Acadia Realty Trust (NYSE: AKR) (“Acadia” or the “Company”)
today reported operating results for the quarter and year-to-date
period ended December 31, 2021. All per share amounts are on a
fully-diluted basis, where applicable. Acadia operates dual
platforms, comprised of a high-quality core real estate portfolio
(“Core Portfolio”), through which the Company owns and operates
retail assets in the nation’s most dynamic corridors, and a series
of discretionary, institutional funds (“Funds”) that target
opportunistic and value-add investments.
Please refer to the tables and notes accompanying this press
release for further details on operating results and additional
disclosures related to net income (loss), funds from operations
("FFO") as per NAREIT and before Special Items, and net property
operating income ("NOI").
“We are very pleased with our fourth quarter results and how
that sets us up for a strong performance in 2022,” stated Kenneth
F. Bernstein, President and CEO of Acadia Realty Trust. "We enter
2022 well positioned to achieve our internal and external growth
goals by maintaining our strong leasing momentum and closing on our
robust pipeline of new acquisitions."
Fourth Quarter and Recent
Highlights
- Fourth Quarter Earnings and Operating Results:
- Exceeded expectations with GAAP earnings per share of $0.03,
FFO per share of $0.28 and FFO before Special Items per share of
$0.29
- Same-property NOI increased by 3.2% driven by the Street/Urban
portfolio
- Accretive Core and Fund Acquisition Activity:
- During the fourth quarter and year to date 2022, accretively
completed approximately $138 million of investments with a growing
amount of investments under contract and/or agreements in principle
("Pipeline") as follows:
- Core: Completed approximately $66 million of Street retail
acquisitions with a robust Pipeline of predominantly Street retail
investments
- Fund V: Completed an approximately $72 million acquisition with
an additional $120 million in the Pipeline
- Core Portfolio Leasing:
- GAAP and cash leasing spreads of 59.9% and 49.5%, respectively,
on comparable new and renewal leases
- Increased leased rate to 93.2% as of December 31, 2021 compared
to 92.6% leased as of September 30, 2021
- Balance Sheet and Dividend Update:
- Raised gross proceeds of $114.5 million at an average gross
issuance price per share of approximately $22.50 through the
at-the-market equity program ("ATM Program") to fund external
growth and the acquisition Pipeline on a leverage neutral basis
during the fourth quarter and year to date 2022
- The Company's Board of Trustees increased the quarterly
distribution to $0.18 per common share, representing a 20% increase
from the prior quarterly distribution
- Guidance:
- The Company is providing 2022 earnings per share guidance of
$0.19 to $0.32 and FFO before Special Items per diluted share of
$1.15 to $1.31, inclusive of $0.06 to $0.10 of net promote and
other Core and Fund transactional activity
Restatement of Previously Issued
Financial Statements
As previously disclosed in a Current Report on Form 8-K filed
with the Securities and Exchange Commission (“SEC”) on
February 15, 2022 (the “Restatement 8-K”), the Company will restate
its prior period financial statements as of and for the years ended
December 31, 2020 and 2019 and for each of the quarterly periods
ended March 31, 2021 and 2020, June 30, 2021 and 2020, September
30, 2021 and 2020, for errors in accounting related to the
classification upon formation of two consolidated Fund investments
acquired approximately 10 years ago. Such restatement impacts the
classification of certain amounts within the Company’s consolidated
balance sheets, statements of operations and statements of cash
flows, but is not expected to significantly change the Company’s
previously-reported net income, FFO, FFO before special items,
earnings (loss) or FFO per share, or cash flows. All restated
amounts for the three months and year ended December 31, 2020
referred to herein are derived from the unaudited restatement
tables provided in the Restatement 8-K. The restatement did not
result from any override of controls or misconduct, and BDO USA
LLP, the Company’s independent registered public accounting firm,
has not informed the audit committee of the board of trustees of
the Company of any issues related to an override of controls or
misconduct. The Company expects to restate the financial statements
affected by errors in its Annual Report on Form 10-K for the year
ended December 31, 2021.
