth below that can be determined by the Administrative Agent (and, in the case of the alternative set forth in clause (a) below, that has been consented to in writing by the Borrower):
(a) the sum of: (i) Term SOFR and (ii) 0.11448% (11.448 basis points) for an Available Tenor of one-month’s duration, 0.26161% (26.161 basis points) for an Available Tenor of three-months’ duration, and 0.42826% (42.826 basis points) for an Available Tenor of six-months’ duration; or
(b) the sum of: (i) Daily Simple SOFR and (ii) 0.11448% (11.448 basis points);
provided that, if initially LIBOR is replaced with the rate contained in clause (b) above (Daily Simple SOFR plus the applicable spread adjustment) and subsequent to such replacement, the Administrative Agent determines that Term SOFR has become available and is administratively feasible for the Administrative Agent in its sole discretion, and the Administrative Agent notifies the Borrower and each Lender of such availability, then with the Borrower’s written consent from and after the beginning of the Interest Period, relevant interest payment date or payment period for interest calculated, in each case, commencing no less than thirty (30) days after the date of such notice, the Benchmark Replacement shall be as set forth in clause (a) above; and
(2) For purposes of Section 3.03(c)(ii), the sum of (a) the alternate benchmark rate and (b) an adjustment (which may be a positive or negative value or zero), in each case, that has been selected by the Administrative Agent and the Borrower as the replacement Benchmark giving due consideration to any evolving or then-prevailing market convention, including any applicable recommendations made by a Relevant Governmental Body, for Dollar-denominated syndicated credit facilities at such time;
provided that, if the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement and the other Loan Documents.
Any Benchmark Replacement shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Administrative Agent, such Benchmark Replacement shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing
requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Benchmark Transition Event” means, with respect to any then-current Benchmark other than LIBOR, the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark or a Governmental Authority with jurisdiction over such administrator announcing or stating that all Available Tenors are or will no longer be representative, or made available, or used for determining the interest rate of loans, or shall or will otherwise cease, provided that, at the time of such statement or publication, there is no successor administrator that is satisfactory to the Administrative Agent, that will continue to provide any representative tenors of such Benchmark after such specific date.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined and subject to in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“BofA Securities” means BofA Securities, Inc. and its successors.
“Bookrunners” means BofA Securities and Wells Fargo Securities, LLC, in their capacities as joint bookrunners for the credit facilities under this Agreement.
“Borrower” has the meaning specified in the first introductory paragraph hereto.
“Borrower Materials” has the meaning specified in Section 6.02.
“Borrower Remittance Instructions” means, the Borrower’s remittance instructions provided in the form attached hereto as Exhibit K. The Administrative Agent is authorized to follow the instructions in any Borrower Remittance Instructions delivered to the Administrative Agent until five (5) Business Days following receipt of a new Borrower Remittance Instructions accompanied by evidence, reasonably satisfactory to the Administrative Agent, of the authority of the Person executing such new Borrower Remittance Instructions.
“Borrower’s Instruction Certificate” means a certificate provided by or on behalf of the Borrower in the form attached hereto as Exhibit J, designating certain Authorized Persons and Authorized Signers as set forth therein.
“Borrowing” means a Committed Borrowing.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan or LIBOR Floating Rate Loan, means any such day that is also a London Banking Day.
“Capitalization Rate” means six and one-quarter percent (6.25%).
“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the L/C Issuers or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and the applicable L/C Issuer(s) shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and such L/C Issuer(s). “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Cash Equivalents” means:
“CFTC” means the Commodity and Futures Trading Commission, and any successor thereto.
“CFTC Regulations” means any and all regulations, rules, directives, or orders now or hereafter promulgated or issued by CFTC relating to Swap Contracts.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation (including, without limitation, Regulation D issued by the FRB) or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith or in the implementation thereof and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.
“Change of Control” means an event or series of events by which:
“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 11.01.
“CME” means CME Group Benchmark Administration Limited.
“Code” means the Internal Revenue Code of 1986.
“Commitment” means a Term Commitment or a Revolving Credit Commitment, as the context may require.
“Commitment Increase Amendment” has the meaning specified in Section 2.15(g).
“Committed Borrowing” means a Revolving Credit Borrowing, a Term Borrowing or an Incremental Term Loan Borrowing, as the context may require.
“Committed Loan” means a Term Loan or a Revolving Credit Loan, as the context may require.
“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to another, or (c) a continuation of Eurodollar RateTerm SOFR Loans, pursuant to Section 2.02(a), which shall be substantially in the form of Exhibit A or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.
“Compliance Certificate” means a certificate substantially in the form of Exhibit D.
“Communication” means this Agreement, any Loan Document and any document, any amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to any Loan Document.
“Compliance Certificate” means a certificate substantially in the form of Exhibit D.
“Conforming Changes” means, with respect to the use, administration of or any conventions associated with SOFR, any proposed Successor Rate, Daily Simple SOFR or Term SOFR, as applicable, any conforming changes to the definitions related thereto, including “Base Rate, “SOFR”, “Daily Simple SOFR, “Term SOFR” and “Interest Period”, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters (including, for the avoidance of doubt, the definitions of “Business Day” and “U.S. Government Securities Business Day”, timing of borrowing requests or prepayment, conversion or continuation notices and length of lookback periods) as may be appropriate, in the discretion of the Administrative Agent, to reflect the adoption and implementation of such applicable rate(s) and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such rate exists, in such other manner of administration as the Administrative Agent determines, in consultation with the Borrower, is reasonably necessary in connection with the administration of this Agreement and any other Loan Document).
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Group” means, collectively, the Loan Parties and their Consolidated Subsidiaries.
“Consolidated Group Pro Rata Share” means, with respect to any Unconsolidated Affiliate or any Non-Wholly Owned Consolidated Subsidiary, the percentage interest held by the REIT and its Wholly Owned Subsidiaries, in the aggregate, in such Person determined by calculating the percentage of Equity Interests of such Person owned by the REIT and its Wholly Owned Subsidiaries.
“Consolidated Subsidiaries” means, as to any Person, all Subsidiaries of such Person that are consolidated with such Person for financial reporting purposes under GAAP.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Controlled Joint Venture” means a Subsidiary of the Borrower (the “Designated Subsidiary”) that meets each of the following requirements: (i) the Designated Subsidiary owns or ground leases a Property (the “Designated Property”); (ii) the Borrower (either directly or through
Wholly Owned Subsidiaries thereof that are not Controlled Joint Ventures) (A) owns 100% of all voting Equity Interests in the Designated Subsidiary, (B) has exclusive operational control over the Designated Property and the Designated Subsidiary, including the ability to cause the Designated Subsidiary to Dispose of, grant Liens in, or otherwise encumber the Designated Property and other assets, incur, repay and prepay Indebtedness, provide Guarantees and make Restricted Payments, in each case without any requirement for the consent of any other Person; and (iii) no Person other than the Borrower is entitled to receive any distributions or other payments from the Designated Subsidiary except upon Disposition of the Designated Property.
“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.
“Creditor Parties” means, collectively, the Administrative Agent, the Lenders, the L/C Issuers and each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05, and the other Persons to whom the Obligations are owing.
“Daily Simple SOFR” with respect to any applicable determination date means the secured overnight financing rate (“SOFR”) published on such date by the Federal Reserve Bank of New York, as the administrator of the benchmark (or a successor administrator) on the Federal Reserve Bank of New York’s website (or any successor source)means the rate per annum equal to SOFR determined for any day pursuant to the definition thereof plus the SOFR Adjustment. Any change in Daily Simple SOFR shall be effective from and including the date of such change without further notice. If the rate as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement and the other Loan Documents.
“Daily SOFR Loan” means a Committed Loan that bears interest at a rate based on Daily Simple SOFR.
“Debt Rating” means, as of any date of determination, the rating assigned by a Rating Agency to the REIT’s non-credit enhanced, senior unsecured long term debt as in effect on such date.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate, plus (ii) the Applicable Rate for Base Rate Loans under the Revolving Credit Facility (determined using the highest pricing level applied in the then applicable Pricing Grid), plus (iii) 2.00% per annum; provided, however, that (x) with respect to a Base Rate Loan, the Default Rate shall be an interest rate equal to (i) the Base Rate, plus (ii) the Applicable Rate for Base Rate Loans for the Facility under which such Loan was made (determined
using the highest pricing level applied in the then applicable Pricing Grid), plus (iii) 2.00% per annum, (y) with respect to a Eurodollar RateTerm SOFR Loan, the Default Rate shall be an interest rate equal to (i) the Eurodollar RateTerm SOFR, plus (ii) the Applicable Rate for Eurodollar RateTerm SOFR Loans for the Facility under which such Loan was made (determined using the highest pricing level applied in the then applicable Pricing Grid), plus (iii) 2.00% per annum, and (z) with respect to a LIBOR Floating RateDaily SOFR Loan, the Default Rate shall be an interest rate equal to (i) the LIBOR Daily Floating RateSimple SOFR, plus (ii) the Applicable Rate for LIBOR Floating RateDaily SOFR Loans for the Facility under which such Loan was made (determined using the highest pricing level applied in the then applicable Pricing Grid), plus (iii) 2.00% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate then applicable to Letter of Credit Fees, plus 2.00% per annum.
“Defaulting Lender” means, subject to Section 2.17(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within three Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any L/C Issuer or any Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or amounts payable pursuant to Section 11.04(c)) within three Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or any L/C Issuer in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.17(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the
Administrative Agent to the Borrower, each L/C Issuer and each other Lender promptly following such determination.
“Designated Jurisdiction” means any region, country or territory to the extent that such country, region or territory itself or the government of any such country, region or territory, is the subject of any Sanction (which on the Closing Date includes Cuba, Iran, North Korea, Syria, and the Crimea region of Ukraine).
“Development Property” means a Property (a) the primary purpose of which is to be leased in the ordinary course of business or to be sold upon completion, (b) on which construction, redevelopment or material rehabilitation of material improvements has commenced and is continuing to be performed and (c) that is classified as “development in progress” on the Borrower’s balance sheet or as a redevelopment project in any publicly filed financial and operating reporting supplement of the REIT, with any such Property remaining as a Development Property until the earlier of (i) such Property achieving an occupancy rate of 75% (based on net leasable area) and (ii) the first anniversary of the substantial completion of construction of such Property and material improvements as evidenced by a temporary or permanent certificate of occupancy; for the avoidance of doubt, on the date of the earlier of the occurrence of clause (i) or clause (ii) such Property will become a Newly Stabilized Property.
“Direct Owner” means, (i) as to any Unencumbered Property that is owned by or ground leased to a Subsidiary of the Borrower, the Subsidiary of the Borrower that directly owns or ground leases such Unencumbered Property and (ii) as to any Unencumbered First Mortgage Receivable held by a Subsidiary of the Borrower, the Subsidiary of the Borrower that directly holds such Unencumbered First Mortgage Loan Receivable.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith and including any disposition of property to a Division Successor pursuant to a Division.
“Dividing Person” has the meaning given that term in the definition of “Division.”
“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.
“Division Successor” means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division. A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the occurrence of such Division.
“Disqualified Institution” means (a) any competitor of the REIT and its Affiliates that has been specifically identified by name on the DQ List and (b) an Affiliate of any such identified Person that (i) has been specifically identified to the Administrative Agent in writing by the
Borrower or (ii) is clearly identifiable on the basis of such Affiliate’s name; provided that “Disqualified Institutions” shall exclude any Person that the Borrower has designated as no longer being a “Disqualified Institution” by written notice delivered to the Administrative Agent and the Lenders from time to time until such time as Borrower has, in accordance with the terms of this Agreement, re-designated such Person as a “Disqualified Institution”.
“Dollar” and “$” mean lawful money of the United States.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.
“DQ List” means the list of Disqualified Institutions provided by the Borrower to the Administrative Agent prior to the Closing Date, as the same may be updated in writing from time to time after the Closing Date upon notice from the Borrower to the Administrative Agent; provided that no such update shall become effective until the second Business Day after it is provided by the Borrower to the Administrative Agent for dissemination to the Lenders.
“Early Opt-in Effective Date” means, with respect to any Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.
“Early Opt-in Election” means the occurrence of:
(1) a determination by the Administrative Agent, or a notification by the Borrower to the Administrative Agent that the Borrower has made a determination, that U.S. dollar-denominated syndicated credit facilities currently being executed, or that include language similar to that contained in Section 3.03(c), are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR, and
(2) the joint election by the Administrative Agent and the Borrower to replace LIBOR with a Benchmark Replacement and the provision by the Administrative Agent of written notice of such election to the Lenders.
“EBITDA” means, with respect to the Consolidated Group for any period, the sum of (a) Net Income for such period, in each case, excluding, without duplication, (i) any non-recurring or extraordinary gains and losses for such period, (ii) any income or gain and any loss in each case resulting from the early extinguishment of indebtedness during such period and (iii) any net income or gain or any loss resulting from a Swap Contract (including by virtue of a termination thereof) during such period, plus (b) an amount which, in the determination of Net Income for such period pursuant to clause (a) above, has been deducted for or in connection with: (i) Interest Expense (plus, amortization of deferred financing costs, to the extent included in the determination of Interest Expense per GAAP), (ii) income taxes, (iii) depreciation and amortization, all as determined in accordance with GAAP for such period, (iv) adjustments as a result of the straight lining of rents, (v) non-cash charges and (vi) transaction costs incurred in connection with the Loan Documents (and any amendment, consent, supplement or waiver thereto), plus (c) the Consolidated Group Pro
Rata Share of the foregoing items attributable to the Consolidated Group’s interests in Unconsolidated Affiliates; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the foregoing items and components attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary for such period shall be included in the calculation of EBITDA.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Copy” shall have the meaning specified in Section 11.17.
“Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.
“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.06(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 11.06(b)(iii)). For the avoidance of doubt, no Disqualified Institution shall be an Eligible Assignee.
“Eligible Ground Lease” means a ground lease that on the date of determination (a) has a minimum remaining term of thirty (30) years, including extension options controlled exclusively by the tenant, (b) permits the Loan Party party thereto to grant a Lien thereon to secure the Obligations without the consent of any Person (other than any consent that has been obtained), (c) no default has occurred and is continuing, and no terminating event has occurred by any Loan Party or Subsidiary thereof, thereunder, (d) is not encumbered by any Liens, negative pledges and/or encumbrances, (e) no party thereto is subject to a proceeding under any Debtor Relief Law and (f) is otherwise reasonably acceptable to the Administrative Agent.
“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.
“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
“ESA” has the meaning specified in Section 6.17.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Eurodollar Rate” means:
(a) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered Rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for U.S. Dollars for a period equal in length to such Interest Period) (“LIBOR”) as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and
(b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at approximately 11:00 a.m., London time determined two London Banking Days prior to such date for Dollar deposits with a term of one month commencing that day; and
(c) if the Eurodollar Rate as determined in accordance with the foregoing is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate based on clause (a) of the definition of “Eurodollar Rate.”
“Event of Default” has the meaning specified in Section 8.01.
“Excepted Unencumbered Property” means any Unencumbered Property the occupancy rate with respect to which is less than 75% and that is designated as a Excepted Unencumbered Property by Borrower in any calculation of the covenant set forth in clause (ii) of Section 6.18.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 11.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii), (a)(iii) or (c), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.
