Acadia Realty Trust (NYSE: AKR) (“Acadia” or the “Company”)
today reported operating results for the quarter ended September
30, 2020. All per share amounts are on a fully-diluted basis, where
applicable.
Acadia operates dual platforms, comprised of a high-quality core
real estate portfolio (“Core Portfolio”), through which the Company
owns and operates retail assets in the nation’s most dynamic
corridors, and a series of discretionary, institutional funds
(“Funds”) that target opportunistic and value-add investments.
Please refer to the tables and notes accompanying this press
release for further details on operating results and additional
disclosures related to net income, funds from operations ("FFO") as
per NAREIT and before Special Items (discussed below), and net
property operating income ("NOI") which were impacted due to the
COVID-19 Pandemic.
Third Quarter Highlights
- Core Portfolio Cash Collections: Continued improvement
in cash collections:
- Collected 90% of September 2020 billed rents and
recoveries
- For the full third quarter, collected 87% of billed rents and
recoveries
All cash collection percentages are based
upon pre-COVID billings and are as of October 30, 2020
- Core Portfolio Opening Status: Increased tenant
re-openings during the quarter:
- Approximately 86% of Core Portfolio’s pro-rata gross annualized
base rents (“ABR”) was open for business at September 30, 2020
- Approximately 93% of Core Portfolio’s pro-rata and gross
leasable area (“GLA”) was open for business at September 30,
2020
- Core Portfolio Leasing Progress: Solid demand on
leasing:
- Executed 11 new and renewal conforming leases in the Core
Portfolio during the third quarter, with comparable cash and GAAP
spreads of 5.1% and 12.5% on conforming leases, respectively
- Increasing leasing pipeline in the Core Portfolio with
approximately $1.3 million signed, $1.7 million out for signature,
$1.5 million at lease and $2.0 million under executed LOI to date.
50% are within Street/Urban in the Core Portfolio
- Earnings: Primarily due to $0.15 of credit reserves
(including $0.06 from straight-line rent), the COVID-19 Pandemic
continued to negatively impact quarterly earnings:
- GAAP loss per share of $0.10
- NAREIT FFO per share of $0.17 and FFO before Special Items per
share of $0.20 (excluding approximately $0.03 of an unrealized
mark-to-market adjustment on Albertson’s shares)
- Core Portfolio Operating Results: Decrease in
same-property NOI of 21.4% for the third quarter versus the
comparable 2019 period, predominantly due to credit reserves on
billed Core Portfolio rents and recoveries resulting from the
COVID-19 Pandemic
- Fund Update:
- Fund V has 40% of future acquisition capacity (approximately
$600.0 million on a leveraged basis) remaining to invest
- Made no new investments during the third quarter; Fund V
continues to make cash distributions
- Extended $158.6 million of Fund loans maturing in 2020 and
2021
“With our significantly improving cash collections along with
sustained operating performance, we are cautiously optimistic with
the recovery we are seeing,” stated Kenneth F. Bernstein, President
and CEO of Acadia Realty Trust. “Additionally, while we remain
cognizant of the challenges and resulting uncertainties that may
transpire over the next several months, we are encouraged by our
recently executed leases as well as our growing pipeline. Lastly,
we are beginning to see actionable investment opportunities emerge
for our fund platform.”
OPERATIONS UPDATE
COVID-19 Impact on
Operations
Third quarter results were negatively impacted by approximately
$0.15 related to credit losses, of which $0.06 arose from
straight-line rent reserves. The amounts below represent Acadia’s
share of credit losses, straight-line rent reserves and tenant
abatements associated with the COVID-19 Pandemic (in millions):
Core Same Store
Core Other
Funds
Total
Per Share
Credit Loss - Billed Rents and recoveries
(a)
$
5.5
$
0.4
$
1.4
$
7.3
$
0.08
Straight-Line Rent Reserves (b)
N/A
2.1
3.1
5.2
0.06
Rent Abatements
0.6
0.2
—
0.8
0.01
Total
$
6.1
$
2.7
$
4.5
$
13.3
$
0.15
a)
Amount represents reserves taken against a
tenant’s rent and recoveries that were billable pursuant to the
terms of a lease agreement.
b)
Amount represents reserves against a
tenant’s straight-line rent balance. The balance is derived from
the cumulative difference, generally from inception of the lease,
between a tenant’s billed rents and the amount of rent recognized
in earnings on a straight-line basis over the life of the
lease.