CORE PORTFOLIO OPERATING
RESULTS
The Company exceeded expectations with GAAP earnings per share
of $0.03, FFO per share of $0.28 and FFO before Special Items per
share of $0.29. Please refer to the Consolidated Financial Results
section below for additional details.
Driven by the Street/Urban portfolio, the Company had an
increase in same-property NOI of 3.2% for the fourth quarter 2021
as compared to the fourth quarter 2020.
CORE AND FUND TRANSACTIONAL
ACTIVITY
During the fourth quarter and year to date, the Company
accretively completed approximately $138 million of acquisitions as
follows:
Core Acquisitions
The Company completed approximately $66 million of Core
acquisitions as follows:
14th Street Portfolio, Washington, D.C. In December 2021,
the Company acquired the 14th Street portfolio, a collection of
three urban retail assets located in the flourishing 14th street
corridor of Northwest Washington, D.C for $26.3 million. This
acquisition represents the opportunity to acquire high-quality
street retail assets in one of the best submarkets in Washington,
D.C. and expands Acadia's presence in Washington, D.C.
121 Spring Street, New York, New York. In January 2022,
the Company acquired a retail condominium on the corner of Greene
Street and Spring Street in Soho for $39.6 million. The Company now
owns 12 properties in the Soho market, primarily concentrated on
the Greene Street and Spring Street retail corridors.
The Company has a robust Pipeline of primarily Street retail
investments.
Fund V Acquisitions
Fund V completed an acquisition for approximately $72 million
during the fourth quarter as follows:
Midstate, East Brunswick, New Jersey. In December 2021,
Fund V completed the acquisition of Midstate, a 385,000 square-foot
Shop Rite grocery-anchored property for approximately $72 million.
The property is leased to a strong line-up of high performing
retailers, including Best Buy and PetSmart.
Fund V has an additional $120 million in the Fund Pipeline.
No assurance can be given that the Company or Fund V will
successfully close on these acquisitions in their pipelines, which
are subject to customary conditions and market uncertainty.
Fund Dispositions
Northeast Grocer Portfolio (Fund IV). In January 2022,
Fund IV completed the disposition of a property located in
Pennsylvania within its Northeast Grocer Portfolio for $23.7
million and repaid the property's $11.3 million mortgage.
Cortlandt Crossing (Fund III). In February 2022, Fund III
completed the disposition of a grocery-anchored Shop Rite property
located in Westchester County, New York for $65.5 million and
repaid the property's $34.5 million mortgage.
CORE PORTFOLIO LEASING AND
COLLECTIONS
During the fourth quarter, GAAP and cash leasing spreads were
59.9% and 49.5%, respectively, on 21 conforming new and renewal
leases aggregating approximately 119,000 square feet. Driven by the
New York metro Street portfolio, GAAP and cash leasing spreads for
the Street portfolio were 74.3% and 66.0%, respectively, which were
included in the total GAAP and cash leasing spreads.
The Core Portfolio was 90.0% occupied and 93.2% leased as of
December 31, 2021 compared to 90.3% occupied and 92.6% leased as of
September 30, 2021. The leased rate includes space that is leased
but not yet occupied and excludes development and redevelopment
properties.
As previously announced, in November 2021, Crossroads Joint
Venture LLC (the “Venture”) reached an agreement with Transform
Operating Stores LLC to terminate its lease with Kmart at
Crossroads Shopping Center. The Company profitably executed a new
long-term lease for the entirety of the recaptured space with BJ's
Wholesale Club. The Company owns a 49% interest in the Venture.
Acadia increased its Core cash collections to over 98% for the
fourth quarter.