“Existing Credit Agreement” has the meaning specified in the second introductory paragraph hereto.
“Existing Letter of Credit” means a “Letter of Credit” issued pursuant to the terms of, and as defined in, the Existing Credit Agreement and outstanding on the Closing Date and described on Schedule 1.01(B).
“Existing Maturity Date” has the meaning specified in Section 2.14(a).
“Existing Revolving Credit Note” means a “Revolving Credit Note” as defined in the Existing Credit Agreement.
“Existing Term Loan” has the meaning specified in Section 2.01(b).
“Existing Term Note” means a “Term Note” as defined in the Existing Credit Agreement.
“Extension Notice” has the meaning specified in Section 2.14(a).
“Facility” means the Term Facility, the Revolving Credit Facility and/or any Incremental Term Loan Facility, as the context may require.
“Facility Fee” has the meaning specified in Section 2.09(a)(ii).
“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471 (b) (1) of the Code and any, as of the Second Amendment Effective Date (or any amended or successor version described above) and any intergovernmental agreement (and related fiscal or regulatory legislation, or related official rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities entered into in connection with the implementation of) implementing the foregoing.
“Federal Funds Rate” means, for any day, the rate per annum calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depository institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the federal funds effective rate; provided that if the Federal Funds Rate as so determined would be less than zero, such rate shall be deemed to be zero for purposes of the Loan Documents.
“Fee Letters” means, collectively, the several letter agreements, each dated on or after April 26, 2021 and prior to the Closing Date, among the Borrower and an Arranger and any other parties thereto, that are identified therein as a “fee letter”, and “Fee Letter” means any of them individually.
“First Maturity Date Extension” has the meaning specified in Section 2.14(a).
“Fixed Charges” means, with respect to the Consolidated Group, as of any date of determination, an amount equal to the sum, without duplication, of (i) Interest Expense for the most recently ended period of four consecutive fiscal quarters, (ii) scheduled payments of principal on Total Indebtedness made or required be made during the most recently ended fiscal quarter (excluding any balloon payments payable on maturity of any such Total Indebtedness), (iii) the amount of dividends or distributions paid or required to be paid by any member of the Consolidated Group to any Person that is not a member of the Consolidated Group during the most recently ended period of four consecutive fiscal quarters in respect of its preferred Equity Interests and (iv) the Consolidated Group Pro Rata Share of the foregoing items attributable to the Consolidated Group’s interests in Unconsolidated Affiliates. For the avoidance of doubt, with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the foregoing items and components attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Fixed Charges.
“Foreign Lender” means a Lender that is not a U.S. Person.
“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Fronting Exposure” means, at any time there is a Defaulting Lender such Defaulting Lender’s Applicable Revolving Credit Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.
“Funds From Operations” means, with respect to any period and without double counting, an amount equal to the Net Income for such period, excluding gains (or losses) from sales of property, plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures; provided that “Funds From Operations” shall exclude impairment charges, charges from the early extinguishment of indebtedness and other non-cash charges as evidenced by a certification of a Responsible Officer of the REIT containing calculations in reasonable detail satisfactory to the Administrative Agent. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect “Funds From Operations” on the same basis. In addition, “Funds from Operations” shall be adjusted to remove any impact of the expensing of acquisition costs pursuant to FAS 141 (revised), as issued by the Financial Accounting Standards Board in December of 2007, and effective January 1, 2009, including, without limitation, (i) the addition to Net Income of costs and expenses related to ongoing consummated acquisition transactions during such period; and (ii) the subtraction from Net Income of costs and expenses related to acquisition transactions terminated during such period.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantor Release Notice” has the meaning specified in Section 10.12(b).
“Guarantors” means, collectively, the REIT and each Subsidiary Guarantor.
“Guaranty” means the Guaranty made by the Guarantors under Article X in favor of the Creditor Parties.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“Impacted Loans” has the meaning specified in Section 3.03(a).
“Increase Effective Date” has the meaning specified in Section 2.15(a).
“Incremental Commitments” has the meaning specified in Section 2.15(a).
“Incremental Revolving Commitment” has the meaning specified in Section 2.15(a).
“Incremental Term Commitment” has the meaning specified in Section 2.15(a).
“Incremental Term Loan” means an advance made by an Incremental Term Loan Lender under an Incremental Term Loan Facility.
“Incremental Term Loan Borrowing” means, with respect to any Incremental Term Loan Facility a borrowing consisting of simultaneous Incremental Term Loans of the same Type and, in the case of Eurodollar RateTerm SOFR Loans, having the same Interest Period made by each of the Incremental Term Loan Lenders with respect to such Incremental Term Loan Facility pursuant to the applicable Commitment Increase Amendment.
“Incremental Term Loan Facility” has the meaning specified in Section 2.15(a).
“Incremental Term Loan Lender” means, at any time, any Lender that holds an Incremental Term Loan.
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:
For all purposes hereof: (a) the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person, (b) the Indebtedness of the Consolidated Group shall include, with respect to the foregoing items and components thereof attributable to Indebtedness of Non-Wholly Owned Consolidated Subsidiaries, only the Consolidated Group Pro Rata Share thereof, (c) the Indebtedness of the Consolidated Group shall include the Consolidated Group Pro Rata Share of the foregoing items and components thereof attributable to Indebtedness of Unconsolidated Affiliates, (d) the amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date and (e) the amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitee” has the meaning specified in Section 11.04(b).
“Indirect Owner” means, (a) as to any Unencumbered Property owned by or ground leased to a Subsidiary of the Borrower, each other Subsidiary of the Borrower that owns a direct or indirect interest in the Direct Owner of such Unencumbered Property and (b) as to any Unencumbered First Mortgage Receivable held by a Subsidiary of the Borrower, each other Subsidiary of the Borrower that owns a direct or indirect interest in the Direct Owner of such Unencumbered First Mortgage Receivable.
“Information” has the meaning specified in Section 11.07.
“Interest Expense” means, for any period, without duplication, total interest expense of the Consolidated Group for such period (including the Consolidated Group Pro Rata Share of total interest expense attributable to the Consolidated Group’s ownership interests in Unconsolidated Affiliates and, for the avoidance of doubt, capitalized interest); provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the total interest expense of such Non-Wholly Owned Consolidated Subsidiary for such period shall be included in Interest Expense.
“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan or a LIBOR Floating RateDaily SOFR Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided, however, that if any Interest Period for a Eurodollar RateTerm SOFR Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment
Dates and (b) as to any Base Rate Loan and any LIBOR Floating RateDaily SOFR Loan, the last Business Day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made.
“Interest Period” means as to each Eurodollar RateTerm SOFR Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar RateTerm SOFR Loan and ending on the date one or three months thereafter (in each case, subject to availability), as selected by the Borrower in itsthe applicable Committed Loan Notice, or such other period that is six months or less requested by the Borrower and consented to by all the Appropriate Lenders; provided that:
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
“Investment Grade Credit Rating” means receipt of a Debt Rating of Baa3 or better from Moody’s or BBB- or better from S&P.
“Investment Grade Pricing Effective Date” means the first Business Day following the date on which (i) the REIT has obtained an Investment Grade Credit Rating and (ii) the Borrower has delivered to the Administrative Agent a certificate executed by a Responsible Officer of the Borrower (i) certifying that an Investment Grade Credit Rating has been obtained by the REIT and is in effect (which certification shall also set forth the Debt Rating(s) received, if any, from each Rating Agency as of such date) and (ii) notifying the Administrative Agent that the Borrower has irrevocably elected to have the Ratings-Based Applicable Rate apply to the pricing of the Facilities.
“Investment Grade Release” has the meaning specified in Section 10.12.
“IRS” means the United States Internal Revenue Service.
“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
“ISP” means the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time).
“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the applicable L/C Issuer and the Borrower (or any Subsidiary) or in favor of such L/C Issuer and relating to such Letter of Credit.
“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law. For purposes of Section 3.01, the term “Laws” includes FATCA.
“L/C Advance” means, with respect to each Revolving Credit Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Revolving Credit Percentage.
“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.
“L/C Issuers” means, collectively, (i) Bank of America and (ii) Wells Fargo, in each case in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder; provided that for so long as any Existing Letter of Credit remains outstanding hereunder, the issuer of such Existing Letter of Credit shall continue to be the L/C Issuer with respect to such Existing Letter of Credit. Any L/C Issuer may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such L/C Issuer, in which case the term “L/C Issuer” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. Each reference herein to the “L/C Issuer” in connection with a Letter of Credit or other matter shall be deemed to be a reference to the relevant L/C Issuer with respect thereto.
“L/C Obligations” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time, including any automatic or scheduled increases provided for by the terms of such Letters of Credit, determined without regard to whether any conditions to drawing could be met at that time, plus (b) the aggregate amount of all Unreimbursed Amounts,
including all L/C Borrowings. The L/C Obligations of any Revolving Credit Lender at any time shall be its Applicable Revolving Credit Percentage of the total L/C Obligations at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a) of the UCP or Rule 3.13 or Rule 3.14 of the ISP or similar terms of the Letter of Credit itself, or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be “outstanding” and “undrawn” in the amount so remaining available to be paid, and the obligations of the Borrower and each Revolving Credit Lender shall remain in full force and effect until the L/C Issuers and the Revolving Credit Lenders shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.
“Lender” and “Lenders” have the meanings specified in the first introductory paragraph hereto.
“Lender Party” and “Lender Recipient Party” means collectively, the Lenders and the L/C Issuers.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent, which office may include any Affiliate of such Lender or any domestic or foreign branch of such Lender or such Affiliate. Unless the context otherwise requires each reference to a Lender shall include its applicable Lending Office.
“Letter of Credit” means any standby letter of credit issued hereunder providing for the payment of cash upon the honoring of a presentation thereunder and shall include the Existing Letters of Credit.
“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable L/C Issuer.
“Letter of Credit Fee” has the meaning specified in Section 2.03(h).
“Letter of Credit Subfacility” means, at any time, an amount equal to the lesser of (a) the aggregate amount of the L/C Issuers’ Letter of Credit Sublimits at such time and (b) the Revolving Credit Facility at such time. The Letter of Credit Subfacility is part of, and not in addition to, the Revolving Credit Facility. On the Closing Date, the amount of the Letter of Credit Subfacility is $60,000,000.
“Letter of Credit Sublimit” means, as to each L/C Issuer, its agreement as set forth in Section 2.03 to issue, amend and extend Letters of Credit in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such L/C Issuer’s name on Schedule 2.01, or in the Assignment and Assumption, New Lender Joinder Agreement or other documentation, which other documentation shall be in form and substance satisfactory to the Administrative Agent, pursuant to which such L/C Issuer becomes an L/C Issuer hereunder, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Leverage-Based Applicable Rate” means the applicable percentages per annum set forth below determined by reference to the ratio of Total Indebtedness to Total Asset Value as set forth in the most recent Compliance Certificate received by the Administrative Agent and the Lenders pursuant to Section 6.02(b):
Leverage-Based Applicable Rate |
||||||
Pricing Level |
Ratio of Total Indebtedness to Total Asset Value |
Revolving Credit Facility |
Term Facility |
|||
Eurodollar RateTerm SOFR Loans, LIBOR Daily Floating RateSOFR Loans and Letters of Credit |
Base Rate Loans |
Facility Fee |
Eurodollar RateTerm SOFR Loans and Daily SOFR Loans |
Base Rate Loans |
||
I |
< 35% |
1.250% |
0.250% |
0.200% |
1.400% |
0.400% |
II |
≥ 35% but < 40% |
1.350% |
0.350% |
0.200% |
1.500% |
0.500% |
III |
≥ 40% but < 45% |
1.400% |
0.400% |
0.200% |
1.550% |
0.550% |
IV |
≥ 45% but < 50% |
1.450% |
0.450% |
0.250% |
1.650% |
0.650% |
V |
≥ 50% but < 55% |
1.550% |
0.550% |
0.300% |
1.800% |
0.800% |
VI |
≥ 55% |
1.700% |
0.700% |
0.350% |
2.000% |
1.000% |
Any increase or decrease in the Leverage-Based Applicable Rate resulting from a change in the ratio of Total Indebtedness to Total Asset Value shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level VI shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance Certificate is delivered.
Notwithstanding anything to the contrary contained in this definition, (a) from the Closing Date through the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b) for the fiscal quarter ending June 30December 31, 20212022 the Leverage-Based Applicable Rate in effect shall be at Pricing Level IIthe same as in effect under the Original Credit Agreement on the Second Amendment Effective Date, immediately prior to giving effect to the Second Amendment and (b) the determination of the Leverage-Based Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).
“LIBOR” has the meaning specified in the definition of Eurodollar Rate.
“LIBOR Daily Floating Rate” for any day, a fluctuating rate of interest per annum equal to LIBOR as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by Administrative Agent from time to time), at approximately 11:00 a.m., London time, two (2) London Banking Days prior to such day, for Dollar deposits with a term of one (1) month commencing that day; provided that (x) to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate will be applied in a manner consistent with market practice; provided, further, that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate will be applied in a manner as otherwise reasonably determined by the Administrative Agent and (y) if the LIBOR Daily Floating Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“LIBOR Floating Rate Loan” means a Revolving Credit Loan that bears interest at a rate based on the LIBOR Daily Floating Rate.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, negative pledge, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).
“Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Committed Loan.
“Loan Documents” means this Agreement, including schedules and exhibits hereto, each Note, each Issuer Document, any agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of Section 2.16 of this Agreement, the Fee Letters and any amendments, modifications or supplements hereto or to any other Loan Document or waiver hereof or to any other Loan Document.
“Loan Parties” means, collectively, (a) at any time prior to the Investment Grade Release, the Borrower and the Guarantors and (b) upon and at any time following the Investment Grade Release, the Borrower, the Guarantors (if any) and the Owners.
“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.
“Material Acquisition” means any acquisition or series of acquisitions by a member of the Consolidated Group in which the aggregate purchase price of all assets (including any Equity Interests) acquired pursuant thereto exceeds ten percent (10%) of the Total Asset Value as of the last day of the then most recently ended fiscal quarter of the REIT for which financial statements are publicly available.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, assets, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the REIT or the Borrower and its Subsidiaries taken as a whole; (b) a material adverse effect on the rights and remedies of the Administrative Agent or any Lender under
any Loan Document or of the ability of the Loan Parties taken as a whole to perform their obligations under any Loan Document; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.
“Material Contract” means, with respect to any Person, each contract to which such Person is a party involving aggregate consideration payable to or by such Person of $5,000,000 or more in any year or that is otherwise material to the business, condition (financial or otherwise), operations, performance, properties or prospects of such Person.
“Maturity Date” means (a) with respect to the Revolving Credit Facility, the later of (i) fourth anniversary of the Closing Date and (ii) if maturity is extended pursuant to Section 2.14, such extended maturity date as determined pursuant to such Section and (b) with respect to the Term Facility, the fifth anniversary of the Closing Date; provided, however, that, in each case, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.
“Maturity Date Extension” has the meaning specified in Section 2.14(a).
“Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances an amount equal to 105% of the Fronting Exposure of all L/C Issuers with respect to Letters of Credit issued and outstanding at such time and (ii) otherwise, an amount determined by the Administrative Agent and the L/C Issuers in their sole discretion.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Mortgage Loan Receivable” means any loan or other note receivable owned by or held by the Borrower or a Wholly Owned Subsidiary of the Borrower that is a Domestic Subsidiary, in each case, secured by a mortgage or deed of trust on Real Property.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including the Borrower or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.
