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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-12002

 

ACADIA REALTY TRUST

(Exact name of registrant in its charter)

 

 

 

 

 

 

Maryland

 (State or other jurisdiction of

 incorporation or organization)

23-2715194

 (I.R.S. Employer

 Identification No.)

411 THEODORE FREMD AVENUE, SUITE 300, RYE, NY

 (Address of principal executive offices)

10580

 (Zip Code)

(914) 288-8100

(Registrant’s telephone number, including area code)

Title of class of registered securities

Trading symbol

Name of exchange on which registered

Common shares of beneficial interest, par value $0.001 per share

AKR

The New York Stock Exchange

Indicate by check mark whether the registrant (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.

 

 

 

 

Yes

No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

 

 

 

Yes

No ☐

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.

 

Large Accelerated Filer

  Accelerated Filer

  Emerging Growth Company

 

 

 

 

 

 

Non-accelerated Filer

  Smaller Reporting Company

 

 

 

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

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No

As of April 26, 2024 there were 103,181,468 common shares of beneficial interest, par value $0.001 per share (“Common Shares”), outstanding.

 


 

ACADIA REALTY TRUST AND SUBSIDIARIES

FORM 10-Q

INDEX

 

 

 

 

 

 

 

 

 

Item No.

 

Description

Page

 

PART I - FINANCIAL INFORMATION

 

1.

 

Financial Statements

4

 

Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2024 and December 31, 2023

4

 

Condensed Consolidated Statements of Income (Unaudited) for the Three Months Ended March 31, 2024 and 2023

5

 

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three Months Ended March 31, 2024 and 2023

6

 

Condensed Consolidated Statements of Changes in Equity (Unaudited) for the Three Months Ended March 31, 2024 and 2023

7

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2024 and 2023

8

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

10

 

 

2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

36

3.

 

Quantitative and Qualitative Disclosures about Market Risk

47

4.

 

Controls and Procedures

49

 

 

 

PART II - OTHER INFORMATION

 

1.

 

Legal Proceedings

50

1A.

 

Risk Factors

50

2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

50

3.

 

Defaults Upon Senior Securities

50

4.

 

Mine Safety Disclosures

50

5.

 

Other Information

50

6.

 

Exhibits

51

 

Signatures

52

 

 


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q (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) macroeconomic conditions, including due to geopolitical conditions and instability, which may lead to a disruption of or lack of access to the capital markets, disruptions and instability in the banking and financial services industries and rising inflation; (ii) our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (iii) 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; (iv) increases in our borrowing costs as a result of rising inflation, changes in interest rates and other factors; (v) our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; (vi) 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; (vii) our ability to obtain the financial results expected from our development and redevelopment projects; (viii) 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; (ix) our potential liability for environmental matters; (x) damage to our properties from catastrophic weather and other natural events, and the physical effects of climate change; (xi) the economic, political and social impact of, and uncertainty surrounding, any public health crisis, such as the COVID-19 Pandemic, which adversely affected the Company and its tenants’ business, financial condition, results of operations and liquidity; (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; and (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.

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” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other periodic or current reports the Company files with the SEC, including those set forth under the headings “Item 1A. Risk Factors” and “Item 2. 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 Notes to the Condensed Consolidated Financial Statements of the registrant referenced in Part I, Item 1. Financial Statements.

3


 

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

 

 

March 31,

 

 

December 31,

 

(in thousands, except share amounts)

 

2024

 

 

2023

 

ASSETS

 

 

 

 

 

 

Investments in real estate, at cost

 

 

 

 

 

 

Operating real estate, net

 

$

3,499,695

 

 

$

3,517,281

 

Real estate under development

 

 

96,594

 

 

 

94,799

 

Net investments in real estate

 

 

3,596,289

 

 

 

3,612,080

 

Notes receivable, net ($1,416 and $1,279 of allowance for credit losses as of March 31, 2024 and December 31, 2023, respectively)

 

 

118,877

 

 

 

124,949

 

Investments in and advances to unconsolidated affiliates

 

 

198,702

 

 

 

197,240

 

Other assets, net

 

 

212,699

 

 

 

208,460

 

Right-of-use assets - operating leases, net

 

 

28,348

 

 

 

29,286

 

Cash and cash equivalents

 

 

18,795

 

 

 

17,481

 

Restricted cash

 