The Company's pro-rata share of net credit losses and rent
abatements was $0.6 million, inclusive of a benefit from
approximately $2.2 million of previously-reserved tenant accounts
for the quarter ended December 31, 2021 as follows (dollars in
millions):
Fourth Quarter 2021 Credit Losses and
Reserves
Core Same Store
Core Other
Funds
Total
Per Share
Credit Loss and Abatements - Billed Rents
and Recoveries
$
2.3
$
0.1
$
0.4
$
2.8
$
0.03
Prior Period (Benefit), Net
(1.7
)
—
(0.5
)
(2.2
)
(0.02
)
Total
$
0.6
$
0.1
$
(0.1
)
$
0.6
$
0.01
BALANCE SHEET AND DIVIDEND
UPDATE
During the fourth quarter and year-to-date 2022, the Company
raised gross proceeds of $114.5 million at an average gross
issuance price per share of approximately $22.50 through the ATM
Program to fund its external growth and acquisition Pipeline on a
leverage neutral basis.
The Company's Board of Trustees increased the quarterly
distribution to $0.18 per common share, representing a 20% increase
from the prior quarterly distribution. The quarterly distribution
on common shares, is payable on April 14, 2022 to shareholders of
record on March 31, 2022, which is based upon the Company's
projected annual REIT taxable income.
CONSOLIDATED FINANCIAL
RESULTS
A complete reconciliation, in dollars and per share amounts, of
(i) net income or loss attributable to Acadia to FFO (as defined by
NAREIT and before Special Items) attributable to common
shareholders and common OP Unit holders and (ii) operating income
or loss to NOI is included in the financial tables of this
release.
Net Income (Loss)
Net income attributable to Acadia for the quarter ended December
31, 2021 was $2.7 million, or $0.03 per share, inclusive of a
charge of $1.3 million, or $0.01 per share, primarily from the
unrealized mark-to-market loss on its investment in Albertsons
supermarkets ("Albertsons").
Net loss attributable to Acadia for the quarter ended
December 31, 2020 (as restated) was $10.9 million, or $0.13
per share, which included: (i) $5.6 million, or $0.06 per share,
related to credit loss, straight-line rent reserves and tenant
abatements, primarily due to the COVID-19 Pandemic; (ii) $5.3
million, or $0.06 per share, primarily attributable to impairment
charges within the Funds and (iii) $2.9 million, or $0.03 per share
on an impairment charge for a Right-of-Use Asset (“ROU”) within the
Funds related to a ground lease. These charges were partially
offset by: (i) $4.3 million, or $0.05 per share, primarily from the
unrealized mark-to-market gain on Albertsons and (ii) $4.1 million,
or $0.04 per share, attributable to a gain on debt
extinguishment.
Net income attributable to Acadia for the year ended December
31, 2021 was $23.1 million, or $0.26 per share, which included: (i)
$13.8 million, or $0.15 per share, primarily from the net
unrealized mark-to-market gain on Albertsons and (ii) $6.6 million,
or $0.07 per share, attributable to an aggregate gain on
dispositions of Core Portfolio and Fund investments. These benefits
were partially offset by: (i) $6.3 million, or $0.07 per share,
related to credit loss, straight-line rent reserves and tenant
abatements, primarily due to the COVID-19 Pandemic and (ii) Fund
impairment charges of $2.3 million, or $0.02 per share.
Net loss attributable to Acadia for the year ended December 31,
2020 (as restated) was $9.0 million, or $0.11 per share, which
included (i) $32.5 million, or $0.36 per share, related to credit
loss, straight-line rent reserves and tenant abatements, primarily
due to the COVID-19 Pandemic; (ii) $17.7 million, or $0.20 per
share, attributable to impairment charges within the Funds and
(iii) $2.9 million, or $0.03 per share on an impairment charge for
a ROU within the Funds related to a ground lease. These charges
were offset by: (i) $27.0 million, or $0.29 per share, primarily
from the monetization and unrealized mark-to-market gain on
Albertsons and (ii) $4.1 million, or $0.04 per share, attributable
to a gain on debt extinguishment.
FFO as Defined by NAREIT
FFO for the quarter ended December 31, 2021 was $26.5
million, or $0.28 per share, and included $1.3 million, or $0.01
per share, primarily from the unrealized mark-to-market loss on
Albertsons.