Core Portfolio Cash
Collections
At October 30, 2020, monthly and quarterly cash collections for
the Core Portfolio were as follows:
Asset Type
July 2020
August 2020
September 2020
Q3 2020
Street/Urban
82
%
87
%
90
%
86
%
Suburban
85
%
90
%
91
%
88
%
Total Core Portfolio
83
%
88
%
90
%
87
%
Additionally, through October 30, 2020, the Company has
collected approximately 90% of October 2020 billed rents and
recoveries comprised of 89% and 92% for Street/Urban and Suburban,
respectively.
All amounts are based upon pre-COVID billings (original contract
rents without regard to deferral or abatement agreements) and
exclude the impact of any security deposits applied against tenant
accounts.
Core Portfolio Opening
Status
Core Portfolio store openings continued to increase as
follows:
% Open - ABR
% Open - GLA
As of
As of
Asset Type
Approximate % of Core
ABR
June 30, 2020
September 30, 2020
October 30, 2020
% of Core GLA
June 30, 2020
September 30, 2020
October 30, 2020
Street/Urban
60
%
66
%
80
%
83
%
29
%
77
%
88
%
89
%
Suburban
40
%
87
%
95
%
92
%
71
%
90
%
95
%
92
%
Total Core Portfolio
100
%
74
%
86
%
86
%
100
%
86
%
93
%
91
%
Core Portfolio cash collections and openings continue to improve
but could fluctuate on a monthly basis due to timing of payments
between reported periods which may continue to occur from the
COVID-19 Pandemic. Cash collections and store opening data are
presented for information purposes and are not intended to
represent future trends.
Dividend
Beginning with the second quarter of 2020, the Board of Trustees
(“Board”) temporarily suspended distributions on common shares and
common units, which suspension the Board has determined to continue
through the fourth quarter of 2020. Assuming that current operating
conditions continue to prevail, the Company currently expects to
reinstate quarterly distributions in the first quarter of 2021,
which would be subject to Board approval at that time.
CONSOLIDATED FINANCIAL
RESULTS
A complete reconciliation, in dollars and per share amounts, of
(i) net loss or income attributable to Acadia to FFO (NAREIT and
before Special Items) attributable to common shareholders and
common OP Unit holders and (ii) operating income to NOI is included
in the financial tables of this release.
Net (Loss) Income
Net loss attributable to Acadia for the quarter ended September
30, 2020 was $9.0 million, or $0.10 per share. This included $13.3
million, or $0.15 per share, related to credit loss, straight-line
rent reserves and tenant abatements, primarily due to the COVID-19
Pandemic and approximately $2.2 million, or approximately $0.03 per
share, from the unrealized mark-to-market adjustment on Albertsons.
Net income attributable to Acadia for the quarter ended September
30, 2019 was $10.5 million, or $0.12 per share.
Net income attributable to Acadia for the nine months ended
September 30, 2020 was $2.0 million, or $0.02 per share. This
included (i) $26.9 million, or $0.30 per share, related to credit
loss, straight-line rent reserves and tenant abatements, primarily
due to the COVID-19 Pandemic and (ii) $12.4 million, or $0.14 per
share, attributable to impairment charges within the Funds. These
charges were offset by $22.6 million, or $0.25 per share, from the
monetization and unrealized mark-to-market adjustment on
Albertsons. Net income attributable to Acadia for the nine months
ended September 30, 2019 was $31.7 million, or $0.38 per share,
inclusive of $5.8 million, or $0.07 per share, related to a
previously-announced accelerated tenant recapture.