 

8,119

 

 

 

7,813

 

Marketable securities

 

 

27,274

 

 

 

33,284

 

Rents receivable, net

 

 

51,532

 

 

 

49,504

 

Assets of properties held for sale

 

 

11,147

 

 

 

11,057

 

Total assets (a)

 

$

4,271,782

 

 

$

4,291,154

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Mortgage and other notes payable, net

 

$

962,468

 

 

$

930,127

 

Unsecured notes payable, net

 

 

646,524

 

 

 

726,727

 

Unsecured line of credit

 

 

114,687

 

 

 

213,287

 

Accounts payable and other liabilities

 

 

218,116

 

 

 

229,375

 

Lease liability - operating leases

 

 

30,620

 

 

 

31,580

 

Dividends and distributions payable

 

 

19,978

 

 

 

18,520

 

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

 

 

7,858

 

 

 

7,982

 

Total liabilities (a)

 

 

2,000,251

 

 

 

2,157,598

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Redeemable noncontrolling interests (Note 10)

 

 

45,462

 

 

 

50,339

 

Equity:

 

 

 

 

 

 

Acadia Shareholders' Equity

 

 

 

 

 

 

Common shares, $0.001 par value per share, authorized 200,000,000 shares, issued and outstanding 103,155,933 and 95,361,676 shares, respectively

 

 

103

 

 

 

95

 

Additional paid-in capital

 

 

2,078,295

 

 

 

1,953,521

 

Accumulated other comprehensive income

 

 

46,942

 

 

 

32,442

 

Distributions in excess of accumulated earnings

 

 

(364,440

)

 

 

(349,141

)

Total Acadia shareholders’ equity

 

 

1,760,900

 

 

 

1,636,917

 

Noncontrolling interests

 

 

465,169

 

 

 

446,300

 

Total equity

 

 

2,226,069

 

 

 

2,083,217

 

Total liabilities, redeemable noncontrolling interests, and equity

 

$

4,271,782

 

 

$

4,291,154

 

 

(a)
Represents the consolidated assets and liabilities of Acadia Realty Limited Partnership (the "Operating Partnership"), which is a consolidated variable interest entity ("VIE") (Note 15). The consolidated balance sheets include the following amounts related to our consolidated VIEs that are consolidated by the Operating Partnership: $1,672.4 million and $1,679.8 million of Operating real estate, net; $29.0 million and $28.9 million of Real estate under development; $90.2 million and $92.8 million of Investments in and advances to unconsolidated affiliates; $96.7 million and $101.7 million of Other assets, net; $2.0 million and $2.1 million of Right-of-use assets - operating leases, net; $15.5 million and $10.8 million of Cash and cash equivalents; $6.6 million and $7.0 million of Restricted cash; $22.5 million and $21.4 million of Rents receivable, net; $804.7 million and $764.6 million of Mortgage and other notes payable, net; $0.0 million and $80.5 million of Unsecured notes payable, net; $130.5 million and $127.2 million of Accounts payable and other liabilities; $2.1 million and $2.2 million of Lease liability- operating leases, net as of March 31, 2024 and December 31, 2023, respectively.

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

 

 

 

Three Months Ended March 31,

 

(in thousands, except per share amounts)

 

2024

 

 

2023

 

Revenues

 

 

 

 

 

 

Rental

 

$

86,037

 

 

$

80,737

 

Other

 

 

5,319

 

 

 

1,102

 

Total revenues

 

 

91,356

 

 

 

81,839

 

Expenses

 

 

 

 

 

 

Depreciation and amortization

 

 

34,940

 

 

 

33,173

 

General and administrative

 

 

9,768

 

 

 

9,946

 

Real estate taxes

 

 

12,346

 

 

 

11,479

 

Property operating

 

 

19,096

 

 

 

15,133

 

Total expenses

 

 

76,150

 

 

 

69,731

 

 

 

 

 

 

 

 

Loss related to a previously disposed property

 

 

(1,198

)

 

 

 

Operating income

 

 

14,008

 

 

 

12,108

 

Equity in (losses) earnings of unconsolidated affiliates

 

 

(312

)

 

 

29

 

Interest income

 

 

5,238

 

 

 

4,818

 

Realized and unrealized holding (losses) gains on investments and other

 

 

(2,051

)

 

 

26,757

 