“Net Cash Proceeds” means, with respect to any issuance or sale by the REIT of any of its Equity Interests, the excess of (i) the sum of the cash and Cash Equivalents received by the REIT in connection with such issuance or sale, less (ii) underwriting discounts and commissions, and other reasonable out-of-pocket expenses, incurred by the REIT in connection with such issuance or sale, other than any such amounts paid or payable to an Affiliate of the REIT.
“Net Income” means, for any period, the sum, without duplication, of (i) the net income (or loss) of the REIT and its Wholly Owned Subsidiaries for such period and (ii) the aggregate amount of cash actually distributed by Non-Wholly Owned Subsidiaries and Unconsolidated Affiliates during such period to the REIT or its Wholly Owned Subsidiary as a dividend or other distribution;
provided, however, that Net Income shall exclude (a) extraordinary gains and extraordinary losses for such period and (b) the net income of any Wholly Owned Subsidiary of the REIT during such period to the extent that the declaration or payment of dividends or similar distributions by such Wholly Owned Subsidiary of such income is not permitted by operation of the terms of its Organization Documents or any agreement, instrument or Law applicable to such Wholly Owned Subsidiary during such period, except that the REIT’s equity in any net loss of any such Wholly Owned Subsidiary for such period shall be included in determining Net Income, and (and in the case of a dividend or other distribution to a Wholly Owned Subsidiary of the REIT, such Wholly Owned Subsidiary is not precluded from further distributing such amount to the REIT as described in clause (b) of this proviso).
“Net Operating Income” means, with respect to any Property for any period, an amount equal to (a) the aggregate gross revenues from the operation of such Property during such period from tenants (as determined in accordance with GAAP), minus (b) the sum of all expenses and other proper charges incurred in connection with the operation of such Property during such period (including management fees (which deduction for management fees shall be an amount equal to the greater of (x) three percent (3.00%) of the aggregate base rent and percentage rent due and payable with respect to such Property during such period and (y) the aggregate amount of any actual management, advisory or similar fees paid during such period) and accruals for real estate taxes and insurance, but excluding debt service charges, income taxes, depreciation, amortization and other non-cash expenses), which expenses and accruals shall be calculated in accordance with GAAP.
“New Lender Joinder Agreement” means a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel pursuant to which an Eligible Assignee becomes a Lender.
“Newly Acquired Property” means, as of any date, a Property (other than a Development Property) that has been owned or ground leased for less than four full fiscal quarters as of such date.
“Newly Stabilized Property” means as of any date a Property that as of such date is not a Development Property, but was a Development Property at some time during the most recently ended period of four full fiscal quarters.
“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all Lenders, all Lenders of a Facility or all affected Lenders in accordance with the terms of Section 11.01 and (ii) has been approved by the Required Lenders or the Required Term Lenders or Required Revolving Lenders, as applicable.
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“Non-Recourse Indebtedness” means, with respect to a Person, (a) Indebtedness in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, voluntary bankruptcy, collusive involuntary bankruptcy and other similar customary exceptions to nonrecourse liability) is contractually limited to specific assets of such Person encumbered by a Lien securing such Indebtedness, (b) if such Person is a Single Asset
Entity, any Indebtedness of such Person (other than Indebtedness described in the immediately following clause (c)), or (c) if such Person is a Single Asset Holding Company, any Indebtedness (“Holdco Indebtedness”) of such Single Asset Holding Company resulting from a Guarantee of, or Lien securing, Indebtedness of a Single Asset Entity that is a Subsidiary of such Single Asset Holding Company, so long as, in each case, either (i) recourse for payment of such Holdco Indebtedness (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, voluntary bankruptcy, collusive involuntary bankruptcy and other similar customary exceptions to nonrecourse liability) is contractually limited to the Equity Interests held by such Single Asset Holding Company in such Single Asset Entity or (ii) such Single Asset Holding Company has no assets other than Equity Interests in such Single Asset Entity and cash and other assets of nominal value incidental to the ownership of such Single Asset Entity.
“Non-Recourse Subsidiary” means a Subsidiary that (a) is not a Loan Party and (b) is not a Specified Subsidiary, (c) has no Indebtedness other than Non-Recourse Indebtedness and (d) has no assets other than (i) de minimis amounts of cash and (ii) assets securing Non-Recourse Indebtedness.
“Non-Recourse Threshold Amount” means $90,000,000.
“Non-Wholly Owned Consolidated Subsidiary” means a Consolidated Subsidiary of the REIT that is not a Wholly Owned Subsidiary of the REIT.
“Note” means a Term Note, a Revolving Credit Note or a promissory note made by the Borrower in favor of an Incremental Term Loan Lender under an Incremental Term Loan Facility evidencing the Incremental Term Loans made by such Incremental Term Loan Lender under such Incremental Term Loan Facility substantially in a form agreed among the BorrowersBorrower, the Administrative Agent and such Incremental Term Loan Lenders, as the context may require.
“Notice of Loan Prepayment” means a notice of prepayment with respect to a Loan, which shall be substantially in the form of Exhibit F or such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer.
“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Off-Balance Sheet Arrangement” means any transaction, agreement or other contractual arrangement to which a Non-Wholly Owned Subsidiary or an Unconsolidated Affiliate is a party, under which any member of the Consolidated Group has:
(a) any obligation under a guarantee contract that has any of the characteristics identified in FASB ASC 460-10-15-4;
(b) a retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets;
(c) any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, except that it is both indexed to the REIT’s stock and classified in stockholders’ equity in the REIT’s statement of financial position, as described in FASB ASC 815-10-15-74; or
(d) any obligation, including a contingent obligation, arising out of a variable interest (as defined in the FASB ASC Master Glossary) in an unconsolidated entity that is held by, and material to, any member of the Consolidated Group, where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with, any member of the Consolidated GroupOriginal Credit Agreement” means this Agreement, as in effect immediately prior to the Second Amendment becomes effective on the Second Amendment Effective Date.
“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Rate Early Opt-in” means the Administrative Agent and the Borrower have elected to replace LIBOR with a Benchmark Replacement other than a SOFR-based rate pursuant to (1) an Early Opt-in Election and (2) Section 3.03(c)(ii) and paragraph (2) of the definition of “Benchmark Replacement”.
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution,
delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).
“Outstanding Amount” means (i) with respect to Committed Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Committed Loans occurring on such date; and (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts.
“Owner” means, as to any Unencumbered Property or Unencumbered First Mortgage Receivable, the Direct Owner of such Unencumbered Property or Unencumbered First Mortgage Receivable, as the case may be, or any Indirect Owner of such Direct Owner.
“Pari Passu Obligations” means Unsecured Indebtedness of any Loan Party (exclusive of the Obligations) owing to a Person that is not a member of the Consolidated Group or an Affiliate thereof.
“Participant” has the meaning specified in Section 11.06(d).
“Participant Register” has the meaning specified in Section 11.06(d).
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Act” means the Pension Protection Act of 2006.
“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.
“Permitted Equity Encumbrances” means
“Permitted Pari Passu Provisions” means provisions that are contained in documentation evidencing or governing Pari Passu Obligations which provisions are the result of (a) limitations on the ability of a Loan Party or any of its Subsidiaries to make Restricted Payments or transfer property to the Borrower or any Guarantor which limitations, taken as a whole, are substantially the same as or less restrictive than those contained in this Agreement, (b) limitations on the creation of any Lien on any assets of a Loan Party that, taken as a whole, are substantially the same as or less restrictive than those contained in this Agreement or (c) any requirement that Pari Passu Obligations be secured on an “equal and ratable basis” to the extent that the Obligations are secured.
“Permitted Property Encumbrances” means:
“Permitted Swap Contract” means shall mean any Swap Contract entered into in accordance with the terms and provisions of Section 7.17.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Borrower or any ERISA Affiliate or any such Plan to which the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.
“Platform” has the meaning specified in Section 6.02.
“Pricing Grid” means (i) prior to the Investment Grade Pricing Effective Date, the pricing grid set forth in the definition of “Leverage-Based Applicable Rate” and (ii) on and after the Investment Grade Pricing Effective Date, the pricing grid set forth in the definition of “Ratings-Based Applicable Rate”.
“Property” means any real property assets owned or leased or acquired by one or more of the Borrower and its Subsidiaries.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Lender” has the meaning specified in Section 6.02.
“Rating Agency” means any of S&P or Moody’s.
“Ratings-Based Applicable Rate” means the applicable percentages per annum determined, at any time, based on the range into which the Debt Ratings then fall, in accordance with the following table:
Ratings-Based Applicable Rate |
||||||
Pricing Level |
Debt Ratings (Moody’s/S&P) |
Revolving Credit Facility |
Term Facility |
|||
Eurodollar RateTerm SOFR Loans, LIBOR Daily Floating RateSOFR Loans and Letters of Credit |
Base Rate Loans |
Facility Fee |
Eurodollar RateTerm SOFR Loans and Daily SOFR Loans |
Base Rate Loans |
||
I |
≥ A- / A3 |
0.725% |
0.000% |
0.125% |
0.800% |
0.000% |
II |
BBB+ / Baa1 |
0.775% |
0.000% |
0.150% |
0.850% |
0.000% |
III |
BBB / Baa2 |
0.850% |
0.000% |
0.200% |
1.000% |
0.000% |
IV |
BBB- / Baa3 |
1.050% |
0.050% |
0.250% |
1.250% |
0.250% |
V |
< BBB- / Baa3 (or unrated) |
1.400% |
0.400% |
0.300% |
1.650% |
0.650% |
If at any time the REIT has two (2) Debt Ratings, and such Debt Ratings are not equivalent, then: (A) if the difference between such Debt Ratings is one ratings category (e.g. Baa2 by Moody’s and BBB- by S&P), the Ratings-Based Applicable Rate shall be the rate per annum that would be applicable if the higher of the Debt Ratings were used; and (B) if the difference between such Debt Ratings is two ratings categories (e.g. Baa1 by Moody’s and BBB- by S&P) or more, the Ratings-Based Applicable Rate shall be the rate per annum that would be applicable if the rating that is one higher than the lower of the applicable Debt Ratings were used.
Initially, the Ratings-Based Applicable Rate shall be determined based upon the Debt Rating(s) specified in the certificate delivered pursuant to clause (ii) of the definition of “Investment Grade Pricing Effective Date”. Thereafter, each change in the Ratings-Based Applicable Rate resulting from a publicly announced change in a Debt Rating shall be effective, in the case of an upgrade, during the period commencing on the date of delivery by the REIT to the Administrative Agent of notice thereof pursuant to Section 6.03(e) and ending on the date immediately preceding the effective date of the next such change and, in the case of a downgrade, during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.
“Real Property” means real property assets that are (a) owned or acquired by one or more Persons that are not members of the Consolidated Group, (b) located in the United States of America and (c) either (i) a retail facility or (ii) a mixed-use facility with respect to which at least 75% of gross income is expected to be generated by the retail component of such facility.
“Recipient” means the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder.
“Recourse Indebtedness” means Indebtedness for borrowed money (other than Indebtedness under the Loan Documents) in respect of which recourse for payment is to any Loan Party, excluding any Indebtedness in which recourse for payment to any Loan Party is limited solely for fraud, misrepresentation, misapplication of cash, waste, failure to pay taxes, environmental claims and liabilities and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guaranty or indemnification agreements in non-recourse financings of real estate. For the avoidance of doubt, “Recourse Indebtedness” shall include Indebtedness arising under Guarantees by a Loan Party of Non-Recourse Indebtedness and Guarantees by a Loan Party of obligations under Swap Contracts to the extent that (x) such Guarantee provides for recourse to such Loan Party or any of its assets and (y) the guarantor’s obligations under such Guarantee have become payable or cash collateral in respect thereof has been demanded. For purposes of Section 8.01(e) the amount of Recourse Indebtedness of such Loan Party arising under any such Guarantee shall be the maximum face amount payable by it thereunder.
“Register” has the meaning specified in Section 11.06(c).
“REIT” has the meaning specified in the first introductory paragraph hereto.
“REIT Status” means, with respect to any Person, (a) the qualification of such Person as a real estate investment trust under the provisions of Sections 856 et seq. of the Code and (b) the applicability to such Person and its shareholders of the method of taxation provided for in Sections 857 et seq. of the Code.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors, consultants, service providers and representatives of such Person and of such Person’s Affiliates.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“Relevant Payment” has the meaning specified in Section 10.11.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.
“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice and (b) with respect to an L/C Credit Extension, a Letter of Credit Application.
“Required Lenders” means, as of any date of determination, two or more Lenders having greater than 50% of the sum of (a) the Total Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (b) the aggregate unused Commitments; provided that the unused Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes
of making a determination of Required Lenders; provided further that, Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Revolving Credit Lender shall be deemed to be held by the applicable L/C Issuer in making such determination.
“Required Revolving Lenders” means, as of any date of determination, two or more Revolving Credit Lenders having greater than 50% of the sum of the (a) Total Revolving Credit Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders; provided further that, the amount of any participation in any Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Revolving Credit Lender shall be deemed to be held by the applicable L/C Issuer in making such determination.
“Required Subsidiary Guarantor” means (a) at all times prior to an Investment Grade Release, each Owner with respect to any Property to be included as an Unencumbered Property, and (b) upon and at all times following an Investment Grade Release, each Owner with respect to any Property to be included as an Unencumbered Property (if any) that is a borrower or guarantor of, or is otherwise obligated in respect of, any Unsecured Indebtedness (other than Indebtedness under the Facilities), but only for so long as such Subsidiary remains obligated in respect of such Unsecured Indebtedness, in each case under clauses (a) and (b), together with their successors and permitted assigns, in each case, to the extent such Subsidiary has not been released from its obligations hereunder in accordance with Section 10.12.
“Required Term Lenders” means, as of any date of determination, two or more Term Lenders having greater than 50% of the Term Facility on such date; provided that the portion of the Term Facility held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Term Lenders.
“Rescindable Amount” has the meaning specified in Section 2.12(b)(ii).
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means (a) in the case of the Borrower, (i) the chief executive officer, president, chief financial officer, treasurer, chief accounting officer or controller of the Borrower (or if the Borrower does not have any officers, of the general partner of the Borrower) designated as an “Authorized Signer” in Section I of the Borrower’s Instruction Certificate, (ii) solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary of the Borrower (or if the Borrower does not have any officers, of the general partner of the Borrower) and (iii) solely for purposes of notices given pursuant to Article II, any officer or employee of the Borrower (or if the Borrower does not have any officers, of the general partner of the Borrower) designated as an “Authorized Person” in Section II of the Borrower’s Instruction Certificate, (b) in the case of any other Loan Party that has one or more officers, (i) the
chief executive officer, president, chief financial officer, treasurer, chief accounting officer or controller of the applicable Loan Party for whom the Administrative Agent has received an incumbency certificate, (ii) solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary of the applicable Loan Party and (iii) solely for purposes of notices given pursuant to Article II, any officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent and for whom the Administrative Agent has received an incumbency certificate, and (c) in the case of any other Loan Party that does not have any officers, (i) the chief executive officer, president, chief financial officer, treasurer, chief accounting officer or controller of the general partner, manager, managing member or member, as applicable, of such Loan Party for whom the Administrative Agent has received an incumbency certificate, (ii) solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary of the general partner, manager, managing member or member, as applicable, of such Loan Party and (iii) solely for purposes of notices given pursuant to Article II, any officer or employee of the general partner, manager, managing member or member, as applicable, of such Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent and for whom the Administrative Agent has received an incumbency certificate. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party (or general partner, manager, managing member or member, as applicable, of such Loan Party) and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any Subsidiary thereof, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to such Person’s stockholders, partners or members (or the equivalent Person thereof).