FFO as Defined by NAREIT
FFO for the quarter ended September 30, 2020 was $15.6 million,
or $0.17 per share. This included $13.3 million, or $0.15 per
share, related to credit loss, straight-line rent reserves and
tenant abatements, primarily due to the COVID-19 Pandemic and
approximately $2.2 million, or approximately $0.03 per share, from
the unrealized mark-to-market adjustment on Albertsons. FFO was
$31.0 million, or $0.34 per share, for the quarter ended September
30, 2019.
FFO for the nine months ended September 30, 2020 was $88.4
million, or $0.96 per share. This included $26.9 million, or $0.29
per share, related to credit loss, straight-line reserves and
tenant abatements, primarily due to the COVID-19 Pandemic that was
offset by $22.6 million, or $0.25 per share, from the monetization
and unrealized mark-to-market adjustment on Albertsons. FFO was
$97.6 million, or $1.09 per share, including $5.8 million, or $0.07
per share, related to a previously-announced accelerated tenant
recapture for the nine months ended September 30, 2019.
FFO before Special Items
FFO before Special Items for the quarter ended September 30,
2020 was $17.8 million, or $0.20 per share, which excludes
approximately $2.2 million, or approximately $0.03 per share, from
the unrealized mark-to-market adjustment on Albertsons. There were
no Special Items for the quarter ended September 30, 2019.
FFO before Special Items for the nine months ended September 30,
2020 was $72.3 million, or $0.79 per share, which excludes $16.2
million, or $0.18 per share, from the unrealized mark-to-market
adjustment on Albertsons. There were no Special Items for the nine
months ended September 30, 2019.
CORE PORTFOLIO
Core Portfolio Operating
Results
The Company had a decrease in same-property NOI of 21.4% for the
three months ended September 30, 2020 predominantly due to credit
reserves and abatements on billed Core Portfolio rents and
recoveries.
The Core Portfolio was 90.3% occupied and 91.1% leased as of
September 30, 2020 compared to 92.6% occupied and 93.3% leased as
of June 30, 2020. The leased rate includes space that is leased but
not yet occupied and excludes development and redevelopment
properties.
During the third quarter, the Company generated a 12.5% increase
in rent on a GAAP basis and 5.1% increase in rent on a cash basis,
on 11 conforming new and renewal leases aggregating approximately
120,000 square feet.
The Company has an increasing Core Portfolio leasing pipeline
with approximately $1.3 million signed, $1.7 million out for
signature, $1.5 million at lease and $2.0 million under executed
LOI to date. 50% of these leases are within Street/Urban within the
Core Portfolio.
FUND UPDATE
Fund V has $208.0 million of acquisition capital remaining to
reinvest (approximately $600.0 million on a leveraged basis) as
opportunities arise. During the third quarter, Fund V extended its
investment period to August 2021.
While there were no new investments during the third quarter,
Fund V’s pipeline continues to see opportunities. As of the third
quarter, Fund V continues to make cash distributions.
The Funds extended $158.6 million of their loans maturing in
2020 and 2021.
CONFERENCE CALL
Management will conduct a conference call on Wednesday, November
4, 2020 at 11:00 AM ET to review the Company’s earnings and
operating results. Dial-in and webcast information is listed
below.
Live Conference
Call:
Date:
Wednesday, November 4, 2020
Time:
11:00 AM ET
Dial#:
844-309-6711
Passcode:
“Acadia Realty” or “4682435”
Webcast (Listen-only):
www.acadiarealty.com under Investors, Presentations
& Events
Phone
Replay:
Dial#:
855-859-2056
Passcode:
“4682435”
Available Through:
Wednesday, November 11, 2020
Webcast
Replay:
www.acadiarealty.com under Investors, Presentations
& Events
The Company uses, and intends to use, the Investors page of its
website, which can be found at www.acadiarealty.com, as a means of
disclosing material nonpublic information and of complying with its
disclosure obligations under Regulation FD, including, without
limitation, through the posting of investor presentations that may
include material nonpublic information. Accordingly, investors
should monitor the Investors page, in addition to following the
Company’s press releases, SEC filings, public conference calls,
presentations and webcasts. The information contained on, or that
may be accessed through, our website is not incorporated by
reference into, and is not a part of, this document.