Interest expense

 

 

(23,709

)

 

 

(21,587

)

(Loss) income from continuing operations before income taxes

 

 

(6,826

)

 

 

22,125

 

Income tax provision

 

 

(31

)

 

 

(123

)

Net (loss) income

 

 

(6,857

)

 

 

22,002

 

Net loss attributable to redeemable noncontrolling interests

 

 

2,554

 

 

 

2,075

 

Net loss (income) attributable to noncontrolling interests

 

 

7,572

 

 

 

(10,717

)

Net income attributable to Acadia shareholders

 

$

3,269

 

 

$

13,360

 

 

 

 

 

 

 

 

Basic income per share

 

$

0.03

 

 

$

0.14

 

Diluted income per share

 

$

0.03

 

 

$

0.14

 

 

 

 

 

 

 

 

Weighted average shares for basic income per share

 

 

102,128

 

 

 

95,189

 

Weighted average shares for diluted income per share

 

 

102,128

 

 

 

95,189

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


 

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

 

 

 

Three Months Ended March 31,

 

(in thousands)

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(6,857

)

 

$

22,002

 

Other comprehensive income (loss):

 

 

 

 

 

 

Unrealized gain (loss) on valuation of derivatives

 

 

25,819

 

 

 

(15,242

)

Reclassification of realized interest on swap derivatives

 

 

(8,833

)

 

 

(6,553

)

Other comprehensive income (loss)

 

 

16,986

 

 

 

(21,795

)

Comprehensive income

 

 

10,129

 

 

 

207

 

Comprehensive loss attributable to redeemable noncontrolling interests

 

 

2,554

 

 

 

2,075

 

Comprehensive loss (income) attributable to noncontrolling interests

 

 

5,086

 

 

 

(5,736

)

Comprehensive income (loss) attributable to Acadia shareholders

 

$

17,769

 

 

$

(3,454

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


 

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

Three Months Ended March 31, 2024 and 2023

 

 

 

Acadia Shareholders

 

 

 

 

 

 

 

 

 

 

(in thousands, except per share amounts)

 

Common
Shares

 

 

Share
Amount

 

 

Additional
Paid-in
Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Distributions
in Excess of
Accumulated
Earnings

 

 

Total
Common
Shareholders’
Equity

 

 

Noncontrolling
Interests

 

 

Total
Equity

 

 

Redeemable Noncontrolling
Interests

 

Balance as of January 1, 2024

 

 

95,362

 

 

$

95

 

 

$

1,953,521

 

 

$

32,442

 

 

$

(349,141

)

 

$

1,636,917

 

 

$

446,300

 

 

$

2,083,217

 

 

$

50,339

 

Conversion of OP Units to Common Shares by limited partners of the Operating Partnership

 

 

795

 

 

 

1

 

 

 

12,912

 

 

 

 

 

 

 

 

 

12,913

 

 

 

(12,913

)

 

 

 

 

 

 

Issuance of Common Shares, net

 

 

6,987

 

 

 

7

 

 

 

113,841

 

 

 

 

 

 

 

 

 

113,848

 

 

 

 

 

 

113,848

 

 

 

 

Dividends/distributions declared ($0.18 per Common Share/OP Unit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,568

)

 

 

(18,568

)

 

 

(1,453

)

 

 

(20,021

)

 

 

 

City Point Loan accrued interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,323

)

Employee and trustee stock compensation, net

 

 

12

 

 

 

 

 

 

202

 

 

 

 

 

 

 

 

 

202

 

 

 

4,043

 

 

 

4,245

 

 

 

 

Capital call receivable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,153

)

 

 

(6,153

)

 

 

 

Noncontrolling interest distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,459

)

 

 

(5,459

)

 

 

 

Noncontrolling interest contributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

43,709

 

 

 

43,709

 

 

 

 

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

14,500

 

 

 

3,269

 

 

 

17,769

 

 

 

(5,086

)

 

 

12,683

 

 

 

(2,554

)

Reallocation of noncontrolling interests

 

 

 

 

 

 

 

 

(2,181

)

 

 

 

 

 

 

 

 

(2,181

)

 

 

2,181

 

 

 

 

 

 

 

Balance as of March 31, 2024

 

 

103,156

 

 

$

103

 

 

$

2,078,295

 

 

$

46,942

 

 