“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurodollar RateTerm SOFR Loans, having the same Interest Period made by each of the Revolving Credit Lenders pursuant to Section 2.01(a).
“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligation to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.01(a) and (b) purchase participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Revolving Credit Exposure” means, as to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Lender’s participation in L/C Obligations at such time.
“Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time. On the Closing Date, the Revolving Credit Facility iswas $300,000,000.
“Revolving Credit Lender” means, at any time, any Lender that has a Revolving Credit Commitment at such time.
“Revolving Credit Loan” has the meaning specified in Section 2.01(a).
“Revolving Credit Note” means a promissory note made by the Borrower in favor of a Revolving Credit Lender evidencing Revolving Credit Loans made by such Lender, substantially in the form of Exhibit C-1.
“S&P” means S&P Global Ratings, a division of S&P Global, and any successor to its rating agency business.
“Sanction(s)” means any sanction administered or enforced by the United States Government (including without limitation, OFAC), the United Nations Security Council, the European Union, HerHis Majesty’s Treasury or other relevant sanctions authority.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Second Amendment” means that certain Second Amendment to Second Amended and Restated Credit Agreement, dated as of December [●], 2022, among the Borrower, the Guarantors, the Lenders, the Administrative Agent and certain other parties.
“Second Amendment Effective Date” means December [●], 2022.
“Second Maturity Date Extension” has the meaning specified in Section 2.14(a).
“Secured Indebtedness” means, with respect to any Person, all Indebtedness of such Person that is secured by a Lien on any asset (including without limitation any Equity Interest) owned or held by any Person or any Subsidiary thereof; provided that a negative pledge shall not, in and of itself, cause any Indebtedness to be considered to be Secured Indebtedness.
“Secured Recourse Indebtedness” means, with respect to any Person, Recourse Indebtedness of such Person that is secured by a Lien.
“Single Asset Entity” means a Person (other than an individual) that (a) only owns or leases pursuant to an Eligible Ground Lease a single real property and/or cash and other assets of nominal value incidental to such Person’s ownership of such real property; (b) is engaged only in the business of owning, developing and/or leasing such real property; and (c) receives substantially all of its gross revenues from such real property. In addition, if the assets of a Person consist solely of (i) Equity Interests in one or more other Single Asset Entities and (ii) cash and other assets of nominal value incidental to such Person’s ownership of the other Single Asset Entities, such Person
shall also be deemed to be a Single Asset Entity for purposes of this Agreement (such an entity, a “Single Asset Holding Company”).
“Single Asset Holding Company” has the meaning specified in the definition of Single Asset Entity.
“SOFR” has the meaning specified in the definition of Daily Simple SOFR.
“SOFR Early Opt-in” means the Administrative Agent and the Borrower have elected to replace LIBOR pursuant to (1) an Early Opt-in Election and (2) Section 3.03(c)(i) and paragraph (1) of the definition of “Benchmark Replacement”means, with respect to any applicable determination date, the Secured Overnight Financing Rate published on the fifth U.S. Government Securities Business Day preceding such date by the SOFR Administrator on the Federal Reserve Bank of New York’s website (or any successor source); provided however that if such determination date is not a U.S. Government Securities Business Day, then SOFR means such rate that applied on the first U.S. Government Securities Business Day immediately prior thereto.
“SOFR Adjustment” means 0.10% (10 basis points).
“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“Solvency Certificate” means a Solvency Certificate of the chief financial officer or the chief accounting officer of the REIT, substantially in the form of Exhibit I.
“Specified Event of Default” means any Event of Default other than an Event of Default arising under (a) Section 8.01(b) solely from the Borrower’s or another Loan Party’s failure to perform or observe any term, covenant or agreement contained in any of Sections 6.01(c), 6.02(c),
(e) or (h), 6.05(a) (solely with respect to a Subsidiary that is not a Loan Party), (b) or (c), or 6.10 or (b) Section 8.01(c).
“Specified Subsidiary” means any Subsidiary that (a) is not a Loan Party, and (b) would not be a Subsidiary but for the governing body or management of such Subsidiary being controlled, directly, or indirectly through one or more intermediaries, or both, by the REIT or its Subsidiaries.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the REIT.
“Subsidiary Guarantor” means, at any time, a Subsidiary that at such time is a party to the Guaranty.
“Successor Rate” has the meaning specified in Section 3.03(b).
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended
to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.
“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).
“Tangible Net Worth” means, for the Consolidated Group as of any date of determination, (a) total equity of the Consolidated Group, minus (b) all intangible assets of the Consolidated Group (other than lease intangibles), plus (c) all accumulated depreciation and amortization of the Consolidated Group, in each case on a consolidated basis determined in accordance with GAAP; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of the foregoing items and components attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Tangible Net Worth.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Borrowing” means a borrowing consisting of simultaneous Term Loans of the same Type and, in the case of Eurodollar RateTerm SOFR Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01(b).
“Term Commitment” means, as to each Lender, its obligation to make and/or hold Term Loans to the Borrower pursuant to Section 2.01(b) in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Term Lender’s name on Schedule 2.01 under the caption “Term Commitment” or opposite such caption in the Assignment and Assumption or New Lender Joinder Agreement pursuant to which such Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.
“Term Facility” means, (a) at any time on or prior to the Closing Date, the aggregate amount of the Term Lenders’ Term Commitments at such time and (b) at any time after the Closing Date, the aggregate amount of Term Loans of all Term Lenders outstanding at such time. On the Closing Date, the Term Facility iswas $400,000,000.
“Term Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Term Commitment at such time and (b) at any time after the Closing Date, any Lender that holds a Term Loan at such time.
“Term Loan” means an advance made by a Term Lender under the Term Facility.
“Term Note” means a promissory note made by the Borrower in favor of a Term Lender evidencing Term Loans made by such Term Lender, substantially in the form of Exhibit C-2.
“Term SOFR” means, for the applicable corresponding tenor (or if any Available Tenor of a Benchmark does not correspond to an Available Tenor for the applicable Benchmark Replacement, the closest corresponding Available Tenor and if such Available Tenor corresponds equally to two Available Tenors of the applicable Benchmark Replacement, the corresponding tenor of the shorter duration shall be applied), the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body. :
(a) for any Interest Period with respect to a Term SOFR Loan, the rate per annum equal to the Term SOFR Screen Rate two U.S. Government Securities Business Days prior to the commencement of such Interest Period with a term equivalent to such Interest Period; provided that if the rate is not published prior to 11:00 a.m. on such determination date then Term SOFR means the Term SOFR Screen Rate on the first U.S. Government Securities Business Day immediately prior thereto, in each case plus the SOFR Adjustment; and
(b) for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to the Term SOFR Screen Rate with a term of one month commencing that day;
provided, that if Term SOFR determined in accordance with either of the foregoing provisions (a) or (b) of this definition would otherwise be less than zero, Term SOFR shall be deemed zero for purposes of the Loan Documents.
“Term SOFR Screen Rate” means the forward-looking SOFR term rate administered by CME (or any successor administrator reasonably satisfactory to the Administrative Agent) and published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time).
“Threshold Amount” means $30,000,000.
“Total Asset Value” means, with respect to the Consolidated Group as at any date of determination, without duplication, the sum of the following:
Notwithstanding the foregoing, for purposes of calculating Total Asset Value at any time the contribution for certain types of Investments shall be limited, without duplication, as follows (in each case, calculated on the basis of the Consolidated Group Pro Rata Share of such Investment consistent with the foregoing) with any excess over such limit being excluded from Total Asset Value:
“Total Credit Exposure” means, as to any Lender at any time, the Applicable Percentage of the Term Facility, the unused Revolving Credit Commitment and Revolving Credit Exposure of such Lender at such time.
“Total Indebtedness” means, as at any date of determination, the aggregate amount of all Indebtedness of the Consolidated Group on such date determined on a consolidated basis; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of Indebtedness attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Total Indebtedness.
“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.
“Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of all Revolving Credit Loans and L/C Obligations.
“Total Secured Indebtedness” means, as at any date of determination, the aggregate amount of all Secured Indebtedness of the Consolidated Group on such date determined on a consolidated basis; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of Secured Indebtedness attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Total Secured Indebtedness.
“Total Unsecured Indebtedness” means, as at any date of determination, the aggregate amount of all Unsecured Indebtedness of the Consolidated Group on such date determined on a consolidated basis; provided that with respect to any Non-Wholly Owned Consolidated Subsidiary, only the Consolidated Group Pro Rata Share of Unsecured Indebtedness attributable to the Consolidated Group’s interests in such Non-Wholly Owned Consolidated Subsidiary shall be included in the calculation of Total Unsecured Indebtedness.
“Type” means, with respect to a Committed Loan, its character as a Base Rate Loan, LIBOR Daily Floating RateSOFR Loan or a Eurodollar RateTerm SOFR Loan.
“UCP” means the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600 (or such later version thereof as may be in effect at the applicable time).
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unconsolidated Affiliate” means, at any date, an Affiliate of the REIT whose financial results are not required to be consolidated with the financial results of the REIT in accordance with GAAP.
“Unencumbered Asset Value” means, at any time for the Consolidated Group, without duplication, the sum of the following:
Notwithstanding the foregoing, for purposes of calculating Unencumbered Asset Value at any time, the contribution for certain types of Investments shall be limited, without duplication, as follows (in each case, calculated on the basis of the Consolidated Group Pro Rata Share of such Investment consistent with the foregoing) with any excess over such limit being excluded from Unencumbered Asset Value:
“Unencumbered First Mortgage Receivable” means any Mortgage Loan Receivable that meets each of the following criteria:
“Unencumbered NOI” means, at any time for the Consolidated Group, the sum of the Net Operating Income of all Unencumbered Properties for the then most recently ended period of four consecutive fiscal quarters, minus Net Operating Income attributable to Unencumbered Properties
that were Disposed of by the Consolidated Group during such period, minus the aggregate Annual Capital Expenditure Adjustment for such period with respect to all Unencumbered Properties.
“Unencumbered Property” means any Property that meets each of the following criteria:
“United States” and “U.S.” mean the United States of America.
“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).
“Unrestricted Cash” means, at any time, (a) the aggregate amount of cash and Cash Equivalents of a Person at such time that are not subject to any pledge, Lien or control agreement (excluding statutory Liens in favor of any depositary bank where such cash and Cash Equivalents are maintained), minus (b) amounts included in the foregoing clause (a) that are held by a Person other than a member of the Consolidated Group as a deposit or security for Contractual Obligations.
“Unsecured Indebtedness” means, with respect to any Person, all Indebtedness of such Person that is not Secured Indebtedness, including Indebtedness under the Loan Documents.
“Unsecured Interest Expense” means, for any period, the portion of Interest Expense for such period in respect of Total Unsecured Indebtedness determined in accordance with GAAP.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“U.S. Government Securities Business Day” means any Business Day, except any Business Day on which any of the Securities Industry and Financial Markets Association, the New York Stock Exchange or the Federal Reserve Bank of New York is not open for business because such day is a legal holiday under the federal laws of the United States or the laws of the State of New York, as applicable.
“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(III).
“USA PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
“Usage” means, with respect to any day, the ratio (expressed as a percentage) of (a) the sum of (i) the Outstanding Amount of Revolving Credit Loans on such day and (ii) the Outstanding Amount of L/C Obligations on such day to (b) the Revolving Credit Commitments in effect on such day.
“Wells Fargo” means Wells Fargo Bank, National Association and its successors.
“Wholly-Owned” means, with respect to the ownership by any Person of any Property, that one hundred percent (100%) of the title to such Property is held in fee directly or indirectly by, or one hundred percent (100%) of such Property is ground leased pursuant to an Eligible Ground Lease directly or indirectly by, such Person.
“Wholly Owned Subsidiary” means, as to any Person, (a) any corporation 100% of whose Equity Interests (other than directors’ qualifying shares) is at the time owned by such Person and/or one or more Wholly Owned Subsidiaries of such Person and (b) any partnership, association, joint
venture, limited liability company or other entity in which such Person and/or one or more Wholly Owned Subsidiaries of such Person have a 100% equity interest at such time; provided that, solely for purposes of clause (c) of the definition of “Unencumbered Property”, the term Wholly Owned Subsidiary shall include a Controlled Joint Venture.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will immediately notify the applicable L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against such L/C Issuer and its correspondents unless such notice is given as aforesaid.
The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the Collateral Account. Moneys in the Collateral Account shall be applied by the Administrative Agent to reimburse each L/C Issuer for L/C Disbursements for which it has not been reimbursed, together with related fees, costs, and customary processing charges, and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the L/C Obligations at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Credit Lenders with L/C Obligations representing 66-2/3% of the total L/C Obligations), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived.
(ii) Upon the request of the Required Lenders, while any Event of Default exists (other than as set forth in clause (b)(i) above), the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicableApplicable Laws.
(iii) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or any L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the applicable L/C Issuer, as the case may be, the amount due. With respect to any payment that the Administrative Agent makes for the account of the Lenders or any L/C Issuer hereunder as to which the Administrative Agent determines (which determination shall be conclusive absent manifest error) that any of the following applies (such payment referred to as the “Rescindable Amount”): (1) the Borrower has not in fact made such payment; (2) the
Administrative Agent has made a payment in excess of the amount so paid by the Borrower (whether or not then owed); or (3) the Administrative agent has for any reason otherwise erroneously made such payment; then each of the Lenders or the applicable L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the Rescindable Amount so distributed to such Lender or such L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(iii) Notice. A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable lawApplicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.
(ii) Each Lender and each L/C Issuer shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender or such L/C Issuer (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (y) the Administrative Agent and the Loan Parties, as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Loan Parties, as applicable, against any Excluded Taxes attributable to such Lender or such L/C Issuer, in each case, that are payable or paid by the Administrative Agent or a Loan Party in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender and each L/C
Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or such L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).
(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable lawApplicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii) Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,
(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable lawApplicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable lawApplicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable lawApplicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(iii) Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to perform any of its obligations hereunder or make, maintain or fund or chargeLoans whose interest with respect to any Credit Extensionis determined by reference to SOFR, Daily Simple SOFR or Term SOFR, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank marketSOFR, Daily Simple SOFR or Term SOFR, then, onupon notice thereof by such Lender to the Borrower (through the Administrative Agent), (ia) any obligation of such Lender to issue, make, maintain, fund or charge interest with respect to any such Credit Extension or continue Eurodollar RateSOFR Loans or to convert Base Rate Loans or LIBOR Floating Rate Loans to Eurodollar Rate Loans or to convert Eurodollar Rate Loans or Base Rate Loans to LIBOR Floating Rateto SOFR Loans shall be suspended, and (iib) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar RateTerm SOFR component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar RateTerm SOFR component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (xi) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay all SOFR Loans of such Lender or, if applicable, convert all Eurodollar Rate Loans and LIBOR Floating RateSOFR Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar RateTerm SOFR component of the Base Rate), in each case, immediately in the case of LIBOR Floating Rate Loans and, or, in the case of Eurodollar RateTerm SOFR Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar RateTerm SOFR Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (yii) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar RateTerm SOFR, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar RateTerm SOFR component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar RateTerm SOFR. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 3.05.