About Acadia Realty Trust
Acadia Realty Trust is an equity real estate investment trust
focused on delivering long-term, profitable growth via its dual –
Core Portfolio and Fund – operating platforms and its disciplined,
location-driven investment strategy. Acadia Realty Trust is
accomplishing this goal by building a best-in-class core real
estate portfolio with meaningful concentrations of assets in the
nation’s most dynamic corridors; making profitable opportunistic
and value-add investments through its series of discretionary,
institutional funds; and maintaining a strong balance sheet. For
further information, please visit www.acadiarealty.com.
Safe Harbor Statement
Certain statements in this press release may contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities and Exchange Act of 1934, as amended. Forward-looking
statements, which are based on certain assumptions and describe our
future plans, strategies and expectations are generally
identifiable by use of the words “may,” “will,” “should,” “expect,”
“anticipate,” “estimate,” “believe,” “intend” or “project,” or the
negative thereof, or other variations thereon or comparable
terminology. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that could cause our actual
results and financial performance to be materially different from
future results and financial performance expressed or implied by
such forward-looking statements, including, but not limited to: (i)
economic, political and social uncertainty surrounding the COVID-19
Pandemic, including (a) the effectiveness or lack of effectiveness
of governmental relief in providing assistance to large and small
businesses, including the Company’s tenants, that have suffered
significant declines in revenues as a result of mandatory business
shut-downs, “shelter-in-place” or “stay-at-home” orders and social
distancing practices, as well as individuals adversely impacted by
the COVID-19 Pandemic, (b) the duration of any such orders or other
formal recommendations for social distancing and the speed and
extent to which revenues of the Company’s retail tenants recover
following the lifting of any such orders or recommendations, (c)
the potential impact of any such events on the obligations of the
Company’s tenants to make rent and other payments or honor other
commitments under existing leases, (d) to the extent we were
seeking to sell properties in the near term, significantly greater
uncertainty regarding our ability to do so at attractive prices,
(e) the potential adverse impact on returns from development and
redevelopment projects, and (f) the broader impact of the severe
economic contraction and increase in unemployment that has occurred
in the short term and negative consequences that will occur if
these trends are not quickly reversed; (ii) the ability and
willingness of the Company’s tenants (in particular its major
tenants) and other third parties to satisfy their obligations under
their respective contractual arrangements with the Company; (iii)
macroeconomic conditions, such as a disruption of or lack of access
to the capital markets; (iv) the Company’s success in implementing
its business strategy and its ability to identify, underwrite,
finance, consummate and integrate diversifying acquisitions and
investments; (v) changes in general economic conditions or economic
conditions in the markets in which the Company may, from time to
time, compete, and their effect on the Company’s revenues, earnings
and funding sources; (vi) increases in the Company’s borrowing
costs as a result of changes in interest rates and other factors,
including the potential phasing out of the London Interbank Offered
Rate after 2021; (vii) the Company’s ability to pay down,
refinance, restructure or extend its indebtedness as it becomes
due; (viii) the Company’s investments in joint ventures and
unconsolidated entities, including its lack of sole decision-making
authority and its reliance on its joint venture partners’ financial
condition; (ix) the Company’s ability to obtain the financial
results expected from its development and redevelopment projects;
(x) the ability and willingness of the Company’s tenants to renew
their leases with the Company upon expiration, the Company’s
ability to re-lease its properties on the same or better terms in
the event of nonrenewal or in the event the Company exercises its
right to replace an existing tenant, and obligations the Company
may incur in connection with the replacement of an existing tenant;
(xi) the Company’s liability for environmental matters; (xii)
damage to the Company’s properties from catastrophic weather and
other natural events, and the physical effects of climate change;
(xiii) uninsured losses; (xiv) the Company’s ability and
willingness to maintain its qualification as a REIT in light of
economic, market, legal, tax and other considerations; (xv)
information technology security breaches, including increased
cybersecurity risks relating to the use of remote technology during
the COVID-19 Pandemic; and (xvi) the loss of key executives. The
risks described above are not exhaustive and additional factors
could adversely affect the Company’s business and financial
performance, including the risk factors discussed under the section
captioned “Risk Factors” in the Company’s Annual Report on Form
10-K for the year ended December 31, 2019, and other periodic or
current reports the Company files with the SEC. Any forward-looking
statements in this press release speak only as of the date hereof.