$

(364,440

)

 

$

1,760,900

 

 

$

465,169

 

 

$

2,226,069

 

 

$

45,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1, 2023

 

 

95,121

 

 

$

95

 

 

$

1,945,322

 

 

$

46,817

 

 

$

(300,402

)

 

$

1,691,832

 

 

$

489,364

 

 

$

2,181,196

 

 

$

67,664

 

Conversion of OP Units to Common Shares by limited partners of the Operating Partnership

 

 

37

 

 

 

 

 

 

631

 

 

 

 

 

 

 

 

 

631

 

 

 

(631

)

 

 

 

 

 

 

Dividends/distributions declared ($0.18 per Common Share/OP Unit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,131

)

 

 

(17,131

)

 

 

(1,343

)

 

 

(18,474

)

 

 

 

City Point Loan accrued interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,320

)

Employee and trustee stock compensation, net

 

 

50

 

 

 

 

 

 

988

 

 

 

 

 

 

 

 

 

988

 

 

 

3,897

 

 

 

4,885

 

 

 

 

Noncontrolling interest distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(70,868

)

 

 

(70,868

)

 

 

 

Noncontrolling interest contributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31,242

 

 

 

31,242

 

 

 

 

Comprehensive (loss) income

 

 

 

 

 

 

 

 

 

 

 

(16,814

)

 

 

13,360

 

 

 

(3,454

)

 

 

5,736

 

 

 

2,282

 

 

 

(2,075

)

Reallocation of noncontrolling interests

 

 

 

 

 

 

 

 

(1,784

)

 

 

 

 

 

 

 

 

(1,784

)

 

 

1,784

 

 

 

 

 

 

 

Balance as of March 31, 2023

 

 

95,208

 

 

$

95

 

 

$

1,945,157

 

 

$

30,003

 

 

$

(304,173

)

 

$

1,671,082

 

 

$

459,181

 

 

$

2,130,263

 

 

$

63,269

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

7


 

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

 

 

Three Months Ended March 31,

 

(in thousands)

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net (loss) income

 

$

(6,857

)

 

$

22,002

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

34,940

 

 

 

33,173

 

Loss related to a previously disposed property

 

 

1,198

 

 

 

 

Net unrealized holding losses on investments

 

 

2,015

 

 

 

2,059

 

Stock compensation expense

 

 

4,245

 

 

 

4,885

 

Straight-line rents

 

 

(76

)

 

 

(767

)

Equity in losses (gains) of unconsolidated affiliates

 

 

312

 

 

 

(29

)

Distributions of operating income from unconsolidated affiliates

 

 

1,245

 

 

 

1,097

 

Adjustments to straight-line rent reserves

 

 

 

 

 

473

 

Amortization of financing costs

 

 

1,766

 

 

 

1,647

 

Non-cash lease expense

 

 

938

 

 

 

901

 

Adjustments to allowance for credit loss

 

 

(73

)

 

 

326

 

Other, net

 

 

(1,232

)

 

 

(1,568

)

Changes in assets and liabilities:

 

 

 

 

 

 

Rents receivable

 

 

(3,253

)

 

 

3,562

 

Other liabilities

 

 

(2,844

)

 

 

(1,281

)

Accounts payable and accrued expenses

 

 

(3,164

)

 

 

(6,256

)

Prepaid expenses and other assets

 

 

(2,213

)

 

 

118

 

Lease liability - operating leases

 

 

(959

)

 

 

(910

)

Net cash provided by operating activities

 

 

25,988

 

 

 

59,432

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Investments in and advances to unconsolidated affiliates

 

 

(2,532

)

 

 

(24,911

)

Development, construction and property improvement costs

 

 

(12,775

)

 

 

(12,529

)

Refund of deposits for properties under purchase contract

 

 

 

 

 

930

 

Return of capital from unconsolidated affiliates

 

 

2,615

 

 

 

35,406

 

Payment of deferred leasing costs

 

 

(1,132

)

 

 

(2,508

)

Proceeds from sale of marketable securities

 

 

3,995

 

 

 

 

Proceeds from repayment of notes receivable

 

 

6,000

 

 

 

 

Net cash used in investing activities

 

 

(3,829

)

 

 

(3,612

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Proceeds from unsecured debt

 

 

31,750

 

 

 

43,309

 

Principal payments on unsecured debt

 