Thereafter, (x) the obligation of the Lenders to make or maintain Daily SOFR Loans and/or Term SOFR Loans, as applicable, or to convert to, Eurodollar Rate Loans and/or LIBOR Floating Rate LoansBase Rate Loans to SOFR Loans, shall be suspended (in each case to the extent of the affected Eurodollar Rate Loan, LIBOR Floating Rate LoanSOFR Loans or Interest Periods)Period(s) or determination date(s), as applicable, and (y) in the event of a determination described in the preceding sentence with respect to the Eurodollar RateTerm SOFR component of the Base Rate, the utilization of the Eurodollar RateTerm SOFR component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (or, in the case of a determination by the Required Lenders described in clause (ii) of Section 3.03(a), until the Administrative Agent upon instruction of the Required Lenders) revokes such notice.
Upon receipt of such notice, (i) the Borrower may revoke any pending request for a Committed Borrowing of, or conversion to Daily SOFR Loans, or Committed Borrowing of, or conversion to, or continuation of Eurodollar RateTerm SOFR Loans (to the extent of the affected Eurodollar Rate LoanTerm SOFR Loans or Interest Periods) or any pending request for a Borrowing of or conversion to LIBOR Floating Rate Loans (to the extent of the affected LIBOR Floating Rate Loans or periods) or determination date(s), as applicable), or, failing that, will be deemed to have converted such request into a request for a borrowingCommitted Borrowing of Base Rate Loans in the amount specified therein and (ii) any outstanding affected Eurodollar Rate Loan willSOFR Loans shall be deemed to have been converted into ato Base Rate Loans immediately, in the case of a Daily SOFR Loan, or at the end of the applicable Interest Period and any outstanding LIBOR Floating Rate Loan shall be deemed to have been converted to a Base Rate, in the case of a Term SOFR Loan immediately.
(b) Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (i) of Section 3.03(a), the Administrative Agent, in consultation with the Borrower and Required Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (i) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (i) of the first sentence of Section 3.03(a), (ii) the Administrative Agent or the Required Lenders notify the Administrative Agent and the Borrower that such alternative interest
rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (iii) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.
(c) Notwithstanding anything to the contrary herein or in any other Loan Document:
(y) On the Early Opt-in Effective Date in respect of an Other Rate Early Opt-in, the Benchmark Replacement will replace LIBOR for all purposes hereunder and under any Loan Document in respect of any setting of such Benchmark on such day and all subsequent settings without any amendment to, or further action or consent of any other party to this Agreement or any other Loan Document.
(iii) At any time that the administrator of the then-current Benchmark has permanently or indefinitely ceased to provide such Benchmark or such Benchmark has been announced by the regulatory supervisor for the administrator of such Benchmark pursuant to public statement or publication of information to be no longer representative of the underlying market and economic reality that such Benchmark is intended to measure and that representativeness will not be restored, the Borrower may revoke any request for a borrowing of, conversion to or continuation of Loans to be made, converted or continued that would bear interest by reference to such Benchmark until the Borrower's receipt of notice from the Administrative Agent that a Benchmark Replacement has replaced such Benchmark, and, failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans. During the period referenced in the foregoing sentence, the component of Base Rate based upon the Benchmark will not be used in any determination of Base Rate.
notwithstanding anything to the contrary contained herein, if the events or circumstances of the type described in Section 3.03(b)(i) or (ii) have occurred with respect to the Successor Rate then in effect, then, the Administrative Agent and the Borrower may amend this Agreement solely for the purpose of replacing SOFR, Daily Simple SOFR and/or Term SOFR, or any then current Successor Rate, in accordance with this Section 3.03 with an alternative benchmark rate giving due consideration to any evolving or then existing convention for similar credit facilities syndicated and agented in the U.S. and denominated in Dollars for such alternative benchmarks, and, in each case,
including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similar credit facilities syndicated and agented in the U.S. and denominated in Dollars for such benchmarks. For the avoidance of doubt, any such proposed rate, including for the avoidance of doubt, any adjustment thereto, shall constitute a “Successor Rate”. Any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders object to such amendment.
The Administrative Agent will promptly (in one or more notices) notify the Borrower and each Lender of the implementation of any Successor Rate.
Any Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Administrative Agent, such Successor Rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.
Notwithstanding anything else herein, if at any time any Successor Rate as so determined would otherwise be less than zero, the Successor Rate will be deemed to be zero for the purposes of this Agreement and the other Loan Documents.
(iv) In connection with the implementation and administration of a Benchmark Replacement,Successor Rate the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided that, with respect to any such amendment effected, the Administrative Agent shall post each such amendment implementing such Conforming Changes to the Borrower and the Lenders reasonably promptly after such amendment becomes effective.
(v) The Administrative Agent will promptly notify the Borrower and the Lenders of (A) the implementation of any Benchmark Replacement and (B) the effectiveness of any Benchmark Replacement Conforming Changes. Any determination, decision or election that may be made by the Administrative Agent pursuant to this Section 3.03(c), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 3.03(c).
(vi) At any time (including in connection with the implementation of a Benchmark Replacement), (A) if the then-current Benchmark is a term rate (including Term SOFR or LIBOR), then the Administrative Agent may remove any tenor of such Benchmark that is unavailable or non-representative for Benchmark (including Benchmark Replacement) settings and (B) the Administrative Agent may reinstate any such previously removed tenor for Benchmark (including Benchmark Replacement) settings.
and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or such L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or such L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or such L/C Issuer, the Borrower will pay to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or such L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.
(e) Reserves on Eurodollar Rate Loans and LIBOR Floating Rate Loans. The Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan and LIBOR Floating Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest or costs shall be due and payable 10 days from receipt of such notice.
including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.
Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.
Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to another Type or a continuation of Eurodollar RateTerm SOFR Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.
Each Loan Party represents and warrants to the Administrative Agent and the Lenders that:
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, each Loan Party shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03, 6.11, and 6.15) cause each Subsidiary thereof to:
As to any information contained in materials furnished pursuant to Section 6.02(d), the Loan Parties shall not be separately required to furnish such information under subsection (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Loan Parties to furnish the information and materials described in subsections (a) and (b) above at the times specified therein.
Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the REIT posts such documents, or provides a link thereto on the REIT’s website on the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents are posted on the REIT’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that the REIT shall notify the Administrative Agent and each Lender (by facsimile or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and each Lender shall be solely responsible for maintaining its copies of such documents.
Each Loan Party hereby acknowledges that (a) the Administrative Agent, the Bookrunners and/or the Arrangers may, but shall not be obligated to, make available to the Lenders and the L/C Issuers materials and/or information provided by or on behalf of any Loan Party hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the REIT or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. Each Loan Party hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” each Loan Party shall be deemed to have authorized the Administrative Agent, the Bookrunners, the Arrangers, the L/C Issuers and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Loan Parties or their respective securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent, the Bookrunners and the Arrangers shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”
Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, no Loan Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly:
Notwithstanding anything to the contrary contained herein, in no event shall the Borrower be permitted to (i) merge, dissolve or liquidate or consolidate with or into any other Person unless after giving effect thereto the Borrower is the sole surviving Person of such transaction and no Change of Control results therefrom, (ii) consummate a Division or (iii) engage in any transaction pursuant to which it is reorganized or reincorporated in any jurisdiction other than a state of the United States or the District of Columbia.
For the avoidance of doubt, nothing in this Section 7.05 restricts the issuance, sale or other Disposition of Equity Interests of the REIT, to the extent that such issuance, sale or other Disposition does not result in Change of Control.
lend, contribute or otherwise mademake available such proceeds to fund any activity or business in any Designated Jurisdiction; (ii)Subsidiary, joint venture partner or other Person, to fund any activityactivities of or business ofwith any Person located, organized or residing in any Designated Jurisdiction or whothat, at the time of such funding, is the subject of any Sanctions; or (iii) in any other manner that will result in any violation by any Person (including any Lender, any Arranger, any Bookrunner, the Administrative Agent or any L/C Issuer) of any Sanctions.
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Loan Party under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of each L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuers (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuers (including fees and time charges for attorneys who may be employees of any Lender or any L/C Issuer) and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause Fourth held by them;
Fifth, to the Administrative Agent for the account of the L/C Issuers, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Sections 2.03 and 2.16; and
Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Sections 2.03(c) and 2.16, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuers, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 11.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or any L/C Issuer any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or any L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or any L/C Issuer in any such proceeding.
Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.
Anything contained in this Guaranty to the contrary notwithstanding, it is the intention of each Guarantor and the Creditor Parties that the obligations of each Guarantor (other than the REIT) hereunder at any time shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code (Title 11, United States Code) or any comparable provisions of any similar federal or state law. To that end, but only in the event and to the extent that after giving effect to Section 10.11, such Guarantor’s obligations with respect to the Obligations or any payment made pursuant to such Obligations would, but for the operation of the first sentence of this paragraph, be subject to avoidance or recovery in any such proceeding under applicable Debtor Relief Laws after giving effect to Section 10.11, the amount of such Guarantor’s obligations with respect to the Obligations shall be limited to the largest amount which, after giving effect thereto, would not, under applicable Debtor Relief Laws, render such Guarantor’s obligations with respect to the Obligations unenforceable or avoidable or otherwise subject to recovery under applicable Debtor Relief Laws. To the extent any payment actually made pursuant to the Obligations exceeds the limitation of the first sentence of this paragraph and is otherwise subject to avoidance and recovery in any such proceeding under applicable Debtor Relief Laws, the amount subject to avoidance shall in all events be limited to the amount by which such actual payment exceeds such limitation, and the Obligations as limited by the first sentence of this paragraph shall in all events remain in full force and effect and be fully enforceable against such Guarantor. The first sentence of this paragraph is intended solely to preserve the rights of the Creditor Parties hereunder against such Guarantor in such proceeding to the maximum extent permitted by applicable Debtor Relief Laws and neither such Guarantor, the Borrower, any other Guarantor nor any other Person shall have any right or claim under such sentence that would not otherwise be available under applicable Debtor Relief Laws in such proceeding.
(i) the Borrower shall have delivered to the Administrative Agent, at least five (5) Business Days prior to the date of the proposed release or re-designation (or such shorter period of time as agreed to by the Administrative Agent in writing), a written request for such release or re-designation (a “Guarantor Release Notice”) which shall identify the
Subsidiary or Property, as applicable, to which it applies and the proposed date of the release or re-designation,
(ii) the representations and warranties made or deemed made by the Loan Parties in any Loan Document are true and correct in all material respects on and as of the date of such release or re-designation and, both before and after giving effect to such release or re-designation (without duplication of materiality qualifiers set forth in such representations and warranties), except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties are true and correct in all material respects on and as of such earlier date without duplication of materiality qualifiers set forth in such representations and warranties) and except that for purposes of this Section 10.12(b), the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01,
(iii) immediately after giving effect to such release or re-designation the Loan Parties shall be in compliance, on a pro forma basis, with the provisions of Section 7.11,
(iv) no Default shall have occurred and be continuing or would result under any other provision of this Agreement after giving effect to such release or re-designation, and
(v) the Borrower shall have delivered to the Administrative Agent an Officer’s Certificate certifying that the conditions in clauses (ii) through (iv) above have been satisfied.
Upon the satisfaction of the conditions in clauses (i) through (v) above, each Unencumbered Property that is owned or ground leased directly or indirectly by a Subsidiary Guarantor that is the subject of a release pursuant to this Section 10.12(b) will immediately upon such release cease to be an Unencumbered Property.
The Administrative Agent will (at the sole cost of the Borrower) following receipt of such Guarantor Release Notice and Officer’s Certificate, and each of the Lenders and each of the L/C Issuers irrevocably authorizes the Administrative Agent to, execute and deliver such documents as the Borrower or such Subsidiary Guarantor may reasonably request as is necessary or desirable to evidence the release of such Subsidiary Guarantor from its obligations under the Guaranty or the re-designation of such Property to no longer be an Unencumbered Property, as applicable, which documents shall be reasonably satisfactory to the Administrative Agent.
(i) the Borrower shall have delivered to the Administrative Agent, at least five (5) Business Days prior to the date of the proposed release or re-designation (or such shorter period of time as agreed to by the Administrative Agent in writing), a Guarantor Release Notice,which notice shall identify the Subsidiary or Property, as applicable, to which it
applies, the proposed date of the release or re-designation, as applicable, and specify, in the case of a release of a Subsidiary Guarantor from its obligations under the Guaranty, whether the Subsidiary Guarantor to which such notice relates will be a borrower or guarantor of, or otherwise have payment obligations in respect of, any Unsecured Indebtedness,
(ii) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects on and as of the effective date of such release or re-designation and, both before and after giving effect to such release or re-designation, except (A) to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, (B) any representation or warranty that is already by its terms qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects as of such applicable date (including such earlier date set forth in the foregoing clause (A)) after giving effect to such qualification and (C) for purposes of this Section 10.12(c), the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01,
(iii) immediately after giving effect to such release or re-designation, the Loan Parties shall be in compliance, on a pro forma basis, with the provisions of Section 7.11,
(iv) no Default shall have occurred and be continuing or would result under any other provision of this Agreement after giving effect to such release or re-designation, and
(v) the Borrower shall have delivered to the Administrative Agent an Officer’s Certificate certifying that the conditions in clauses (ii) through (iv) above have been satisfied.
For the avoidance of doubt, if a Subsidiary Guarantor is a borrower or guarantor of, or is otherwise obligated in respect of, any Indebtedness at the time that it is released from its obligations under the Guaranty, each Unencumbered Property that is owned or ground leased directly or indirectly by such Subsidiary Guarantor that is the subject of a release pursuant to this Section 10.12(c) will immediately upon such release cease to be an Unencumbered Property.
The Administrative Agent will (at the sole cost of the Borrower) following receipt of such Guarantor Release Notice and Officer’s Certificate, and each of the Lenders and each of the L/C Issuers irrevocably authorizes the Administrative Agent to, execute and deliver such documents as the Borrower or such Subsidiary Guarantor may reasonably request as is necessary or desirable to evidence the release of such Subsidiary Guarantor from its obligations under the Guaranty or the re-designation of such Property to no longer be an Unencumbered Property, as applicable, which documents shall be reasonably satisfactory to the Administrative Agent.
and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by thean L/C IssuersIssuer in addition to the Lenders required above, affect the rights or duties of anysuch L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, (x) affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document or (y) amend ormodify, change, waive, or consent to any departure from, or have the definitionseffect of “LIBOR”, “Available Tenor”, “Benchmark”, “Benchmark Replacement”, “Benchmark Replacement Conforming Changes”, “Benchmark Transition Event”, “modifying, changing, waiving or consenting to any departure from, Section 3.03, any term defined in such section, any term defined in any other section or provision in this Agreement relating to Daily Simple SOFR”,
“Early Opt-in Effective Date”, “Early Opt-in Election”, “Other Rate Early Opt-in”, “Relevant Governmental Body”, “, SOFR”, “SOFR Early Opt-in”, or “Term SOFR” or the provisions of Section 3.03 or any Successor Rate, or any term or provision relating to the replacement of any such rate or Successor Rate; and (iii) any Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein,
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.
Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and all of the L/C Issuers; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any L/C Issuer from exercising the rights and remedies that inure to its benefit (solely in its capacity as an L/C Issuer) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 11.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the
avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
For purposes of this Section, “Information” means all information received from any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any L/C Issuer on a nonconfidential basis prior to disclosure by any Loan Party or any Subsidiary thereof, provided that, in the case of information received from any Loan Party or any Subsidiary thereof after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
The Administrative Agent, each Lender and each L/C Issuer each acknowledges that (a) the Information may include material non-public information concerning a Loan Party or a Subsidiary thereof, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicableApplicable Laws, including United States Federal and state securities Laws.
Notwithstanding anything herein to the contrary, the Administrative Agent, each Lender, each L/C Issuer and each of their respective Related Parties may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of any transaction and all materials of any kind (including opinions or other tax analyses) that are provided to the Administrative Agent, any Lender, any L/C Issuer or any of their respective Related Parties relating to such tax treatment or tax structure.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
Each party hereto agrees that (a) an assignment required pursuant to this Section 11.13 may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee and (b) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to an be bound by the terms thereof; provided that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided, further that any such documents shall be without recourse to or warranty by the parties thereto.
Neither the Administrative Agent nor any L/C Issuer shall be responsible for or have any duty to ascertain or inquire into the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document (including, for the avoidance of doubt, in connection with the Administrative Agent’s or anysuch L/C Issuer’s reliance on any Electronic Signature transmitted by telecopy, emailed .pdf or any other electronic means). The Administrative Agent and anyeach L/C Issuer shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any Communication (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution or signed using an Electronic Signature) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).
Each of the Loan Parties and each Lender Party hereby waives (i) any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, or any other Loan Document based solely on the lack of paper original copies of this Agreement, or such other Loan Document, and (ii) waives any claim against the Administrative Agent, each Lender Party and each Related Party for any liabilities arising solely from the Administrative Agent’s and/or any Lender Party’s reliance on or use of Electronic Signatures, including any liabilities arising as a result of the failure of the Loan Parties to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
[signature pages immediately follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
[Signature Page to Second Amended and Restated Credit Agreement]
Exhibit 21
LIST OF AFFILIATES OF
ACADIA REALTY TRUST
SUBSIDIARIES |
|
JURISDICTION OF INCORPORATION/ ORGANIZATION |
Acadia Realty Limited Partnership |
|
DE |
ARLP GS LLC |
|
DE |
100 Bull LLC |
|
DE |
102 EB LLC |
|
DE |
1035 Third Avenue LLC |
|
DE |
106 Spring Retail Owner LLC |
|
DE |
11 East Walton LLC |
|
DE |
110 UP NY LLC |
|
DE |
1100 N. State Lender LLC |
|
DE |
120 West Broadway Lender LLC |
|
DE |
120 West Broadway LLC |
|
DE |
121 Spring Street Owner LLC |
|
DE |
1238 Wisconsin Holdco LLC |
|
DE |
1238 Wisconsin Lender LLC |
|
DE |
1238 Wisconsin Owner LLC |
|
DE |
131-135 Prince Street LLC |
|
DE |
1324 14th Street Owner LLC |
|
DE |
135 East 65th Street Lender LLC |
|
DE |
146 Geary LLC |
|
DE |
146 Geary Member LLC |
|
DE |
151 North State Owner LLC |
|
DE |
152-154 Spring Street Lender LLC |
|
DE |
152-154 Spring Street Retail LLC |
|
DE |
1526 14th Street Owner LLC |
|
DE |
1529 14th Street Owner LLC |
|
DE |
158 East 126th Street LLC |
|
DE |
163 Highland Owner LLC |
|
DE |
165 Newbury Street Owner LLC |
|
DE |
17 East 71 Street LLC |
|
DE |
182-186 Spring Street Lender LLC |
|
DE |
188 Spring Street Lender LLC |
|
DE |
1964 Union Member LLC |
|
DE |
201 Needham Street Owner LLC |
|
DE |
201 WB LLC |
|
DE |
210 Bowery LLC |
|
DE |
210 Bowery Owners LLC |
|
DE |
210 Bowery Residential Owners LLC |
|
DE |
2207 Fillmore Member LLC |
|
DE |
2208-2216 Fillmore Member LLC |
|
DE |
230/240 WB LLC |
|
DE |
239 Greenwich Associates Limited Partnership |
|
CT |
241 Bedford JV LLC |
|
DE |
241 Bedford JV Member LLC |
|
DE |
241 Bedford Mezz Owner LLC |
|
DE |
241 Bedford Owner LLC |
|
DE |
241 Bedford Portfolio Lender LLC |
|
DE |
2520 Flatbush Avenue LLC |
|
DE |
252-264 Greenwich Avenue Retail LLC |
|
DE |
2622-2634 Henderson Ave Owner LLC |
|
DE |
2675 City Center Partner LLC |
|
DE |
2675 Geary Boulevard LP |
|
DE |
27 East 61st Street LLC |
|
DE |
300 WB LLC |
|
DE |
3131 M Street Owner LLC |
|
DE |
313-315 Bowery Lender LLC |
|
DE |
313-315 Bowery LLC |
|
DE |
3177 East Main LLC |
|
DE |
3200 M Street Lender LLC |
|
DE |
37 Greene Street Owner LLC |
|
DE |
41 Greene Street Owner LLC |
|
DE |
1
SUBSIDIARIES |
|
JURISDICTION OF INCORPORATION/ ORGANIZATION |
430 Broome Street Lender LLC |
|
DE |
45 Greene Street Owner LLC |
|
DE |
47-49 Greene Street Owner LLC |
|
DE |
51 Greene Street Owner LLC |
|
DE |
53 Greene Street Owner LLC |
|
DE |
555 9th Street LP |
|
DE |
555 9th Street Partner LLC |
|
DE |
55-57 Spring Street Lender LLC |
|
DE |
565 Broadway Owner LLC |
|
DE |
57-63 Greene Acquisition LLC |
|
DE |
57-63 Greene Street NYC Lender LLC |
|
DE |
61 Main Street Owner LLC |
|
DE |
640 Broadway Lender LLC |
|
DE |
640 Broadway Member LLC |
|
DE |
640 Broadway Owners LLC |
|
DE |
640 Broadway Owners Subsidiary I LLC |
|
DE |
640 Broadway Owners Subsidiary II LLC |
|
DE |
717 N Michigan Ave Owner LLC |
|
DE |
717 N Michigan Ave Owner Subsidiary LLC |
|
DE |
801 Madison Avenue Owner LLC |
|
DE |
8-12 East Walton LLC |
|
DE |
840 North Michigan Avenue Acquisition LLC |
|
DE |
8436-8452 Melrose General Partner LLC |
|
DE |
8436-8452 Melrose Owner LP |
|
DE |
849 W. Armitage Owner LLC |
|
DE |
850 Third Preferred Equity Member LLC |
|
DE |
865 West North Avenue LLC |
|
DE |
868 Broadway LLC |
|
DE |
900 Block I Holdings LLC |
|
DE |
900 W Randolph Preferred Member LLC |
|
DE |
907 W. Armitage Owner LLC |
|
DE |
910 W Armitage Owner LLC |
|
DE |
912 W. Armitage Owner LLC |
|
DE |
917 W. Armitage Owner LLC |
|
DE |
991 Madison Ave LLC |
|
DE |
A/L 3200 M Street LLC |
|
DE |
ABR Amboy Road LLC |
|
DE |
ABS Investor LLC |
|
DE |
ABS Opportunities, LLC |
|
DE |
ABS Preferred Equity Member LLC fka Broughton Street Partners Lender LLC |
|
DE |
Acadia 1520 Milwaukee Avenue LLC |
|
DE |
Acadia 152-154 Spring Street Retail LLC |
|
DE |
Acadia 161ST Street LLC |
|
DE |
Acadia 181 Main Street LLC |
|
DE |
Acadia 239 Greenwich Avenue, LLC |
|
DE |
Acadia 28 Jericho Turnpike LLC |
|
DE |
Acadia 2914 Third Avenue LLC |
|
DE |
Acadia 3104 M Street LLC |
|
DE |
Acadia 3200 M Street LLC |
|
DE |
Acadia 330 River Street LLC |
|
DE |
Acadia 3780-3858 Nostrand Avenue LLC |
|
DE |
Acadia 4401 White Plains Road LLC |
|
DE |
Acadia 56 East Walton LLC |
|
DE |
Acadia 5-7 East 17th Street LLC |
|
DE |
Acadia 639 West Diversey LLC |
|
DE |
Acadia 654 Broadway LLC |
|
DE |
Acadia 654 Broadway Member LLC |
|
DE |
Acadia 83 Spring Street LLC |
|
DE |
Acadia Absecon LLC |
|
DE |
Acadia Albee LLC |
|
DE |
Acadia Albertsons Investors LLC |
|
DE |
Acadia Bartow Avenue, LLC |
|
DE |
Acadia Bloomfield NJ LLC |
|
DE |
Acadia Brandywine Holdings, LLC |
|
DE |
Acadia Brentwood LLC |
|
DE |
Acadia Cambridge LLC |
|
DE |
2
SUBSIDIARIES |
|
JURISDICTION OF INCORPORATION/ ORGANIZATION |
Acadia Chestnut LLC |
|
DE |
Acadia Chicago LLC |
|
DE |
Acadia Clark-Diversey LLC |
|
DE |
Acadia Connecticut Avenue LLC |
|
DE |
Acadia Cortlandt Crossing LLC |
|
DE |
Acadia Cortlandt LLC |
|
DE |
Acadia Crescent Plaza LLC |
|
DE |
Acadia Crossroads, LLC |
|
DE |
Acadia Cub Foods Investors LLC |
|
DE |
Acadia D.R. Management LLC |
|
DE |
Acadia Elmwood Park LLC |
|
DE |
Acadia Fund IV Investments LLC |
|
DE |
Acadia Gold Coast LLC |
|
DE |
Acadia Gotham Member LLC |
|
DE |
Acadia Heathcote LLC |
|
DE |
Acadia Hobson LLC |
|
DE |
Acadia Investors IV, Inc. |
|
MD |
Acadia L.U.F. LLC |
|
DE |
Acadia Mad River Property LLC |
|
DE |
Acadia Mark Plaza LLC |
|
DE |
Acadia Market Square, LLC |
|
DE |
Acadia MCB Holding Company II LLC |
|
DE |
Acadia MCB Holding Company LLC |
|
DE |
Acadia Mercer Street LLC |
|
DE |
Acadia Merrillville LLC |
|
DE |
Acadia Merrillville Realty, L.P. |
|
IN |
Acadia Mervyn I, LLC |
|
DE |
Acadia Mervyn II, LLC |
|
DE |
Acadia Mervyn Investors II, LLC |
|
DE |
Acadia Naamans Road LLC |
|
DE |
Acadia New Loudon, LLC |
|
DE |
Acadia North Michigan Avenue LLC |
|
DE |
Acadia Nostrand Avenue LLC |
|
DE |
Acadia Pacesetter LLC |
|
DE |
Acadia Paramus Plaza LLC |
|
DE |
Acadia Pelham Manor LLC |
|
DE |
Acadia Property Holdings, LLC |
|
DE |
Acadia Realty Acquisition II, LLC |
|
DE |
Acadia Realty Acquisition III LLC |
|
DE |
Acadia Realty Acquisition IV LLC |
|
DE |
Acadia Realty Acquisition V LLC |
|
DE |
Acadia Republic Farmingdale LLC |
|
DE |
Acadia Rush Walton LLC |
|
DE |
Acadia Second City 1521 West Belmont LLC |
|
DE |
Acadia Second City 2206-08 North Halsted LLC |
|
DE |
Acadia Second City 2633 North Halsted LLC |
|
DE |
Acadia Second City 843-45 West Armitage LLC |
|
DE |
Acadia Self Storage Management Company LLC |
|
DE |
Acadia Self Storage Management Investment Company LLC |
|
DE |
Acadia SP Investor LLC |
|
DE |
Acadia Strategic Opportunity Fund II, LLC |
|
DE |
Acadia Strategic Opportunity Fund III LLC |
|
DE |
Acadia Strategic Opportunity Fund III Special Member LLC |
|
DE |
Acadia Strategic Opportunity Fund IV LLC |
|
DE |
Acadia Strategic Opportunity Fund IV Promote Member LLC |
|
DE |
Acadia Strategic Opportunity Fund IV Special Member LLC |
|
DE |
Acadia Strategic Opportunity Fund V LLC |
|
DE |
Acadia Strategic Opportunity Fund V Promote Member LLC |
|
DE |
Acadia Strategic Opportunity Fund V Special Member LLC |
|
DE |
Acadia Town Center Holdco LLC |
|
DE |
Acadia Town Line, LLC |
|
CT |
Acadia Urban Development LLC |
|
DE |
Acadia West 54th Street LLC |
|
DE |
Acadia West Diversey LLC |
|
DE |
Acadia West Shore Expressway LLC |
|
DE |
Acadia-Washington Square Albee LLC |
|
DE |
3
SUBSIDIARIES |
|
JURISDICTION OF INCORPORATION/ ORGANIZATION |
ACF Paramus Plaza LLC |
|
DE |
ACRS II LLC |
|
DE |
ACRS, Inc. |
|
DE |
AFWV Investor Member LLC |
|
DE |
Airport Mall Owner LLC |
|
DE |
A-K JV I LLC |
|
DE |
Albee Development LLC |
|
DE |
Albee Food LLC |
|
DE |
Albee Phase 3 Development LLC |
|
DE |
Albee Retail 21 Development LLC |
|
DE |
Albee Retail Development LLC |
|
DE |
Albee Tower I Management LLC |
|
DE |
Albee Tower I Member LLC |
|
DE |
Albee Tower I Owners LLC |
|
NY |
AMCB Bloomfield LLC |
|
DE |
AMCB Eden Square LLC |
|
DE |
AMCB Kennedy LLC |
|
DE |
AMCB Manassas Promenade LLC |
|
DE |
AMCB Rhode Island Mall Owner LLC |
|
DE |
AP Fillmore II LLC |
|
DE |
AP Fillmore LLC |
|
DE |
AP Union II LLC |
|
DE |
ARA IV Class A Member LLC |
|
DE |
BDG Gotham Plaza LLC |
|
DE |
Bedford Green LLC |
|
DE |
Beverly Owner GP LLC |
|
DE |
Beverly Owner Holdco LP |
|
DE |
Beverly Owner LP |
|
DE |
BKLYN Studios LLC |
|
DE |
Brandywine Town Center Maintenance Corporation |
|
DE |
Brandywine Town Center/Market Square Lender LLC |
|
DE |
Broughton Street Partners Company II LLC |
|
DE |
Broughton Street Partners Company LLC |
|
DE |
California & Armitage Main Owner LLC |
|
DE |
California & Armitage Outparcel Owner LLC |
|
DE |
Canton Marketplace Owner LLC |
|
DE |
City Point 21 Development LLC |
|
DE |