The Company expressly disclaims any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company’s
expectations with regard thereto or change in the events,
conditions or circumstances on which such forward-looking
statements are based.
ACADIA REALTY TRUST AND
SUBSIDIARIES
Consolidated Statements of
Operations (a)
(dollars and Common Shares in
thousands, except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Revenues
Rental income
$
50,300
$
72,191
$
183,396
$
214,490
Other
981
1,136
3,078
3,053
Total revenues
51,281
73,327
186,474
217,543
Operating expenses
Depreciation and amortization
34,457
32,170
101,627
92,807
General and administrative
8,625
8,222
26,415
25,579
Real estate taxes
10,689
10,225
31,833
29,680
Property operating
11,559
13,180
41,685
37,267
Impairment charges
—
321
51,549
1,721
Total operating expenses
65,330
64,118
253,109
187,054
Gain on disposition of properties
24
12,056
509
14,070
Operating (loss) income
(14,025
)
21,265
(66,126
)
44,559
Equity in (losses) earnings of
unconsolidated affiliates
(624
)
1,299
(155
)
7,129
Interest and other income
2,132
6,782
7,156
13,194
Realized and unrealized holding (losses)
gains on investments and other
(7,946
)
—
79,335
—
Interest expense
(17,752
)
(19,103
)
(54,373
)
(56,721
)
(Loss) income from continuing operations
before income taxes
(38,215
)
10,243
(34,163
)
8,161
Income tax (provision) benefit
(74
)
(1,403
)
741
(1,622
)
Net (loss) income
(38,289
)
8,840
(33,422
)
6,539
Net loss attributable to noncontrolling
interests
29,259
1,618
35,388
25,196
Net (loss) income attributable to
Acadia
$
(9,030
)
$
10,458
$
1,966
$
31,735
Less: net income attributable to
participating securities
—
(38
)
(233
)
(134
)
Net (loss) income attributable to Common
Shareholders - basic and diluted earnings per share
$
(9,030
)
$
10,420
$
1,733
$
31,601
Weighted average shares for basic loss and
basic and diluted earnings per share
86,309
84,888
86,486
83,552
Net loss per share - basic, Net
earnings per share - basic and diluted (b)
$
(0.10
)
$
0.12
$
0.02
$
0.38
ACADIA REALTY TRUST AND
SUBSIDIARIES
Reconciliation of Consolidated
Net (Loss) Income to Funds From Operations (a, c)
(dollars and Common Shares and
Units in thousands, except per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Net (loss) income attributable to
Acadia
$
(9,030
)
$
10,458
$
1,966
$
31,735
Depreciation of real estate and
amortization of leasing costs (net of noncontrolling interests'
share)
25,106
22,436
73,584
66,157
Impairment charges (net of noncontrolling
interests' share)
—
74
12,400
395
Gain on disposition of properties (net of
noncontrolling interests' share)
(6
)
(2,758
)
(117
)
(3,142
)
(Loss) income attributable to Common OP
Unit holders
(475
)
649
199
2,031
Distributions - Preferred OP Units
4
135
372
405
Funds from operations attributable to
Common Shareholders and Common OP Unit holders
$
15,599
$
30,994
$
88,404
$
97,581
Adjustments for Special Items:
Less: Albertsons unrealized holding loss
(gain) (net of noncontrolling interest share)
2,240
—
(16,157
)
—
Funds from operations before Special
Items attributable to Common Shareholders and Common OP Unit
holders
$
17,839
$
30,994
$
72,247
$
97,581
Funds From Operations per Share -
Diluted
Basic weighted-average shares outstanding,
GAAP earnings
86,309
84,888
86,486
83,552
Weighted-average OP Units outstanding
4,890
5,083
5,027
5,140
Assumed conversion of Preferred OP Units
to common shares (d)
25
499
465
499
Assumed conversion of LTIP units and
restricted share units to common shares
—
213
—
213