 

(210,950

)

 

 

(88,395

)

Proceeds from the sale of Common Shares

 

 

113,848

 

 

 

 

Capital contributions from noncontrolling interests

 

 

37,556

 

 

 

31,242

 

Principal payments on mortgage and other notes

 

 

(12,976

)

 

 

(2,196

)

Distributions to noncontrolling interests

 

 

(6,790

)

 

 

(22,999

)

Dividends paid to Common Shareholders

 

 

(17,165

)

 

 

(17,122

)

Proceeds received from mortgage and other notes

 

 

45,553

 

 

 

 

Payment of deferred financing and other costs

 

 

(1,323

)

 

 

(498

)

Payments of finance lease obligations

 

 

(42

)

 

 

 

Net cash used in financing activities

 

 

(20,539

)

 

 

(56,659

)

Increase (decrease) in cash and restricted cash

 

 

1,620

 

 

 

(839

)

Cash and cash equivalents of $17,481 and $17,158 and restricted cash of $7,813 and $15,063, respectively, beginning of period

 

 

25,294

 

 

 

32,221

 

Cash and cash equivalents of $18,795 and $17,125 and restricted cash of $8,119 and $14,257, respectively, end of period

 

$

26,914

 

 

$

31,382

 

 

8


 

ACADIA REALTY TRUST AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)

 

 

 

Three Months Ended March 31,

 

(in thousands)

 

2024

 

 

2023

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

Cash paid during the period for interest, net of capitalized interest of $1,648 and $1,928 respectively (a)

 

$

31,612

 

 

$

23,107

 

Cash paid for income taxes, net of refunds

 

$

31

 

 

$

123

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

Dividends/distributions declared and payable

 

$

19,898

 

 

$

18,351

 

Conversion of Common OP Units to Common Shares

 

$

12,913

 

 

$

631

 

Accrued interest on note receivable recorded to redeemable noncontrolling interest

 

$

2,362

 

 

$

2,307

 

Recognition of non-refundable deposit upon expiration of sale agreement

 

$

3,315

 

 

$

 

Distributions to noncontrolling interests of marketable securities

 

$

 

 

$

49,117

 

Reclassification of investment in unconsolidated affiliate to marketable securities

 

$

 

 

$

32,745

 

 

(a)
Interest paid for the three months ended March 31, 2024 and 2023 excludes the cash flows from net settlements on interest rate swap contracts, which was a net receivable of cash of $7.6 million and $5.7 million, respectively.

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

9


ACADIA REALTY TRUST AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

 

1. Organization, Basis of Presentation and Summary of Significant Accounting Policies

Organization

Acadia Realty Trust (the “Trust”, collectively with its consolidated subsidiaries, the “Company”), a Maryland real estate investment trust (“REIT”), is a fully-integrated equity 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 March 31, 2024 and December 31, 2023, the Trust controlled approximately 95% of the Operating Partnership as the sole general partner and is entitled to share, in proportion to its percentage interest, 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”) and employees who have been awarded restricted Common OP Units (“LTIP Units”) as long-term incentive compensation (Note 13). Limited partners holding Common OP and LTIP Units are generally entitled to exchange their units on a one-for-one basis for 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.”

As of March 31, 2024, the Company has ownership interests in 149 properties within its core portfolio, which consist 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 its funds (“Core Portfolio”). The Company also has ownership interests in 52 properties within its opportunity funds, 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, collectively with Fund II, Fund III and Fund IV, the “Funds”). The 201 Core Portfolio and Fund properties primarily consist of street and urban retail and suburban shopping centers. In addition, the Company, together with the investors in the Funds, invested in operating companies through Acadia Mervyn Investors II, LLC (“Mervyns II”), all on a non-recourse basis.

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 20% to the Operating Partnership (“Promote”) and 80% to the partners or members (including the Operating Partnership). All transactions between the Funds and the Operating Partnership have been eliminated in consolidation.

The following table summarizes the general terms and Operating Partnership’s equity interests in the Funds and Mervyns II (dollars in millions):

Entity

 

Formation
Date

 

Operating
Partnership
Share of
Capital

 

 

Capital Called
as of March 31, 2024
(a)

 

 

Unfunded
Commitment
 (a)

 

 

Equity Interest
Held By
Operating
Partnership
 (b)

 

 

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