FFO for the quarter ended December 31, 2020 (as
restated) was $26.0 million, or $0.28 per share, which included:
(i) $4.3 million, or $0.05 per share, primarily from the unrealized
mark-to-market gain on Albertsons and (ii) $4.1 million, or $0.04
per share, attributable to gain on debt extinguishment. These
benefits were partially offset by: (i) $5.6 million, or $0.06 per
share, related to credit loss, straight-line rent reserves and
tenant abatements, primarily due to the COVID-19 Pandemic and (ii)
$2.9 million, or $0.03 attributable to an impairment charge for a
ROU within the Funds related to a ground lease.
FFO for the year ended December 31, 2021 was $116.7 million, or
$1.25 per share, and included $13.8 million, or $0.15 per share,
primarily from the net unrealized mark-to-market gain on Albertsons
and was offset by $6.3 million, or $0.07 per share, related to
credit loss, straight-line rent reserves and tenant abatements,
primarily due to the COVID-19 Pandemic.
FFO for the year ended December 31, 2020 (as restated) was
$114.4 million, or $1.25 per share, inclusive of $27.0 million, or
$0.29 per share, primarily from the monetization and unrealized
mark-to-market gain on Albertsons. This benefit was offset by $32.5
million, or $0.36 per share, related to credit loss, straight-line
rent reserves and tenant abatements, primarily due to the COVID-19
Pandemic.
FFO before Special Items
FFO before Special Items for the quarter ended December 31, 2021
was $27.8 million, or $0.29 per share, which excluded $1.3 million,
or $0.01 per share, primarily from the unrealized mark-to-market
loss on Albertsons.
FFO before Special Items for the quarter ended December 31,
2020 (as restated) was $21.7 million, or $0.24 per share, which
excluded $4.3 million, or $0.05 per share, primarily from the
unrealized mark-to-market gain on Albertsons.
FFO before Special Items for the year ended December 31, 2021
was $103.0 million, or $1.10 per share, which excluded $13.8
million, or $0.15 per share, primarily from the net unrealized
mark-to-market gain on Albertsons.
FFO before Special Items for the year ended December 31, 2020
(as restated) was $93.9 million, or $1.02 per share, which excluded
$20.5 million, or $0.22 per share, primarily from the net
unrealized mark-to-market gain on Albertsons.
2022 GUIDANCE
The following initial guidance is based upon Acadia's current
view of existing market conditions and assumptions for the year
ended December 31, 2022.
The Company is setting initial 2022 guidance ranges as
follows:
- Earnings per share of $0.19 to $0.32
- FFO before Special Items per share of $1.15 to $1.31, inclusive
of $0.06 to $0.10 of net promote and other Core and Fund
transactional income
- Same-property NOI growth, excluding redevelopments of 4% to
6%
These forecasts and comparable 2021 results, both presented
below are before gains/losses on sale or impairment of depreciated
and non-operating assets. Please refer to the Company's fourth
quarter 2021 supplemental information package for additional
items.
2022 Guidance
2021 Actuals
Net earnings per share attributable to
Common Shareholders
$0.19 to $0.32
$0.26
Depreciation of real estate and
amortization of leasing costs (net of noncontrolling interests'
share)
1.01 to 1.04
0.99
Impairment charges (net of noncontrolling
interest share)
—
0.02
Gain on disposition of properties (net of
noncontrolling interests' share)
(0.07)
(0.04)
Noncontrolling interest in Operating
Partnership
0.02
0.02
NAREIT Funds from operations per share
attributable to Common Shareholders and Common OP Unit
holders
$1.15 to $1.31
$1.25
Unrealized holding (gain) loss and other
(net of noncontrolling interest share) (a)
—
(0.15)
Funds from operations before Special
Items per share attributable to Common Shareholders and Common OP
Unit holders
$1.15 to $1.31
$1.10
(a) The Company is not providing 2022 guidance for unrealized
changes in fair value for its investment holdings in Albertsons.
Any realized gains of such shares will be included in net promote
and other Core and Fund transactional income in the period in which
a sale occurs.
CONFERENCE CALL
Management will conduct a conference call on Wednesday, February
16, 2022 at 12:00 PM ET to review the Company’s earnings and
operating results. Dial-in and webcast information is listed
below.