Weighted average number of Common Shares
and Common OP Units
91,224
90,683
91,978
89,404
Diluted Funds from operations, per Common
Share and Common OP Unit
$
0.17
$
0.34
$
0.96
$
1.09
Diluted Funds from operations before
Special Items, per Common Share and Common OP Unit
$
0.20
$
0.34
$
0.79
$
1.09
ACADIA REALTY TRUST AND
SUBSIDIARIES
Reconciliation of Consolidated
Operating (Loss) Income to Net Property Operating Income
(“NOI”) (a)
(dollars in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Consolidated operating (loss) income
$
(14,025
)
$
21,265
$
(66,126
)
$
44,559
Add back:
General and administrative
8,625
8,222
26,415
25,579
Depreciation and amortization
34,457
32,170
101,627
92,807
Impairment charge
—
321
51,549
1,721
Straight-line rent reserves
13,185
—
19,714
—
Less:
Above/below market rent, straight-line
rent and other adjustments
(3,671
)
(4,338
)
(6,256
)
(16,970
)
Gain on disposition of properties
(24
)
(12,056
)
(509
)
(14,070
)
Consolidated NOI
38,547
45,584
126,414
133,626
Noncontrolling interest in consolidated
NOI
(10,335
)
(13,157
)
(36,327
)
(38,217
)
Less: Operating Partnership's interest in
Fund NOI included above
(2,289
)
(3,480
)
(8,710
)
(10,292
)
Add: Operating Partnership's share of
unconsolidated joint ventures NOI (e)
3,133
6,288
12,353
19,553
NOI - Core Portfolio
$
29,056
$
35,235
$
93,730
$
104,670
ACADIA REALTY TRUST AND
SUBSIDIARIES
Consolidated Balance
Sheets (a)
(dollars in thousands)
As of
September 30, 2020
December 31, 2019
ASSETS
Investments in real estate, at cost
Land
$
771,508
$
756,297
Buildings and improvements
2,822,818
2,740,479
Tenant improvements
183,361
173,686
Construction in progress
7,605
13,617
Right-of-use assets - finance leases
25,086
102,055
Right-of-use assets - operating leases,
net
89,615
60,006
3,899,993
3,846,140
Less: Accumulated depreciation and
amortization
(552,562
)
(490,227
)
Operating real estate, net
3,347,431
3,355,913
Real estate under development
268,298
253,402
Net investments in real estate
3,615,729
3,609,315
Notes receivable, net
134,798
114,943
Investments in and advances to
unconsolidated affiliates
240,414
305,097
Other assets, net
183,170
190,658
Cash and cash equivalents
16,108
15,845
Restricted cash
13,673
14,165
Rents receivable
47,516
59,091
Total assets
$
4,251,408
$
4,309,114
LIABILITIES
Mortgage and other notes payable, net
$
1,159,688
$
1,170,076
Unsecured notes payable, net
502,500
477,320
Unsecured line of credit
127,400
60,800
Accounts payable and other liabilities
394,111
371,516
Dividends and distributions payable
147
27,075
Distributions in excess of income from,
and investments in, unconsolidated affiliates
15,462
15,362
Total liabilities
2,199,308
2,122,149
Commitments and contingencies
EQUITY
Acadia Shareholders' Equity
Common shares, $0.001 par value,
authorized 200,000,000 shares, issued and outstanding 86,266,122
and 87,050,465 shares, respectively
86
87
Additional paid-in capital
1,695,338
1,706,357
Accumulated other comprehensive loss
(85,873
)
(31,175
)
Distributions in excess of accumulated
earnings
(156,321
)
(132,961
)
Total Acadia shareholders’ equity
1,453,230
1,542,308
Noncontrolling interests
598,870
644,657
Total equity
2,052,100
2,186,965
Total liabilities and equity
$
4,251,408
$
4,309,114
ACADIA REALTY TRUST AND SUBSIDIARIES
Notes to Financial Highlights:
(a)
For additional information and analysis
concerning the Company’s balance sheet and results of operations,
reference is made to the Company’s quarterly supplemental
disclosures for the relevant periods furnished on Form 8-K to the