City Point Retail Development LLC |
|
DE |
Concord & Milwaukee Owner LLC |
|
DE |
Cortlandt Crossing Sewage Works Corporation |
|
NY |
Cortlandt Town Center Member LLC |
|
DE |
Crossing Release Parcel Owner LLC |
|
DE |
Crossroads II |
|
NY |
Crossroads II, LLC |
|
DE |
Crossroads Joint Venture |
|
NY |
Crossroads Joint Venture, LLC |
|
DE |
Dauphin Plaza Member LLC |
|
DE |
Dauphin Plaza Owner LLC |
|
DE |
Dekalb Market Hall LLC |
|
DE |
Elk Grove General Partner LLC |
|
DE |
Elk Grove Owner LP |
|
DE |
Fairlane Green Condo Manager LLC |
|
DE |
Fairlane Green Owner LLC |
|
DE |
FAPFABI LLC |
|
DC |
FC Riverdale Investor Member LLC |
|
DE |
FC Riverdale Lender LLC |
|
DE |
FC Riverdale Shopping Center, LLC |
|
DE |
Fifth Wall Ventures Retail Fund, L.P. |
|
DE |
Frederick County Square Improvements, LLC |
|
DE |
Frederick Crossing Improvements, LLC |
|
DE |
Frederick Crossing Operator, LLC |
|
DE |
Fund II Lender LLC |
|
DE |
George Washington Bridge Bus Station Development Venture LLC |
|
DE |
Georgetown Ownership Associates LLC |
|
DE |
Gotham Member LLC |
|
DE |
GT Metro Portfolio Member LLC |
|
DE |
4
SUBSIDIARIES |
|
JURISDICTION OF INCORPORATION/ ORGANIZATION |
Heathcote Associates, L.P. |
|
NY |
Henderson Ave Dev 1 Owner LLC |
|
DE |
Henderson Ave Dev 2 Owner LLC |
|
DE |
Henderson Ave Grand Owner LLC |
|
DE |
Henderson Ave Land Owner LLC |
|
DE |
Henderson Ave Lots Owner LLC |
|
DE |
Henderson Ave Main Owner LLC |
|
DE |
Henderson Ave Shops Owner LLC |
|
DE |
Henderson Portfolio Owner LLC |
|
DE |
Hickory Ridge Owner LLC |
|
DE |
Hiram Pavilion Owner LLC |
|
DE |
JP Waterville Owner LLC |
|
DE |
La Frontera Holdco LLC |
|
DE |
La Frontera Improvements, LLC |
|
DE |
La Frontera Lender LLC |
|
DE |
La Frontera Landlord, LLC |
|
DE |
La Frontera Member LLC |
|
DE |
Lake Montclair-Dumfries, VA LLC |
|
DE |
Landstown Commons Owner LLC |
|
DE |
Lincoln Commons Owner LLC |
|
DE |
Lincoln Place SC Owner LLC |
|
DE |
Lincoln Road III LLC |
|
FL |
L.U.F. Associates LLC |
|
DC |
Mark Plaza Fifty L.P. |
|
PA |
Mark Twelve Associates, L.P. |
|
PA |
Mayfair Center Owner LLC |
|
DE |
MCB Bloomfield LLC |
|
NJ |
MC MP 850 Third Holdings LLC |
|
DE |
Miami Beach Lincoln, LLC |
|
FL |
Mid-Atlantic Portfolio Holdings, LLC |
|
DE |
Mid-Atlantic Portfolio Lender LLC |
|
DE |
Mid-Atlantic Portfolio Member LLC |
|
DE |
Midstate Owner LLC |
|
DE |
Mohawk Commons Member LLC |
|
DE |
Mohawk Commons Owner LLC |
|
DE |
Monroe Marketplace Owner LLC |
|
DE |
New Towne Center Owner LLC |
|
DE |
North & Kingsbury Owner LLC |
|
DE |
Pacesetter Lender LLC |
|
DE |
Pacesetter/Ramapo Associates |
|
NY |
Palm Coast Landing Owner LLC |
|
DE |
Plaza Santa Fe Owner LLC |
|
DE |
RD Abington Associates Limited Partnership |
|
DE |
RD Absecon Associates, L.P. |
|
DE |
RD Bloomfield Associates Limited Partnership |
|
DE |
RD Branch Associates L.P. |
|
NY |
RD Elmwood Associates, L.P. |
|
DE |
RD Hobson Associates, L.P. |
|
DE |
RD Methuen Associates Limited Partnership |
|
MA |
RD Smithtown, LLC |
|
NY |
Restaurants at Fort Point LLC |
|
DE |
RIM Member LLC |
|
DE |
Roosevelt Galleria LLC |
|
DE |
SC Retail Owner LLC |
|
DE |
Self Storage Management LLC |
|
DE |
Shops At Grand Avenue LLC |
|
DE |
South Hills Lender LLC |
|
DE |
South Hills Member LLC |
|
DE |
South Hills Owner LLC |
|
DE |
SP Holdings I LLC |
|
DE |
SP Holdings II LLC |
|
DE |
SP Holdings III LLC |
|
DE |
State & Washington Owner LLC |
|
DE |
Storage Post Holdings LLC |
|
DE |
Storage Post Member I LLC |
|
DE |
Strategic Opportunity Acquisition LLC |
|
DE |
5
SUBSIDIARIES |
|
JURISDICTION OF INCORPORATION/ ORGANIZATION |
Strategic Opportunity Fund Acquisition LLC |
|
DE |
Tri-City Plaza Lender LLC |
|
DE |
Tri-City Plaza Member LLC |
|
DE |
Tr-City Plaza Owner LLC |
|
DE |
Trussville Promenade I Owner LLC |
|
DE |
Trussville Promenade II Owner LLC |
|
DE |
Wake Forest Crossing Owner LLC |
|
DE |
Westport Retail Owner LLC |
|
DE |
White Oak Lender LLC |
|
DE |
Wood Ridge Improvements LLC |
|
DE |
Wood Ridge Plaza Member LLC |
|
DE |
6
EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
Acadia Realty Trust
Rye, New York
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-249900, 333-203236, 333-126712, 333-114785, 333-31630) and Form S-8 (Nos. 333-256025, 333-249898) of Acadia Realty Trust of our reports dated March 1, 2023, relating to the consolidated financial statements and financial statement schedules, and the effectiveness of Acadia Realty Trust’s internal control over financial reporting, which appear in this Form 10-K.
/s/ BDO USA, LLP
New York, New York
March 1, 2023
EXHIBIT 23.2
Consent of Independent Registered Public Accounting Firm
Acadia Realty Trust
Rye, New York
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-249900, 333-203236, 333-126712, 333-114785, 333-31630) and Form S-8 (Nos. 333-256025, 333-249898) of Acadia Realty Trust of our report dated March 1, 2023, relating to the combined financial statements of 840 North Michigan Avenue, Tenant-in-Common Interests, which appears in this Form 10-K.
/s/ BDO USA, LLP
New York, New York
March 1, 2023
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
BDO is the brand name for the BDO network and for each of the BDO Member Firms.
R-221 (11/20)
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a - 14(a)
(SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)
I, Kenneth F. Bernstein, certify that:
/s/ Kenneth F. Bernstein |
Kenneth F. Bernstein |
President and Chief Executive Officer |
March 1, 2023 |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a - 14(a)
(SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002)
I, John Gottfried, certify that:
/s/ John Gottfried |
John Gottfried |
Executive Vice President and |
Chief Financial Officer |
March 1, 2023 |
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Annual Report on Form 10-K of Acadia Realty Trust (the “Company”) for the period ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kenneth F. Bernstein, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
/s/ Kenneth F. Bernstein |
Kenneth F. Bernstein |
President and Chief Executive Officer |
March 1, 2023 |
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Annual Report on Form 10-K of Acadia Realty Trust (the “Company”) for the period ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Gottfried, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
/s/ John Gottfried |
John Gottfried |
Executive Vice President and |
Chief Financial Officer |
March 1, 2023 |
Exhibit 99.3
840 North Michigan Avenue, Tenant-in-Common Interests
Combined Financial Statements for the Years Ended December 31, 2022 and 2021
and Independent Auditor’s Report
1
840 North Michigan Avenue, Tenant-in-Common Interests
Combined Financial Statements
For the Years Ended December 31, 2022 and 2021 (Unaudited)
Contents
2
Independent Auditor’s Report
840 North Michigan Avenue, Tenant-in-Common Interests
Rye, New York
Opinion
We have audited the combined financial statements of 840 North Michigan Avenue, Tenant-in-Common Interests (the “Commonly-Held Property”), which comprise the combined balance sheet as of December 31, 2022, and the related combined statements of operations, tenant-in-common interests, and cash flows for the year then ended, and the related notes to the combined financial statements.
In our opinion, the accompanying combined financial statements present fairly, in all material respects, the financial position of the Commonly-Held Property as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Combined Financial Statements section of our report. We are required to be independent of the Commonly-Held Property and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Combined Financial Statements
Management is responsible for the preparation and fair presentation of the combined financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the combined financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Commonly-Held Property’s ability to continue as a going concern within one year after the date that the combined financial statements are issued or available to be issued.
Auditor’s Responsibilities for the Audit of the Combined Financial Statements
Our objectives are to obtain reasonable assurance about whether the combined financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the combined financial statements.
3
In performing an audit in accordance with GAAS, we:
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ BDO USA, LLP
New York, New York
March 1, 2023
4
840 North Michigan Avenue, Tenant-in-Common Interests
Combined Balance Sheets
|
|
December 31, |
|
|
December 31, |
|
||
(in thousands) |
|
2022 |
|
|
2021 |
|
||
Assets |
|
|
|
|
(Unaudited) |
|
||
Operating real estate: |
|
|
|
|
|
|
||
Land |
|
$ |
11,931 |
|
|
$ |
20,698 |
|
Buildings and improvements |
|
|
93,708 |
|
|
|
142,364 |
|
Construction in progress |
|
|
101 |
|
|
|
52 |
|
|
|
|
105,740 |
|
|
|
163,114 |
|
Less: accumulated depreciation |
|
|
(28,010 |
) |
|
|
(24,819 |
) |
Net operating real estate |
|
|
77,730 |
|
|
|
138,295 |
|
Cash |
|
|
1,175 |
|
|
|
1,347 |
|
Rents receivable |
|
|
591 |
|
|
|
1,167 |
|
Prepaid expenses |
|
|
18 |
|
|
|
19 |
|
Acquired lease intangibles, net of accumulated amortization of $12,661 and $11,094, respectively |
|
|
1,383 |
|
|
|
2,950 |
|
Total assets |
|
$ |
80,897 |
|
|
$ |
143,778 |
|
|
|
|
|
|
|
|
||
Liabilities and tenant-in-common interests |
|
|
|
|
|
|
||
Acquired lease intangibles, net of accumulated amortization of ($8,553) and ($5,009), respectively |
|
$ |
2,362 |
|
|
$ |
5,906 |
|
Accounts payable and accrued expenses |
|
|
3,027 |
|
|
|
4,370 |
|
Due to affiliates |
|
|
2 |
|
|
|
99 |
|
Deferred income and other liabilities |
|
|
3,771 |
|
|
|
1,451 |
|
Total liabilities |
|
|
9,162 |
|
|
|
11,826 |
|
Commitments and contingencies (Note 8) |
|
|
|
|
|
|
||
Tenant-in-common interests |
|
|
71,735 |
|
|
|
131,952 |
|
Total liabilities and tenant-in-common interests |
|
$ |
80,897 |
|
|
$ |
143,778 |
|
See accompanying notes to combined financial statements.
6
840 North Michigan Avenue, Tenant-in-Common Interests
Combined Statements of Operations
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
Revenues |
|
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|||
Rental income |
|
$ |
13,590 |
|
|
$ |
13,926 |
|
|
$ |
12,147 |
|
Total revenues |
|
|
13,590 |
|
|
|
13,926 |
|
|
|
12,147 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
4,757 |
|
|
|
5,135 |
|
|
|
5,359 |
|
Property operating |
|
|
653 |
|
|
|
457 |
|
|
|
456 |
|
Real estate taxes |
|
|
1,397 |
|
|
|
4,064 |
|
|
|
3,731 |
|
Impairment charge |
|
|
57,423 |
|
|
|
— |
|
|
|
— |
|
Total operating expenses |
|
|
64,230 |
|
|
|
9,656 |
|
|
|
9,546 |
|
|
|
|
|
|
|
|
|
|
|
|||
Net (loss) income |
|
|
(50,640 |
) |
|
|
4,270 |
|
|
|
2,601 |
|
See accompanying notes to combined financial statements.
7
840 North Michigan Avenue, Tenants-in-Common Interests
Combined Statements of Tenant-in-Common Interests
Years Ended December 31, 2022 and 2021 (Unaudited)
(in thousands) |
|
Acadia |
|
|
CHUSA |
|
|
Total |
|
|||
Combined tenant-in-common interests at January 1, 2020 (Unaudited) |
|
$ |
126,493 |
|
|
$ |
16,550 |
|
|
$ |
143,043 |
|
Distributions to tenant-in-common interests |
|
|
(7,742 |
) |
|
|
(1,013 |
) |
|
|
(8,755 |
) |
Net income allocated to tenant-in-common interests |
|
|
2,300 |
|
|
|
301 |
|
|
|
2,601 |
|
Combined tenant-in-common interests at December 31, 2020 (Unaudited) |
|
$ |
121,051 |
|
|
$ |
15,838 |
|
|
$ |
136,889 |
|
|
|
|
|
|
|
|
|
|
|
|||
Distributions to tenant-in-common interests |
|
|
(8,142 |
) |
|
|
(1,065 |
) |
|
|
(9,207 |
) |
Net income allocated to tenant-in-common interests |
|
|
3,776 |
|
|
|
494 |
|
|
|
4,270 |
|
Combined tenant-in-common interests at December 31, 2021 (Unaudited) |
|
$ |
116,685 |
|
|
$ |
15,267 |
|
|
$ |
131,952 |
|
|
|
|
|
|
|
|
|
|
|
|||
Distributions to tenant-in-common interests |
|
|
(8,470 |
) |
|
|
(1,107 |
) |
|
|
(9,577 |
) |
Net (loss) allocated to tenant-in-common interests |
|
|
(44,781 |
) |
|
|
(5,859 |
) |
|
|
(50,640 |
) |
Combined tenant-in-common interests at December 31, 2022 |
|
$ |
63,434 |
|
|
$ |
8,301 |
|
|
$ |
71,735 |
|
See accompanying notes to combined financial statements.