Live Conference Call:
Date: Wednesday, February 16, 2022 Time: 12:00 PM ET Dial#:
844-309-6711 Passcode: “Acadia Realty” or “6716338” Webcast
(Listen-only): www.acadiarealty.com under Investors, Presentations
& Events
Phone Replay:
Dial#: 855-859-2056 Passcode: "6716338” Available Through:
Wednesday, February 23, 2022
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, the website is not incorporated by
reference into, and is not a part of, this document.
About Acadia Realty Trust
Acadia Realty Trust is an equity real estate investment trust
focused on delivering long-term, profitable growth via its dual –
Core Portfolio and Fund – operating platforms and its disciplined,
location-driven investment strategy. Acadia Realty Trust is
accomplishing this goal by building a best-in-class core real
estate portfolio with meaningful concentrations of assets in the
nation’s most dynamic corridors; making profitable opportunistic
and value-add investments through its series of discretionary,
institutional funds; and maintaining a strong balance sheet. For
further information, please visit www.acadiarealty.com.
Safe Harbor Statement
Certain statements in this press release may contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities and Exchange Act of 1934, as amended. Forward-looking
statements, which are based on certain assumptions and describe the
Company's future plans, strategies and expectations are generally
identifiable by the use of 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
the Company's 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, including
its impact on the Company’s 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; (iii) the Company’s success
in implementing its business strategy and its 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 the
Company may, from time to time, compete, and their effect on the
Company’s revenues, earnings and funding sources; (v) increases in
the Company’s borrowing costs as a result of changes in interest
rates and other factors, including the discontinuation of the USD
London Interbank Offered Rate, which is currently anticipated to
occur in 2023; (vi) the Company’s ability to pay down, refinance,
restructure or extend its indebtedness as it becomes due; (vii) 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;
(viii) the Company’s ability to obtain the financial results
expected from its development and redevelopment projects; (ix) the
tenants’ ability and willingness 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; (x) the
Company’s potential liability for environmental matters; (xi)
damage to the Company’s properties from catastrophic weather and
other natural events, and the physical effects of climate change;
(xii) uninsured losses; (xiii) the Company’s ability and
willingness to maintain its qualification as a 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 during
the COVID-19 Pandemic; (xv) the loss of key executives; and (xvi)
the accuracy of the Company’s 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 its ESG efforts; and (xvii)
the timing and ultimate conclusion of BDO regarding the audit of
the Company's restated financial statements (including the risk
that additional information may arise during such audit), and
the completion and filing of the Company's 2021 10-K,
including the restated financial statements, taking longer than
expected.
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, 2020 and other
periodic or current reports the Company files with the SEC. Any
forward-looking statements in this press release speak only as of
the date hereof. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in the Company’s expectations with regard thereto or change in the
events, conditions or circumstances on which such forward-looking
statements are based.
ACADIA REALTY TRUST AND
SUBSIDIARIES Consolidated Statements of Operations
(a) (Dollars and Common Shares in thousands, except per
share data)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
Revenues
(As Restated)(b)
(As Restated)(b)
Rental income
$
77,529
$
66,472
$
285,898
$
246,432
Other
1,828
1,410
6,599
4,476
Total revenues
79,357
67,882
292,497
250,908
Operating expenses
Depreciation and amortization
32,195
47,444
123,439
147,229
General and administrative