SEC and included on the Company’s website at
www.acadiarealty.com.
(b)
Diluted earnings and (loss) per share
reflects the potential dilution that could occur if securities or
other contracts to issue common shares were exercised or converted
into common shares. The effect of the conversion of common units of
partnership interest (“OP Units”) in Acadia Realty Limited
Partnership, the “Operating Partnership” of the Company, is not
reflected in the above table as they are exchangeable for Common
Shares on a one-for-one basis. The income allocable to such units
is allocated on the same basis and reflected as noncontrolling
interests in the consolidated financial statements. As such, the
assumed conversion of these OP Units would have no net impact on
the determination of diluted earnings per share.
(c)
The Company considers funds from
operations (“FFO”) as defined by the National Association of Real
Estate Investment Trusts (“NAREIT”) and net property operating
income (“NOI”) to be appropriate supplemental disclosures of
operating performance for an equity REIT due to their widespread
acceptance and use within the REIT and analyst communities. In
addition, the Company believes that given the atypical nature of
certain unusual items (as further described below), “FFO before
Special Items” is also an appropriate supplemental disclosure of
operating performance. FFO, FFO before Special Items and NOI are
presented to assist investors in analyzing the performance of the
Company. They are helpful as they exclude various items included in
net income (loss) that are not indicative of the operating
performance, such as gains (losses) from sales of real estate
property, depreciation and amortization, and impairment of real
estate property. In addition, NOI excludes interest expense and FFO
before Special Items excludes certain unusual items (as further
described below). The Company’s method of calculating FFO and NOI
may be different from methods used by other REITs and, accordingly,
may not be comparable to such other REITs. Neither FFO nor FFO
before Special Items represent cash generated from operations as
defined by generally accepted accounting principles (“GAAP”) and is
not indicative of cash available to fund all cash needs, including
distributions. It should not be considered as an alternative to net
income for the purpose of evaluating the Company’s performance or
to cash flows as a measure of liquidity. Consistent with the NAREIT
definition, the Company defines FFO as net income (computed in
accordance with GAAP), excluding gains (losses) from sales of real
estate property, plus depreciation and amortization, impairment of
real estate property, 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. FFO before Special
Items begins with the NAREIT definition of FFO and further adjusts
FFO to take into account FFO without regard to certain unusual
items including charges, income and gains that management believes
are not comparable and indicative of the results of the Company’s
operating real estate portfolio.
(d)
Series C Preferred OP Units are
anti-dilutive for the three months ended September 30, 2020.
(e)
The pro-rata share of NOI is based upon
the Operating Partnership’s stated ownership percentages in each
venture or Fund’s operating agreement. Does not include the
Operating Partnership's share of NOI from unconsolidated joint
ventures within the Funds.
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Sunny Holcomb (914) 288-8100
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