8
840 North Michigan Avenue, Tenant-in-Common Interests
Combined Statements of Cash Flows
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2022 |
|
|
2021 |
|
|
2020 |
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|||
Net (loss) income |
|
$ |
(50,640 |
) |
|
$ |
4,270 |
|
|
$ |
2,601 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization |
|
|
4,757 |
|
|
|
5,135 |
|
|
|
5,359 |
|
Impairment charge |
|
|
57,423 |
|
|
|
— |
|
|
|
— |
|
Amortization of lease intangibles |
|
|
(3,544 |
) |
|
|
(1,468 |
) |
|
|
(582 |
) |
Straight-line rents |
|
|
512 |
|
|
|
441 |
|
|
|
372 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|||
Due to/(from) affiliates |
|
|
(97 |
) |
|
|
98 |
|
|
|
(44 |
) |
Prepaid expenses and other assets |
|
|
1 |
|
|
|
17 |
|
|
|
11 |
|
Rents receivable |
|
|
64 |
|
|
|
(13 |
) |
|
|
(13 |
) |
Accounts payable and accrued expenses |
|
|
(1,342 |
) |
|
|
338 |
|
|
|
(54 |
) |
Deferred income and other liabilities |
|
|
2,320 |
|
|
|
18 |
|
|
|
616 |
|
Net cash provided by operating activities |
|
|
9,454 |
|
|
|
8,836 |
|
|
|
8,266 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|||
Development, construction and property improvement costs |
|
|
(49 |
) |
|
|
(52 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(49 |
) |
|
|
(52 |
) |
|
|
— |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|||
Distributions to members |
|
|
(9,577 |
) |
|
|
(9,207 |
) |
|
|
(8,755 |
) |
Net cash used in financing activities |
|
|
(9,577 |
) |
|
|
(9,207 |
) |
|
|
(8,755 |
) |
Decrease in cash |
|
|
(172 |
) |
|
|
(423 |
) |
|
|
(489 |
) |
Cash beginning of year |
|
|
1,347 |
|
|
|
1,770 |
|
|
|
2,259 |
|
Cash end of year |
|
$ |
1,175 |
|
|
$ |
1,347 |
|
|
$ |
1,770 |
|
See accompanying notes to combined financial statements.
9
840 North Michigan Avenue, Tenant-in-Common Interests
Notes to Combined Financial Statements
(dollars in thousands)
1. Organization
On December 3, 2014, two unrelated parties acquired an undivided 100% tenant-in-common (“TIC”) interest in a commercial retail property located at 840 North Michigan Avenue in Chicago, Illinois (the “commonly-held property”). 840 North Michigan Avenue Acquisition LLC (“Acadia”), a wholly-owned subsidiary of Acadia Realty Limited Partnership, holds an 88.43% TIC interest, and the remaining 11.57% TIC interest is held by an unaffiliated third-party CHUSA LLC (“CHUSA”), pursuant to the terms of the tenants-in-common agreement (the “TIC Agreement”). These combined financial statements represent 100% of the combined TIC interest in the commonly-held property for the years ended December 31, 2022 and 2021 and are being presented to satisfy certain reporting requirements of Acadia Realty Trust.
These combined financial statements exclude a $73.5 million mortgage loan (the "Mortgage Loan") and the related interest expense, which is the obligation of the individual TIC interest holders.
2. Summary of Significant Accounting Policies
Use of Estimates
Accounting principles generally accepted in the United States of America (“GAAP”) require estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The significant assumptions and estimates relate to the valuation of real estate, depreciable lives, revenue recognition and the collectability of rents receivable. Application of these estimates and assumptions requires the exercise of judgement as to future uncertainties and, as a result, actual results could differ from these estimates.
Real Estate
Land, buildings improvements, and other property are carried at cost less accumulated depreciation. Improvements and significant renovations that extend the useful lives of the property are capitalized, while replacements, maintenance, and repairs that do not improve or extend the lives of the respective assets are expensed as incurred.
Depreciation is computed on the straight-line basis over estimated useful lives of the assets as follows:
Buildings and improvements Useful life of 40 years for buildings and 15 years for improvements
Tenant improvements Shorter of economic life or lease terms
Upon acquisition of the real estate property, Management assessed the fair value of acquired assets and assumed liabilities (including land, buildings, and improvements, and identified intangibles such as above- and below-market leases and acquired in-place leases) and assumed liabilities in accordance with ASC Topic 805, “Business Combinations” and ASC Topic 350 “Intangibles – Goodwill and Other,” and allocated the acquisition price based on these assessments. As the acquisition of the property did not meet the criteria for a business combination, the property was accounted for as an asset acquisition; therefore, no goodwill was recorded, and acquisition costs were capitalized.
Management assessed the fair value of its tangible assets acquired and assumed liabilities based on estimated cash flow projections that utilized appropriate discount and capitalization rates and available market information at the measurement period. Estimates of future cash flows were based on several factors including the historical operating results, known trends, and market/economic conditions that may affect the property.
In determining the value of above- and below-market leases, Management estimated the present value difference between contractual rent obligations and estimated market rate of leases at the time of the transaction. To the extent there were fixed-rate options at below-market rental rates, management included these periods along with the current term below-market rent in arriving at the fair value of the acquired leases. The discounted difference between contract and market rents is being amortized to rental income over the remaining applicable lease term, inclusive of any option periods.
In determining the value of acquired in-place leases, Management considered market conditions at the time of the transaction and values the costs to execute similar leases during the expected lease-up period from vacancy to existing occupancy, including carrying costs. The value assigned to in-place leases and tenant relationships is amortized over the estimated remaining term of the leases. If a lease were to be terminated prior to its scheduled expiration, all unamortized costs (e.g., lease intangibles) relating to that lease would be written off.
10
Construction in progress pertains to construction activity at the commonly-held property that are in service and continue to operate during the construction period.
Real Estate Impairment – Impairment losses on a long-lived asset used in operations will be recorded when events and circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows, without interest charges to be generated by the asset is less than the carrying amounts of the asset. The commonly-held property is reviewed periodically to determine if its carrying amounts will be recovered from future operating cash flows. In cases where the carrying amount is not expected to be recovered, an impairment loss will be recognized. The determination of anticipated undiscounted cash flows is inherently subjective, requiring significant estimates made by management, and considers the most likely expected course of action at the balance sheet date based on current plans, intended holding periods and available market information. If management is evaluating the potential sale of an asset, the undiscounted future cash flows analysis is probability-weighted based upon management’s best estimate of the likelihood of the alternative courses of action as of the balance sheet date. Such cash flow projections consider factors such as expected future operating income, trends, and prospects, as well as the effects of demand, competition, and other factors. If an impairment is indicated, an impairment loss is recognized based on the excess of the carrying amount of the asset over its estimated fair value.
Impairment charges totaled $57,423 for the year ended December 31, 2022 (Note 7). No impairment losses were recognized in 2021.
Revenue Recognition and Accounts Receivable
Management accounts for its leases under Accounting Standard Codification (“ASC”) 842, Leases. Pursuant to ASC 842, management has made an accounting policy election to not separate the non-lease components from its leases, such as common area maintenance, and has accounted for each of its leases as a single lease component. In addition, management has elected to account only for those taxes that it pays on behalf of the tenant as reimbursable costs and will not account for those taxes paid directly by the tenant. Minimum rents from tenants are recognized using the straight-line method over the non-cancelable lease term of the respective leases. Lease termination fees are recognized upon the effective termination of a tenant’s lease when there are no further obligations under the lease. As of December 31, 2022 and 2021, unbilled rents receivable relating to the straight-lining of rents of $540 and $1,052, respectively, are included in Rents Receivable on the accompanying balance sheets. In addition, leases typically provide for the reimbursement of real estate taxes, insurance, and other property operating expenses. These reimbursements are recognized as revenue in the period the related expenses are incurred. To the extent that real estate taxes, insurance, and other property operating expenses are prepaid, they are included in Deferred income and other liabilities on the combined balance sheets.
Management assesses the collectability of its accounts receivable related to tenant revenues under ASC 842 related to billed rents, straight-line rents, recoveries from tenants, and other revenue taking into consideration historical write-off experience, tenant creditworthiness, current economic trends, and remaining lease terms. At both December 31, 2022 and December 31, 2021, there is no provision for doubtful accounts.
Cash
Cash is maintained at financial institutions and, at times, balances may exceed the limits insured by the Federal Deposit Insurance Corporation.
Income Taxes
No provision for income taxes is necessary in these financial statements because, as a TIC interest, the tax effect of its activities accrues to the individual TIC interest holders.
11
Concentration of Credit Risk
There is a concentration of credit risk as space in the property is 100% leased to two tenants which terms expire at various dates through March 20, 2024, not including renewal options. It is anticipated that both of these tenants will not renew upon expiration of its current term, including one such tenant that comprises approximately 68.1% of the space with a scheduled expiration in August 2023. These two tenants each accounted for more than 10% of total revenues for the year ended December 31, 2022 and 2021.
3. Lease Intangibles
Upon acquisitions of real estate, management assesses the fair value of acquired assets (including land, buildings, and improvements, and identified intangibles such as above- and below-market leases, including below- market options and acquired in-place leases) and assumed liabilities. The lease intangibles are amortized over the remaining terms of the respective leases, including option periods where applicable.
Intangible assets and liabilities are summarized as follows (in thousands):
|
|
December 31, 2022 |
|
|
December 31, 2021 (Unaudited) |
|
||||||||||||||||||
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
|
Gross Carrying |
|
|
Accumulated |
|
|
Net Carrying |
|
||||||
Amortizable Intangible Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
In-place lease intangible assets |
|
$ |
2,950 |
|
|
$ |
(1,567 |
) |
|
$ |
1,383 |
|
|
$ |
4,516 |
|
|
$ |
(1,566 |
) |
|
$ |
2,950 |
|
|
|
$ |
2,950 |
|
|
$ |
(1,567 |
) |
|
$ |
1,383 |
|
|
$ |
4,516 |
|
|
$ |
(1,566 |
) |
|
$ |
2,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortizable Intangible Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Below-market rent |
|
$ |
(5,906 |
) |
|
$ |
3,544 |
|
|
$ |
(2,362 |
) |
|
$ |
(7,374 |
) |
|
$ |
1,468 |
|
|
$ |
(5,906 |
) |
|
|
$ |
(5,906 |
) |
|
$ |
3,544 |
|
|
$ |
(2,362 |
) |
|
$ |
(7,374 |
) |
|
$ |
1,468 |
|
|
$ |
(5,906 |
) |
Amortization of in-place lease intangible assets is recorded in depreciation and amortization expense and amortization of above-market rent and below-market rent is recorded as a reduction to and increase to rental income, respectively, in the statements of operations.
The scheduled amortization of acquired lease intangible assets and liabilities, net as of December 31, 2022 is as follows:
Years Ending December 31, |
|
Net Increase in |
|
|
Increase to |
|
|
Net (Expense) Income |
|
|||
2023 |
|
$ |
2,362 |
|
|
$ |
(1,238 |
) |
|
$ |
1,124 |
|
2024 |
|
|
— |
|
|
|
(145 |
) |
|
|
(145 |
) |
2025 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
2026 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
2027 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Thereafter |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
2,362 |
|
|
$ |
(1,383 |
) |
|
$ |
979 |
|
4. Mortgage Loan Payable (Not Reflected in Combined Financial Statements)
In connection with the acquisition of the commonly-held property, each TIC interest holder is party to the Mortgage Loan. The Mortgage Loan is subject to certain debt service coverage ratio requirements, with which the commonly-held property is compliant as of December 31, 2022 and 2021. Interest expense on the Mortgage Loan was $3,145 for the year ended December 31, 2022 and $3,180 for the year
12
ended December 31, 2021. The Mortgage Loan and related interest expense is the responsibility of the individual TIC-interest holders and is not reflected in these combined financial statements.
The following table summarizes the mortgage notes payable as of December 31, 2022 and 2021:
|
|
|
|
|
|
December 31, |
|
|||||
Description |
|
Interest Rate |
|
Maturity Date |
|
2022 |
|
|
2021 |
|
||
Secured |
|
|
|
|
|
|
|
|
(Unaudited) |
|
||
Promissory Note |
|
4.49% |
|
February 10, 2025 |
|
|
55,000 |
|
|
|
55,000 |
|
Additional Advance Promissory Note |
|
3.97% |
|
February 10, 2025 |
|
|
18,500 |
|
|
|
18,500 |
|
Total Debt |
|
|
|
|
|
|
73,500 |
|
|
|
73,500 |
|
13
Scheduled Debt Principal Payments
The scheduled principal repayments, without regard to available extension options (described further below) as of December 31, 2022 are as follows:
Year Ending December 31, |
|
|
|
|
2023 |
|
$ |
— |
|
2024 |
|
|
— |
|
2025 |
|
|
73,500 |
|
2026 |
|
|
— |
|
2027 |
|
|
— |
|
Thereafter |
|
|
— |
|
Total indebtedness |
|
|
73,500 |
|
5. Related Party Transactions
Acadia Realty Limited Partnership (the "ARLP Manager"), an affiliate of Acadia, and Parkside Realty, Inc. (“Parkside Manager” and collectively, “Property Managers”), were engaged by the TIC interest holders to perform respective property management duties for the commonly-held property pursuant to the terms of the property management agreement (the “Management Agreement”). Under the Management Agreement, the ARLP Manager and Parkside Manager each receive a property management fee equal to 1.0% of the monthly gross revenues of the commonly-held property. Total management fees earned by the Property Managers for the year ended December 31, 2022 and 2021 were $259 and $257, respectively, and are included in Property operating expenses on the combined statements of operations. Payables due to Property Managers totaled $2 and $99 at December 31, 2022 and 2021, respectively.
6. Tenant Leases
Space in the commonly-held property is currently 100% leased to two tenants which terms expire at various dates through March 20, 2024. Space is generally leased to tenants pursuant to agreements that provide for terms ranging generally from three to ten years and generally provide for additional rents based on certain operating expenses. It is anticipated that both of these tenants will not renew upon expiration of its current term, including one such tenant that comprises approximately 68.1% of the space with a scheduled expiration in August 2023. During the years ended December 31, 2022 and 2021, variable-lease revenue of $2,047 and $4,461, respectively, primarily for real estate taxes and common area maintenance charges are included in rental income in the combined statements of operations.
Minimum future annual rentals to be received under non-cancelable operating leases as of December 31, 2022 are summarized as follows:
Year Ending December 31, |
|
Minimum Rental |
|
|
2023 |
|
$ |
6,368 |
|
2024 |
|
|
665 |
|
2025 |
|
|
5 |
|
2026 |
|
|
2 |
|
2027 |
|
|
— |
|
Thereafter |
|
|
— |
|
Total |
|
$ |
7,040 |
|
7. Impairment
During 2022, management identified an impairment indicator of a significant decrease in the market price of its real estate. As a result, management recorded impairment charges of $57,423 for the year ended December 31, 2022. The fair value of these assets were derived using discounted cash flow analyses based on Level 3 inputs based on projections of: holding period, net operating income, capitalization rate, and incremental costs.
14
8. Commitments and Contingencies
As an acquirer and holder of real estate, the TIC is subject to various federal and local environmental laws. Compliance by the TIC with existing laws has not had a material adverse effect on the TIC and management does not believe that it will have a negative impact in the future. However, the TIC cannot predict the impact of new or changed laws or regulations on its current investment in operating real estate.
The TIC may, over time, be subject to routine litigation arising out of the normal course of business, none of which is expected to have a material adverse effect on the financial position, results of operations or liquidity of the TIC.
9. Tenants-in-Common Interests
The TIC Agreement includes, among other matters, the rights and limitations of the TIC interest holders.
Pursuant to the TIC Agreement, each TIC interest holder is responsible for its pro-rata share of contributions which may be required thereunder in connection with the ownership, operation, management, and maintenance of the commonly-held property, and each TIC interest holder is entitled to receive its pro-rata share of applicable revenues and proceeds derived from the commonly-held property in accordance with the terms thereof.
10. Subsequent Events
Management has performed subsequent events procedures through March 1, 2023, which is the date the financial statements were available to be issued. No material subsequent events have occurred since December 31, 2022, that require recognition or disclosure in the combined financial statements.
15