10,570
9,670
40,125
35,798
Real estate taxes
10,909
11,409
45,357
42,477
Property operating
15,228
14,604
53,516
55,551
Impairment charges
—
34,049
9,925
85,598
Total operating expenses
68,902
117,176
272,362
366,653
Gain on disposition of properties
—
174
10,521
683
Operating income (loss)
10,455
(49,120
)
30,656
(115,062
)
Equity in earnings (losses) of
unconsolidated affiliates
2,177
(1,503
)
5,330
(3,057
)
Interest and other income
2,957
1,823
9,065
8,979
Realized and unrealized holding (losses)
gains on investments and other
(4,340
)
34,027
49,120
113,362
Interest expense
(18,552
)
(17,118
)
(68,969
)
(69,581
)
(Loss) income from continuing operations
before income taxes
(7,303
)
(31,891
)
25,202
(65,359
)
Income tax benefit (provision)
306
(1,012
)
(93
)
(269
)
Net (loss) income
(6,997
)
(32,903
)
25,109
(65,628
)
Net loss (income) attributable to
noncontrolling interests
9,721
22,046
(1,962
)
56,675
Net income (loss) attributable to
Acadia
$
2,724
$
(10,857
)
$
23,147
$
(8,953
)
Less: net income attributable to
participating securities
(156
)
—
(624
)
(233
)
Net income (loss) attributable to Common
Shareholders -
basic and diluted earnings per share
$
2,568
$
(10,857
)
$
22,523
$
(9,186
)
Weighted average shares for basic and
diluted earnings (loss) per share
88,949
86,311
87,654
86,442
Net earnings (loss) per share - basic
and diluted (C)
$
0.03
$
(0.13
)
$
0.26
$
(0.11
)
ACADIA REALTY TRUST AND
SUBSIDIARIES Reconciliation of Consolidated Net Income
(Loss) to Funds from Operations (a, d) (Dollars and
Common Shares and Units in thousands, except per share data)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
(As Restated)(b)
(As Restated)(b)
Net income (loss) attributable to
Acadia
$
2,724
$
(10,857
)
$
23,147
$
(8,953
)
Depreciation of real estate and
amortization of leasing costs (net of noncontrolling interests'
share)
23,393
32,574
93,388
106,220
Impairment charges (net of noncontrolling
interests' share)
—
4,923
2,294
17,323
Gain on disposition of properties (net of
noncontrolling interests' share)
—
(174
)
(4,163
)
(291
)
Income (loss) attributable to Common OP
Unit holders
213
(569
)
1,584
(370
)
Distributions - Preferred OP Units
123
123
492
495
Funds from operations attributable to
Common Shareholders and Common OP Unit holders
$
26,453
$
26,020
$
116,742
$
114,424
Adjustments for Special Items:
Less: Unrealized holding (gain) loss and
other (net of noncontrolling interest share)
1,302
(4,336
)
(13,782
)
(20,493
)
Funds from operations before Special
Items attributable to Common Shareholders and Common OP Unit
holders
$
27,755
$
21,684
$
102,960
$
93,931
Funds From Operations per Share -
Diluted
Basic weighted-average shares outstanding,
GAAP earnings
88,949
86,311
87,654
86,442
Weighted-average OP Units outstanding
5,085
4,890
5,115
4,992
Assumed conversion of Preferred OP Units
to common shares
465
465
465
465
Assumed conversion of LTIP units and
restricted share units to common shares
6
—
—
—
Weighted average number of Common Shares
and Common OP Units
94,505
91,666
93,234
91,899
Diluted Funds from operations, per Common
Share and Common OP Unit
$
0.28
$
0.28
$
1.25
$
1.25
Diluted Funds from operations before
Special Items, per Common Share and Common OP Unit
$
0.29
$
0.24
$
1.10
$
1.02
ACADIA REALTY TRUST AND
SUBSIDIARIES Reconciliation of Consolidated Operating Income
(Loss) to Net Property Operating Income (“NOI”) (a)
(Dollars in thousands)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
(As Restated)(b)
(As Restated)(b)
Consolidated operating income (loss)
$
10,455
$
(49,120
)
$
30,656
$
(115,062
)
Add back:
General and administrative
10,570
9,670
40,125
35,798
Depreciation and amortization
32,195
47,444
123,439
147,229
Impairment charges
—
34,049
9,925
85,598
Less:
Above/below market rent, straight-line
rent and other adjustments
(5,746
)
196
(19,488
)
13,581
Gain on disposition of properties
—
(174
)
(10,521
)
(683
)
Consolidated NOI
47,474
42,065
174,136
166,461
Noncontrolling interest in consolidated
NOI
(14,964
)
(11,743
)
(48,401
)
(46,316
)
Less: Operating Partnership's interest in
Fund NOI included above
(3,820
)
(3,072
)
(12,337
)
(11,518
)
Add: Operating Partnership's share of
unconsolidated joint ventures NOI (e)
3,786
3,306
13,811
15,659
NOI - Core Portfolio
$
32,476
$
30,556
$
127,209
$
124,286
ACADIA REALTY TRUST AND
SUBSIDIARIES Consolidated Balance Sheets (a)
(Dollars in thousands)
As of
December 31, 2021
December 31, 2020
ASSETS
(As Restated)(b)
Investments in real estate, at cost
Land
$
739,641
$
752,721
Buildings and improvements
2,892,051
2,802,253
Tenant improvements
199,925
178,918
Construction in progress
11,131
5,147
Right-of-use assets - finance leases
25,086
25,086
3,867,834
3,764,125
Less: Accumulated depreciation and
amortization
(648,461
)
(573,364
)
Operating real estate, net
3,219,373
3,190,761
Real estate under development
203,773
247,201
Net investments in real estate
3,423,146
3,437,962
Notes receivable, net
153,886
100,882
Investments in and advances to
unconsolidated affiliates
322,326
272,829
Other assets, net
186,365
170,281
Right-of-use assets - operating leases,
net
40,743
76,268
Cash and cash equivalents
17,746
18,699
Restricted cash
9,813
11,096
Rents receivable, net
43,625
43,052
Assets of properties held for sale
63,952
—
Total assets
$
4,261,602
$
4,131,069
LIABILITIES
Mortgage and other notes payable, net
$
1,140,410
$
1,068,806
Unsecured notes payable, net
559,145
500,083
Unsecured line of credit
112,905
138,400
Accounts payable and other liabilities
236,415
268,442
Lease liability - operating leases,
net
38,759
88,816
Dividends and distributions payable
14,460
147
Distributions in excess of income from,
and investments in, unconsolidated affiliates
9,939
15,616
Total liabilities
2,112,033
2,080,310
Commitments and contingencies
EQUITY
Acadia Shareholders' Equity
Common shares, $0.001 par value,
authorized 200,000,000 shares, issued and outstanding 89,303,545
and 86,268,303 shares, respectively
89
86
Additional paid-in capital
1,754,383
1,683,165
Accumulated other comprehensive loss
(36,214
)
(74,891
)
Distributions in excess of accumulated
earnings
(196,903
)
(167,178
)
Total Acadia shareholders’ equity
1,521,355
1,441,182
Noncontrolling interests
628,214
609,577
Total equity
2,149,569
2,050,759
Total liabilities and equity
$
4,261,602
$
4,131,069
ACADIA REALTY TRUST AND SUBSIDIARIES
Notes to Financial Highlights:
- 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 the Company's Current Report on Form
8-K made available on the Company’s website at
www.acadiarealty.com.
- See the Restatement 8-K filed with the SEC on February 15, 2022
for a detailed reconciliation to previously reported amounts and a
detailed description of adjustments thereon. As mentioned in the
press release, the Company is restating its prior period financial
statements for the years and interim periods 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 for errors in accounting
primarily related to the reclassification of two consolidated
joint-venture subsidiaries. The restatement primarily impacts the
classification of certain amounts within the Company’s consolidated
balance sheets, statements of operations and statements of cash
flows.
- Diluted earnings per share reflects the potential dilution that
could occur if securities or other contracts to issue common shares
of the Company were exercised or converted into common shares. The
effect of the conversion of units of limited partnership interest
(“OP Units”) in Acadia Realty Limited Partnership, the “Operating
Partnership” of the Company, is not reflected in the above table;
OP Units are exchangeable into common shares on a one-for-one
basis. The income allocable to such OP 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.
- 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 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”), or are indicative of cash available to fund
all cash needs, including distributions. Such measures should not
be considered as an alternative to net income (loss) 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 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 and, in particular, the impact of the mark-to-market gain
and loss attributable to the Company's investment in
Albertsons.
- 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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version on businesswire.com: https://www.businesswire.com/news/home/20220215005551/en/
Sunny Holcomb (914) 288-8100
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